There are hundreds of different insurance companies out there. And thousands of insurance products. It’s hard to understand what is covered and what isn’t. Understanding insurance can seem impossible but there are a few basics that will help it make more sense. Learn the basic information about insurance and how it works.

Don’t feel bad if you find insurances confusing. Most providers find them difficult to understand. I didn’t understand them at all when I started. I realize now that I didn’t understand the differences because I always had pretty good insurance that covered most things. Most people aren’t so lucky. Their insurance doesn’t cover everything and they are left having to pay the difference.

Insurance Products

One of the first things you have to understand is that insurance companies offer different products for sale. Let’s use an example to make this concept clear. If you go to a clothing store to buy a new shirt, you have many choices of styles and colors. Some of these choices will be more expensive while others will be cheaper. Some of the shirts will cover more of your body than others too. They can have long sleeves, short sleeves, long waists, short waists and other features.

Insurance companies offer different products just like the shirt example. Some products can cover more while others are cheaper. Some have a high deductible while others have a low or no deductible. Some have co-pays or co-insurance and others don’t. And you may be able to take some products but not others.

Different insurance products can make it confusing to understand if you can take a person’s insurance or not. It is possible be a provider for some of an insurance company’s products but not others. For example, you may be an in network provider for one person with Highmark but not another person with Highmark insurance. When I started I found this to be the most confusing part of insurance. I thought if I could take Highmark, anyone with Highmark would be covered. But that isn’t the case.

I have had a few situations where this has come up. I had a new client who called and said they had Highmark. I was credentialed with Highmark so I thought I would be able to take their insurance. After taking their insurance information, I discovered I could not see them. I could not take their insurance because they had purchased their insurance through CHIP. Chip is a low-cost insurance in my state for anyone under 18. While I can take Highmark, I could not take this client because they had a product offered by Highmark that I could not take.

The sections below will explain the different options that insurances offer with different products and some terms you need to know about insurance.

Deductible

A deductible is an amount you have to pay before your insurance starts covering any services. Some insurance products don’t have a deductible and services are always covered. Some have a high deductible like $3,000 or $5,000. With a high deductible like this, you have to pay for any doctor appointments or mental health services until you reach the deductible amount. A lower deductible like $250 or $500, can be reached easier so services are covered.

You might wonder why someone would want insurance with a $5,000 deductible. The answer is you don’t always have a choice. Insurance through an employer may not give you a choice of products. Or sometimes it is all a person can afford. An insurance plan with a high deductible is going to be more affordable than a low one. And the insurance will still cover the person if they have a major accident or need an expensive surgery so it is still worthwhile to have over no insurance.

Deductibles can be applied per incident as in auto insurance or by a length of time as most health insurance. This means the deductible typically renews annually. You can pay your deductible, get some services covered and the deductible renews and you have to start paying it all over again. When you have a client with a deductible, it is important to know when their deductible renews.

Deductibles can be based on the calendar year which means they renew January 1st or by the effective date. The effective date is the date the insurance started covering the person. If the person purchased their insurance in July and it started covering them on July 15th, the effective date would be July 15th. Their deductible could renew January 1st if it is by calendar year or July 15th if it is by effective date.

If a client has a deductible of $500 and your negotiated fee with the insurance is $100 for a 60 minutes session, then the client will have to pay for 5 sessions (60 minutes) before their insurance will pay anything. After 5 sessions, they may have a co-pay or co-insurance to pay each session. However, a deductible amount can change if the client uses another service that counts toward their deductible before they complete the 5 sessions.

Using the example above, a client sees you for 2 sessions at $100 a session. Then, they see a doctor for $100 that counts toward their deductible. This means their deductible is now $200. To figure this out, you take the deductible and subtract the 2 sessions with you and the doctor appointment like this: $500 – ($200 + $100) = $200.  If you use an electronic billing service, you may be able to use it to find the current deductible. Or you can call the insurance company for this information. It helps to know what to charge each session so the client does not end up owing you money which has to be billed.

Co-Pay

A co-pay is a fixed amount a person pays before they meet their deductible. A person may have a co-pay of $20 to go to their doctor. However, co-pays can vary according to the service. A person can have a co-pay of $20 for a primary care doctor but a co-pay of $30 for a specialist.

Co-Insurance

Co-insurance is like a co-pay but the person has to pay co-insurance after the deductible is met. A person with co-insurance pays the full amount of their deductible until the deductible is met. Then, they pay their co-insurance for each service. Co-insurance is a percentage of the fee. A client may have a deductible of $500 and co-insurance of 10%. The client pays for all sessions until they reach $500, then the client pays 10% of the negotiated fee. Using the example above and a negotiated fee of $100, the client pays for 5 sessions at $100 per session, then pays $10 per session ($100 X .10 = $10). Co-insurance is paid until the client meets an out-of-pocket limit.

Out of Pocket Limit

An insurance plan may have an out-of-pocket limit. An out-of-pocket limit is a limit to the amount of money a client has to pay. If a client has an out-of-pocket limit of $1,000, this is the most money they have to pay for services. When they reach their out-of-pocket limit, insurance will cover 100% for services. A person can have a different out-of-pocket limit for in network or out of network providers.

Negotiated Fee

The negotiated fee is the fee the provider has agreed to accept as a part of their contract with the insurance. A provider may not charge the client more than the negotiated fee. You cannot charge a client the difference between the negotiated fee and your full fee. It is fraudulent to ask the client to make up the difference between your full fee and the negotiate rate with the insurance. If you are unsure what your negotiated fee is, check your contract with the insurance or your “welcome letter.” There will usually be a fee schedule listed in the contract or welcome letter. The fee schedule lists how much you are paid for different CPT codes.

In Network

In network means the provider is contracted with the person’s insurance. If you are in network for a client, you are credentialed with their insurance. Insurances often have different deductibles, co-pays, co-insurance and out-of-pocket limits for in network versus out of network providers.

Out of Network

Out of network means the provider is not credentialed with the person’s insurance. Clients often have higher deductibles, co-pays, co-insurance and out-of-pocket limits for out of network providers. If you have a client who is out of network, you can try to get credentialed with their insurance to reduce costs for the client.

Medicaid

Medicaid is an insurance for people who are low-income or disabled. It is available through a public assistance office and is funded by the government. It may be credentialed by the state or the county you work in. To get credentialed with Medicaid, you need to determine who manages the credentialing for your area. You can begin by visiting the Medicaid website at http://www.medicaid.gov/. The website has a tool to direct you to your state Medicaid program which can be found on the menu at Medicaid > By State. You may have to search for the program that services behavioral health. If you can trouble locating the correct site, contact your local public assistance office and ask who manages the credentialing for Medicaid behavioral health in your area.

Medicare

Medicare is government insurance for people age 65 or older who are on social security, or disabled people on Social Security Disability (SSD) or Supplemental Security Income (SSI). Medicare does not credential counselors. This may be changing soon but for now only Licensed Clinical Social Workers can take Medicare. I am not familiar with the credentialing process for Medicare because I am a counselor so I’m not able to be credentialed for it.  However, I did some research and it seems you can complete a paper application or an online application.

The online application is available through a system called PECOS. The link for PECOS has information about completing the application and some downloads to help with the application. It’s my understanding that it is a time-consuming process. You can find the PECOS system at https://pecos.cms.hhs.gov/pecos/login.do. I highly recommend going to the first link and reading the PDFs and other available downloads before trying to complete the application. They even have some webinars on how to complete the application. You can find the information at: http://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/MedicareProviderSupEnroll/InternetbasedPECOS.html.