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Please Explain Co-pays versus Co-insurance

I am often asked by providers and their staff to explain what each of these terms actually means.  Some mistakenly believe that the two terms are interchangeable.

I discovered that many times when a patient had for example, a 20% coinsurance, the staff would charge the patient $20 a visit as if it were a co-pay.   In the end, the patient either had a credit or a balance. If there was a credit, the provider was unhappy and if there was a balance, then the patient was unhappy!

In a nutshell:

Co-insurance: Insured pays a set percentage of the allowed charges.

Co-payment: A fixed amount the insured pays per occurrence. For example $15 per visit.

Example One: Patient is seen by the provider. The verification of benefits states that there is a $15 co-pay per visit.  The staff should charge the patient $15 before he leaves the clinic (or preferably, before he sees the provider upon check-in).

Example Two: Patient is seen by the provider.  The VOB states that the patient portion is 20% coinsurance per visit.  After the patient is seen by the provider, the staff calculates what the fee is based on the allowed amount for that insurance carrier if provider is in-network, or the patient may be billed via statement after the claim is processed and all adjustments are applied.

Example ThreeThis scenario is fairly common with physical and occupational therapy services: The patient is seen by the therapist.  The therapist performs an initial evaluation and also provides some physical therapy services in the same visit. The VOB states that there is a $25 co-pay for the evaluation, but a 20% coinsurance for therapy services. The staff will charge the patient the $25 co-pay for the evaluation only, plus 20% of the allowed amount for the therapy charges.

Make sure your staff fully understands and accurately applies the terminology and you will have taken steps to keep both provider and patient happy!  Tune in tomorrow for the explanation of Out of Pockets and Deductibles…….

Keeping Providers & Patients Happy!
Keeping Providers & Patients Happy!