Question:
Has anyone had an issue with XXXXXXX applying amounts toward the OON deductible over and beyond the member's annual deductible?
(The name of the insurance company has been X'd out to protect their name. The wording of the question has not been changed)

Answer:
Deductibles are one of three out of pocket expenses that we, as patients, are required to pay. The amount of deductible is based on our specific plan, whether it is Medicare, Tricare or any commercial insurance plan. Deductibles for Medicare and commercial insurance plans usually begin brand new every January. Tricare deductibles start in October, the military fiscal year. Deductibles are based on the patient's policy regardless if the provider is participating, networked, contracted or non-participating, out of network, or non-contracted. What this means is if Steve Verno has a commercial PPO plan, HMO plan or POS plan, and Steve's annual deductible is $300, Steve has the same $300 deductible if Steve seeks or obtains medical care from a non-participating or Out of Network (OON) provider. When a deductible begins, whether in October or January, all benefit payments will be applied to the deductible. This means that a check will not be issued until the deductible has been met.

Now if Steve has a $300 deductible, he goes to see Dr. Jones on January 12, 2014, where the charge is $100 and Steve's insurance allows $100 for the visit, instead of writing a check for $100, Steve's insurance will apply the $100 to his deductible, basically transferring payment for the $100 to Steve. It is up to the doctor to send a bill to Steve so that Steve pays that contracted amount. If every additional visit costs $100, it will take two more visits before Steve will meet his deductible. On the 4th visit or the visit after Steve meets his deductible, Steve's insurance will issue a check to the doctor.

In regards to the question that was asked, we have an unknown variable there. What we don't know is if the patient's benefit plan has a normal, usual and customary singular deductible or if the benefit plan has an actual out of network provider deductible. Also we don't know if the person asking the question is correct with their question. We don't have access to the explanation of benefit (EOB) form to see if what the poster asked is true or factual. To obtain our answer and know if the insurance company is correct, we have to look at the patient's benefit plan.

How do you do that? You look at the patient's benefit manual or summary plan description. That document is your foundation to appeal the insurance company's statement. When appealing or submitting a resolution, YOU have to PROVE YOU are right and the insurance company is WRONG! With this situation, it is possible that the insurance company hopes or expects that the provider or medical biller will accept what is documented on the EOB and that they do nothing. This happened to a physician I worked for where the insurance company sent us an EOB or remittance advice where they applied an unfair discount to the allowed amount. Buried on page 14 of the remittance they placed a statement, in very small lettering stating that acceptance of the check constituted payment in full and we gave up any appeal rights. This statement wasn't on most of the claims information at the front of the remittance. This statement was buried in the hopes it wouldn't be seen and it would be forgotten. It wasn't forgotten. We gave the EOBs to our practice attorney who corresponded with the insurance company.

This question was asked months ago, so far no one has provided an answer. The reason is because we don't have the information we need to see so that a correct answer can be provided. When you think something is wrong, it probably is and if you think something is wrong, you cannot do anything until you have proof, in writing. Again, YOU must PROVE, YOU are RIGHT and the INSURANCE COMPANY is WRONG!

I don't appeal. That right belongs to the patient. I may submit a letter to try and resolve the problem, to allow the insurance company to correct the wrong and make things right.

A sample letter may be prepared in a similar manner.

Dear (Insurance CEO),

We received your company's Explanation of Benefit (EOB) form, dated (date). On the EOB, you can see that your company applied the benefit payment to your member's deductible. You can also see that your company defines this deductible as an Out of Network provider Deductible, because we made the freedom of choice to become a non-contracted provider with your company.

If you look at page (page number) of your member's benefit manual or summary plan description, you can see that your member has a deductible amount of ($amount). You can also see that your member has NO out of network provider deductible.

This letter is NOT a letter of appeal. We will leave the appealing of your member's benefit process to your member and their legal representatives. This letter serves to identify that your company processed your member's benefit incorrectly and to allow you to correct this problem so that you can process your members' benefit in accordance to the contract that you have with your member. We do not have any complaints with collecting valid deductibles from your member. We will not collect any benefit amounts, from your member, that is your company's fiduciary responsibility.

Kindly inform us how you plan to correct this situation to allow us to make the decision to require your member to pay said out of network deductible. I am confident that you are aware that my State law does not prohibit the collection of deductibles from your members and we have no legal and binding agreement that places any such restrictions, so we are permitted to bill your member and if their debt to us becomes delinquent, we can proceed to any and all legal debt collection processes. A copy of this letter is being provided to your member and your member's legal representative.

Sincerely;

Name of Provider
Attachment(s):
(1) Explanation of Benefit, (date)
(2) Page (number) of benefit manual/summary plan description

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Steven M. Verno, CMMC, CMMB, NREMT-P, CEMCS, CMSCS, is a Professor of Medical Coding and Billing Instruction at Florida Metropolitan University. Steve_verno@hotmail.com
Steve is a certified medical billing specialist instructor, a healthcare coding specialist instructor, a certified emergency medicine coding specialist, a certified multispecialty coding specialist, and certified practice manager-medical coding specialist. His specialties include emergency medicine, family practice, internal medicine, pediatrics, ERISA, ICD-10-, AR Recovery, Insurance Claims resolution, and training. He is a member of the Medical Association of Billers, the Professional Association of Healthcare Coding Specialists, National Healthcare Leaders Association and medical economics committee of the Florida College of Emergency Physicians and a speaker with The Coding Institute and Regent Surgical Health. He is a retired American Red Cross Health and Safety Instructor Trainer and a retired professor of coding and billing at Everest University. He is the co-author of the Medical Office Guide to the Employee Retirement Income Security Act and has additional books on AR recovery and Insurance Claim Resolution in development. He spends his free time rescuing abandoned cats, and a local patient advocate with coding and billing issues.