We probably answer more questions about insurance than any other subject. This is because it can be a confusing topic. We thought we would break it down into a few billing scenarios and answer of the most frequently asked questions.
Let’s go over a few basics together!
A few definitions for you:
Allowed amount: This is the amount that your insurance company will pay or allow as a charge for a service provided, regardless of what was billed. For instance, we could bill $390 for an initial prenatal visit, but your individual insurance company might only allow $225 for that visit. The $225 is number they use to figure out what they will pay towards your care.
Deductible: This is the amount you must pay before your insurance benefits kick in. Most often, the deductible resets each year. With some plans, the baby is covered under the mother’s deductible for the first 1-3 months and with other plans, the baby has his/her own deductible as well.
Co-insurance: The percentage of each allowed amount that the insurance determines is the patient’s responsibility to pay out-of-pocket. Many plans might be 80/20, so your insurance will pay 80% of the bill and you are expected to pay 20%…. after you have paid your deductible.
Often people will come in for a group tour and then want to know exactly what their out-of-pocket expenses will be. We can only provide estimates (after checking on your insurance plan), because we bill only for services provided. Each person’s care is going to look a little different. We also have no way of knowing what your insurance will accept as the allowed amount on each claim unless we are contracted with them. One insurance plan might pay $500 for a code and another insurance plan will only allow $189 for the exact same code.
If you come into care and have a very straightforward pregnancy and completely uncomplicated birth, the charges to your insurance will be global bills for maternity care, facility fee, and then itemized newborn procedures (such as the newborn metabolic screening). If, however, you go past your due date and have non-stress tests, a long labor, a transport to the hospital, and then newborn care is provided by the hospital, your billing from us will look entirely different as we will bill for prenatal care, the hours of supervision for your labor at the birth center, and a lower facility fee rate since it ended in a transport. The hospital would bill for the birth and newborn care.
Let’s run through a few sample scenarios so that you may understand how it looks (pricing is fictional for these scenarios, these are examples only):
A. Jane has an insurance plan that covers care at the birth center at the in-network rates because we have a contract with them (yay!). She has a $500 deductible and then care is covered at 80% after that. Since we have a contract with her insurance company, we have to accept adjustments based on our contracted rates and can only make Jane pay out-of-pocket for her deductible and co-insurance:
We bill her insurance a total of $5700 for care.
Her insurance applies an adjustment of $1300 for the contracted rates, bringing the total bill down to $4400.
Jane is billed her $500 deductible (bringing the total to $3900). Now, her insurance will finally kick in and cover 80% of what is left. Her insurance will pay $3120 towards her care and Jane’s out-of-pocket expenses for care will be the $500 deductible and a 20% co-insurance ($780), which brings her total to $1280. Now her deductible is met for the year and all other health care she gets will be only subject to the co-insurance and she won’t have to pay the deductible again until the next calendar year!
B. Jane has great insurance, a $500 deductible and 80% coverage after that. She wants a homebirth, which is a non-covered service under her plan. Her prenatal care is covered at 100% and is not subject to a deductible. Keep in mind that the 100% coverage is based on what the insurance company allows for that charge. We can bill 1 million dollars for prenatal care, but they will only pay 100% of what is an allowed amount.
Jane is billed $3000 directly for the cost of the home birth, which cannot be billed to her insurance. This will not apply to her deductible. This will cover the birth, birth assistant, immediate medications….. basically anything that would have to be billed with a place-of-service code of home (each billing code asks for where the care was provided), since we know her plan does not cover services provided in her home.
Her insurance is billed for prenatal care and postpartum care. They determine that her prenatal care is worth $982. Her prenatal care was not subject to deductible, so she still has a $500 deductible to meet the next time she gets medical care.
C. Jane has an insurance plan that covers the birth center, but only at the out-of-network rate. For out-of-network benefits, Jane has a $1000 deductible and then her plan covers at 70% (her in-network benefits were $500 deductible and 80% coverage).
We bill her insurance $5700 for care
Her insurance adjusts for the allowed amount and will apply benefits towards the amount of $4400
Here is a difference from the very first scenario, since we are not under the contract for her insurance provider, we do not have to forgive that $1300 adjustment and Jane is responsible for covering it.
Jane pays the $1000 deductible and then the insurance pays 70% after that. Jane’s insurance pays a total of $2380. Jane pays out-of-pocket: $1300 for above the allowed amount+ $1000 deductible+ $1020 for her 30% co-insurance. Jane’s total= $3320.
As you can see, these different scenarios can become quite confusing, depending on the plan and what the person is choosing for care. Here are some questions we run into about these issues:
Q: Can you just bill everything as a covered service? If prenatal care is covered, can you code everything as prenatal care? If homebirth isn’t covered, can you pretend it took place at the birth center?
A: When it comes to asking someone else to cover your medical bills (as is the case with insurance billing), it is important to be completely honest. We cannot do any sort of fraudulent billing. How would they know? If you are asking your health insurance company to cover your bills, you also give them the right to audit your account and records. They can request your full medical records from any provider at any time to be sure that what they have been billed matches the services provided. Honesty is the best policy. Much like you wouldn’t want us to bill you for a medication you never received, we cannot bill your insurance in any way that has them paying for services they wouldn’t normally cover or in amounts that are used to make up for uncovered services.
Q: I think you got paid too much by my insurance company! I heard of a midwife who only charges $3000 in cash for home births (she doesn’t bill insurance) and you got $2000 from me for my deductible and then another $3500 from my insurance! Can’t you just keep the amount that my insurance company paid and then refund me the deductible amount that I paid?
A: It is considered insurance fraud to allow a consumer to profit from their health insurance being billed. It is a fraudulent practice if a consumer is not billed their deductible and co-insurance amounts. Something to keep in mind about this sort of scenario is that you are still coming out ahead. It cost you $2000 out-of-pocket, but that amount ate up your deductible for the year and now you do not need to meet it again. Had you gone with the cash pay midwife, you would have been out $3000 for the care (so $1000 more than your current OOP) AND that care wouldn’t have applied to your deductible, so you would have had to cover the first $2000 when you got any other medical services for the year.
Q: My insurance company sent me a check for $3000 for my recent birth. I can keep it, right?
A: Nope. Sorry. Some insurance companies will send the payments directly to the consumer. This happens most often if we are not in their network or covered by a contract. You are still responsible for the bill for the care you received. They sent you that money to pay your bill at the birth center. Should you decide to cash it and spend it on your own personal bills, you are committing insurance fraud (see above question involving profiting from your insurance). Legal action may come from the birth center, your health insurance company, or both. You also may be sent to collections for the medical bill. Let’s not do that. If your insurance sends you the checks, you have 5 days to turn it over to the birth center.
Q: I am confused by my insurance coverage. How can I find out more information?
A: The best place to go for information on your coverage is directly to your insurance plan. You pay them a premium for their services! They are the best ones to answer exactly what those services are.