Medical Billing 201
As always, insurance information is provided for informational purposes only. Final determination of claims and coverage is handled solely by your insurance payor. Please verify all information directly with your insurance provider.
Welcome to the second article discussing some of the intricacies of medical insurance billing and how it impact's you as a patient.
If you have not already, please consider reviewing our Medical Billing 101 post.
We are going to be covering several aspects of insurance billing in this article. The typical billing process and procedures were covered in our previous article, and we will focus more on some common issues/concerns that hit patients.
We will break things down in 3 major sections:
Licenses, Networks and Credentialing (Oh My!)
These are all issues that could have a major impact on whether your benefits get paid. In most cases you don't need to know all these details if you are willing to confirm coverage via a phone call to your insurance company, but it is good to understand how any of these criteria could result in denials of your insurance claims.
This is another area where your benefits could be impacted by determination made by your insurance company. Medical necessity is determined by your insurance company, and the determination of medical necessity may not be solely determined on what is best for your health and wellness.
Lab billing is interesting as it is a combination of your physician's order (including diagnosis codes), as well as the labs network status with your insurance company. Lab billing (including patient invoicing) is generally handled entirely by the lab and not your physician or physicians office.
Licenses, Networks and Credentialing (Oh My!)
Your medical providers are licensed by the state in which they practice medicine. Based on their license designation, they are assigned a scope of practice within their state.
In Washington State, you can lookup your providers licensing status using the Provider Credential Search tool. This tool not only tells you the credentials of your provider, but can even let you know if your physician, medical assistant or other provider has had their license expired, terminated or suspended!
Your physician's license is one of the first critical areas for insurance billing. Our physician's are all Naturopathic Doctors (ND) licensed in the State of Washington.
Most insurance plans underwritten within Washington State must provide coverage for Naturopathic Doctors due to the "Every Category of Health Provider" law. That said, there are many individuals in Washington State that do not have Naturopathic coverage. This could be for a variety of reasons, including that your insurance payor is actually in another state. In that case, Naturopathic coverage can be denied even if one of our Doctors is listed as in-network in your "Find a Doctor" tools.
This ability for insurance companies to exclude Naturopathic Doctors is one of the main reasons we always recommend patients verify coverage by calling their insurance company, and getting a reference number for their call.
The insurance company solely determines benefits and coverage, so having the discussion documented where they verify coverage is your single best method in avoiding surprise bills.
Networks and Credentialing
Each medical provider must be regularly credentialed with the insurance company verifying their license, location, liability insurance, etc.
In order for a physician or medical provider to be deemed "in network" with an insurance payor, they must also sign contracts with your insurance company.
Once credentialed, the provider's "network" is determined by the contract and agreement they make with an insurance company.
Insurance companies like to keep very narrow networks as a cost savings technique. This can have a dramatic impact on the level of coverage for patients.
The important thing to remember is that even if your provider is contracted with your insurance payor, they may or may not be in the network associated with your specific plan. It is also important to note that insurance companies will sometimes change networks (sometimes dramatically) with the New Year.
In most cases, physicians do not wish to be excluded from networks. However, the insurance companies will often work to keep these networks as narrow as possible.
At it's surface, the idea of having a standard for medical necessity for health coverage is a prudent ideal. Accepted health care services designed and tested for the evaluation and treatment of disease or illness is important and provides a good baseline of protection for the patient.
In practice, it become a bit fuzzier. Let's pull back some layers of the term "medical necessity".
The concept of "medical necessity" has a financial component as a driving force, as well as generally looking to treat patients after they are ill or symptomatic.
A good example is how insurance companies treat testing of Vitamin D levels.
All things being equal, regular monitoring of Vitamin D levels and appropriate use of supplements to support Vitamin D levels would be beneficial to patients. However, Vitamin D testing is expensive.
If Vitamin D tests cost under $5, it is likely that it would suddenly become "medically necessary". That is not to say that the medical insurance industry should not make wise decisions to keep patient costs down, or to make use of scientifically proven treatments. Our physicians also take these considerations into mind when treating patients. This is just to illustrate that cost, and reactive treatment does play a role in which treatments qualify for insurance coverage under the "medical necessity" umbrella.
Our approach is to proactively maintain and improve a patients health, rather than only control symptoms.
Our clinic may recommend tests, supplements or procedures that are not deemed "medically necessary" and are not covered by insurance. We make those recommendations due to the clinical and diagnostic value to our physicians, and the health benefits to our patients.
We also will let patient's know when there are procedures, injectables or labs that cannot be billed to insurance. We make use of these alternatives because we believe they work for our patients, and informed patients should be allowed to choose to receive these valuable choices.
Am I Covered?
The answer is not always so simple.
In short, your medical provider (and facility) must:
- Accept your insurance
- Be in network with your insurance plan
- Have a license that is "covered" by your plan
- Perform covered services
- Have services deemed "medically necessary"
Even if all of the above it true, the patient may still have out of pocket costs based on their co-insurance, deductible or limitations of covered services. There is more information on deductible, co-insurance and patient liability in the Medical Billing 101 post.
We always recommend that patients check directly with their insurance to verify coverage and benefits. The main reason we recommend this is extraordinarily simple: Your insurance payor is solely responsible for determining benefits.
Lab Fees and Billing
We work with 3 basic lab models:
- Patient Pay
- Insurance Billing
- Discounted "Pre-pay"
Patient pay is simple and clean. One price, paid directly to the lab. No surprise bills or hassling with insurance, etc. Done and done.
Although the out of pocket costs are sometimes higher than insurance billing, the patient pay models consistently generate the highest patient satisfaction.
Laboratories can bill insurance on your behalf. Your physician will generate the lab order and provide diagnosis codes, but after that it is entirely managed by the lab and your insurance company.
The lab (not your Doctor or the clinic) bill insurance. This generates an explanation of benefits, which the insurance uses to bill the patient (if applicable). Most patients have at least a co-insurance with most lab orders.
This method does have issues. The two primary issues are insurance denials and patient liability via co-insurance and deductible.
Insurance denials for standard labs are fairly rare, but they do occur. In this case, the patient could be liable for the entire amount billed to insurance which can be quite significant. Per our laboratory billing policy, it is the patients responsibility to verify eligibility and benefits for their lab services. It is the clinics responsibility to provide accurate diagnosis codes to the laboratories to use for billing.
Co-insurance and deductible balances are very common. Your insurance will make adjustments to the billed amount, however may not make any payments to the lab. This leaves all (or part) if the adjusted balance the responsibility of the patient.
Some specialty laboratories will offer a set price if patient's pre-pay for their lab. This is NOT the same as "Patient Pay", since the lab also bills your insurance.
This can be confusing for patients since they have "paid" for the service, but still receive an explanation of benefits showing a large patient liability. In addition, some of these labs will also send an invoice out to patients.
Not surprisingly, this laboratory billing method causes the most confusion and dissatisfaction for patients. We offer to use these "Pre-paid" labs since they often allow a patient to have a test that could cost hundreds or thousands of dollars done for a much lower set price.
We advise patients who wish to use this model of the financial risks. As with all labs, we do not process any of the payments directly nor do we receive compensation of any sort for offering or submitting the labs.
We ask all patients to work directly with "Pre Pay" labs to resolve any billing issues or concerns.
Medical Billing Wrap
Medical Billing is a complex topic. It is also counter-intuitive as it is one of the few areas where people sometimes do not receive bills until weeks or even months after their visit or service.
Specialty Natural Medicine always recommends that patients verify eligibility and benefits with their insurance prior to service. We also recommend getting a reference number when speaking to your insurance.
In our experience, calling and obtaining a reference number is the patient's best option for getting the most accurate information and having a good basis to appeal any denied claims.
It is also important to try and understand the details of plans and coverage. By knowing all of the pieces that go into determining eligibility and benefits, a patient can make informed decisions to help minimize any unexpected medical bills.
Premiums are only one piece of the puzzle for determining medical costs. Making sure the plan you are purchasing cover the physicians and services that matter to you is at least as important as the initial cost (premium) of your insurance plan.