Insurance Tips Part IV - How to Interpret an Explanation of Benefits (Or how much my health cost when I was in PT school)

I fully intend for this to be the last insurance specific posts for a while, but I have been thinking about it a ton as of late. In my last post I talked about payment structures where physical therapy (what I talk about because I have experienced both paying for it and getting paid for it) gets paid at a flat rate. In the scenario where it is a flat contracted rate, you could theoretically figure out how much it was going to cost you per visit. When I first started seeing a pelvic floor physical therapist, the office I went to got paid $60 for each visit I had because that was their contracted rate with United Health Care. Before I had paid my deductible, that meant that I paid the full $60. After I paid the deductible I only paid 20%, so I paid $12 and my insurance paid $48, totaling $60. I was really lucky and was seeing an incredible therapist who only saw one person when she was treating pelvic health, which meant her company lost money in those hours. Imagine if I were 1 of 4 people she were seeing in that same hour? How do you think that would effect the time it took for me to get better?

For insurances that don't pay a flat rate, but instead pay a certain amount from each code billed it gets more complicated.

The first thing to know is that insurances pay per code, regardless of what body part is being treated. In physical therapy, common codes are for: neuro re-education, therapeutic exercise, therapeutic activities, and manual therapy. Each code is for 15 minutes of whatever the code is for. The amount that is charged per code is decided by each individual business, and the amount that the insurance company will pay for that code is decided by the insurance company. Clear as mud, right?

When I was in PT school (before my pelvic debacle) I had a concussion from a car accident that I needed treatment for. (I learned a lot about being a patient as I learned to be a provider.) I first saw a physical therapist in an outpatient orthopedic setting.

He charged:

$51 for 15 minutes of Neuro Re-Education

$53 for 15 minutes of manual therapy

$52 for 15 minutes of therapeutic exercise and

$51 for 15 minutes of therapeutic activity

I had to switch therapists because I was working in a different part of town. He charged:

$100 for 15 minutes of neuro re-education and

$40 for 15 minutes of therapeutic exercise

$100 for 15 minutes of Therapeutic activity

I still wasn't better so I had to see a specialist who worked in a hospital. They charged:

$196 for 15 minutes of neuromuscular re-education

$217 for 15 minutes of manual therapy

$196 for 15 minutes of therapeutic exercise

So you can see, that in a 60 minute appointment, there would be between $200 - $600 in charges. If the first two places took my united healthcare insurance, they each would have gotten paid $60 / visit. If my insurance paid per code, it could have been between $60 - $240, which means that before my deductible was met, I would have been paying between $60 and $240 per visit, and then a percentage after that. And even if you think your insurance is going to pay for something, you don't actually know if they are going to pay for it until after it is paid. The money you pay at the appointment (assuming it is a percentage) is a guesstimate of what the insurance company will pay, but in just about every setting, the provider will have you sign a form for the amount that the insurance company doesn't cover, putting you on the hook for that amount.

Likely, the third place in the hospital would have gotten paid better from my insurance company, which would have meant that during my deductible period, I would have paid more per visit than at either of the other two places. So, you say, why I don't I just avoid PT performed at hospitals? Besides choosing your care on price and not on quality, there are also standalone outpatient clinics that bill under hospital systems, getting paid hospital rates, so even a blanket policy on not getting PT at hospitals won't necessarily save you money.

If you're still with me after all of those numbers, color me impressed. It's confusing - I pulled out a bunch of my medical bills to write this post and it made my head spin trying to decipher what the bills said. And that brings me back to why I changed my opinion on out-of-network care.

If my time is worth $200, you know that you're going to pay $200. I don't have to change my treatment based on what codes an insurance company reimburses best. There is no external pressure for me to do anything except treat you to the absolute best of my ability - I know that you know exactly how much you are paying for, and for what. If you aren't happy with your treatment here, I have no illusions that you won't take your $200 somewhere else, which means you are going to get the treatment you need and want. I don't have to see four people in an hour, I can see just you, which means you're going to get an individualized plan for your goals and your needs.

There are going to be people for whom the insurance system works really well - people with really good insurance and low deductible plans. There are also people for whom the insurance system doesn't work for at all. People with high deductible plans, combined with high monthly fees, or insurance that just doesn't cover very much. It's so tempting when you are paying per month to insist on finding a provider who takes your insurance, but I hope I've shown that that's not always the best thing you can do - for either your health or your wallet.