Unlock the secrets of insurance billing with Jennifer in the latest episode, where she offers a coveted sneak peek training from inside the Ultrasound Business Academy. She’s spilling the beans on everything you need to know about navigating the insurance billing side of running an ultrasound business. Prepare to be enlightened as she dissects real-world billing scenarios, explores the varied rates set by different insurance companies, and explains why offices might charge multiples of the Medicare allowable. Join us with your notepad at the ready, and let’s unravel insurance billing together!

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Transcript:

00:02 – Jennifer Lindsey (Host)

Hey, sonographers, grab a seat and a cup of coffee. Welcome to Ultrasound Business School. I’m your host, Jennifer Lindsey. This is Talking Tech: A Sonographer’s Guide to Entrepreneurship. 

00:14

One of the questions I get on a regular basis is how insurance actually works right. Our healthcare system here in the United States can be very confusing, and so I want to share with you a training that I actually have inside our Ultrasound Business Academy For clients. I am bringing that to you in this episode of the podcast. It’s one of the questions I get on the regular and I want to share with you a breakdown of how insurance works so that you better understand the process. Listen in, hey there guys. Okay, insurance billing can be so confusing, so I want to break down just a few of the main points here so that you guys understand kind of where the charges are, what the allowables are and how that all comes into play. So I have a little whiteboard here. So we’re going to go to school, all right, all right. 

01:07

So insurance usually people have an 80-20 plan patients. So that means that insurance covers 80% of covered costs and the patient’s co-insurance portion is 20%. So let’s say, as an example, there was a $100 allowable, the doctor would get a check from insurance for 80 bucks, 80% of that, $100, and the patient would be responsible for 20% of that $100 or 20 bucks. So the doctor would send the patient a bill for $20. Let’s see how that breaks down a little bit. So there is a charge that all of the offices will charge for any of their services, ultrasound included, and usually that usual and customary charge is two to three times the Medicare allowable. Okay, each insurance has their own allowable. Now we can look those insurance allowables up for Medicare online and the unfortunate part is we can’t look the exact allowables up for private insurance. But we know industry average is about 115 to 118% of the Medicare allowable. It can be lower, it can be higher, but that’s a good customary average. 

02:20

All right, so for easy math here for me I’m going to say there’s $100 Medicare allowable. As an example. Now, if the doctor’s office is setting their charges and we’re doing two to three times the Medicare rate, they can do anywhere between $200 and $300 as their actual charge for the Ultrasound. So I’m going to say it’s $300. Three times the Medicare’s $100 allowable. Does that make sense? Now, as I mentioned earlier, each insurance has their own allowable, so Medicare’s allowable may be $100. Blue Cross Blue Shield may have a contract with that doctor for $280, as an example for their allowable. Cigna may have a contract for that same ultrasound at $160 as an allowable, and Aetna may have a contract with that doctor, as an example, for 120. So you can see they vary greatly. Now that’s why, though, they create a charge of $300. Because if the Medicare allowable is $100 and they’re only charging $100, blue Cross Blue Shield isn’t going to pay them $280. If they send in a charge for $100, they’re going to send them $100. So that’s why the charge is higher than the allowables. That way, medicare is paying $100, blue Cross Blue Shield is paying $280, Cigna is paying $160, and Aetna is paying $120. Now they’ll likely pay it as part of an 80-20 plan, where the patient would pay 80% of whatever their plan allowed, and the 20% would then be owed by the patient. 

03:47

So the next question I get is where does that extra money go? If the allowable is $300, but Medicare only pays $100, where does that $200 go? Does the patient owe that? Where does that go? It doesn’t go anywhere. It poof disappears. So this is an actual made up, arbitrary number. I know that doesn’t make logical sense. It doesn’t make logical sense, but that’s how it works, and this is one of the most confusing parts. So if you can get that down, all of this will make a lot more sense to you. 

04:21

So, just as a recap, each insurance has their own allowable that they contract with the physicians for. We can look up Medicare allowables online, but private insurance allowables are per physician in their contracts, and so the average, just to give you an idea, is about 115 to 118% of the Medicare allowable, although that can differ. So the doctor’s office will set a charge that’s usually about two to three times the Medicare rate so that they can encompass all of these different payables that they’re going to be getting back, so that they ensure they get their highest amount of their allowable back. The balance doesn’t go anywhere. It’s just written off. It disappears. Let me know if you have any questions. I hope this training gave you a lot more insight and made you feel more confident in understanding a bit more about how the insurance process works. 

05:14

Again, this is a sneak peek into one of the trainings that we have inside our ultrasound business academy client portal. These are things we are chatting about on the daily with clients looking to start, grow and scale their ultrasound businesses. If that sounds like you, make sure to send me a DM over on Instagram or LinkedIn or Facebook. We’ve got the links in the show notes. Can’t wait to chat you through your best next steps for your ultrasound business. Thank you so much for tuning in to today’s episode. If you enjoyed the information, make sure to subscribe so you never miss an episode, and help us reach other sonographers by leaving us a review. We truly appreciate it and until next time I’m over here cheering you on.