Wiki Copay, Co-Ins, Allowable, Billed?

[Brandy0618]

Good afternoon. I am a CPB in addition to a CPC. I have primarily held coding jobs until now. I am now in a billing position and I need a refresher in the equation of copay + insurance payment should = the allowable? Correct? The paid amount from the carrier + the adjusted amount should = the billed amount? Where does the co-insurance factor in? This is all in reference to processing the ERA. I am processing many paper claims due to software conversion. I have looked back through all my material from the CPB course and I cannot find this anywhere. I would appreciate any words of wisdom.

Thank you.

 

[sls314]

Good afternoon. I am a CPB in addition to a CPC. I have primarily held coding jobs until now. I am now in a billing position and I need a refresher in the equation of copay + insurance payment should = the allowable? Correct? The paid amount from the carrier + the adjusted amount should = the billed amount? Where does the co-insurance factor in? This is all in reference to processing the ERA. I am processing many paper claims due to software conversion. I have looked back through all my material from the CPB course and I cannot find this anywhere. I would appreciate any words of wisdom.

Thank you.

The paid amount from the carrier + the adjusted amount should = the billed amount?

No. The allowed amount + the adjustment should equal the billed amount.

Provider submits Billed Charges.

Provider is contracted to receive Allowed Amount for services. The difference between Billed Charges and Allowed Amount would be the contractual adjustment.

Patient's benefits are calculated based on the allowed amount. Whatever the patient's deductible or coinsurance might be, the allowed amount is used for that calculation.

Paid Amount is whatever remains of the Allowed Amount after patient liability is deducted.

If any line items were denied, there could be a denied amount that needed to be factored in too.

The basic gist would look something like the formulas below:

Billed Charges - Allowed Amount = Contractual Adjustment

Insurance Payment + Patient Liability + Contractual Adjustment = Billed Charges

 

[Brandy0618]

The paid amount from the carrier + the adjusted amount should = the billed amount?

No. The allowed amount + the adjustment should equal the billed amount.

Provider submits Billed Charges.

Provider is contracted to receive Allowed Amount for services. The difference between Billed Charges and Allowed Amount would be the contractual adjustment.

Patient's benefits are calculated based on the allowed amount. Whatever the patient's deductible or coinsurance might be, the allowed amount is used for that calculation.

Paid Amount is whatever remains of the Allowed Amount after patient liability is deducted.

If any line items were denied, there could be a denied amount that needed to be factored in too.

The basic gist would look something like the formulas below:

Billed Charges - Allowed Amount = Contractual Adjustment

Insurance Payment + Patient Liability + Contractual Adjustment = Billed Charges

This is much appreciated. What if the carrier only indicates the billed amount and the provider allowed amount but does not indicate the write off?

 

[Brandy0618]

The paid amount from the carrier + the adjusted amount should = the billed amount?

No. The allowed amount + the adjustment should equal the billed amount.

Provider submits Billed Charges.

Provider is contracted to receive Allowed Amount for services. The difference between Billed Charges and Allowed Amount would be the contractual adjustment.

Patient's benefits are calculated based on the allowed amount. Whatever the patient's deductible or coinsurance might be, the allowed amount is used for that calculation.

Paid Amount is whatever remains of the Allowed Amount after patient liability is deducted.

If any line items were denied, there could be a denied amount that needed to be factored in too.

The basic gist would look something like the formulas below:

Billed Charges - Allowed Amount = Contractual Adjustment

Insurance Payment + Patient Liability + Contractual Adjustment = Billed Charges

Can you tell me if the provider allowed amount added to the coinsurance is the total provider amount. So in this case for the first line item of 97112 would the total provider allowed amount be 24.39 plus 9.04? 33.43?

 

[sls314]

This is much appreciated. What if the carrier only indicates the billed amount and the provider allowed amount but does not indicate the write off?

You'd just do the math for the contractual adjustment. Billed amount - allowed amount

 

[sls314]

Can you tell me if the provider allowed amount added to the coinsurance is the total provider amount. So in this case for the first line item of 97112 would the total provider allowed amount be 24.39 plus 9.04? 33.43?

No, you don't add the allowed amount to coinsurance. Never ever ever.

The patient's coinsurance is calculated as a percentage of the allowed amount. That's how those 2 numbers relate to each other.

If you wanted to know a line item payment, you could subtract the coinsurance from the allowed amount. Allowed amount - patient liability = paid amount

For 97112, the line item payment would be $15.35. $24.39 - $9.04

That bold shows labeled "totals" shows the summary for the whole claim. So, for the claim as a whole you have:

Billed Amount	$ 296
Provider Allowed Amount	$ 66.30
Contractual Adjustment	$ 229.70	Calculated as $296 - $66.30
Member Responsibility	$ 24.56
Paid amount for claim	$ 41.74	Calculated as $66.30 - $24.56

Notice that you have an ETP incentive of $0.42 added to the claim payment, so that's what the Total Amount Paid in the bottom right corner is $42.16 ($41.74 + $0.42)

 

[Brandy0618]

The paid amount from the carrier + the adjusted amount should = the billed amount?

No. The allowed amount + the adjustment should equal the billed amount.

Provider submits Billed Charges.

Provider is contracted to receive Allowed Amount for services. The difference between Billed Charges and Allowed Amount would be the contractual adjustment.

Patient's benefits are calculated based on the allowed amount. Whatever the patient's deductible or coinsurance might be, the allowed amount is used for that calculation.

Paid Amount is whatever remains of the Allowed Amount after patient liability is deducted.

If any line items were denied, there could be a denied amount that needed to be factored in too.

The basic gist would look something like the formulas below:

Billed Charges - Allowed Amount = Contractual Adjustment

Insurance Payment + Patient Liability + Contractual Adjustment = Billed Charges

 

[Brandy0618]

Thank you so VERY MUCH!!