Understanding denial codes can feel like deciphering a foreign language. CO 187 is one that many billers encounter. It indicates that the service is the member's responsibility because it's covered under a Consumer Directed Health Plan (CDHP) or Health Savings Account (HSA). Let's break down what this means for your billing processes and how high-deductible health plans are reshaping how payments are handled.
Demystifying CO 187
CO 187 isn't just an ordinary denial code. It directly ties to the structure of the patient’s insurance plan. When you see CO 187 on a remittance advice, it means the patient's insurance plan has determined that the responsibility for the billed service falls on the patient, not the insurer. Why? Because they have a CDHP or HSA.
What Are CDHPs and HSAs?
Consumer Directed Health Plans and Health Savings Accounts are two sides of the same coin. CDHPs are health insurance policies with higher deductibles compared to traditional plans. They're designed to encourage patients to be more cost-conscious. HSAs, on the other hand, are tax-advantaged savings accounts specifically for medical expenses. Patients contribute pre-tax dollars, which they then use to pay for healthcare services until their deductible is met.
How High-Deductible Plans Change Billing
One significant impact of high-deductible plans is the shift from insurer to patient liability. As deductibles climb sky-high, patients find themselves paying out-of-pocket more often, at least until they meet their deductible threshold. This shift means billers and practices must adapt their approach.
Practical Steps for Handling CO 187 Denials
When CO 187 appears, it’s more than just a line on the report—it’s a cue to take action. Here's how to approach it effectively:
Verify Plan Details
Always start by verifying the patient’s plan details. This includes understanding their deductible amounts and limits. Reach out to carriers through their portals or via those dreaded hold lines (yes, they’re a hassle, but necessary). Confirm whether the service provided is indeed the patient’s responsibility or if an error was made.
Educate Patients
Once you’ve confirmed the patient’s responsibility, the next step is communication. Be prepared to explain the situation to your patients. Many are unaware of how their plans work. Offer clear, concise explanations of what a CDHP or HSA means for their payment obligations. Consider offering a printed or digital brochure outlining their plan's specifics.
Set Up Payment Plans
High out-of-pocket costs can be daunting. Alleviate this by offering flexible payment plans. Many practices find success setting up monthly payment arrangements. Make it easy for patients to enroll, whether in person, over the phone, or through an online portal.
Navigating Payer Portals and Systems
Plan verification isn’t without its challenges. Payer portals are notorious for their quirks—slow load times, confusing interfaces, and cryptic error messages. Some even require a separate login just for CDHP information. Understanding these nuances saves time and prevents frustration.
Prioritize Payer-Specific Knowledge
Each payer processes CDHPs and HSAs differently. Know the quirks of your most common payers. For example, some might automatically apply HSA dollars when available, while others require patient action. Stay informed with regular training sessions and updates from payer newsletters or user groups.
The Financial Impact of High-Deductible Plans
The increase in high-deductible plans has a direct financial impact on healthcare practices. With more patients being responsible for larger portions of their medical bills, practices experience longer A/R cycles and potential cash flow issues. Keeping an eye on metrics like days in A/R becomes even more critical.
Tools for Tracking and Managing A/R
Utilize billing software that offers clear reporting on patient responsibility and outstanding balances. These tools should allow you to track open accounts, send reminders, and see at a glance how long specific balances have been pending. Automation in billing can help ensure consistent follow-up.
Looking Forward
High-deductible health plans aren't going away anytime soon. In fact, their popularity continues to rise as employers and individuals seek lower premium options. As such, practices must stay agile, adapting billing strategies to effectively manage patient responsibility.
The key takeaway? Don't ignore CO 187. Use it as an opportunity to streamline your billing processes, improve patient communication, and secure your practice's financial health. It’s not just about managing denials; it’s about evolving with the healthcare payment landscape.
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