drbowen wrote on Friday, August 12, 2005:
In the United States, there are some special rules having to do what is "reasonable and customary". The insurance companies, (bless their benevolent souls…snicker) have dictated that the reasonable and customary charge is what a particular physician charges, is that amount which is charged at leat 51% of the time.
If I, through happenchance, charge some fee at a discounted rate in 51% of the instances of billing for that fee, that fees reasonable and customary becomes the new discounted amount. This could a sudden and very uncomfortable drop in my reimbursement for that fee. The best strategy in the US is to charge only one fee schedule.
Since we have numerous negotiated contracts with different insurance companies there are a lot of different negotiated fee schedules. 13 different schedules in my office at this time.
A patient shows at my office. They pay me a small fee referred to as a "co-pay". I perform the visit. I then bill the insurance company for the full cash fee price (not the negotiated rate). Some time much later we get a check and an "explanation of benefits."
On the explanation of benefits the insurance company will list the CPT of the visit and the amount I charged. On the same line the insurance will show the amount deducted by the co-pay, the amount they will actually allow for reimbursement and the "disallowed amount". The disallowed amount will usually be the difference of my cash fee amount and "allowed amount" plus the co-pay.
Early in the year they may also subtract amounts for the patients prenegotiated "deductible". The patient will be responsible for this amount.
In the US, assuming that the patient is insured (not always the case), all of the charges are billed to an insurance company. Even the US federal government insurance is billed just like any other insurance company.
Frequently, the patient has 2 or more insurance policies. Once we get the explanation of benefits from the first company, we bill the second company for the balance. Eventually, we get anothe r explanation of benefits with (hopefully) another small balance.
Finally, on classic endemnity insurance, we finally the patient for the remaining balance. (There are other insurance types many of which do not allow direct billing of the patient.)
We generally refer to the responsible party as the "Payor". The first payor is the primary insurance, the second payor is the second insurance company. The person responsible for the portions not covered is generally referred to as the guarantor. A parent of a minot child would usually be the "guarantor."
