It's our favorite time of year, the time when we pay close attention to the “Deduct” column on our Medicare Explanations of Benefits (EOBs). Medicare applies a $100 deductible to each beneficiary in the New Year. The question I am asked the most by home medical equipment providers is, “How do I reduce my exposure to Medicare's deductibles beginning Jan. 1?” The second question I am asked is, “Do I have to collect this money from the beneficiary?” Let's review these two questions.
There is no true science that can completely alleviate the reduction of revenue your company will experience from deductibles, but there are ways to reduce your exposure. Medicare will apply the deductible toward the first claims they receive each year for each beneficiary.
I have found that by holding claims until at least Feb. 15, your exposure can be reduced by up to 65 percent. If a physician files a claim first, then the deductible amount, up to $100 per beneficiary, is taken from his or her allowable. So, to reduce your exposure to deductibles, don't file too early in the year.
Deductibles and Third-Party Insurance
The tricky deductibles actually come with third-party insurance carriers. When you verify a customer's insurance, you must ask the following questions to ensure that you receive the amount you think you will when you are reimbursed:
- Does the patient have a separate HME/pharmacy deductible?
- If so, how much is the deductible?
- Has the patient met his or her deductible amount?
- If not, what percentage has the patient met?
When Medicare is the primary payer, some secondary insurers will not reimburse for the deductible amount, or for your 20 percent co-pay. For instance, if the third-party carrier is a closed-network policy and you are not in the network, the carrier is not obligated to pay the deductible or the 20 percent co-pay. If this is the case, you need to let your patients know that they will be responsible for this amount if they still choose an out-of-network provider.
You must teach your accounts receivables department about the collection process for the deductible amounts and the secondary co-pay amounts. It is your responsibility to collect these amounts from patients or to prove that patients are indigent and cannot pay for their services.
When you receive a Medicare or third-party EOB, you must verify whether a deductible has been applied toward your claim. If a deductible has been applied, look in your patient's file to see if the patient has secondary insurance. Some Medicare “Medigap” insurers will pay for the deductible and co-insurance amounts.
If the patient has Medigap, the deductible payment should cross over to the insurance company electronically from Medicare. For non-Medigap policies, you need to bill the secondary insurer by sending a Medicare EOB — along with a CMS-1500 form that matches the EOB amounts — to the insurer for payment.
Indigent Patients
Let's review the indigent patient process. A provider may not routinely waive the deductible or 20 percent co-insurance amount. If a patient cannot afford to pay you, he or she must complete a “hardship form,” or Application for Medicare Co-Insurance Waiver, that states his or her monthly income and monthly expenses. If the patient qualifies for hardship, you may write off the deductible or co-pay amount. If a patient does not qualify, you may set up a monthly payment plan until the debt is current.
Just like taxes, deductibles and co-insurance amounts come every year, and you need to collect them. With the daily changes in our industry, including competitive bidding and the freeze on any reimbursement increases for five to seven years, we must streamline and do a better job at collecting what is due from our patients and payer sources.
Jane Bunch is chief executive officer of Kennesaw, Ga.-based JB&CS. A reimbursement specialist, Bunch delivers educational seminars worldwide, helps develop corporate compliance plans, and serves as a consultant for fraud and abuse cases. She can be reached at 678/445-1221 or via e-mail at BILLHME@aol.com.
