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Sickness billing format for organizations

hey guys it's kiana certified professional biller aapc approved instructor and medical billing business owner and in today's video i want to discuss patient responsibility how do you calculate patient responsibility and estimate what the insurance is going to pay so everything we discussed today is going to be all about in-network benefits okay so let's get started number one before you're able to calculate what patient and insurance reimbursement is going to be you have to verify the patient's benefit so you want to contact provider services and verify if the patient has a co-payment so a co-payment is a set dollar amount the patient pays for a service so for example every time the patient sees their primary care doctor they have a 10 copay that's a set dollar amount there are always exceptions to the rules like maybe preventative services such as an annual exam or annual physical the copay may not apply but in general the co-payment again is a set dollar amount the patient has to pay for a service next is co-insurance so co-insurance is a percentage of the allotted amount the insurance and patient pays for a service so the split can be you know 50 50 60 40 70 30 80 20 90 10. i've seen 95.5 they're all different types of splits but basically the insurance is responsible for a percentage of the allowed amount and the patient is also responsible for a percentage of the allowed amount then we have deductible so deductible is a set dollar amount the patient pays each year before the insurance starts to pay and what's really important with the deductible is to keep in mind everyone's deductible does not reset on january 1st when it comes to medical billing you want to verify when you're speaking with provider services and verifying the patient's specific benefit you want to verify if their benefits are based on a calendar year which starts january 1st or a plan year which will start any other day throughout the year okay so it's really important to find out so that you know when their particular benefit is going to reset so again this is a set dollar amount so for example the patient has a one thousand dollar deductible that has to be met prior to the insurance companies starting to pay okay then we have out of pocket maximum so the out-of-pocket maximum is the set dollar amount the patient pays before the insurance covers 100 of the allowed services for the remainder of their benefit year okay so this is a set dollar amount let's say for example five thousand dollars is the patient's out of pocket maximum this means once the patient has paid five thousand dollars out of pocket during their benefit year they no longer have to pay another dime so let's say they've met their five thousand out of pocket max they go to see their doctor they normally pay a ten dollar copay in this scenario they would pay nothing the allot amount is going to get covered 100 by the insurance because their out-of-pocket maximum has been reached okay so let's go over some examples i have five examples for you today example number one the build amount is 300 we submitted a claim to the insurance company for 300 the allowed amount is the contracted rate that the provider has agreed to accept so the allowed amount is 156 dollars and the adjustment is going to be 144 so the way that you calculate adjustment you take the build amount and you subtract the allowed amount and that gives you the adjustment so 300 minus 156 equals 144 okay so this patient has a forty dollar copay so their responsibility is going to be forty dollars and the insurance reimbursement amount is going to be one hundred and sixteen dollars so we take the allowed amount and we subtract patient responsibility and that gives us the insurance reimbursement so 156 minus 40 equals 116 dollars okay example number two the build amount is nine hundred dollars the in network allowed amount is seven hundred and sixty dollars so we do 900 minus 760 and that equals an adjustment of 140. that's what we're writing off we've agreed to write that off when the providers in network so the patient has a 70 30 co-insurance this means the patient is responsible for 30 the insurance is responsible for 70 so we take the allowed amount of 760 and multiply by 30 percent and that equals 228 that's what the patient is responsible for paying then we take the allowed amount 760 and multiply it by 70 which equals 532 and that is the amount of insurance reimbursement example number three the build amount is 590 dollars the in-network allowed amount is 330 so 590 minus 330 equals an adjustment of 260 this patient has an annual deductible of 1 500 and none of it has been met so the allowed amount is 330 which is less than their deductible that is going to get applied towards their deductible and that is facial responsibility 330 the insurance reimbursement is going to be zero because deductible has not been met the entire allowed amount has been applied towards patient responsibility their deductible okay in this example the build amount is ten thousand four hundred the allot amount is eight thousand six hundred and five dollars so to calculate the adjustment we do one ten thousand four hundred minus eight thousand six hundred and five and that equals one thousand seven hundred and ninety five that's the amount we're writing off and then uh the add a pocket maximum has been met for this patient so the deductible co-insurance and co-pay if they have any of those responsibilities does not apply in this particular example again because their out-of-pocket maximum has been met so they pay zero dollars for the remainder of their benefit year and the insurance company is going to cover the allowed amount 100 percent so insurance reimbursement is going to be 8605 dollars and in our last example um you'll actually see this in my instagram post from august 13th i did receive several requests to break this amount down so the build amount is 11 000 the allowed amount is 8422 so the adjustment is 11 000 minus 8422 which equals 2578. the patient has a remaining unmet deductible of 2032. and they also have a coinsurance a 6040 co-insurance so what this means is we're going to take the allowed amount and we're going to subtract that deductible so 8422 minus 2032 equals 6390. so we're going to take the ninety 6390 multiply by forty percent which is the patient's coinsurance that equals two thousand five hundred and fifty six and then we have to add the remaining unmet deductible of 2032 and it brings their out-of-pocket responsibility to 4 588 the insurance reimbursement is going to be 6390 times 60 eight 3800 and thirty four so again we're not multiplying the allowed amount eight thousand four hundred and twenty two by forty percent and by sixty percent because we have to deduct their unmet deductible okay so that's how we got the six thousand and three hundred and ninety um if any of this is still unclear to you or if you have any further questions feel free to leave a comment below and i will respond to you directly also feel free to reach out to me via email at askthebiller gmail.com i offer an online six-week training uh via zoom and we meet every wednesday night at 8pm eastern standard time and i teach the entire revenue cycle from uh registration all the way to collection so if that's something you're interested in learning medical billing or you're looking for a refresher course maybe you did medical billing several years ago and you want to get back into it definitely join us in the billing coaching group where we meet every wednesday every class is recorded so you don't miss anything if you're unable to attend live you do have unlimited access to the replay so don't forget to give this video a like if you found it helpful and leave me a comment below