How To Calculate Patient Responsibility in Medical Billing?

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Not sure how to calculate patient responsibility in medical billing? With patients being one of the most rapidly rising sources of revenue for practices. It's no surprise that collecting past-due payments is such a difficult task for providers. Although the process can seem intimidating and perplexing at first, the essential components are rather simple to comprehend when broken down individually. 

However, estimating patient responsibility prior to claims adjudication is difficult, and no estimating software or solution that suits the demands of small independent practices exists yet. Small practices, on the other hand, can successfully estimate patient responsibility to reduce risks and improve the essential work of enhancing patient collections.

Here’s everything you need to know regarding financial responsibility for medical bills.

What Is Patient Financial Responsibility

Before knowing how to calculate patient responsibility in medical billing it is important to understand that patient responsibility refers to the portion of a medical cost that the patient must pay instead of the insurance company. Patients who do not have health insurance, for example, are responsible for the full cost of their medical costs. Patients with a High Deductible Health Plan (HDHP) must pay their medical bills until their deductible is met, which is usually a higher amount. 

Patients are increasingly opting for HDHPs, assuming they will not require medical attention that year. As a result, they are required to see their physician more frequently than they anticipated, resulting in higher medical costs than anticipated. Consumers want to know their payment obligations before visiting a provider, and around 45% would transfer providers if they didn't know the charges of services at the time of booking visits. 

With the rise of high-deductible payment plans and patient out-of-pocket costs, collecting on those patients at the time of service is critical to your practice's financial stability.

How Is Patient Responsibility Calculated in Medical Billing?         

With the correct technology, determining patient responsibility is simple. Providers can establish a patient's accountability for their bill for treatments using medical billing software that includes a prior authorization tool and a patient cost estimate. Previously, clinicians had to wait until their claim was denied or spend time on the phone with their insurance company to figure out how much the patient owed at the end of the appointment. 

These features of good medical billing software assist your practice in determining that number in a matter of seconds, allowing you to advise your patients about their patient liability balance before they leave the office.

Is There Any Difference in Patient Responsibility and Copay?

There are many health insurance plans currently using copayments or copays as a type of cost-sharing. Simply put, cost-sharing refers to the percentage of costs that you pay out of pocket. It is possible to keep medical expenditures in check by splitting the cost of medical treatments between the insurance company and the policyholder. 

A health insurance copayment is a defined sum set by an insurance plan for the plan and the customer to share the cost of covered treatments. Because it lays down how much you'll actually owe for services, medications, doctor visits, and more, the cost-sharing structure is a key selling factor for any plan. Now, coming back to the answer to the question—copayments are usually not covered by the employer if the patient has coverage through a small business plan or group health insurance. Copayments are normally the policyholder's responsibility.

Depending on the type of service offered (e.g., surgeries, lab services, EKGs, etc.), the patient may be responsible for both a co-payment.

Top Ways to Improve Patient Financial Responsibility Collection

Providers are finding it challenging to collect patient financial responsibility due to high deductibles and the possibility of an increase in self-pay consumers. Even during a pandemic, there are four approaches to improve collecting.

Transparency in Prices

While understanding how to calculate patient responsibility in medical billing? Patients with high deductibles and those who are newly uninsured can benefit greatly from providing out-of-pocket expense estimates. The estimations provide the patient with reasonable expectations and allow for a good discussion about the patient's financial situation.

While insurance verification and technology are important in calculating patient cost estimates, education is also necessary for a successful pricing transparency plan.

Payment Plans 

Payment plans are an excellent choice for providers and their patients in circumstances where patients are unable to fulfill their financial obligations in one lump sum. Patients can spread out hefty medical expenditures over time using these programs, increasing their chances of paying in whole and on their own terms.

Process of Collecting Patient Responsibility

According to recent statistics, practices only collect 50% (or less) of patient responsibility once patients leave the office. This means that if you collect more than 50% of the patient's responsibility at the time of service, your collection rate is improving. As the percentage of uncollected patient responsibility grows across the country, be sure your practice has the necessary staff in place to streamline patient payments and claims processing.

Furthermore, identifying unknown coverage saves patients money by avoiding the higher costs of becoming a genuine self-pay account and helps providers avoid A/R lags by pursuing insurance even before they arrive.

FAQs About Patient Responsibility in Medical Billing

Q: Is it Necessary for Me to Use a Patient Responsibility Estimator?

A: You can utilize patient responsibility estimators as one technique to help you improve your patient collections. You are not required to use an estimator. For years, many practitioners have used a spreadsheet and a sample of their most prevalent CPT codes, as well as the corresponding authorized amounts for their most common payers, to create their own patient responsibility estimates. 

When you integrate this type of tool with your existing eligibility verification procedure, you can estimate the patient's financial obligation for the visit, allowing you to talk to them about their payment choices.

Q: Is it Permissible for Me to Collect at the Moment of Service if the Claim Has Not Yet Been Arbitrated?

This frequently necessitates including the patient's payment on your claim when it is presented. They also demand that any reimbursements for overpayments be processed as soon as the overpayment is discovered.

If you're thinking about incorporating time of service payment collections into your revenue cycle, make sure to review your payer contracts and consult with your healthcare attorney about any state laws that govern whether you can collect payment from patients for services that haven't been arbitrated yet.

It’s Time to Start Planning Your Patient Responsibility Estimation Strategy

The need to assist patients in understanding what they will owe before services are delivered will increase with the implementation of the No Surprises Act in 2022. To help your practice comply with new rules, start building your strategy today.

Patient responsibility balances are rising across the country, so make sure your clinic has the tools it needs to improve patient payments and claims processing while also increasing profits. For finding such contractors visit any well-reputed directory such as Topspot 101