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.