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Explanation of Insurance

Thank you for beginning your road of recovery with us, you are in for the ride of your life! Part of treatment is dealing with insurance which can be a real pain especially when all you want to do is get help for your substance abuse issues. In order to help you better understand how insurance coverage and billing work at Liberty Bay we have prepared the following explanation.

After you have submitted your insurance information to us and we have verified your insurance benefits one of our staff members will get back to you with the following information:

Deductible

After the verification of benefits comes back to us, we will know what your deductible is for the year and how much of the deductible is “Unmet”. Unmet deductible amount simply means the portion of your deductible that has not been paid during that calendar year. It is our policy at Liberty Bay Recovery to collect the unmet deductible upon your admission as it is a regulation by your insurance carrier. We do not waive the unmet amount of the deductible. You may pay the entire unmet portion by check or card or you may enter into a structured payment plan that begins upon discharge from the 90-Day program or the date of early discharge. The payment plan is non-interest bearing and has no prepayment penalties. The example below and in the following explanations describes a typical deductible situation at Liberty Bay:

Yearly deductible amount as presented by your insurance carrier: $5000
Amount of the deductible that has been met at time of verification: $3000
Total Amount Due to Liberty Bay upon admission: $2000

Co-insurance

Once the $2000 unmet portion of the deducible has been paid in full or entered as a payment plan to Liberty Bay your insurance plan has a percentage rate of what they will pay for your treatment. It is customary for most insurances to cover anywhere from 50% to 90% of the billed charge from the provider once the deductible has been met. The percentage not covered by your insurance is called co-insurance. The co-insurance amount is your responsibility as a member to pay to the healthcare provider that you are receiving treatment from. Listed below is a typical example of how co-insurance works at Liberty Bay:

Unmet Deductible Amount Paid Now Paid: $2000
Insurance Percentage Coverage: 70% (The amount your insurance will pay after deducible is met)
Co-Insurance Percentage: 30% (The amount of your patient responsibility for the billed charge)

 

As you attend treatment, your insurance will be billed. These billed amounts will be subject to the co-insurance. The co-insurance is the patient responsibility amount and it is what we will send an invoice out for every month. The patient responsibility (co-insurance) amount will continue to be sent out until the Out-Of-Pocket Maximum has been met.

Each insurance carrier has what’s known as a Usual and Customary rate for the healthcare providers billed service rate. Each insurance carrier has a different usual and customary rate and these rates can change frequently. As an out-of-network provider, Liberty Bay Recovery does not have access to rates nor do we know when they change. The only time we as the treatment provider have access to the usual and customary rate information is when the insurance carrier sends out an EOB (Estimation of Benefits). For example:

Billed charged: $500
Allowed Amount: $400
Percentage Covered
After Deductible is met: 70%
————————————————————
Amount paid to provider: $280
Amount remaining to be paid by the member: $120

The $120 is the patient responsibility. This is the amount that we will be sending a bill out for month until the Out-of-Pocket Maximum has been met.

Out-Of-Pocket Max

Now the light at the end of the tunnel is that you are only responsible for the 30% of co-insurance up until patient responsibilities reach your insurances’ Out-Of Pocket Maximum.
Out-of-Pocket Maximum is the dollar amount that your insurance carrier has decided as the maximum amount of what you, the member, will pay for healthcare services over the course of the calendar year. Once the dollar amount of your treatment services exceed your insurance plans’ Out-of Pocket Maximum, all the charges submitted by the healthcare provider will be covered at 100% of the allowed rate. The 100% coverage will remain constant the entire calendar year so long as you make your monthly premiums.

At Liberty Bay, it is our policy to attempt to collect the co-insurance until the Out-of-Pocket Maximum has been met. There are three ways to settle this debt with Liberty Bay:

  1. Once you receive your monthly invoice from Liberty Bay, you can pay the amount in full by check or credit/debit.
  2. Once you receive the invoice you can enter into a payment plan for the amounts owed.
  3. If you provide the necessary financial hardship documents, you may be eligible for a partial or full waiver of the co-insurance. For financial consideration you will need:
    • Handwritten letter of hardship describing current living situation, relationship status, bank account amounts, child support, employment status and legal issues.
    • W-2, unemployment paperwork or a current printed bank statement
    • Financial hardship form that we provide at Liberty Bay

IF all three requested financial hardship documents are collected a determination will be made to waive a portion of the co-insurance or the full amount. This process is the same for co-pays if they are applicable in your insurance plan. If all 3 documents are not collected you will not be eligible for financial hardship assistance. Co-insurance amounts cannot be billed until the services are provided by Liberty Bay. That means if you do not qualify for financial assistance you will be receiving an invoice at the conclusion of month 1.

Co-Pays

Co-Pays are tricky because of the multiple layers of service we provide at Liberty Bay. Listed below are the levels of care we provide:

PHP (Partial Hospitalization) 30 Hours per week of group and individual sessions
IOP (Intensive Outpatient) 15 Hours per week and individuals
OP (Outpatient) 3 hours per week
Individual Sessions 1 weekly once stepped down to that level of care
Psych/MD Visits Upon admission and as needed thereafter

Some insurance will charge the member $0 for co-pays on each level of care while insurance companies will require co-pay for all levels of care. Co-Pays can range from $0-$50 per session but typically are in the $15 range. Liberty Bay cannot bill for co-pays until they actually occur. Listed below is an example of how billing would work for co-pays:

  1. You check into treatment on Monday January 1, 2017
  2. Your co-pay as per the verification is $15 for IOP and OP
  3. You attend group starting Monday the 1st and attend all groups until Friday (5)
    • These groups are billed at PHP due to medical necessity
    • So the co-pay for these groups $0 due to the level of care
  4. In two weeks your insurance steps you down to IOP and remain in IOP until the completion of the 90 day program
  5. You meet with our MD 5 times while in our program
  6. IOP meets 5 times per week and you have a remaining 10 weeks of treatment

10 weeks x 5 sessions per week x $15 co-pay per session + 5 MD visits @ $15 =

 

$825 in co-pays for treatment

At the completion of the 90 days, you will receive an invoice for the $825 in co-pays. You have two ways to address the charges incurred:

  1. You may fill out the same documents for financial hardship that you did the co-insurance waiver
  2. Pay the balance in full upon receipt of invoice

Listed below is an example of what we would send you once the verification of benefits has been complete. This is a direct verification from our billing team and it represents the current insurance information we have at the time we verify benefits. If there is a discrepancy and charges towards the deductible have not been applied yet our Accounts Manager will work with you to adjust payments as needed.

Good morning Liberty Bay,

Thank you for your patience, our verifications team has completed verifying substance abuse and mental health benefits for John Smith through Cigna. John will be covered at 60% for PHP, IOP, OP, psych visits, and individual sessions after satisfying the $2,400 deductible. As of today, $1,000 has been met. John will be covered at 100% once the $6,600.00 out of pocket maximum has been met. So far, $1000 has been met. There will be a $0 copay for PHP/IOP/OP/IND/PHYS. This policy is on calendar year which means the deductible and out of pocket accumulators will reset to $0 on 01/01/2017.

 

Your Responsibility:

$1400 Deductible due ($2400-$1000=$1400) at time of Admission
(Pay in Full or payment plan)
+
$4200 Out-of-Pocket will be due as charges are incurred
(Start of month 2 invoice for incurred co-insurance charges)
• If financial hardship documents are turned in and approved, could be eligible for waiver of co-insurance ($3200)
+
$0 for Co-Pays

Total cost of Treatment with NO financial hardship $5600

Total cost of Treatment with financial hardship $1400