Understanding patient collections

January 12, 2018

Copays, deductibles and coinsurances


There are many different ways an insurance processes claims for patient responsibility. 

Copay: A copay (or copayment) is a flat fee that you pay on the spot each time you go to your doctor or fill a prescription. Let’s say you hurt your back and go see your doctor. Or you need a refill of your child’s asthma medicine. The amount you pay for that visit or medicine is your copay. Your copay amount is printed right on your insurance card. Copays cover your portion of the cost of a doctor’s visit or medicine

Deductible: A deductible is the amount you pay each year for eligible medical services or medicines before your insurance plan kicks in. For example, if you have a $1,000 yearly deductible, you’re on the hook to pay the first $1,000 of your total eligible medical costs.  There are deductibles for individual and family. 

Many costs for eligible medical services count toward your deductible. Examples include bills for hospitalization, surgery, lab tests, MRIs, CAT scans, anesthesia, physical therapy, medical devices like pacemakers, mental health care and chiropractic care

Coinsurance: Coinsurance is a portion of medical cost that you pay when your health plan kicks in. Your plan kicks in after you hit your deductible. Coinsurance is just a way of saying that you and your insurance carrier each pay a share of eligible costs to add up to 100%.

Please be aware of the Federal and State laws as well as your insurance contracts regarding waiver of patient responsibility.

There are provisions for waiving copayments in cases of financial hardship. At a minimum, you should document the financial hardship, and obtain a release from the patient to turn the financial document over to the insurance company, if requested

The OIG states the following criteria for waiver on the basis of financial hardship:

  • The waiver must be based on a good faith determination of the patient’s financial need. In other words, waivers must not be applied routinely. The government does not specify the financial status that would justify a waiver, so you should develop your own approach, apply it consistently, and document your efforts. For example, if your efforts to collect on a patient’s bill fail, or if it’s obvious that a patient is struggling to pay the amount owed, ask the beneficiary to fill out a form noting their employment status and average household income and expenses. Then make your determination based on the information provided.
  • The waiver must not be based on the amount of the charges. Your decision about whether to waive what a patient owes should be based on the patient’s ability to pay without regard to what Medicare may have paid or the total charges for the service.
  • The waiver must not be offered as part of an advertisement or solicitation

There are many resources for you.  I have attached a few links for your reference.

If you have any questions, please do not hesitate to us.