When a patient has medical insurance, whether it be governmental (Medicare or Medicaid) or private health insurance i.e. (Blue Cross, Kaiser, Aetna or United Healthcare) the facility price will most likely not be what the patient is ultimately responsible for.
Here is an example to show how Gritman determines the final amount a patient owes and why it is different from the amount on the pricing list (also called the total charge). In this example Gritman’s facility charge from the pricing list is $309.70. However, the patient’s total financial obligation is $112.16. This is $197.50 less than the original amount in the pricing list.
Here’s how we arrive at that number:
For this example we will use an insurance plan that has:
Patient: Adult female, pain in her right forearm
Situation: Referred to the hospital by her primary care doctor for an x-ray.
Description from pricing list: XR Forearm, AP and LAT
Cost from pricing list: $309.70
Contractual write-off: -$148.91*
(*Each insurance company has a different contract with the hospital which determines pricing for the patients covered by that company’s plan. In this example, the maximum contractual amount allowed by the insurer for an x-ray of the forearm is $160.79. So $148.91 has been deducted from the original price of $309.70.)
Allowed amount: $160.79
Remaining balance due: $60.79
20% coinsurance: $12.16 ($60.79 x 20%)
Patient’s total financial obligation: $112.16 ($100.00 + $12.16)
Below is a list of medical terminology definitions that will be used in an example explaining how a patient’s financial obligation is determined.
A price set by the hospital for a service, supply or drug.
A charge negotiated between the hospital and the patient’s insurance carrier that determines the maximum amount the hospital may charge for a specific service, supply or drug.
The variance between the hospital’s price and the patient’s insurance carriers maximum allowed amount.
The amount the patient pays for a covered health care service before the insurance plan starts to pay.
A copayment is a fixed amount for a covered service, paid by a patient to the provider of service before receiving the service. Typically a copayment amount will be listed on the back of the patient’s insurance card.
Refers to money that an individual is required to pay for services after a deductible has been paid. Coinsurance is often specified by a percentage. For example, the insured pays 20 percent toward the charges for a service and the insurance company pays 80 percent.