Preparing for Deductible Season
By Paula Muhlenbruch
We are coming into the home stretch of 2020 and the new year of 2021 is just around the corner! Along with the new year comes another Deductible Season. This is a time where you will see an increase in patient AR and a decrease in insurance payments. If you educate your staff and focus on a few items, you can overcome the predictable cash flow issues that are about to come.
Understanding how patients’ benefits work will go a long way to helping your staff know what to collect in the office at the time of visit. Your staff should understand the difference between the 3 major areas of patient responsibility and when to collect them:
- Copay – set fee established by the insurance plan that a patient is responsible for any time they receive a particular service
- Co-insurance – patient’s share of the liability for the services; a set percentage of the procedures allowed amount
- Deductible – set amount a patient must pay before insurance coverage kicks in
Of the 3 items listed above, collecting copays are the easiest. If you mandate your staff to collect copays at the time of visit, you will be one third of the way there. Deductibles and co-insurances are more of a challenge; knowing when and how much to collect can be difficult.
Medicare Part B patients are the easiest to handle. At the start of the new year, the patient deductible will go up to $203. Once it is met, their 20% co-insurance will kick in. Making sure your front office staff is aware and understands this process at the beginning of the year and that they are collecting something at the time of visit will go a long way with helping manage your cash flow.
Commercial plans are a bit trickier since they may have benefits that include copays for specific services, yearly deductibles, as well as co-insurances that are patient responsible. If your staff is contacting the carrier to confirm eligibility, at a minimum they should take the extra step of asking for a benefit summary. Some of the electronic eligibility systems/services will provide such additional data.
Knowing this information will help them know what to collect from the patient when they’re in the office. For example, Patient A’s benefits for physicians’ services are 100% of allowed amount after a specialist copay of $30 and Patient B’s benefits are 20% coinsurance subject to in-network deductible of $500. When Patient A comes into the office, the staff would know to only collect a $30 copay; the remainder of the visit would be covered 100% by their insurance. When Patient B comes in for the same service, they will have to meet their $500 deductible before the insurance will pay for anything, so the staff should collect the full cost of the allowed amount, not to exceed $500.
If your staff is not familiar with each carriers’ fees schedule, which most are not, it would be easiest to manage this process by having a deposit strategy in place for patients with deductibles that have not been met. You should set minimum fees that need to be collected at the time of service, letting the patient know that you will bill them for the difference. For example, Patient B (from above) is having an exam and testing today and you are not sure if they have seen any other physicians prior to coming to you. You’re also not sure if their deductible has been met. If you are the first physician the patient has seen this year, or they have a high deductible, having your staff collect a set fee—such as $75 for the exam and $30 per test—you will have collected something instead of nothing, which will help maintain your cash flow during deductible season.
“I couldn’t be happier with the service and would unreservedly recommend PMRG to any practice looking for ophthalmology-specific billing help.”
~ Darren H, MD
