Collecting Deductibles, Co-Pays and Co-Insurance in Your Practice
It’s a fact that many of our patient’s have unmet deductibles. Deductibles are the amount of money that your patient has to pay out of pocket before their insurance company will begin to pay their claims.
To clarify, it’s also important to understand how this is different from co-pays and co-insurance. Co-pays are the amount of money that an individual’s insurance states they must pay upfront for each and every visit. Co-insurance is usually the 20% that an individual (or secondary plan) must pay after figuring in the allowed amount, minus the co-pay. And of course, the deductible is the amount of money your patients must pay out of pocket, prior to the insurance company paying any of their claims.
Deductible amounts will vary from policy to policy. The Medicare 2011 deductible rate is $162.00. Various commercial policies will have deductibles ranging from a few hundred dollars to more likely $1,000 or $5,000 or already $10,000. Knowing the amount of deductible and collecting it is imperative for the financial health of your practice.
Another point…it’s likely written into your insurance contracts and failure for you to collect co-pays, co-insurance or deductibles leaves you potentially open to accusations of fraud. There is something called the “False Claim Act”, which would leave you unprotected to prosecution for fraudulent billing under federal law. Know your contracts and consequently your requirements. Enough said.
So what can you do to maximize your collections?
- First and foremost, understand your individual contracts with third party payers. You’ll need to be aware of when you can collect deductibles (some prohibit you from collecting prior to providing sets). Additionally, some sets, usually preventative sets may not be unprotected to co-pays, co-insurance or deductibles.
- Review your financial policies on a regular basis. Make sure patients understand their obligation upfront. Remind them every year about deductibles, and indeed every visit if necessary. I nevertheless have people who tell me they were unaware of this being an annual obligation on their part, and some Medicare patients who tell me I’m the only one who has ever collected a deductible.
- When verifying insurance, do what you can to confirm if the deductible is met or not. This is not always easy, especially if patients are seeing multiple providers the first few months of the year.
- Work with your staff to teach them how to collect money, what should be said and not be said to patients and how to respond to objection easily and respectfully.
- Most patients will want to pay their bills, make it easy for them by providing multiple ways to pay such as cash, check, credit or debit card.
Good financial policies, fair collection practices and excellent education of your staff and patients will go a long way in avoiding any problems when it comes to proper collection of co-pays, co-insurance and deductibles.
Steps You Must Take
- Review your insurance contracts
- Review your financial policies. Tweak them if necessary
- use some time with your staff to review their practices and make sure it’s consistent with your policies and that of your contracts.
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