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Rates & Fees

Insurance Billing Explained

In our mission for transparency, we wanted to provide some quick education about our insurance billing process. This is a particularly confusing system to navigate – we’ll do our best to simplify it! Please note that our examples are only for your edification, and your exact circumstance will vary based on multiple factors. The best bet is to arm yourself with this knowledge, and then use it to help you understand all the information provided to you by your insurance payor.

Let’s start with some vocabulary:

Billed charges

These are the fees at which we, as a practice, have determined that our services should be valued. This number is based on many factors, including our business overhead, value of our expertise, and a comparison to whatever local market data is available for similar services offered elsewhere. This is the charge we submit to all insurance companies.

You are NOT directly responsible for this whole fee if you are using an in-network insurance.
This value is effectively a placeholder and unlikely to directly impact any part of your responsibility.

Allowed Amount / Maximum Allowed Amount

For all intents and purposes of billing, this charge is the actual starting point. It is a “negotiated” rate from your insurance provider, and it notes how much they believe our services are worth. Generally, this is a “behind the scenes” amount, and may not be readily clear or available to your doctor’s office until after the claim has been submitted. As a part of the agreement to take your insurance, we agree to accept this Amount, instead of our ‘Billed Charge’.

It is, more often than not, significantly less than our ‘billed charge’, and varies from insurance company to insurance company, and sometimes even plan to plan.
Depending on your specific coverage details, you may be responsible for a portion or for the total Allowed Amount / Maximum Allowed Amount.

Co-Payment

This is the most common fee, and one you may be most familiar with when you go to any doctors’ office. Many insurance cards will show the expected co-pay amount directly on them.

We collect this co-payment on the day of the visit.

Most commonly, the co-payment is applied toward your Allowed Amount / Maximum Allowed Amount (please note that this is not always the case, and you must refer to your insurance plan’s details for specifics!).

For example, if your insurance plan has an Allowed Amount of $100 for your visit, and you paid a co-pay of $25, the outstanding balance would be $75.

This is where it starts to get tricky!

If you have not met your deductible, it is most likely that you are responsible for the remaining $75.
If you have met your deductible, then your insurance should cover this balance.

Please note that this represents a common example of the process, but your insurance plan will have details that should explain your specific case.

Co-Insurance

This is often a payment occurring after a deductible has been met, however, depending on your plan, it may be the way you pay for any service from the beginning. The specific details of co-insurance should be clearly noted in your plan coverage documents.

Let’s say your insurance company has given you a 70/30 split, where 70% is paid by insurance and 30% is paid by you (your co-insurance).
Using the example of an Allowed Amount of $100, this means that you are responsible for paying 30% of the $100, or $30, and your insurance should cover the remaining 70%, or $70.

Once again, this all depends on your specific terms, and may only be applicable up to or after you have met your deductible.

Deductible

This is often the value from which most people choose their insurance plans.

It is typically described as the amount you will have to pay out-of-pocket before your insurance company begins to help with payments.
In some plans, after you meet your deductible, you may begin paying on a co-insurance program; in others, you may only have to pay co-pays!
In the best cases, once you meet your plan’s deductible, you may have no payment responsibilities at all (co-pay, co-insurance, or others!).

It is vital that you familiarize yourself with the details of your plan’s terms to understand all this process.

Out-of-pocket Maximum

This is about as close to an absolute cap on spending as we can get from insurances. While the deductible represents a value after which your out-of-pocket spending may become less, the out-of-pocket maximum is typically a true absolute limit after which you should no longer have any more out-of-pocket expense. The calculation may very from payor to payor, but, in the most general sense, all of your co-pays, co-insurances, and out-of-pocket payments toward Allowed Amounts are factored in, and when the total hits your out-of-pocket maximum, you should no longer have to pay anything at all.

If you made it this far, thank you!

We can put some of this into context with an example.

This is an extremely simplified scenario designed to explain the concept only. Please note that the values are entirely arbitrary, and in no way intended to represent our or your insurance’s rates, fees, or values.

An Example

Mr. X is on a plan where his deductible is $1,000.
His co-payments are $50.
After he meets his deductible, he no longer has to make co-payments, but will have a 30% co-insurance responsibility.
His out-of-pocket maximum is $5,000.

For the sake of simplicity, let’s say all of his doctor’s appointments have a Billed Charge of $300, and an Allowed Amount of $200.

(Remember, the ‘Billed Charge’ is mostly irrelevant, and, in reality, we may not know the Allowed Amount up front – it will depend on multiple variables which may not become clear until the insurance company sends the summary to you and the providers’ office.)

Every time he goes to an appointment, he first pays a $50 co-payment, and will owe $150 after the visit, making his total responsibility equal to the Allowed Amount of $200.
Assuming Mr. X’s plan counts his co-payments toward the deductible goal, each visit brings him $50 (co-payment) + $150 (balance/responsibility), or $200, closer to the $1,000 mark.
Thus, after 5 appointments, he is likely to meet his deductible.

After meeting his deductible, he begins to have a co-insurance of 30% instead of a co-pay.

On a $200 Allowed Amount, this is $60.
His insurance company should cover the remainder (70%, or $140).
Thus, his total responsibility is $60 for each visit.

For the remainder of his plan-year, each of his appointments (assuming they have Allowed Amounts of $200) will leave him with a responsibility of $60, and bring him that much closer to his out-of-pocket maximum.

To reach his out-of-pocket maximum with appointments alone, he will require approximately 67 more visits, or a total of 72 visits for the year!
Remember, his out-of-pocket maximum was $5,000.
His deductible was $1,000.
After 5 office visits, he met his deductible, which counts toward his out-of-pocket maximum ($5,000, the out-of-pocket maximum, minus $1,000, the deductible), leaving $4,000 that he must pay out-of-pocket before he reaches his cap.
After meeting his deductible, his out-of-pocket expense becomes $60 per appointment (rather than $200), therefore, it will require about 67 more visits in order to contribute the remaining $4,000.

Is it all as clear as mud?

What are the negotiated rates, or Allowed Amounts?

By definition, these are the rates we have agreed to accept from insurance companies to provide our services to their Members.

As for the actual rate or amount, unfortunately, each plan and payor has its own ‘fee schedule’ that is proprietary information. Under the terms of the contract, it is not public information. However, insurance companies are required to share this information with you as a plan holder or member. So the best answer is to get in touch with them for exact details.

What if I am out-of-network?

This is an excellent and important question!

Being out-of-network simply means the practice or provider does not have a contract with your insurance. This means that the practice or provider are not required to accept their dictated rates for services, and they are permitted to bill fully at their own rates.

Insurances do offer some coverage in these cases, but this is based on a percentage of an Allowed Amount (usually different for out-of-network than in-network). They typically count on the practice/provider to bill you directly for a large proportion of the remaining charge. In these cases, the Billed Charge may hold some value, because a practice or provider is permitted to hold you responsible for the full amount.

For example, let’s say you go to a practice who is out of network and they have a Billed Charge of $300.

Your insurance provides some out-of-network coverage, and has an out-of-network Allowed Amount of $100.
Your plan covers a maximum of 70% of out-of-network Allowed Amounts, or $70.
As far as the out-of-network practice is concerned, you now have an outstanding balance of $230 ($300 Billed Charge minus $70 covered by your insurance), which you are responsible for paying.

Here at WISH, we do our best to limit your extra expenses, and are eager to help everyone! If we are out-of-network for your plan, but you are still interested in meeting our experts, please call us to discuss some options!

What about Surprise Billing or Balance Billing?

This is a fantastic question.

The practice of Surprise- or Balance-Billing typically refers to out-of-network circumstances. It describes a situation where a patient sees a provider who is out-of-network, then receives a bill for the difference between the Billed Charge and the Allowed Amount, as a result of the insurance refusing to pay the amounts. More often than not, this refers to emergency circumstances and surgical procedures.

Unless you are uninsured or self-pay, it does not technically refer to knowing all the costs up front. The onus of responsibility for transparency of costs falls to insurance companies. Most of them have tools online through their portals which help estimate your personal costs based on your particular plan. These can help estimate your responsibility.

If you are uninsured, or plan to self-pay, it is always a good habit to ask for a “good-faith” estimate of costs from the practice.

We understand this can be confusing and overwhelming.
For information, please feel free to call us at (360) 345-3175 or send us an email at [email protected]. Our team will be happy to answer your questions!

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