{ Contact Us } { Locations } { Forms }
Phone: 763-255-3800

Services

Reliable Medical Supply, Inc.
Brooklyn Park - 763-255-3800
Buffalo - 763-684-1778
Waite Park - 320-259-5900

Contact Us

Billing - Educational Information

Looking for more in-depth answers to your questions? You can find some of those answers here. Check back later as we expand this section with more helpful education.

Insurance Knowledge

Durable Medical Equipment or DME is a portion of our insurance policies that many individuals do not access unless something very serious happens. The products that are covered under these policies vary by insurance companies, individual policies and groups.

DME coverage is seldom at 100% coverage meaning that the insurance pays the claim/product/service and there is no expense to the patient. Some of the terms that are commonly used are:

  • Subscriber - The individual who is the policy holder
  • Coinsurance - The amount that the patient is responsible to pay
  • Deductible - The amount that the patient must pay before the insurance will pay
  • Out of Pocket - The amount that the patient must pay before the insurance will pay 100%
  • HCPC - This stands for Health Care Procedure Code
  • Allowable - The amount that the insurance company will pay for a service/product

Subscribers

Subscribers are the policy holder whose information is necessary to include on a claim. If the patient is the policy holder then the “relationship” would be “self” if the patient is a spouse then the relationship would be “spouse”.

Coinsurance

Coinsurance is different than a co-pay. Co-pays are set amounts that do not vary; these are amounts listed on the back of the insurance card and include Office Visit, Emergency Room, and Prescription amounts. Coinsurance is a percentage of what the insurance company allows for payment to a provider. Example: If the insurance company pays 80% then the patient would be responsible for 20% (to equal 100%). Policies vary from 45% to 100% so verification is necessary to ensure that we are paid properly from the insurance company and that we collect the estimated amount of coinsurance upfront from the patient.

Deductible

Deductible is the amount of money that a patient pays before the insurance company will consider the amount for payment. Example: If you have a policy that has a $500.00 deductible and we bill the insurance for $500.00 you would be responsible for the full payment of $500.00 to satisfy the deductible requirement of your policy. Once you have “met” the deductible your insurance company will pay the scheduled percentage on items/services that they deem medically necessary.

Out of Pocket

Out of Pocket is the amount of money that you must pay before the insurance will pay 100%. Example: Say your deductible was $500.00 and your coinsurance amount is 20% and your Out of Pocket is $1000.00. Then you must pay the first $500.00, and then you must pay an additional $500.00 in your 20% coinsurance to have paid a total of $1000.00. Once you have paid this amount your insurance will pay 100% for the on charges incurred until your renewal date.

HCPC

HCPC is an industry code that tells the insurance company what we are billing for. Some examples are E0966 Headrest or E0601 CPAP. These codes along with modifiers tell the insurance processor how to determine the reimbursement for that product/service. Some examples of modifiers are NU = New, RR = Rental etc.

Allowable

Allowable is what the insurance company will consider for payment of a service/product. Some follow Medicare’s fee schedule other use a combination of the fee schedule and contact pricing to determine the amount of reimbursement. An allowable is not the amount that we charge but rather the amount that we expect to get from the insurance and patient payments combined. Example: If we charge $100.00 and the allowable is $80.00, on an 80/20 policy insurance would pay $64.00 (80% of $80.00) and the patient will be responsible for $16.00 (20% of $80.00).

Medically Necessary

Insurance company products/services require medical justification usually diagnosis driven. Some of the terms that are commonly used are:

  • LMN/CMN - Letter of Medically Necessity or Certificate of Medical Necessity
  • RAC - Release of Information/Accepting Assignment/HIPAA
  • ABN - Advanced Beneficiary Notice
  • Waiver - Document signed and agreed upon for rendering service not covered
  • Up Grade - Document signed and agreed upon for provided upgraded product

Medical Necessity

Medical Necessity is a requirement by the payer to deem that the product/service is being provided/prescribed for medical reasons and not out of convenience. Even if the physician prescribes the service/product it does not mean that the insurance will pay for it. It may not even be a covered product/service under their insurance policy. The requirements for proving medical necessity vary from one insurance and policy to another. This is another reason why verification of medical policy is essential, but is still not a guarantee of payment.

LMN/CMN

LMN/CMN is the documentation or detailed prescription that is provided by the physician to support the need of the product/service provided. These documents must include the name of the patient, DOB, a description of the item/service that is to be provided, length of need (if applicable), physician’s signature and date.

RAC

RAC forms are Reliable Medical Supply internal form which combines three necessary documents required for billing purposes. The first part of the form is the “Release of Information”; this allows Reliable Medical Supply to coordinate care with physicians, insurance companies or any other entity. The patient’s signature is required and this is specific to the type of service/supply we are providing. Second is the Assignment of Benefits this is an acknowledgement of accepting financial responsibility for copays, deductibles, and non-covered items. Lastly HIPAA is the “Consent Agreement” this informs them of the sharing of personal information and extends the opportunity for the patient to dictate how their personal information is shared or obtained. HIPAA stands for the Health Insurance Portability and Accountability Act of 1996. This act is not only for our industry but pertains to any company who handles confidential/personal information.

ABN

ABN is the notice given to beneficiaries in advance that the product/service may not be covered. The ABN is a Medicare two part form and can be used for other insurances. On this form you must indicate why you believe that the product/service will not be covered this must be specific, i.e. you do not meet the necessary requirements of the LCD for coverage. The patient must select an option of whether to receive the supply/service knowing that they may be financially responsible. Money is collected from the patient at the time of service as we are a non-participating provider with Medicare. This means that we can “Accept” assignment or not on a claim by claim basis. Accepting Assignment means that we will “accept” the insurance payment (allowable) in full for supplies/services rendered and not charge the beneficiary any amount not allowed by the insurance.

Waivers

Waivers are used when the supplier feels that the product/service being provided will not be covered. These should be specific to the product/service and fully explain to the beneficiary why we believe that it is not covered. Different then an ABN this would be determined by the supply/service and not intended to be for Medicare beneficiaries.

Up Grades

Up Grades are products that are above the standard medically necessary piece of equipment. When the customer wishes to have something more than the standard or not medically necessary piece of equipment, they can. However, they must be willing to pay the difference between what the insurance company would reimburse us for and the MSRP of that item.

Insurance Companies

Some of the terms that are commonly used are:

  • Participating Providers - Contracted
  • Accepting Assignment - Accepting payment at an agreed rate
  • Primary Secondary Tertiary Insurance priority
  • EOB - Explanation of Benefits
  • Write off - Money that cannot be collected
  • Denials - Claims that may not be paid
  • DX ICD9 - Diagnosis Codes

Participating Providers

Participating Providers These are the insurances that we are “contracted” with. Patient who come to us we have the ability to bill their insurance; the “in network” benefit is in some cases better for the patient. We must “accept assignment” on these patient claims. Medicare we are not a participating provider this is why we make the decision to accept assignment on a case by case basis.

Accepting Assignment

Accepting assignment means that we will accept the allowable from the insurance. We are paid directly and there is a contractual write-off that we are mandated to take.

If we are contacted with an insurance company we are considered a “participating” provider. We would have a signed contract and we would accept assignment for products/services provided to the beneficiary. Even though we have a Medicare ID number or NPI for each location, we are a Non-participating Provider. Not accepting assignment means that we would provide product to the beneficiary, they would pay our supplier charge (in full), and we would bill Medicare on behalf of the beneficiary Medicare would in turn paid the beneficiary directly and not Reliable Medical Supply. We at this point would not be obligated to take the write-off portion. This means that we can “pick and choose” who we accept assignment on and who we do not. Example, customer comes in and wants a fully electric hospital bed. They do not qualify under Medicare so we know we will not get paid. We would inform the patient and if they wanted the bed they would pay in full (2300.00) and we would bill on their behalf. Medicare would not reimburse the patient for the full 2300.00 because the patient does not qualify for this piece of equipment. Medicare may down code the bed to a semi electric (1907.00), or a manual (1335.00) and reimburse them. They may deny the bed all together; this is why we continue to be a Non-participating Medicare provider.

Primary

Primary Insurance is the party who is financially responsible first. We bill this insurance first and anything denied or partially paid would go on to the next responsible party.

Secondary and Tertiary

Secondary and Tertiary payers are the next order of billing. In some cases the Primary Insurance may not cover the item. In this case we bill the Secondary or Tertiary Insurance as if they were Primary. Example: Patient has Medicare and MA. They order incontinent products that Medicare does not cover. We do not bill Medicare for a denial we bill MA as Primary. If we supply a product that is a covered benefit by Medicare then MA would look for and EOB (Explanation of Benefits) in order to process the denial or co-pay amount.

EOB

EOB Explanation of Benefits is the document provided by the insurance company and explains the payment or the reason for denial. This document is also sent to the Beneficiary and explains to them how their claim was processed. This document is required to bill any insurance that would be secondary or Tertiary. Insurance companies use this to determine what they will pay. In all cases if Medicare is Primary then who ever follows Medicare MUST pay the co-pay and deductible or deny it as patient responsibility. Providers do not have to take additional write offs after Medicare has processed the claim.

Write off

Write offs are the difference between the charged amount and the allowable. This amount on a claim that we have accepted assignment on cannot be billed to the patient. It is a “contractual” agreement between the insurance carrier and the provider via a contact. Other write offs may occur due to bad debt and timely filling.

Denials

Denials are services/supplies that the insurance company has not paid or will not consider for payment. In some cases we bill expecting a denial or needing a denial to go to the next responsible party. Denials can be for lack of information, missing information, requiring additional information, not covered under policy, not medically necessary, wrong DX code, no coverage at time of service and the list goes on. Working Denials are a primary billing function because insurance companies can deny for any reason (right or wrong), the claim must be sent back to the insurance company for reconsideration. It is a known fact that insurance processors are instructed to deny claims, this puts the payment off for another 45-60 days (insurance came keep their money longer), and in some cases it is hoped that the adjustment will not come back within the timeframe and it will be denied for timely filing. Billers must be cognizant of denial “trends” and make management aware so that we can work with the provider representatives for resolution.

DX ICD9

DX ICD9 like the HCPC codes this tells the insurance processor what the diagnosis is to justify the product/service that was provided and being billed for. Also, like HCPC they are date driven meaning that you must use the most specific code for your date of service. Example: for dates of service prior to 1-1-09, it may require a new more appropriate code to get through the billing edits or software, clearing houses, and claims insurance processing.