Coinsurance Uncovered

Now we’ve covered copays and deductibles, that leaves coinsurance. Coinsurance is a term used by the insurance carriers to refer to the amount that the patient is required to pay for a medical claim.

If a patient has an indemnity insurance plan then they would not have a set copay or a set amount that they are responsible for. The amount the patient will owe will be determined when the claim is processed.

For example, if the patient has an 80/20 indemnity plan, then the insurance carrier will pay 80% of the allowed amount and the patient is responsible for the remaining 20%. So if a provider bills $120 for an office visit and the insurance company allows $100, then the insurance would pay the provider $80 and the patient would owe $20.

The problem this presents for the provider is that the patient cannot be charged for their portion at the time of the visit. Since the amount the patient owes cannot be known until the claim is paid, the provider must wait until the insurance carrier processes the claim before they can bill the patient.

Many times with indemnity plans the patient also has a deductible that must be met first. After the deductible is met then the insurance carrier will begin to make their payments. Again, even when you know the patient has a deductible you can’t charge them up front. You must wait to find out what the insurance carrier is going to allow for your services. You can only charge the patient the allowed amount, not the billed amount.

Coinsurances can vary depending on the plan. They are not a set amount like 80/20. They can be 70/30, 90/10, etc. You should call when the patient comes in initially to find out what type of insurance plan they have. Just advise the patient that they will be billed for their responsibility as soon as their insurance carrier makes payment.

This is a good example of why it’s important to make sure your claims are being submitted and processed timely. If you are billing a patient for their portion 2 weeks after their visit instead of 6 months, you are more likely to get paid.

Medicare Applications – Which Form Is Used To Become A Medicare Provider

Medicare requires that you complete specific forms put out by CMS when applying to become a Medicare provider. Sounds easy enough but have you seen the list of forms that they have? How are you suppose to know the correct form to complete and once you figure that out, what fields on the form do you need to fill out?

If you are a solo provider, can you bill under a tax ID number (EIN number) or do you have to use your social security number? Is it necessary if you use a tax ID number to apply for a group Medicare number? And why would you need to reassign benefits to yourself?

Well it’s really not as complicated as it seems. If you are a solo provider and you are using your social security number for your tax ID number then you need to complete an 855I, 588 EFT, and a CMS 460. The CMS 460 is the participating provider agreement. You only need to complete this if you choose to be a participating Medicare provider. The 588 EFT is the Electronic Funds Transfer form. Medicare requires that you accept EFT and they will transfer your payments directly into your bank account. The 855I is the individual provider application.

If you are a solo provider who is going to bill under a tax ID number but you are a sole proprietor you also would need to complete the 855I, 588 EFT and the CMS 460.

When applying for a group, you will need to complete an 855B, an 855I for each provider in the group, an 855R for each provider in the group, a 588 EFT, and a CMS 460. The 855B is the group application and the 855R is to reassign the benefits of each provider to the group. If you are a solo provider but you have formed a corporation, you need to apply for a group application for the corporation.

The forms are available on the internet. You must complete the appropriate forms and send them in to the Medicare carrier for your area. It is crucial that you complete the forms correctly to avoid delays. If your application is not completed completely or correctly the carrier will request the additional or corrected information from you. If you do not respond or respond timely your application may be closed.

Deductibles in Depth

Last month we explained in detail all about copays. Now we are going to cover deductibles in depth. A deductible is a set amount of medical expenses a patient must pay to become eligible for insurance benefits under an insurance program.

What does that mean exactly? It means that before an insurance company begins to make payments for a patient, the patient must meet their deductible. How does a patient meet their deductible? Many people get very confused over how this is actually accomplished.

In order for a patient to meet their deductible claims must be submitted and processed by the patient’s insurance carrier. When the claims are processed, the amount that is applied to the deductible is the allowed amount for the services being billed. So for example, if the claim is for an office visit, 99213 for $80, and the insurance allows $55 for a 99213, then $55 will be applied to the patients deductible, not $80.

Deductibles can vary anywhere from $50 to $5000. If it is a private plan purchased by the patient the deductible depends on the plan the patient purchases. Plans with lower deductibles cost more than plans with higher deductibles. If the insurance plan is thru an employer then the deductible is determined by the employer and how much they pay for the insurance plan.

Some people mistakenly think that the patient has to pay them the amount of the deductible and then the claims that are submitted will be paid by the insurance carrier. They don’t realize that the insurance carrier must actually receive claims for the patient in order to apply them to the deductible for the deductible to be met.

The best thing to do is to call the insurance carrier before the patient is seen and inquire as to the amount of the patient’s deductible and if any of it has been satisfied yet. You must also remember, you don’t know which other providers the patient may have seen and whether or not a claim was submitted for those services.

Usually you will need to submit the claim and wait for the insurance carrier to process it and apply it to the patient’s deductible before you can bill the patient. Many providers like to charge the patient up front when they know that the patient has a deductible that hasn’t been met. This isn’t always the best thing to do since there are many factors that can affect the amount the patient owes.

For example, if you call when the patient comes in and are told they have a $200 deductible and it hasn’t been met yet, and the patient is being seen for an office visit and a urinalysis. The office visit is $80 and the urinalysis is $15 for a total of $95. You make the patient pay the $95 since the deductible is not met. However, you submit the claim and the insurance company allows $60 for the office visit and $12 for the urinalysis. That is only $72. If you participate with that insurance carrier then you can only charge the patient $72 or you are breaking your contract. You’ve already collected $95 so now the patient has overpaid.

Another problem with collecting up front is that a claim by another provider may beat your claim in. If you call when the patient comes in and they tell you the deductible is not met, you charge the patient up front. Then your billing person is out sick for a couple days, or gets busy doing other jobs and the claim doesn’t get submitted for a couple weeks after the patient’s visit. (Trust me, this happens a lot.) In the meantime the patient goes to Urgent Care where they submit their claims electronically the same day the patient is seen and their claim beats yours. Now the patient’s deductible is suddenly met, and the insurance carrier makes payment on your claim. Again, another overpayment.

If a patient has a deductible then usually once the deductible is met the insurance carrier will pay a percentage of the allowed amount and the patient will have a coinsurance. (We’ll talk about coinsurances next month.) Many plans today are getting away from the deductible/coninsurance and moving more towards the HMO/PPO plans that have set copays. However, it is still crucial that you understand exactly how the whole deductible thing works. There are still several plans out there with deductibles, including traditional Medicare plans.

Medicare Changes Carriers

On September 1, 2008 many of the Medicare contracts across the country changed carriers. In some areas it went very smooth and most providers didn’t even notice, but in some areas it wasn’t quite as smooth of a transition. Our local Medicare Carrier, Upstate Medicare, was changed, but I have to say it was a fairly smooth transition. Although I think a lot of that is due to the fact that the new carrier NGS, is subcontracting many of the processes to the old carrier, HealthNow.

I happened to be submitting a Medicare application for a provider in Northern California right around September 1^st though and the carrier for Northern California Medicare also changed. The problem that I had there is that no one seemed to know who the new carrier was, including CMS. After doing many web searches I was finally able to find a new phone number, but when ever I dialed it was busy. Several days of busy signals made me realize that I wasn’t going to get thru, so I went back to searching the web. Finally the new carrier was able to get the website updated to include the new address for provider enrollment.

In any case, if you have been suddenly having trouble with your Medicare carrier, it may just be that your carrier is no longer who you thought it was. By now most of them have worked the bugs out, but if not give it a few more days. Unfortunately dealing with these types of changes is all part of the game.

The Truth About Copays

Many people get very confused by all the different ways that insurance companies process claims and how they calculate what the patient owes. It is crucial that the providers have someone in their office or a good billing service that knows how to read the eobs and that they are billing the patients correctly.

Many plans today have a straight copay that is due at the time of service. Sometimes the copay is different for the patient’s PCP than it is for a specialist, but it is still a straight copay. For example, if a patient goes to their regular doctor for an asthma check or a physical, they pay $15 but if they go to a podiatrist or a chiropractor the copay is $25. In either case the patient is usually accustomed to and willing to pay the copay at the time of their visit.

A lot of the insurance companies print the patient’s copay information right on their ID card. It will say PCP copay $15 Specialist copay $25, or whatever. Some do not print the copays on the card. Usually the patient knows what it is, but some patients do not realize that they have a higher copay for specialists. It is a good idea to call the insurance carrier to verify a copay if it is a new patient. Especially if you are billing for a specialist.

Most offices will ask for the copay when the patient checks in which is a good idea. There may not be a good opportunity to get it on the way out. For example, if the patient doesn’t need to be seen again they may not even need to stop back at the desk. Or if they don’t feel well and they spend an hour and a half in the office, they probably just want to get out of there. It’s just a real good idea to collect the copay when the patient checks in. It eliminates the need to bill a patient later if they get out without paying the copay.

Sometimes patients do not want to pay the copay. Copays are due at the time of service according to most of the contracts that insurance companies require the provider signs to be in their network. It is not the providers who set that rule. If the patient truly just doesn’t have the money, then it’s ok to cut them a break and let them bring it in at another time or bill them. I went to urgent care once with a urinary tract infection. I was in agony and when I got there I realized I had forgotten my purse. They were nice enough to see me even though I couldn’t pay my copay and I didn’t even have my insurance card. I stopped by later that day with the card and the copay.

Since it is better to collect the copay up front, you should definitely try to get it then. But if you are going to allow the patient to be seen without paying the copay, you should let the patient know that you are doing them a favor. If you have pre-printed envelops with the office address on them, it’s a good idea to give one to the patient for them to send the copay in. They are more likely to stick it in the mail if they have a pre-printed envelope.

Many providers don’t realize that they are actually breaking their contract with the insurance carrier if they DON’T charge the patient the copay. If a provider is regularly not charging for copays and an insurance carrier finds out, they can terminate the provider’s contract. This is actually a great tool to use for patients who try to get out of paying the copay. The provider can tell them that if he gets caught not charging the copay he can be thrown out of the patient’s plan.

If you have a patient with a hardship case and the provider is going to forgive a copay, or forgive all copays for a period of time then the patient’s file should be well documented. For example - a patient’s husband was in a bad automobile accident and is out of work for a period of time and the provider decides to forgive her copays while the husband is out of work. The patient’s file should clearly indicate exactly why the copays aren’t being collected. Give details, such as “Pt’s husband in auto acc on 8/3/08 and out of work indefinitely. Only collecting 50% pay. Have 5 children.” Or whatever the case is.

Of course there are always the patients that don’t have to pay their copays. The patient’s wife’s cousin, the son of the doctor’s college roommate, etc. Most insurance companies will allow a couple of cases without getting too upset, but they definitely frown at skipping the copays on too many patients. Providers need to be particular at who they give breaks to.

Bottom line, copays actually work out best for a provider since they know up front what the patient’s responsibility is going to be and can collect it prior to seeing the patient. It is always easier to get paid up front than to have to bill the patient. Make sure the person checking the patient in is consistent about collecting the copays.

PT/OT caps exception process extended to 12/31/2009

When Congress passed The Medicare Improvements for Patients and Providers Act of 2008 on July 15^th not only did it stop a 10.6% pay cut for most medical service providers. There were other provisions as well.

One of the other provisions was to extend the exceptions process of PT and OT therapy caps. Claims for outpatient therapy with dates of service on or after July 1^st that exceed the current cap can be submitted using the KX modifier. The KX modifier indicates that the therapy cap exception has been approved or it meets all the guidelines for an automatic exception. In order for claims to be paid specified required documentation must be on file.

The current caps are $1810 for physical therapy and speech therapy combined and $1810 for occupational therapy, for the 2008 calendar year. Deductible and coinsurance amounts as well as paid amounts count towards the cap. If services meet the exception criteria and are billed using the KX modifier they will be paid beyond the cap.

Prior to Congress passing this new legislation providers were instructed not to submit claims using the KX modifier for any services after July 1^st. Claims that were already submitted for dates of service after July 1^st without the KX modifier that are over the cap will be denied. The claims need to be resubmitted with the KX modifier.

Remember, in order for claims to be paid with the KX modifier they must meet the exception criteria. The exception must either be an automatic exception or be approved by Medicare after the appropriate documentation was submitted for review. The list of ICD-9 codes that qualify for an automatic exception can be found on the CMS website.

If you have a patient who doesn’t qualify for the automatic exception but you feel they need additional therapy you need to submit a request to your Medicare carrier. You should include an evaluation and certified plan of care, Physician approval, clinician signed interval progress reports, treatment encounter notes, and records justifying services over the cap.

The legislation has extended the exceptions process for the therapy caps until December 31, 2009.

What Should Your Billing Service Be Doing For You

Many providers today are choosing to outsource their billing. The billing process has become much more involved over the past few years and for many it makes sense to outsource. Between the software updates, required electronic filing of claims, NPI numbers, and other changes, it has become nearly impossible for providers to keep up.
However, if you've only ever used one biller, or one billing service, then you might not really know what you should be expecting from them. We have providers who use other services ask us sometimes "Should my billing service be doing this for me, or is it something I need to do in my office?"

It is good to clearly know what your billing service should be doing, and what your office will be responsible for. That way you can keep things running smoothly. Not all billing services do things the same way and that's ok, as long as you know what yours is doing and it works for you. We actually provide different services for different accounts depending on the needs of the office. For example, we don't normally get involved with obtaining authorizations, however we have a couple of clients who cannot handle getting them from their office so they pay us extra to take care of that for them.

But there are some things that all billing services should handle. Billing is not just the act of submitting the insurance claims and waiting for payment to come. A good billing service will submit the claims, electronically whenever possible, check electronic reports for denials and bad batches, and follow up on unpaid claims. They should also take care of any denied claims.

If they are not checking electronic reports and doing regular follow up then you are losing money and so are they. Electronic reports will notify you if there are issues with any of your claims or with entire batches. If they are not reading them then they are not fixing those issues. For example, an electronic report will return a claim if the ID number is not right. Maybe it's a simple typo, two numbers got transposed, but if the electronic reports aren't being read it could be a big problem. What if it's a patient that comes in once a week? None of the claims are going thru because the ID number wasn't fixed.

Many insurance carriers today have time filing deadlines. Some are very short, like 60 days from the date of service. If regular follow up is not being done then money can be lost due to timely filing. Follow up reports should be run every 4-6 weeks and all claims over 30 days should be checked on.

There are other things that billing services can do to keep your accounts receivable running smoothly, but those are the basics. If you feel that your accounts receivable is not what it should be you might want to consider meeting with your billing service and asking what can be done to improve the situation. Tell them you would like a report of your accounts receivables. What are your figures over 30 days, over 60 days? They should be willing to provide you with reports of what's outstanding and why and it shouldn't take more than a couple of days for them to make the reports available. If they are unwilling to provide you with this information then you need to consider why.

I'm not trying to rat anybody out. I'm just trying to make us all accountable to providing the best service possible so that billing services don't get a bad name. We hear too many stories of bad services and it makes providers leery of outsourcing when it is a viable option.