Insurance and EAPs – The Basics (Part 2)

Are you in private practice and confused about how to process insurance claims? In this post, I will explain the basics.

Basic Terms

Let me start by explaining some basic terms:

• Insurance Panel: The insurance company, i.e. Blue Cross Blue Shield
• Credentialing: The process of getting accepted into the panel
• Co-pay or Coinsurance: The amount the client pays per session once they have met their deductible
• Deductible: The total amount the client has to spend before they can use their insurance
• Contracted rate: The amount the insurance company pays per session
• Cash rate: The amount you charge per session
• In-network: You have been accepted into the panel. The client pays a copay or coinsurance, and the insurance company pays you the rest. Until the client meets their deductible, you can only charge them the contracted rate, not your cash rate.
• Out-of-network (OON): You have not been accepted into the panel, but you are recognized as a provider. If the client has OON benefits the insurance company may reimburse a portion of the session. The client can either file the claim or you can do so on their behalf. Generally, if the client files the claim they will be reimbursed, and if you file it you are reimbursed.

How to Process Claims

Prior to setting an appointment:

1. Find out what insurance coverage the client has and the details about their benefits: i.e. copay and deductible. Get their full name, address, date of birth and insurance ID number.
2. Get authorization for the service. This usually involves calling the insurance company and providing the client’s details. It’s always a good idea to double-check what the client has told you about their benefits.
3. If you are OON, then you should also ask if the client has OON benefits, and if they have met their deductible.

Some examples

Here are some examples. Let’s say Jane comes to you for counseling and has BCBS (Blue Cross Blue Shield) for her insurance:

1. You are in-network and Jane has not met her deductible. Jane pays you the contracted rate.
2. You are OON and Jane has not met her deductible. Jane pays you the cash rate.
3. You are in-network and Jane has met her deductible. Jane pays you the copay, and the insurance company pays the remainder (contracted rate minus the copay.)
4. You are OON and Jane has met her deductible. Insurance company pays a percentage (depending on plan) of the cash rate, and Jane pays the remainder (cash rate minus what insurance company paid).

You can handle OON clients in two different ways:

1. Charge the client the cash rate and pass any reimbursement from the insurance company to the client. (Either party files the claim).
2. Change the client the difference between the cash rate and the reimbursement and you keep the reimbursement. (You file the claim).

Yours in the Joy of Knowledge,

Dr. Barb LoFrisco