At times, health insurance can be both a blessing and a curse.
If You are the Provider:
Should you choose to accept insurance, chances are you have a steady stream of patients coming into your practice. At the same time, you may have agreed to accept lower reimbursements to join the pane
Of course, you also agreed to bill insurance on your patients’ behalf; essentially, you agreed to do extra work without pay. And now, it is your responsibility to make sure you get reimbursed from insurance and collect any patient responsibility.
While it may not sound like a big deal, billing can get involved and eat up a big chunk of your staff’s time.
If You are the Patient:
When you’re not feeling well and need to be seen, or even admitted to the hospital, health insurance is a blessing. However, just because you have health insurance doesn’t guarantee you have coverage.
The other issue, of course, is finding your way through the insurance maze. Understanding how coverage and payment structures work is not for the faint of heart. Yet you must know what’s covered, and fully understand your rights and obligations under your policy.
Yet sadly, the majority of consumers lack even a basic understanding of their health insurance (in all fairness, providers and staff are not always up to snuff either.)
Many don’t understand the details of their coverage, nor do they fully comprehend their financial responsibility as part of the policy.
And that’s why you must take steps to educate your patient about insurance.
Why Educate Patients?
Patient Responsibility
Healthcare in America is getting more and more expensive, even for the insured. Patient out of pocket costs are soaring, and many are faced with bigger copays, higher coinsurance, and sky-high deductibles.
What does it mean for you and your practice? You must collect copays, coinsurance, and deductibles, or your business could be negatively affected.
Because “patient responsibility” is a significant part of your revenue today. And if you neglect to collect these payments from patients, the financial health of your practice could be at stake.
Unfortunately, patients frequently believe that showing their insurance cards when checking in takes care of their responsibility… just hand the card to the front desk staff, and they will take care of the rest.
And in the past, many offices did just that; they handled everything for the patient. However, due to shrinking reimbursements, offices no longer are willing and able to continue doing so. Today, patients are expected to carry their own weight.
Patient Empowerment
When patients understand their coverage, when they know what is and is not paid for, it provides an incentive to take better care of their health.
Even the simplest of changes in routine behavior can lead to better health. Perhaps it would pay off to start exercising more regularly or drop those extra pounds…
But when there is no understanding of the cost of insurance, it’s easy to delay or even ignore the most fundamental changes in behavior that could improve health.
How to Educate Patients
With every encounter, there are multiple opportunities to educate patients about their health insurance. Perhaps none better than the initial visit.
Glossary
Provide every new patient with a glossary of insurance terms. It’s surprising how many patients, not to mention providers and staff do not understand basic terminology and concepts when it comes to insurance and billing.
Many don’t understand the difference between copay and coinsurance. Many don’t know or understand what their deductible is, and that they are responsible for the payment. They may not understand what is meant by out-of-pocket and out-of-network.
But gaining an understanding of these terms is essential. For when patients know and understand common insurance terminology, they can make better decisions about their healthcare and corresponding financial responsibility.
Here is a glossary of terms published on HealthCare.gov. Use it as is or use it as the foundation to create a customized glossary for your office.
Be sure to include the most basic insurance terms in your financial policy. Compile a glossary, hand it to your patients, and publish it to your website.
Financial Policy
As outlined above, be sure to include the basic insurance terms in your financial policy. But don’t stop there.
At the initial visit, and as needed, explain to patients the type and degree of their financial obligations. Explain if they have a copay, must pay coinsurance, or meet a deductible.
No one should have any questions about what is expected of them; they should know what, how much, and when they have to pay.
As an extra step, have patients initial references to financial responsibility. Not only does it provide the opportunity to answer any questions, but it also underlines the seriousness of meeting their financial obligation.
Enforce Policy
Your policy is only as good as enforced!
Most people want to take care of their obligations; they want to make sure that you get paid, by insurance and themselves.
However, some think they don’t need to pay, even though they receive services in your office. So, when someone asked to be exempt from your financial policy, think twice before you make an exception.
One, you set a precedent, it may be difficult to walk back. After all, if you make an exception once, surely you’ll be willing to do it again.
Two, it’s not fair to other patients. Some patients struggle financially. Yet they make sure they meet their obligations when they come to your office.
And of course, there will be instances where you’ll be more than happy to make allowances. Just make sure these exceptions don’t turn into your day-to-day routine.
But ultimately, it’s your call and your decision on how to enforce your policies.
In Summary…
While all patients, providers, and their staff “should” have a basic familiarity with health insurance and how it works, that is not always the case.
By educating patients about their health insurance, not only do you empower them to take charge of their own health, but you also provide them with a deeper understanding of their responsibility, so that they can act accordingly.
We want to know what you think… let us hear from you by leaving your comment below.
By Johanna Hofmann, MBA, MAc., EAMP; regular contributor to the NPBusiness blog and author of “Smart Business Planning for Clinicians.”