Reviewing Deductibles

It is not enough that we have reimbursement cuts effective Jan. 1, we also have an increase in the amount of the Medicare deductibles per patient per year. The $100 deductible has increased to $110 per calendar year, so the old $100 we once saw in the “deduct” column on the Explanation of Benefits (EOB) is going to be even higher.

This makes it more crucial than ever that we do a better job at collecting what is due from our patients and payer sources. While there is no way to alleviate completely the reduction of revenue your company will experience from deductibles, there are some ways to reduce your exposure. It never hurts to review these with your employees, so here we go:

Medicare will apply the deductible toward the first claim(s) received for each beneficiary. By holding claims until at least Feb. 15, your exposure can be reduced by up to 60 percent. If a physician or other entity files a claim first, then the deductible amount is taken from his/her allowable, up to $110 per beneficiary.

Remember, however, that many secondary insurers pay the Medicare deductible, so it may not be beneficial for you to hold claims. It really depends on the percentage of your patients who do not have adequate secondary insurers. Perform an analysis for your company before making this business decision.

The harder deductibles actually come with third-party insurance carriers. At the time of insurance verification, which is of the utmost importance, you must ask the correct questions to ensure you are collecting the amount from the patient up front, prior to delivering the equipment or supplies.

Ask whether the patient has a separate DME/pharmacy deductible. If so, how much is the deductible? How much of this deductible has been met? Make sure your company has an insurance verification form so your employees are aware of what questions to ask. Try collecting from the patient after they have left with their equipment or supplies — it is much harder!

Keep in mind that on secondary insurance claims when Medicare is primary, some secondary insurers will not reimburse for the deductible amount. This is true for the 20 percent copay as well. If the third-party carrier is a closed-network policy and you are not in the network, the carrier is not obligated to pay the deductible or the 20 percent copay. Let your patients know that they will be responsible for this amount if they still choose an out-of-network provider.

When you receive Medicare EOBs or a third-party EOB, it is vital to verify whether a deductible has been applied toward your claim. If it has, check the patient’s file to see if he has secondary insurance. Some Medicare “Medigap” insurers will pay for the deductible and coinsurance amounts. With these insurers, the deductible amount should have crossed over to the insurance company electronically from Medicare.

On non-Medigap policies, you need to bill the secondary insurer for payment by sending a Medicare EOB with a CMS-1500 form that matches the EOB amounts.

Let’s also review the indigent patient process. A provider may not routinely waive the deductible or 20 percent coinsurance amount. If you have a patient who cannot afford to pay you, he must complete a financial disclosure form, or “hardship form,” stating monthly income and expenses.

If the patient qualifies for hardship, you may write off the deductible or copay amount. If a patient does not qualify, you may set up a monthly payment plan until the debt is current.

It is essential that you have a written policy in place to assure that you are collecting the deductibles that are due from your patients, as well as secondary coinsurance amounts. This also means spending more time on the intake process, which will be more important than ever in 2005.

Take the time and make the investment in training your staff to obtain the correct information at the time of intake. It will prove to be a true investment — not a cost — that can help to reduce denials and poor reimbursement.

Jane Bunch is CEO of Kennesaw, Ga.-based JB&CS. A reimbursement specialist, Bunch delivers educational seminars worldwide, helps develop corporate compliance plans, and serves as a consultant for fraud and abuse cases. She can be reached at 678/445-1221 or via e-mail at [email protected].