Explanation of Medical Billing
For all the medical services we provide, we will submit a claim to your Insurance Plan. It is important that we have accurate information about your plan. After we receive the EOB benefits form, we will determine the amount, if any, that you still owe.
Medical insurance involves 3 common forms of payment to physicians. These are the co-pay, the deductible, and the co-insurance.
Medical billing is called fee-for-service. The doctor provides services, and for each service, there is a fee (or a charge). The amount you owe is usually less than the full fee due to fee-reduction contracts between the doctor and your health insurance company. Contrary to what many people believe, insurance does not “cover everything”.
The co-pay is the amount of money that you owe up front for every doctor visit. Each insurance plan is different. The co-pay might vary in amount or there might be none. The co-pay needs to be paid in advance at the time of your visit. Some co-pays are as high as $50.
Many patients have an annual deductible. This is money that the insurance company will determine is owed to the physician, but that the patient has to pay. When a balance due is applied to your deductible, you owe this money to the practice. See the example below.
This is the percentage of the fee that is owed to the practice based on your plan. The amount depends on what the insurance has approved for payment. You owe the co-insurance amount to the practice. See the example below.
Example using the above terms
You go to the doctor for a problem. The visit fee is $150. Your co-pay is $10 and this is paid at the time of the visit. A claim is filed with your insurance company. They approve a payment of $100.00, but you have a 20% co-insurance.
The $100 is what your insurance has approved for the full payment for this visit. You have already paid $10 of this as your co-pay so the insurance owes $90. You have a co-insurance of 20%, so they will only pay 80% of the $90. Thus, they will pay only $72. Your co-insurance is $18. So you have paid $28 total ($10 co-pay plus the 20% or $18 co-insurance) and your insurance has paid $72.
If you have an unmet deductible, the insurance will “apply” the entire $90 to your account.