Developing Confidence in Accepting Insurance Clients
Starting out in private practice is a courageous leap, but one that most providers feel is very rewarding over the lifetime of their practice and throughout their career. As you start a practice you will find that you are going to learn a subset of skills that you didn’t think you would ever learn. You are going to learn about law, finance, processes, systems, insurance, credentialing, billing, bookkeeping, and another array of skills that come with entrepreneurship. However, one of the biggest learning curves in billing is developing confidence in accepting insurance clients. Questions about payment, terminology, fixing mistakes, and developing systems immediately emerge as prominent clouds of doubt. We have helped hundreds of practices answer these questions. We want to give you a written template, a guide, that will help shorten the learning curve and give you the confidence to accept insurance clients.
Navigating the Learning Curve
First, you have to recognize there is a steep learning curve. That is okay! Learning and developing these skills will keep you sharp and will help you help others in your career. You will be able to help colleagues with questions they may have but you are also going to be able to help a wide number of clients in your practice. Additionally, the better you learn how to develop confidence in accepting insurance clients, the better you will be able to train your staff to accept insurance clients. You are going to be able to grease the wheels on your practice so taking clients is easy and straightforward.
The learning curve involves three main components: learning the terminology, making and correcting mistakes, and developing systems for continual improvement. In each section we are going to give you actionable lessons to apply directly into your practice to feel more confident in accepting insurance clients.
Learning the Terminology
The terminology around billing is complicated, but there are a few critical terms that you need to be familiar with in order to feel comfortable and confident in taking insurance clients. Here is a list of terminology, the meaning for each term, and how you can apply these terms and ideas into your practice.
Deductible: A deductible is a set amount of money that each client must pay before the insurance company pays for sessions. For example, a client’s insurance plan can have a $2,000 deductible before the insurance company pays your contracted rate.
Application: In order to find the deductible, call the insurance company and ask them if the deductible applies for mental health services rendered in an office setting.
Carve-Out Insurance: Carve-out insurance is when an insurance company subcontracts the mental health benefits of a client to another insurance company. This means that even though you are in-network with the insurance company that is on the insurance card you may not be in-network with the insurance company that handles the mental health benefits of a client.
Application: Know who you are in-network with! Credentialing is a very important part of private practice and keeping track of the companies that you are in-network with is critical. Additionally, have a detailed, thorough process of checking the eligibility and benefits of new clients in your practice. A good eligibility and benefits process will carry your practice far.
Contracted Rate: A contracted rate is the rate that you agree to be paid when you become in-network (or contracted) with an insurance company. For example, your private pay rate might be $200.00 for a 60 minute session, but the insurance company says they will pay $125.00. The $125.00 is now the rate that the insurance company will pay for a 60-minute session.
Application: You cannot collect the difference between your private pay rate and the contracted rate. That is illegal and could result in some nasty consequences for you and your practice. Knowing and tracking your contracted rate is very important! It is one of the ways that you know that your reimbursement per session is where you want it to be. Finally, the contracted rate is the number that you will use to calculate a coinsurance amount.
Coinsurance: A coinsurance is a percentage of the contracted rate that your client owes. The rate is variable since percentages are variable. For example, if your contracted rate is $125.00 and the client has a 25% coinsurance, then they would pay $31.25 per session. The mathematical formula in this instance is CONTRACTED RATE X 0.25 = THE COINSURANCE.
Application: You will know if the client owes a coinsurance or a copay during the eligibility and benefits check process. The person doing that process should be familiar with these terms and be able to discern quickly and accurately what the client should owe, and inform the client what they will need to pay.
Copay: A copay is a static amount of money the client pays per session. If a coinsurance is a variable amount of money based on a percentage of the session, then a copay is a flat amount of money. For example, a copay could be $25.00 per session. In this instance, a client would only pay $25.00 per session.
Application: Know the difference between a copay and coinsurance and charge the client the correct amount at the time of service.
EHR: EHR stands for Electronic Health Record. There are a variety of software companies that provide EHR services. It is very important to know and understand your EHR system because this is the system that will house all of your private health information, send claims to the insurance company, and manage the revenue cycle.
Application: Explore! Look through all the EHR systems that are available and make a decision on one that you feel comfortable with. The level of comfortability and experience you have with your EHR system will largely determine the success of your practice.
Making and Correcting Mistakes
Mistakes are going to happen. The system that third-party payment is built on is complicated and is changing all the time. Since the landscape of third party payment is ever shifting, you can expect some degree of imperfection in the process. It is important to make sure that you can catch mistakes when they happen and you have a plan for fixing them. We will give you some applications that will help you make and correct mistakes easily.
Keep some cash in the bank. When taking insurance there are bumps in the road. For example, you can be told by the insurance company that you need to collect a certain amount from the client during your eligibility process but that amount of money can be incorrect. As a result you will either have to refund a client or apply an overpayment to future sessions. Some clients will want a refund and some clients will want to apply payments to future sessions. For the clients that want a refund, have the cash in the bank to be able to refund them. It is a good rule of thumb to assume that around 30% of eligibility and benefits checks are wrong, so do some thinking about what it would look like to refund 30% of your new clients if mistakes happen. If mistakes don’t happen, great! If mistakes happen at least you have the cash to fix the problem.
Be clear with your clients. Managing the expectations of your clients is one of the most important things you can do in your practice. Tell them up front that taking insurance can have its ups and downs, and they will have to be flexible with you as you advocate for their care. You can equip them to deal with those ups and downs by telling them directly and clearly that insurance companies are not easy to work with but you are knowledgeable and equipped to deal with whatever may come. For your practice that might mean hiring the right company or people to help deal with those ups and downs.
Be prompt. Promptly dealing with mistakes is one of the best ways to stay out of trouble with the insurance companies and give your clients the best experience. When there is an issue, because they will come your way, the faster you deal with that problem the better. At Practice Solutions, we tell our team and clients that “problems delayed results in problems amplified”. If a billing or insurance problem exists that problem does not stay the same, rather it gets bigger over time. Deal with those mistakes quickly and billing will go much better for you.
Systems and Continual Improvement
Eligibility and Benefits: This is one of the most important processes and systems that you could implement in your private practice. Eligibility takes a lot of time and energy but in order to avoid denials and rejections, and to be sure that you are collecting the correct amount of money from your client you must be good at eligibility and benefits. You can accomplish this by developing a strong process for eligibility checks on your own, or outsourcing eligibility checks to Practice Solutions along with your billing. We consider eligibility and benefit checks an integral part of the billing process, so eligibility checks performed by your Practice Solutions biller are included with our billing services. When you are doing eligibility checks you want to make sure the client has an insurance that you can accept and what you should collect from them at the time of service.
How to know if it is working: You will know this process is working when you don’t have to go back to clients to ask them for more money and when claims are processed for payment. If neither of those are happening then it is time to evaluate the process to find where it is broken and fix the problem. If you are experiencing consistent payment and you are collecting the right amount of money from clients then monitor the process to make sure that it stays on track.
Claims Submission: This is the other process in your practice you need to have scheduled so you can receive payment from the insurance company. Claim submission is when you take a session and convert that into a document requesting payment from the insurance company. The insurance company will then review the document and pay you or not pay you, depending on the patient’s insurance coverage and your credentialing agreement. Claim submission is more than clicking a button; it is making sure that you have all the information the insurance company needs to make a correct determination. This is more complicated than you might think and it is worth consulting a professional to make sure you have the process correct.
How to know if it is working: You will know this process is working when you are receiving a high number of payments from the insurance company and a low number of rejections and denials. You will know if you have received a denial or rejection if you are not receiving payment or if your EHR system is telling you that you have received a rejection. Knowing your EHR system is critical in this process and that is why we advise you to get familiar with the system as much as possible.
Credentialing: Credentialing is the process of proving who you are to the insurance company and the insurance company approving you as a provider to serve clients and be paid for those services. Credentialing is also complicated and can take a long time. If you are not credentialed we would advise you to look through our other blogs that help distill this process in more detail. Credentialing is not a one time situation. Insurance companies will require you to maintain accurate records and to make sure that you are who you say you are. Also, as you grow your practice you will need to make sure your providers are credentialed properly.
How to know if it is working: You will know if credentialing is working if you can submit claims and receive payment from the insurance company. You will also be given a contract and a fee schedule if credentialing is working properly.
There is a lot to learn when taking insurance clients. We hope that this blog has given you some guideposts to follow as you develop your confidence in taking insurance clients. We know that billing is a burden which is why we are passionate and dedicated to providing you with the best educational content around billing. If you feel that billing and taking insurance is too complicated to learn we would be happy to talk about doing your billing for you. Either way we want your experience taking insurance to be as simple and seamless as possible!