Understanding and Planning for Copays

J. Greene




Q: I’m in a PPO and I’m confused by the copays I have to pay to my doctor’s office. Sometimes I have to pay upfront but other times the office staff sends me a bill after they get the insurance payment. How is this supposed to work?

A: Let’s start at the beginning — the very beginning. Like, what’s a PPO? It’s a preferred provider organization, which basically means a list of doctors whose care is covered by your insurance. It’s the most common type of health insurance plan among employed Americans with insurance. Even though we hear so much about HMOs taking over the world, more of you actually belong to PPOs — 40 percent versus the 29 percent in HMOs. Another 13 percent are in the old-fashioned but true “indemnity” plans that pay a percent of the fee no matter who you see. The rest (18 percent) are in something called point-of-service (POS), which is basically an HMO with more choice of doctors.

      The term copay should be familiar to anyone in a PPO. Typically, your insurance will pay for 80 percent of the bill once you meet a certain deductible amount — in other words, you must spend $250 (or whatever the deductible is) in medical bills before your insurance will kick in. Thereafter, you probably pay 20 percent of the bill.
      This can get confusing, because different doctors' offices handle your copayment differently. Some ask for the money upfront, while others are willing to wait to find out what the insurance company will pay first. This is generally a matter of policy on the part of the doctor's office. One reason they may do this is that they probably contract with dozens of different insurance plans, each of which may have a different amount they're willing to fork over for a given procedure.

For instance, your doctor may charge $100 for an extended office visit. But he may have signed a contract with a health plan to accept $70 for an office visit in exchange for being funneled patients by being on the plan's "preferred provider" list. So when it comes time for billing, you may get a bill for $100. But look more closely. Chances are, the doctor has already sent this bill off to the insurance company and this is merely notification to you that he's done so. Several weeks later, you'll get notice from the health plan that it's paid $56 (80 percent of the acceptable charges). The doctor will then bill you for your share, or $14. What happened to the other $30? The doctor eats it.
You may run across a doctor, possibly a mental health professional, who asks you to make up the entire billed amount. In this case, the doctor has not agreed to accept a lower amount in a contract with an insurer. At least, that's what ought to be happening. If you have any suspicion that you're being overcharged, check with your health plan's customer service agents.
 I ran into an interesting twist on the copay. I went to a new gynecologist who spent a good 45 minutes talking with me (fully clothed!) in her office before we even started an examination. She was friendly, thorough and willing to take as much time as I needed to talk. Later, she called me personally a few times to follow up on test results and other issues we'd discussed. When I received her final bill, my insurance company (a PPO) had decided her time was worth just $50, not the $150 she had billed for an extended visit. I disagreed.
With reimbursements this low, I worry that good doctors like her may just quit, like so many others have, and that’s not in my best interest. So I sent along an extra $50 with my copay, explaining in a note that I appreciated the time she took with me. I was surprised when I received my check back a couple of weeks later, with a note saying they couldn't accept the extra amount.
I was both annoyed and curious about a health-care system that doesn't allow me to pay a doctor what I think she's worth. I ran this one by Dr. Vincent Riccardi, who runs an organization called American Medical Consumers, and he found it ironic as well. "That's there supposedly for your protection, so they can't charge the insurance company $40 and then charge you under the table another $40," Dr. Riccardi notes. "But it's kind of stupid that you cannot reward your physician for additional time spent with you. The docs are really getting underpaid, and you have an interest in her having a realistic income." What to do? I can buy her a gift.

Here's some more advice from the experts on dealing with PPOs:

bulletDr. Riccardi and billing specialist Lynn Northcutt Gregor both emphasize that PPO members should pay attention to what diagnosis code the doctor has assigned to your visit. This will decide what the insurance is being asked to pay. "If you pay for a comprehensive visit, but you think it's really a cursory visit," you should question the bill, Dr. Riccardi says. Gregor offers another scenario: If you go to a cardiologist for an irregular heartbeat and the cause turns out to be stress, and the doctor's diagnosis is "anxiety disorder," his services could be billed at a lower rate. Diagnoses that fall under mental health services are often reimbursed at just 50 percent rather than 80 percent.
bulletBefore you see a new doctor, make sure she's on your plan's current provider list. These lists change constantly, so double-check with your insurance company and the doctor's office before the visit.
bulletExamine all bills and health plan "explanation of benefits" forms carefully. Often the insurance form will take some time to understand, because insurance companies use codes to explain why they've covered something or not. Look up the code explanations, and if it still doesn't make sense, call and ask about it.




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