By Martine G. Brousse
"The Medical Bill Whisperer"
Patient Advocate, Certified Mediator @ AdvimedPro
November 27, 2023
Watch the video: https://youtu.be/4veoExqVz0I
Do you know what all the basic terms your insurance mean, and how they affect you financially?
Let's go over the major definitions and their consequences to patients.
Please note: check out my more in-depth blogs relating to specific items listed here.
AFFORDABLE CARE ACT
Also known as "Obamacare", it is the federal law which took effect in 2010 and mandates most insurance companies to cover a certain number of procedures/medical services.
It prohibits certain practices such as excluding patients due to their health status, denying claims for pre-existing conditions, terminating coverage because of use deemed excessive, or imposing lifetime maximums.
It gives rights to patients including services at no cost to them (preventive care) and to appeal (contest a decision or processing by their insurance)
It offers subsidies to those who need financial help to pay their premiums
The most important item on your EOB (Explanation of Benefit), it is the amount deemed "fair market value" of every service or item your Dr prescribed or performs.
It determines how much is covered (payable), what the plan pays and how much your eventual liability is.
If there is a contract between the medical provider and your insurance, the allowance is considered "In Network rate"
If there is no contract between the medical provider and your insurance and no specific circumstances which would force payment at a higher rate per legal mandates (i.e. emergency, services rendered at an in network facility etc), then the allowance is considered "Out Of Network rate"
Any allowance that shows $ 0.00 is a red flag and a call to the insurance to find out why the claim has been denied or rejected.
APPEAL
It is the right you or your provider have to question your insurance's decision (usually a denial of an approval of a procedure or treatment) or processing of a claim, and to have the insurance review its initial action in order to overturn it.
There are limited number of appeals that can be filed (2 to 3 at most)
Where and how to file an appeal is explained on the EOB or decision letter
Specific reasons have a right to appeal:
AUTHORIZED REPRESENTATIVE
It is someone you grant legal access to your insurance’s information and documents, as well as authorize to take action on your behalf.
You must sign a special HIPAA-release form and send it your insurance
Your representative can be a family member, patient advocate, friend, Power of Attorney or anyone you approve of
BEHAVIORAL HEALTH
These services relate to mental health and/or substance abuse
Due to regulations, the insurance must use additional levels of privacy when processing claims, issuing authorizations, or releasing information to anyone other than the patient
In some cases, a teenage child must provide the insurance with his or her signed consent form before his/her parents are allowed to access information or act on his/her behalf
BENEFITS
Consider it the list of all services and items that your plan covers and therefore deems "payable"
The policy lists the categories of such benefits
BRAND-NAME
A type of prescription drug that has been FDA approved, has been prescribed by your Dr and is brand-new on the market
It is the original version of a drug, usually protected by a patent for a number of years
It is the most expensive version of a drug as it is the only one on the market until the patent expires
CALENDAR YEAR
It is the continuous amount of time that includes business days & Holidays and lasts 365 days, usually between jan 1 and Dec 31 of the same year
CLAIM FORM
It is the special invoice that medical providers submit to an insurance in order to get payment, detailing all services rendered to you and their price
Each claim form results in an Explanation Of Benefit (EOB) which indicates how it was processed (at what rate), how much was allowed, paid and whether the patient holds any financial responsibility
One of the 3 major parts of your Share Of Cost, it is the % of the allowance that is your responsibility once you have met your deductible (see below) and your insurance starts making payment on your behalf.
Based on the terms of policy, and until you meet this co-insurance max, you and your insurance will split payment of the allowance to the medical provider
Once you have met the max, your insurance will py 100% of the allowances
CONTINUATION OF CARE ("COC")
It is your right to transfer an existing authorization for a treatment, Rx or procedure to your new insurance/plan
It is your right to continue an established and ongoing treatment with the same provider, when the provider was In Network (contracted) with your previous plan but no longer is with your new plan/insurance
It is your right to have ongoing services paid at the same In Network (higher) rate now that the provider is no longer contracted
Services must have started
Transferring care just because a new plan is in place and you are familiar with a Dr is not a good enough reason to obtain Continuation of Care. It must be shown that a transfer at this time would be detrimental or hazardous to the patient's health, or that there is no available, experienced, available, comparable provider within the new network.
Note: transfer of authorizations are not automatic. Either the provider or you must file a special request with the new insurance.
COORDINATION OF BENEFITS (COB)
It applies if you have more than 1 policy, in order to determine which carrier comes first ("primary") or second ("secondary")
Specific rules determine which carrier is primary. It is not up to the patient to decide which should pay first.
Once the primary has processed a claim according to its allowance, the claim goes to the secondary if there is a liability to the patient. The secondary then calculates its share of the patient's liability - if any - based on its own allowance and terms of policy. If any liability is left over, it becomes the patient's.
The second part of your Share of cost, it is the set amount that you must pay a Dr (or sometimes ER) at the time services are rendered
Co-pays usually get credited toward your deductible and/or Co-insurance
COVERAGE
It is the list of every service, procedure, item that your plan accepts as your Benefit and therefore deems "payable"
The list and details can be found in the Terms of Policy document
It is the first part of your Share of Cost
It is the amount you must pay first before the insurance opens its purse on your behalf
DENTAL
Services, care, items, devices relating to gums and teeth
NOT considered "Medical" or "behavioral" care, it requires a separate policy
It is considered an exclusion on medical policies
DEPENDANT
A family member who is eligible under your plan, it can be your married spouse, child, registered domestic partner, step or adopted child, etc.
That member on your policy has the same benefits, rights and exclusions as the main subscriber, but usually has their own deductible and share of cost
Note: the last day of the month your child turns 26, he or she will be automatically dropped from your policy. The good news is that she/he will be eligible to get their own policy without waiting for open enrollment.
DRUG FORMULARY
It is the list of all Rx and devices that are FDA-approved and covered/paybale under your plan
A drug can be Brand-name (see above) or generic
Once a brand-name drug patent has expired, and "generic" versions become available, they are usually preferred as they are much cheaper
If a Rx is obtained through a local pharmacy or mail order, the Pharmacy benefits of the policy will be applied
If a Rx is infused or injected in an office or facility, the Medical benefits will apply.
DURABLE MEDICAL EQUIPMENT ("DME")
It is the list of medically necessary supplies, items and devices that your Dr orders for short or long-term use and that your policy pays for
Examples: braces, crutches, wheelchair, walker, oxygen tanks, casts...
ELIGIBILITY
If your plan is active, if your premiums are up to date, if you are a member on the plan then you should be Eligible to receive benefits under that plan
EMERGENCY
It usually means "Life or limb at risk"
However, an illness, injury, symptom or condition so serious that a reasonable person would seek care right away to avoid severe harm can be considered an Emergency
Beware: insurance companies routinely deny payment for ER services that are not considered Emergency even if they occurred at inconvenient times or places. Examples: a UTI or ear infection or mild allergic reaction or sprain which could have been evaluated and treated by your primary care physician, a nurse at a CVS clinic, or a Dr at an urgent care location.
EXCLUSION
something that your insurance specifically does not offer, does not cover or will not take financial responsibility for
the list is detailed on the Terms of Coverage document
Examples: Over-the-counter Rx, dental care, injuries at work, cosmetic surgery, alternative medicine, nutritional supplements, experimental service etc
EXPERIMENTAL/INVESTIGATIONAL
An exclusion on every policy, these are the treatments, Rx or procedures that are:
not FDA-approved,
that do not meet the US standards of care,
that are deemed unproven and/or unsafe,
that do not conform to the insurance's medical policy and/or
which fall outside of the scope of the provider's license.
Examples:
a speech therapist treating a child for "autism": although the child may be autistic, the therapist can only treat "speech disorders"
a brand-new drug approved for a certain diagnosis, but given for another condition
a surgery scheduled before more conventional treatments have been tried
EXPLANATION OF BENEFITS ("EOB")
It is the determination of responsibility, application of your plan’s benefits and calculation of payment by your insurance based on a provider’s claim
Every claim sent in by a provider (or you if you need to get reimbursed) must have a corresponding EOB that confirms receipt, and explains who is responsible for how much
The Allowance (see above) will be most important, as it is the basis of calculations
A location whose specialized medical staff provides extended care for diagnostic, therapeutic, surgical or psychiatric purposes
Some facilities such as psy or regular hospitals, as well as skilled nursing facilities provide 24/7 specialized care (at least nursing level)
A location where extensive or critical care is offered that cannot be performed in simpler settings, such as a Dr's office, neighborhood health clinic or urgent care clinics.
If you must stay overnight, at least 24 H, then you can be considered "Inpatient"
If you are discharged less than 24 H hours from being admitted, your are "Outpatient"
GRIEVANCE
Usually considered an "Appeal", it is not technically the same
A grievance is filed by a member (not a provider) for reasons which usually do not involve a right to appeal (denial of an authorization, incorrectly processed claim)
Examples of grievances:
Complain about quality of care by an In Network provider
Delayed access to care/appointment
Misinformation or mishandling by insurance
Poor customer service
GROUP PLAN vs. Individual plan
A group plan is a policy that you get through your employer
Group plans can be self-funded or bought on the open market
An individual policy is one you purchase yourself on the open maket, through an agent or the Obamacare Exchange
One of the two major types of commercial plans (the other is PPO), it requires that its members:
Use a local, restricted, specific network of designated providers
Obtain a referral or authorization for just about every service they need or require
It means that the medical provider has a contract with the plan, and therefore belongs to the insurance's "Network"
For the insurance:
the contract has established how much the provider will get paid (allowance)
The insurance expedites payment and processing of authorizations as a benefit
the insurance saves $ as the provider agrees to give a discount
For the provider:
they are assured of a determined and prompt payment
they get preferential treatment and face less administrative hurdles
they extend a discount
For you:
you get a discount and pay the least amount possible
your insurance pays the most possible
you get preferential treatment at the office
Under some circumstances, the insurance can be forced to pay higher In Network rates to Out of Network providers, and they in turn must accept them (per State ofr federal laws, emergency conditions, if no comparable provider is available or within the network etc)
Do read the separate blog on L-Z!
Martine Brousse was a long-time Billing Manager for Physicians before switching to the side of patients in 2013. The move has allowed her to apply her deep expertise and vast experience of the intricacies of resolving all types of medical bill and claim payment issues in ways that directly and positively impact her clientsÊ» finances.
(424) 999 4705 - F (424) 226 1330
@martine brousse 2023 @ the medical bill whisperer 2023