Understanding medical insurance and billing is crucial for both healthcare providers and patients alike. It's like having a roadmap in an unfamiliar city- without it, you might find yourself lost and confused. In the world of healthcare.Whether you're a provider aiming to ensure a smooth financial journey or a patient wanting to comprehend your healthcare costs better, this guide is for you

Three Primary Types of Insurance Payers

Commercial payers - Those are the Aetna, United Healthcare, the Cigna,  etc. Private insurance payers - Blue Cross Blue Shield among others. Government insurance payers - such as Medicare, Medicaid, TRICARE. 

The Common Types of Insurance Plans

Those are the indemnity, the managed care and the consumer driven plan. The most commercial insurance and private insurance carriers offer one or a combination of these types of coverages, and these types of insurance coverage are usually provided by your employer or your spouse's employer, or an organization you're affiliated with, such as a union or a professional organization.

Medicare

Medicare has four different parts. There's part A, the hospital coverage. There's part B coverage, which is health insurance for a physician office visits and there's part C, the Medicare Advantage It's a managed care plan. And there's Part D, which is prescription drug coverage plan and Medicare is a federal single payer health insurance program and it's primarily for people over 65 and some younger people with with certain conditions, such as kidney failure.Medicare claims are processed by contractors. They're called, MAC, Medicare administrative contractors. 

There are some other government insurance agencies. There's Medicaid, which is a federal health insurance program for low income and disabled patients and it's administered by state governments with federal matching funds. The coverage varies state by state, but there are federal minimum requirements for health care 

TRICARE, which used to be called CHAMPUS which provides medical medical care for active duty, military and their families and retired military and their families, and also survivors who are not yet eligible for Medicare. And then there's CHAMPVA, which is a civilian health care program for veterans Affairs which shares health care costs with beneficiaries. 

Insurance Verification

When you talk about insurance verification , verification determines if an insurance policy is active, if it requires referral, if it determines the type of plan that a patient has and it determines their deductible, their co-insurance and their co-pays. Insurance verification is very important upfront because it tells the patient and the provider exactly who's responsible for payment, especially the patient. Another term you hear a lot in medical billing is coordination of benefits or COB for short and that's necessary when a patient has more than one insurance policy and the COB establishes which payer is the primary payer, which payers secondary in. You also want to prevent duplicate payments and make sure that both the primary and the secondary policies do not exceed the providers charges.

Credentialing

In order to participate as a network provider. Whether an insurance payer, a physician or doctor provider must be credential or contracted with that payer.
The credentialing  process is a process of requesting to participate in a health insurance network or to be contracted with that insurer. What this does is it qualifies them for the benefits or the privileges of being associated with that insurance and to be considered a network provider. A claim payments to an out-of-network provider are usually not as high, and they may require patients to pay higher co-pays and co-insurance than a network provider.

Depending on who the insurance payer is, the credentialing process can take weeks or months. for example, Medicare can take up to 90 day, typically don't take that long, but they do tend to take longer than commercial and private payers, which are usually in the month or less range. 

So for many practices, a medical billing specialist is usually involved the credentialing process or they may be expected to use and take care of it, which means filling out the paperwork and ensuring it's managed correctly and following up on it. If there's any problems correcting it, resubmitting it and collecting all the information necessary for the application process. 

Patient Responsibility

There are three patient responsibility classes. 

Co-pay

which is the fixed amount the patient pays that goes directly to the provider at the time of this typically does not count towards any annual deductible, but some plans  this usually is a small amount, like $25, Some $30, $10 depends on the plan.

Deductible

This is the amount the patient pays each year before their insurance begins pay.

Co-insurance

This is the portion that the patient pays. Once the deductible was met, this is usually expressed as a percentage. You may see 90/10, 80/20. the second number, the 20% or the 10%, that's the patient co-insurance or the patient responsibility.

Conclusion

Knowing the basics, from different types of insurance to your financial responsibilities, puts you in control. Whether it's commercial, private, or government insurance, each has its quirks, but being aware of these can save you surprises down the road. The involvement of a medical billing specialist becomes instrumental, ensuring that processes such as credentialing are managed efficiently and seamlessly. it becomes evident that an informed approach is essential for both healthcare providers and patients alike.