Health Insurance 101

Health insurance basics

Understanding your insurance policy is vital to coordinating you and your family’s health care. Here are a few tips to ensure the correct handling of your insurance claims:

Your insurance policy is a contract between you and the insurance company.

Our reimbursement for services provided is also based on a contract between Sunny Pediatrics & Family Medicine and your insurance company. We are obligated to report all services provided and to bill for them in accordance with our fee schedules. Much as it would be a contract violation for you to refuse paying your insurance premium, it is also a contract violation to not charge or to undercharge for services we provide.

Charges for services provided may vary depending on many factors.

Check-ups are billed based on age, but other visits are billed based on a complicated system of time, complexity, number of diagnoses, and medical decision making. Therefore charges may not be the same for each visit. In addition, you may be billed for services including (but not limited to) laboratory testing, screening tools, vaccines, procedures, counseling, urgent visits and after-hours visits.

Carry your insurance card with you at all times.

It should have your name or the names of your covered dependents, the policy and group numbers, the claims mailing address and phone number, and the co-pay information. Your doctor may not be able to see you without verification of insurance benefits, or you may have to pay out-of-pocket for the visit.

Understand your insurance benefits.

Your insurance plan decides which benefits are covered in full, which apply to your annual deductible, and whether or not they will allow the benefit and pay for the service. Your doctor’s office does not make this decision. If your policy does not cover the service, you will be responsible for the full amount.

Understand which specialists and laboratories are in-network with your plan.

The best way to verify that the specialist, doctor, or lab is in-network is by calling your insurance company directly. You are not prohibited from seeing a doctor who is out-of-network, but you may be required to pay the full amount of charges. We are happy to see your child even if we are NOT in-network with your insurance company. We provide a discount for all out-of-network or self-pay charges if paid at the time of the visit.

Patient Costs & Financial Responsibilities

There are three different categories of patient responsibility: Co-pay, deductible, and coinsurance. These usually apply per person, with annual limits for each individual as well as the family as a whole.

Co-pay

It is the amount that you must pay up front before seeing a doctor. This is a set fee based upon the type of provider (general or specialist) and the type of visit (preventative or sick visit).

Deductible

It is the amount of money you must pay out-of-pocket before the insurance will begin paying toward the claims filed by your doctor’s office. The amount charged toward the deductible is the negotiated rate between your doctor and your plan, not the full amount of charges for the services provided.

Co-insurance

It is the percentage of the allowed amount, as negotiated between you and your doctor, that you are still responsible for AFTER meeting your deductible.

Many other charges may be applied to your deductible, including (but not limited to) lab testing, prescriptions, procedures and screening tools. Thus you may not even know that you have met your deductible until we verify it for you. Deductibles and co-insurance amounts reset annually.

Questions you need to ask your insurance company before your next check-up:

Many insurance carriers limit what is covered under the “preventative care” umbrella. They may cover your or your child’s annual check-up without a co-pay and without having to meet your deductible, but not cover the developmental questionnaire or hearing & vision screening.

Sunny Pediatrics & Family Medicine follows the American Academy of Pediatrics’ Bright Futures Guidelines for preventative care, and we believe strongly that these tools are not optional. It is your responsibility to notify us if you do not want a screening performed. Once performed, you will be responsible for all uncovered charges. We offer a discount on non-covered services if paid for at the time of the visit.

Charges at a Well Visit?

“I thought well visits/physicals were covered…”

Not uncommonly, when a patient comes in for a check-up and has another presenting problem that is dealt with on the same day, the doctor codes an additional charge. One charge is considered the preventative medicine service (the well check), and the other is a problem-oriented service (problem visit). For example, you present for your check-up and ask about a persistent rash you or he’s had for several weeks. The doctor will perform all necessary annual physical exam protocols, including preventative screening measures and administering vaccines, as well as a problem-oriented exam of the rash, including any necessary prescriptions.

Or your child shows up for her scheduled well visit but happens to have a fever and a sore throat that day. The same guidelines would apply for any other abnormality or preexisting problem encountered at the well child exam.

These types of visits are always coded as two separate encounters, annual physical/ well child and problem visit. When preventative care became covered without co-pays or deductibles, however, many patients began wondering why they had to pay for the well-child visit. The extra cost often includes a co-pay or payment toward the deductible for the “sick” part of the exam, even on the same day of service as the preventative care. The documentation and billing for these two exams must be filed separately, otherwise it would be considered insurance fraud on our part.

Unfortunately, because of your insurer’s payment policy, in some cases we may have to complete your wellness care and your illness care in two separate visits to allow appropriate billing. Your doctor may also decide that a non-urgent complaint brought up at a well visit would be more effectively managed at a separate visit. We will always attempt to address this at the time you check-in for the visit, but it is still your responsibility to notify us if you do not wish to have any extra charges applied.

An “Explanation” of the “Explanation of Benefits”

We urge you to always check the Explanation of Benefits (EOB) that you receive from your insurance company. You will notice several charges, and the first is usually the provider charge. Office charges are set higher than insurance companies will pay, to “capture” the highest allowable insurance payment.

Second, you will see provider responsibility – this is the discounted part of the fee that Sunny Pediatrics & Family Medicine has agreed to accept when contracting with your insurance plan.

Third, you will see amount allowed by benefit. These charges may be paid by your insurance, or may be passed on to you due to a deductible and/or coinsurance. If a charge is “disallowed” the charge will be passed on to the patient directly, the cost and terms of which are confidential between you and your insurance company.

If your insurance company has decided that they will not pay for a particular procedure/service, the payment will be your responsibility. We have had patients ask us “not to do anything not covered by insurance.” We cannot practically do that as there are thousands of different plans within the insurance companies we accept. We cannot ethically do that as it would violate our standards of care.

Co-Insurance

Co-insurance refers to money that an individual is required to pay for services, after a deductible has been paid. Co-insurance is often specified by a percentage. For example, the patient pays 20 percent toward the charges for a service and the insurance company pays 80 percent.

Co-Payment

Co-payment is a predetermined (flat) fee that an individual pays for health care services, in addition to what the insurance covers. For example, some HMOs require a $10 co-payment for each office visit, regardless of the type or level of services provided during the visit. Co-payments are not usually specified by percentages.

COBRA

Federal legislation that lets you, if you work for an insured employer group of 20 or more employees, continue to purchase health insurance for up to 18 months if you lose your job or your employer-sponsored coverage is otherwise terminated. For more information, visit the Department of Labor.

Denial Of Claim

Refusal by an insurance company or carrier to honor a request by an individual (or his or her provider) to pay for health care services obtained from a health care professional.

Explanation of Benefits

The insurance company’s written explanation to a claim, showing what they paid and what the client must pay. Sometimes accompanied by a benefits check.

Health Maintenance Organizations (HMOs)

Health Maintenance Organizations represent “pre-paid” or “capitated” insurance plans in which individuals or their employers pay a fixed monthly fee for services, instead of a separate charge for each visit or service. The monthly fees remain the same, regardless of types or levels of services provided. Services are provided by physicians who are employed by, or under contract with, the HMO. HMOs vary in design. Depending on the type of the HMO, services may be provided in a central facility, or in a physician’s own office (as with IPAs.)

HIPAA

A Federal law passed in 1996 that allows persons to qualify immediately for comparable health insurance coverage when they change their employment or relationships. It also creates the authority to mandate the use of standards for the electronic exchange of health care data; to specify what medical and administrative code sets should be used within those standards; to require the use of national identification systems for health care patients, providers, payers (or plans), and employers (or sponsors); and to specify the types of measures required to protect the security and privacy of personally identifiable health care. Full name is “The Health Insurance Portability and Accountability Act of 1996.”

Indemnity Health Plan

Indemnity health insurance plans are also called “fee-for-service.” These are the types of plans that primarily existed before the rise of HMOs, IPAs, and PPOs. With indemnity plans, the individual pays a pre-determined percentage of the cost of health care services, and the insurance company (or self-insured employer) pays the other percentage. For example, an individual might pay 20 percent for services and the insurance company pays 80 percent. The fees for services are defined by the providers and vary from physician to physician. Indemnity health plans offer individuals the freedom to choose their health care professionals.

Preferred Provider Organizations (PPOs)

You receive discounted rates if you use doctors from a pre-selected group. If you use a physician outside the PPO plan, you must pay more for the medical care.

Primary Care Provider (PCP)

A health care professional (usually a physician) who is responsible for monitoring an individual’s overall health care needs. Typically, a PCP serves as a “quarterback” for an individual’s medical care, referring the individual to more specialized physicians for specialist care.