Tips for Therapists to Survive Health Insurance Deductible Season

At the start of the insurance plan year, deductibles reset so many people are responsible for out-of-pocket payments to healthcare providers. Most plans operate on a calendar year, so the “deductible season” generally starts on January 1st. Billing clients in the first few months of the year is tricky because you don’t know if they’ve met their insurance deductible or not — and it isn’t practical to inquire about every client’s status at every visit.

Having a plan in place to ensure you’re paid in a timely manner for services will improve the cash flow of your practice and reduce costs. There are several options, and this article will help you choose what works best for your practice.

Understanding Benefits and Payments

A person’s responsibility for healthcare claims includes copay, deductible, and coinsurance. A copay is a set fee paid to receive a particular service. For example, an insurance plan may have a $15 mental health visit copay. A deductible is an amount that must be paid before insurance pays for services not covered by a copay. Coinsurance is the percentage of the charge paid after the deductible. The benefits and associated copays, deductibles, and coinsurance vary widely by type of insurer and plan. Here’s what you need to know about the two primary categories.

Commercial Health Insurance

Commercial health insurance is a healthcare policy not provided or administered by a government program. It can be offered through an employer or on an individual basis directly through the insurance carrier or through healthcare marketplaces and exchanges. A universally-approved set of billing codes is used to submit claims, including CPT codes (Current Procedural Terminology) and diagnostic ICD-10 codes. Plans and coverage vary widely as well as policies and procedures.

Medicare

Medicare is a government-run insurance program for people who are 65 years of age and older (though it does cover people with certain approved disabilities). Medicare Part A hospital insurance covers inpatient hospitals and skilled nursing facilities as well as hospice care. Medicare Part B covers doctors and outpatient care.

However, Medicare Advantage plans are available that can offer increased coverage including copays for different services. The rules can change annually and these plans may behave more like commercially-insured plans from a payment perspective.

Options for Dealing with Beginning-of-Year Payments

There are two ways to collect payment from clients whose insurance deductibles may or may not yet have been met at the beginning of the year.  Both options are a balance of how much you request initially vs. after the claim is processed. You want to seek timely payment for your services without placing too much of an up-front financial burden on your client.

Pay Up-Front

Since your client may not have reached their deductible at the start of the plan year, they may be responsible for paying all or a large portion of it. You have a decision to make as to what portion you collect. You can ask for up-front payment: a deposit on the deductible or the entire deductible. Then, when the claim is processed, you issue a credit for any overpayment.

Or, you have the option to accept a copay and submit a bill for the balance at a later date once the claim has been processed by the payer. If you don’t request payment of the deductible up-front, you do run a risk of non-payment. To reduce that risk, you can consider requesting a credit card on file for the estimated amount your client may owe.

Pay at a Specified Time

Once the insurance payer processes the claim, you and your client will receive an EOB (Explanation of Benefits). This document shows the payment due once the claim has been processed. If there’s a balance due, you can request payment immediately, or at a later time, such as 30 or 45 days after you send the first bill.

How to Organize and Manage the Process

What is most important about establishing a process for managing insurance deductible season is that you follow it consistently. Make sure that whatever process you choose, it can be easily and consistently implemented.

Once you establish your policy for collecting payments, then you will need to put a process in place to support it. Explain the process to your clients when they are in the office and include it with intake paperwork for new clients. Let them know when payment will be due as well as the follow-ups they will receive and when.

Make the process easy, and consider rewarding for prompt payment by offering a discount for payment on-time. This encourages quick payment which boosts your practice’s cash flow. It also saves you the hassle of continued collection efforts and the cost involved. You can also have a credit card on file to ensure prompt collection without any action required from the patient.

Create a Plan to Reduce the Stress of Insurance Deductible Season

Deductible season can be a challenge for behavioral health professionals who are trying to find a balance between ensuring cash flow and avoiding undue financial pressure on clients. Establishing a policy to manage payments, consistent implementation, and making it clear and easy for clients will help to make this trying time easier. Once you have a plan, you can focus on implementing it.

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