A Greater UnderstandingPatient Advocate Foundation• MISSION STATEMENT

Patient Advocate Foundation• PUBLICATIONS

Patient Advocate Foundation is anational non-profit organization thatserves as an active liaison between thepatient and their insurer, employerand/or creditors to resolve insurance,job retention and/or debt crisis mattersrelative to their diagnosis through casemanagers, doctors and attorneys.Patient Advocate Foundation seeks tosafeguard patients through effectivemediation assuring access to care,maintenance of employment andpreservation of their financial stability.

• The Managed Care Answer GuideAvailable in English & Spanish

Patient Advocate Foundation is dedicatedto ensuring that all Americans have accessto healthcare. Professional Case Managersare available to assist patients affected bydebilitating or life threatening illnesses byempowering them to be able to makeinformed decisions regarding their health-care options. For further information,please contact Patient AdvocateFoundation at 1-800-532-5274 or visit ourwebsite www.patientadvocate.org.

• Your Guide to the Appeal ProcessAvailable in English & Spanish

• First My IIIness ... Now JobDiscrimination: Steps to ResolutionAvailable in English & Spanish

• Promoting a Healthier AfricanAmerican Community

• The National Financial ResourceGuide for Patients: A State-By-StateDirectory

• Too YoungTo Be III...A Practical Survival Guide for Caregiversof Children and Young Adults

• Guide to Health Savings Acounts

• Promoting a Healthier AfricanAmerican community

• Promoting a Healthier AmericanIndian and Alaska Native Community

• "A Greater Understanding" series:A series of pamphlets written to provideanswers to the most frquently askedquestions regarding health care.

Editors Note:This-is the second in the series "A GreaterUnderstanding" brochures developed bythe Patient Advocate Foundation. Theinformation contained herein is in responseto frequently asked questions (FAQ's) bypatients. This brochure is intended to providea general yet informative response to theseinquires. Any incident, inquiry or issue mayvary according to these specific facts andcircumstances relating to the inc:1ividual.

If you would like further information aboutany of these publications, please contactour office or visit our website atwww.patientadvocate.org.

When you sign up for healthinsurance - just like when you signyour auto or homeowner's policies- youare entering into a contract with theinsurance carrier. Regardless of whomyour insurance carrier is or what type ofinsurance you have, you are subject tothe terms of your policy. It is critical foryou as the patient to understand theway your policy works so you canmaximize your benefits and your cover-age under your plan.

Co-insurance - the percentage apatient will be responsible to pay for aspecific service as dictated by yourplan document.

No matter what kind of health insur-ance plan you have, it is very importantthat you read your plan carefully. If youhave any questions regarding any por-tion of your policy, refer to the phonenumber provided on your insurancecard.

Network Providersand UCRsMost health insurance policies coveringAmericans today use a specified"Network" of providers. Whether youhave an HMO (Health MaintenanceOrganization), a PPO (Preferred ProviderOrganization), a POS (Point of Service)or another variant of one of these plans,you generally have the most extensivecoverage when you visit a physician ormedical facility that participates in yourinsurance carrier's network.

What Are UCR Charges?Many patients are surprised to findthemselves facing large out-of-pocketexpenses even though they are "fullyinsured." Usual, Customary andReasonable (UCR) charges are oftenone reason for this situation. UCR ratesare established based on the geo-graphic region in which you live andthe specific service provided to you.

These providers may include physicians,hospitals, out-patient diagnostic facilities,radiation therapy centers, out-patientinfusion centers or any other providerof medical services. When you remainwithin your provider network, you arenot responsible for UCR rates andcharges.

Terms associated with insurancebilling:Actual charges - the amounts chargedby the physician for a specific service.Allowable charges (UCR charges) - theamounts an insurance carrier is willingto pay for a specific service.Co-payment - the amount a patient isrequired to pay for a visit/service to aphysician/provider.

Example:Doctor VisitActual Charge $250.00UCR Allowable Charge $200.00Contractual Write-Off $50.0080/20 plan Insurance Paid ..$160.00Your 20% Co-Insurance $40.00Your Total Costs $40.00

When your insurance carrier receives aclaim on your behalf, they processclaims payment per the terms of thecontract. Once the claim has beenprocessed, the provider and the patientboth receive statements more com-monly referred to as "Explanation ofBenefits" (EOB). It is important toreview each EOB you receive, as theywill tell you the amounts paid to theprovider as well as any financialresponsibility you may have.

Example:OON Facility Bills Actual

Charge $1 ,000.00UCR Allowable Charge $400.0060% (OON) Insurance Paid .$240.00Your 40% Co-lnsurance $160.00Balance Billing Choosing

OON $600.00Your Total Costs $760.00

Out-of-Network Providersand UCRsOften, patients make the choice to goto providers not participating in theirnetwork. If you choose to do this, it iscritical to make sure that you have"Out-of-Network" (OON) benefits underyour policy. If you do not have OONbenefits and you elect to receive careat an OON facility, you may not receiveANY insurance reimbursement. If youhave OON benefits, your claim will beprocessed using the prevailing UCRrates for the services provided. Inaddition, the provider may "BalanceBill" you for the difference betweenwhat the physician charges and whatthe insurance company pays.

Even if your policy has an out-of-pocketmaximum, it is important to understandthat ONLY your portion of the UCRamount allowed is applied towards yourmaximum. In the example above, only$160.00 (your portion of the amount theinsurance company deemed payable) ofthe $760.00 you paid is counted towardyour yearly out-of-pocket maximum. Forthis reason, many patients have muchlarger than anticipated medical bills whenseeking services at an OON provider.

As the following example illustrates,the amount of patient financial respon-sibility can be much greater thanoriginally anticipated. The applicationof UCR rates and balance billing canmore than double the patient's financialresponsibility.

Medicare and UCRsUCR charges are not regulated by stateor federal agencies, but Medicare doespublish their UCR fee schedule. This iscommonly referred to as "MedicareAllowable" charges. Providers whoparticipate with Medicare agree toaccept the Medicare allowable chargeas full payment. Bear in mind thepatient will be responsible for theirco-insurance and deductible.

Example:Chemotherapy Actual Charge ..$500.00UCR Allowable Charge $300.00Medicare 80/20 Insurance Paid$240.00Your 20% Co-Insurance $ 60.00Your Total Costs $ 60.00

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Medicare providers may choose not tobill the patient for amounts above theMedicare allowable fee schedule. It isimportant to verify that your provider"Accepts Medicare Assignment" or is a"Medicare Provider" to avoid unexpectedand potentially largeout of pocket expenses.

Sometimes, a healthcare provider willnotify a patient-either verbally or bywritten notification-that they may besubject to balance billing after theinsurance carrier has paid the allowablecharge or if the claim is denied completelyfor reimbursement. This communicationconstitutes a "waiver of financialresponsibility." This happens mostcommonly when a healthcare provideranticipates that the insurance carriermay deny a claim and the physician andpatient want to proceed with the therapyregardless of the insurance coverage.

All insurers including Medicare providean appeals process for denial of service.To understand more about theseprocesses, please refer to PatientAdvocate Foundation's Your Guide tothe Appeals Process.

Patient Advocate Foundation421 Butler Farm Road

Hampton, Virginia 23666Toll Free: 1-800-532-5274

Fax: (757) 873-8999Email: info@patientadvocate.org

Website: www.patientadvocate.org

Publication No.2, 7/2007