From the billing department…

There is often confusion when dealing with insurance companies and doctor’s offices and what we as a patient will have to pay. I have taken some of the most common questions among patients and listed them below to help give you a better understanding of the terminology used in the medical/insurance field.

What is an Explanation of Benefits(EOB)?

• An EOB is something that is used by the insurance company to inform a patient and provider’s office of the patient’s benefits for a particular office visit. An EOB lists the total amount that was billed to the insurance, the total amount the insurance will “allow” (per contract with the providers office), the patient’s responsibility (copayment, deductible, coinsurance) and the payment amount to the provider if there is one.

What is an allowed amount?

• An allowed amount is a contracted rate that the insurance and providers office have agreed upon. This is usually a percentage of what Medicare will reimburse for the same code. For example: Suppose a provider is contracted with Cigna at 70% for code 99213 (the code used for an established patient with a moderately complex office visit). That same code with Medicare is reimbursed at $100. Cigna will allow a maximum of $70 for that code.

What is a copayment?

• A copayment is a set amount that a patient would be responsible for during a visit. This amount can vary based on the type of provider the patient is seeing. For example, a primary care doctor is generally less than a specialist or the emergency room. This is based on an individual’s plan through their insurance and varies by carrier and policy.

What is a deductible?

• A deductible is a set amount that a patient is responsible for paying toward and once met, the insurance carrier will contribute toward the visit for the remainder of the plan year. For example, if a patient has a deductible of $1,000, that means that the patient will have to pay total charges for all visits until that amount is met. Once met and depending on the policy, the carrier may contribute a percentage (called co-insurance) or total of the charges for visits. This varies by carrier, plan and individual, so if you want to make sure you are financially prepared for your visit, contact your insurance company and ask for your benefits.

What is the difference between Medicare, Medicaid and Commercial insurances?

• Medicare and Medicaid are both insurances issued through the government. Medicare generally is issued to those with disabilities and retirees. Medicaid is generally provided to those that are not able to afford health care through a commercial insurance and don’t qualify for Medicare. Commercial insurances are those that are offered through a person’s job or on their own and are not affiliated with the government.

The ins and outs of insurance can be daunting, and the language can get a bit confusing.  But don’t underestimate the value of being an informed consumer, especially where  your health is concerned.