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How to Handle Insurance Deductibles

insurance deductibles

As a medical billing company focused on holistic practices, our team of experts often speaks to hundreds of practitioners daily. Many of the questions medical practices have been around handling patient deductibles. At the beginning of every year, most patients have their health insurance benefits recalculated. That is to say, that the number of visits and deductible amounts are re-set on January 1. 

So a frequently asked question through our provider hotline is, “How do I handle a patient‘s deductible?” Follow some of these tips to better manage patient deductibles so you can be paid on time for treatments. 

What are Insurance Deductibles?

insurance deductible

Insurance deductibles refer to the amount patients have to pay out-of-pocket before their insurance benefits will subsidize payment; the amount is identified when verifying insurance benefits. A patient’s deductible is determined by their insurance plan and will range in amount, so you will not know the exact balance until you verify the insurance benefits. Every insurer and plan varies when it comes to benefits, coinsurance, associated copays, and deductibles. 

How Do Insurance Deductibles Work?

If an insurance deductible plan is $1,500, then the patient must pay 100 percent of eligible health care expenses until the bills total $1,500. After that, the patient will share the cost of their insurance by paying coinsurance.

Coinsurance is the percentage of the cost paid after the insurance deductible. The patient starts paying coinsurance after they have paid for their insurance plan’s deductible. For example, let’s say the patient has paid $2,000 in health care expenses and met the deductible. As a result, when they receive medical services, their insurance will cover the costs depending on the plan. For example, the insurance plan may cover 70 percent and the 30 percent will be paid by the patient. That 30 percent is the coinsurance.

On the other hand, a copay is a fixed amount that the patient pays for a medical service, typically when they receive the service. The copay amount varies by type of service. It’s also important to remember that some plans will cover services such as checkups before insurance deductibles are even met. 

When your client has an unmet deductible, make them aware of the amount since you will then typically charge the patient a fee at the time of service. You must bill the insurance claim as you normally would satisfy the deductible. The insurer will process the claim towards the deductible at the allowed rate. Once the patient‘s deductible has been met, the insurance will begin to reimburse the treatments.

Here is an example of a payment schedule for a patient approved for 15 visits with a $500 deductible and a $10 co-pay. In this example, the insurance plan pays $100 per visit.

While it‘s important to pay special attention to deductibles the first couple of months of the year, not all plans go by calendar year; some “contract year” plans use deductibles that are recalculated on a date other than January 1st.

High-Deductible Plans vs. Low-Deductible Plans

Patients may have the choice between choosing a low or high-deductible health plan (HDHP). The logic behind high-deductible plans was that they would encourage possible patients to seek healthcare. It was assumed that since the consumer would be responsible for medical costs upfront, they’ll do the extra work to find lower-cost medical providers, reducing expenses for both themselves and the insurance company. Plans with low insurance deductibles offer patients more generous coverage of medical services and lower costs, but they also have higher premiums. 

Of course, the main difference between both of these plans is the amount of the insurance deductible. Many HDHP plans have deductibles close to their out-of-pocket limits of $5,000 or more, especially if they offer low premiums. Typically, high-deductible health plans are ideal for patients who rarely get sick and can afford to pay their patient deductible upfront or within 30 days of receiving a bill. 

On the other hand, low-deductible plans make health expenses easier to predict for patients. This is the better plan if the patient has a chronic condition, sees the medical provider frequently, or if they take regular prescriptions. 

More medical practices are moving to higher deductible plans and copays due to difficulties with collecting pay; the longer payment is due, the less likely are the chances of it being repaid. Insurance verification is a critical component of billing insurance for acupuncture and other holistic services, as correct verifications have the most direct correlation with successfully getting claims paid.

Tips for Handling Insurance Deductibles in Your Medical Practice

insurance for holistic practices

Managing insurance deductibles in your holistic practice can be a difficult task. Follow these tips to help collect your payments from patients on deductibles  - and how to do so while maintaining a good relationship with them. 

Be Vigilant at the Beginning of the Year

The start of the year is when most of your patients have not yet reached their deductible limit. Most insurance plans are renewed on January 1st, re-setting each patient’s number of visits and deductible amounts. So, it’s important to be vigilant with your patients at this time and ask them if they would either self-pay or check with their insurance plan to make sure they’re covered. 

Check With the Insurance Company

To prevent issues with insurance companies and reimbursements, it’s important to check with each patient’s insurance company before their visit. It can be difficult to monitor which patients are on insurance deductibles or not, so ensuring patients are covered for authorized services can help you get paid on time.   

Communicate with Patients Upfront about the Cost

Your front desk should communicate with your patients with high insurance deductibles about the total cost of the treatment that they would be paying before leaving. Doing so can prevent any miscommunications or issues about the payment due. Every patient should have their eligibility verified and have any details with deductibles shared with them on every visit.

Collect Deductibles at the Time of Service 

By collecting insurance deductibles at the time of service, you can ensure the greatest possible revenue cycle for your holistic practice. You can receive the payments you’re due, as well as avoid the hassle of following up on unpaid treatments in the future. To maximize your collections, collecting deductibles as soon as possible is key. 

Have a Policy in Place about Insurance Deductibles

Make a policy for your entire holistic practice of deductible collections. This can help all your staff, including your front desk, communicate clearly to patients your practice’s policy about copays and deductibles. Your clients will also appreciate understanding what your policy is clearly instead of being unaware and then blindsided down the road when collections are due. With the right software and practice management tools, you can easily equip your holistic practice to check in your patient’s data in real-time and stay updated about each patient’s eligibility

Offer a Variety of Payment Options

Making payment options convenient can help streamline the deductible collections process. Offer a variety of payment ways upfront, such as credit cards or other forms of digital payments. The more options you have, the easier it is for patients to pay you upfront. 

Don’t Forget to Follow-up on Insurance Deductibles

Unpaid insurance deductibles can harm the financial health of your holistic practice. Make sure to follow up with patients who have yet to pay with phone calls and patient statements if patients leave without paying their full deductible amount. Your holistic practice will only realize its true revenue potential with an efficient medical billing process and effectively collecting patient insurance deductibles. 

Have questions about handling patient deductibles or about how to streamline your medical billing process? Reach out to the experts at Holistic Billing! We’d be happy to help you navigate the complicated world of insurance and medical billing for holistic providers. Contact us today!

March 26, 2021
 - by Antonio Arias, MBA, CHBME
insurance deductibles
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