Insurance policies can be complicated and difficult to understand. The more you know about your insurance policy, the lower the chance you will be caught by surprise by unexpected out-of-pocket costs. We wrote this post based on common billing questions we get from our clients, as well as billing issues that could have been prevented had a client had a better understanding of the relationship between providers and insurance companies. This post is specific to commercial insurance plans as opposed to public insurance plans.
In-Network vs Out-Of-Network
Question: If I have insurance, why are you telling me I need to pay out-of-pocket for sessions?
If a medical or behavioral provider takes insurance, this does not necessarily mean they accept all insurance policies. For a provider to be “in-network” with an insurance, they must go through a credentialing process with the insurance company and obtain a contract. This process must be completed for each insurance company; in other words, a contract with Blue Cross does not grant a provider a contract with Harvard Pilgrim. There are many reasons why a provider might not be contracted with your insurance, including lower than average rates or additional certification requirements needed to obtain the contract.
If a provider is not in-network with your insurance, you either need to pay out of pocket for the service or investigate your out-of-network benefits. Not all insurance policies have out-of-network benefits (generally HMO policies do not), and sometimes providers are not able to check benefits ahead of time for insurances they are not contracted with. We recommend you call your insurance company directly to get a better understanding of your out-of-network benefits.
If you don’t have out-of-network benefits or your provider is not able to bill your insurance for in or out-of-network benefits, you will have to pay for the services yourself. In accordance with the No Surprises Act, you should always be notified when a provider doesn’t take your insurance, and how much you should expect to pay out of pocket before any services are rendered.
Question: Why is it important to notify my providers when I have a change of insurance?
Clients failing to notify their provider of a change in insurance is one of the biggest sources of unexpected out-of-pocket costs. If your insurance changes, it is almost certain that your benefits will be different from those of your old policy. Instead of a copayment for each session, you may instead have a deductible. This is something providers can tell you in advance if they have your new insurance information and check your benefits. If your provider is not in-network with your new insurance policy and you wait multiple sessions to notify them of the new policy, you may be stuck paying for those sessions out of pocket.
Out-of-Pocket Costs
Question: If I have insurance, how come I have to pay $X out-of-pocket after every session?
Although it is possible, we don’t often come across insurance policies that pay for 100% of a client’s session cost. Most policies require the client to share the cost of sessions with their insurance company. Cost-sharing results in the client having a co-payment, co-insurance payment, or deductible payment per session.
Copayment: a fixed amount that a client pays per session. For example, a client may pay $25 per session, regardless of the session length or type.
Co-insurance: a fixed percentage that a client pays per session. This means that the co-insurance payment may differ per session depending on the length and type.
Deductible: the client pays the full cost of sessions until they have paid a certain amount of money out of pocket. This amount varies from policy to policy but is often upwards of $1000 in total. Once the total deductible amount is met, the client may then have a co-insurance or copayment per session, or the cost of the sessions may be covered in full.
Your out-of-pocket costs will often be different for different types of medical claims. For example, you may have a copayment for your therapy sessions but then have a deductible payment after getting an MRI.
Once a client reaches their out-of-pocket maximum for their plan year, this means that they will not have any more out-of-pocket costs for covered services for the rest of the plan year. Out-of-pocket maximums are usually multiple thousands of dollars. This means that copayments, co-insurance payments, and deductible payments for applicable services go towards meeting an individual’s and/ or family’s out-of-pocket maximum. There is no guarantee that an individual or family will meet their out-of-pocket maximum in any given year.
Plan Year
Let’s clarify the meaning of “plan year”. Everyone’s insurance benefits “reset” once per year. The time of year is different for everyone; for those with commercial insurance, one company’s employees may have benefits reset in April and another company’s employees may have their insurance plan year start in November. Amounts paid towards deductibles and out-of-pocket maximums all return to zero at the start of a new plan year.
Question: I was paying $X out-of-pocket for sessions, and suddenly I’m paying more on the same insurance policy—why?
In the case above, the client had most likely met their deductible in the previous plan year and was paying a co-insurance or copayment for each session. When the plan year reset, the deductible kicked back in, and their out-of-pocket expenses increased. In other cases, clients start sessions at a time when they have already met their out-of-pocket maximums for the plan year. When the plan year resets, they suddenly have an out-of-pocket cost because the amount paid towards the out-of-pocket maximum resets to zero.
Another element to consider is that insurance companies will typically change the rates they pay providers for services annually; often, the rates will increase. If a client has a deductible, this means that their deductible payment per session increases in accordance with the rate increase. The date of the rate increase does not necessarily correspond with the date the client’s insurance resets at the beginning of their plan year.
Insurance and PWC
At Pause Wellness Center, we check all clients’ insurance eligibility and benefits before assigning them to a clinician. We give a summary of what a client’s expected out-of-pocket costs will be per session based on the information in their insurance company’s online portal. Although most of the time this information is accurate, we always recommend that clients call their insurance company before beginning sessions to verify out-of-pocket costs and avoid surprise charges. For clients whose insurance we are not in-network with, we offer out-of-network billing as well as self-pay options. If you are considering becoming a new client but need more information on your insurance policy and out-of-pocket cost, send us an email at info@pausewellnesscenter.com. For existing clients with billing and insurance questions, reach out to billing@pausewellnesscenter.com to connect with our billing specialist. We are happy to help you navigate your insurance and discuss financial options with you!