Is cost-sharing more harmful or beneficial? What are the consequences of a patient’s cost-sharing arrangement? Will a lack of cost-sharing lead to frivolous, needless care? How about others who are less fortunate, such as chronic sickness patients, pregnant women, and children? This article attempts to address all these questions.
The member and his insurance company collaborate to share the costs of covered medical services. This is referred to as “cost-sharing” or “out-of-pocket” expenses. A member pays a portion of his health-care costs (copayment), and the health-care insurer covers the rest. A member is expected to pay a copay if one is specified on their ID card. If no copayment is stated, they may be requested to pay a percentage or the entire sum during their appointment, depending on the provider.
Cost-sharing
This article will discuss the certain kinds of patient cost-sharing that are based on a person’s actual usage of health services and that are usually being collected during the time the services are rendered. These elements of cost-sharing are designed, in order, for the people to think prior obtaining care.
Here’s an example, a patient receives medical service that is included in his health plan, the patient “shares” the cost by paying a copayment, or a deductible and coinsurance. But, if the service or procedure is not covered by his health plan, then the patient should pay for those health services out of from his pocket. But again, this depends on the type of health plan the consumer has, while most will have a co-payment, coinsurance, or deductible amount.
Copayment
So, let us see how copay works. A copay is a fixed charge (amount of money) that a consumer needs to pay on the spot each time they go to a physician. Sometimes they may use both a copay, deductible, and coinsurance, depending on which type of covered services. Members of Medicare are responsible for all applicable co-payments and cost-sharing amounts. Medicare stipulates that any patient who registers in an RPM program must be “consent” to be in the program, the reason is 80% of all Medicare patients joined in an RPM program has a monthly financial responsibility in the form of copayment.
There are also patient deductibles to consider. In the form of a copay, Medicare patients typically pay 20% of the total Medicare reimbursement paid to the provider (Medicare.gov, n.d.). Patients who sign up for Medicare’s Chronic Care Management (CCM) program agree to pay a $8 monthly cost on average. The monthly CCM patient copay can change at any time. Many Medicare Advantage payers, for example, require patients to pay $20 to $30 in monthly copays if they agree to participate in a CCM program. If a patient has a health insurance plan that includes a $30 copay for seeing a primary care physician and a $50 copay for seeing a specialist, the patient will pay these preset amounts regardless of the cost of the services. The remaining balance, or covered amount, is paid by the insurance company. So, if a patient’s cardiology appointment or consultation costs $250, the patient pays $50 and the insurance company pays $200.
The majority of RPM services will be paid using one of the five CPT codes (99091, 99453, 99454, 99457, and 99458). RPM “service codes” and timed RPM “management codes” are the two most common categories of these codes. RPM service codes cover the costs of providing RPM services, including the device, the patient’s initial education and training, and the data transmission to the clinic. RPM management codes are time-based monthly codes that include interactive communication with the patient to manage treatment or the care plan, as well as interpreting and acting on sent data. Let’s put the RPM codes to work, presuming there would be a specialist copay. The invoice for RPM looks something like this:
The provider will charge the patient a specialty copay, such as $50, and will additionally bill 99453 when they first begin the RPM services. As a result, the Provider will bill 99454 for each calendar month in which the patient’s Physiologic Measurements are transmitted for at least 16 days. The Provider bills for the time spent remotely monitoring the patient’s physiologic data as part of the patient’s treatment management services in addition to the monthly 99454. Under 99457, the first 20 minutes of such management are invoiced. The Health Care Provider (HCP) can then bill 99458 for each subsequent 20 minutes of management time, up to a maximum of 60 minutes.
Deductible
The next is a deductible, which is the amount a member must pay each year for most medical services before the health plan begins to share in the cost of covered services. In most cases, the member is responsible for all provider charges up to the deductible amount before the plan begins to pay. The member’s health plan, for example, has a $1,000 deductible that has yet to be fulfilled. The doctor’s appointment will set the member (patient) back to $100. After that, the member pays $100 and the insurance company pays nothing. The member’s $100 payment will be applied to the member’s total deductible. The remaining deductible balance is now $900. The payment is applied to the member’s deductible each time the member pays for a service. If the member has other family members on the plan, each must satisfy their deductible until the total amount of deductible expenses paid by all family members equals the overall family deductible. In addition, if the member is generally healthy and does not use expensive medical services during the year, a plan with a higher deductible and lower premium may be a good alternative. However, if a member has a known medical condition that will require treatment and the member has an active family with children who participate in sports, a plan with a lower deductible and higher premium that covers a greater percentage of his or her medical costs may be preferable.
Coinsurance
Coinsurance kicks in once the deductible is satisfied. After the deductible has been met, coinsurance is a portion of the medical costs that the member pays. The term “coinsurance” refers to the fact that the member and the insurance company each pay a portion of the total eligible costs.
Knowing What You Owe After Visiting Your Provider
It’s also worth noting that after a member visits a provider and files a claim for medical services, the health insurance company will send an Explanation of Benefits (EOB). The EOB is a document that contains vital information about claims that have been processed by the health insurance company. The EOB isn’t the same as a bill. It’s a list of the benefits that have been applied to a claim. Payers should remember that they should not transmit payment to the billing provider unless they have received a bill from the provider directly. Payers must constantly compare the provider bill to the EOB to ensure that services were provided and that the costs listed are accurate. All EOBs and provider bills should be kept on file for future reference.
Takeaway
- The out of-pocket or out of pocket maximum is covered for all Copays, deductibles and co-insurance. They are the amount to be paid by the member before their insurance company begins to pay for services covered.
- Copays, deductibles, and coinsurance are all forms of cost-sharing.
- Both the member and the health insurance company pay for the cost of covered health care services.
- It is important to make sure to understand the details of the plan before using the coverage so that the amount to pay for the treatment does not come as a surprise.
To know more about Cost Sharing and Remote Patient Monitoring, contact DrKumo Inc.
