Understanding Medical Insurance Contracts
What most people do not understand is the way medical insurance works. In plain English it works by insurance contracts. The insurance companies are the ones to blame for this big mess in the health care system. They make all the money and the love to keep their clients confused as to what it is all about. When the knife slices the reality of what it is and what it isn’t paying for it is too late.
A Medical Provider this could be a doctor, laboratory, hospital, ambulance company, x-ray lab etc. Each medical provider signs a contract with each individual insurance company they want to be contracted with.
Every contract is different. With a doctor it would be considerably different then it would be with a hospital.
This contact simply states that the medical provider will accept this insurance or that insurance and receive a percentage of payment.
Now with each insurance company the percentage changes.
Employers: The employers or business owners sign a contract with the insurance companies. This is where it becomes confusing. There are many different plans with the insurance company.
HMO - This is where you have a PCP or Primary Care Physician. You need a referral to see a specialist and a authorization to have surgery or some sort of test. These medical providers you will be schedule with are within your medical contract. You pay a copay with each visit.
PPO – This is when you can make your own appointment with a specialist. You pay more for this insurance and you can go out of the contract of medical providers but it will cost more.
Straight Commercial Insurance – Is when you pay your contracted rate and a percentage of what your insurance doesn’t cover.
This is why when patient A goes to Dr. Brown and has a general examination blood pressure and a blood test. The insurance will pay a certain percentage and the patient will be charged the rest after something has been adjusted off per the contracted rate.
Patient B same exact thing, same doctor. But when patient B receives his Explanation of Benefits (EOB) from insurance the rate the patient is expected to pay is different.
This is because of the name of the insurance company and the type of plan that was picked.
If you have any questions please contact me on my website www.lindamecklerauthor.com
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Linda Meckler author of over 20 books and worked in Medical Insurance Billing for over 20 years. Her book, Fight Your Medical Insurance Nightmares!! Let me show you how. Explains in simple English how Medical Insurance Works, sample Appeal Letters and much more.
Copyright Linda E. Meckler 2013
