The Medicare system can be daunting at first. However, once you master the enrollment process and billing requirements, you’ll find it manageable. This step-by-step guide helps you learn how to bill Medicare as a provider, from Medicare claim submission to getting paid.

Many new providers struggle with Medicare’s documentation requirements and coding standards. Others face delays because they miss enrollment deadlines or submit incomplete applications. Let us share practical steps to avoid these common pitfalls while maximizing your reimbursements.

How to Bill Medicare as a Provider (Complete Guide)

Medicare billing process for providers requires three essentials:

• Proper enrollment to Medicare
• Accurate claim submission
• And ongoing compliance.

To bill Medicare as a provider, you must obtain an NPI number and enroll through the Provider Enrollment, Chain, and Ownership System (PECOS). Next, you’ll verify patient eligibility and gather required documentation before submitting claims to your Medicare Administrative Contractor (MAC). Finally, you must maintain accurate records and update your enrollment information as needed.

The entire process follows a structured workflow designed to protect both providers and beneficiaries. Medicare uses standardized systems like the resource-based relative value scale (RBRVS) to determine payments. Your MAC processes claims and handles communications throughout the billing cycle. Success depends on understanding each step and following established guidelines consistently.

What is Medicare? And What Does Medicare Billing Mean for Providers?

Medicare serves as America’s federal health insurance program for adults aged 65 and older. The program also covers younger individuals with specific disabilities or permanent kidney failure. The Centers for Medicare and Medicaid Services (CMS) manages this vast system that processes billions of claims annually.

Medicare program divides into three main parts that affect your Medical billing strategy.

For providers, Medicare billing means following federal regulations while serving eligible beneficiaries. You must determine which Medicare part covers each service you provide. Some patients only qualify for certain coverage types, which affects your billing strategy.

Medicare may act as a secondary payer when patients have other insurance coverage.

Understanding Medicare’s structure helps you navigate billing requirements more effectively. Each part has different rules, payment schedules, and documentation needs. Your billing staff must recognize these differences to submit accurate claims and avoid denials.

How to Bill Medicare as a Provider (Step-by-Step)

Successfully billing Medicare requires following a systematic approach from enrollment through payment reconciliation. The process involves multiple steps that build upon each other to ensure compliance and maximize Medicare reimbursement.

Here are the nine essential steps every provider must master:

1. Obtain an NPI Number
2. Enroll in Medicare
3. Verify Enrollment and Maintain Compliance
4. Verify Patient Eligibility and Coverage 
5. Gather Required Documentation
6. Submit Claims to Medicare
7. Respond to MAC Communications and Track Claims
8. Receive Payment and Reconcile Accounts
9. Maintain Records and Compliance

Let us dive a little deeper into these steps to billing Medicare as a healthcare provider.

1. Obtain an NPI Number

Your National Provider Identifier (NPI) serves as your unique healthcare identifier across all transactions. This 10-digit number links all your Medicare billing activities to your practice or facility. Without an NPI, you cannot submit claims or receive payments from Medicare.

Apply for your NPI through the National Plan and Provider Enumeration System (NPPES) website. The application process requires basic information about your practice, including your name, address, and taxonomy code.

Note: Individual providers and healthcare organizations each need separate NPI numbers.

The NPPES system typically processes applications within 10 business days. You’ll receive your NPI via email once approved. Keep this number confidential and use it consistently across all Medicare transactions. Never share your NPI with unauthorized individuals or organizations.

Some providers already have NPI numbers from other insurance billing. You can use the same NPI for Medicare if it’s still active and accurate. Verify your existing NPI information through the NPPES registry before proceeding to Medicare enrollment.

2. Enroll in Medicare

Medicare enrollment establishes your eligibility to bill the program for covered services. The process varies depending on whether you’re an individual provider or institutional facility. Individual physicians typically complete the CMS-855I form, while groups use CMS-855B forms.

Access the enrollment system through PECOS, Medicare’s online platform for provider registration. Create your account using your NPI number and basic practice information. The system guides you through each section of the enrollment application.

Institutional providers face additional requirements during enrollment. Hospitals, skilled nursing facilities, and similar organizations must pay application fees. These fees vary by provider type and are updated annually on the PECOS website.

Prepare supporting documentation before starting your application. You’ll need copies of your professional license, malpractice insurance, and curriculum vitae. Some provider types require additional certifications or accreditations. Having these documents ready speeds up the enrollment process.

3. Verify Enrollment and Maintain Compliance

Your Medicare Administrative Contractor (MAC) reviews your enrollment application and may request additional information. Respond promptly to any MAC communications to avoid processing delays. The review process can take several weeks depending on your provider type and application completeness.

Once enrolled, you must keep your information current in the PECOS system. Report ownership changes, legal actions, or address updates within 30 days. Other enrollment changes must be reported within 90 days. Failure to maintain current information can result in payment delays or enrollment termination.

Institutional providers may undergo site visits or surveys during the enrollment process. Your CMS Location and State Agency coordinates these evaluations. Prepare your facility for inspection and ensure all required documentation is readily available.

Monitor your enrollment status regularly through PECOS. The system shows your current status and any pending actions. Address any issues immediately to maintain uninterrupted billing privileges. Set calendar reminders for important deadlines and renewal dates.

4. Verify Patient Eligibility and Coverage

Patient eligibility verification prevents claim denials and ensures proper billing. Check each patient’s Medicare status before providing services. Use your MAC’s portal or eligibility verification tools to confirm coverage details.

Determine whether Medicare serves as the primary or secondary payer for each patient. Other insurance coverage may take precedence over Medicare in certain situations. Workers’ compensation, employer group health plans, and auto insurance often pay before Medicare.

Collect comprehensive insurance information from every patient. Use the CMS Questionnaire or similar forms to gather employment and coverage details. Ask about spouse’s insurance, recent accidents, and work-related injuries. This information helps identify other potential payers.

Document your eligibility verification efforts in the patient’s record. Note the date, method, and results of your verification. This documentation supports your billing decisions and helps during audits or appeals. Update eligibility information if the patient’s circumstances change.

5. Gather Required Documentation

Accurate documentation forms the foundation of successful Medicare billing. Collect all necessary information before submitting claims to avoid delays or rejections. Your documentation must support the medical necessity of services provided.

Start with basic patient demographics including name, date of birth, and Medicare Beneficiary Identifier (MBI). Verify the patient’s address and contact information. Ensure the MBI matches exactly with Medicare’s records to prevent processing errors.

Select appropriate diagnosis codes using the current ICD-10 system. Choose codes that accurately reflect the patient’s condition and support the services provided. Use the most specific code available and include secondary diagnoses when relevant.

Identify correct procedure codes using CPT or HCPCS Level II codes. Match procedures to appropriate diagnosis codes to demonstrate medical necessity. Apply modifiers when required to clarify services or indicate special circumstances. Review coding guidelines regularly!

6. Submit Claims to Medicare

Electronic claim submission offers the fastest and most reliable method for Medicare billing. Use HIPAA-compliant systems that meet federal privacy requirements. Most practice management systems include Medicare billing capabilities.

Submit claims through your MAC using approved Electronic Data Interchange (EDI) formats. The standard format for professional claims is the 837P transaction. Institutional claims use the 837I format. Ensure your medical billing system supports these formats.

Paper claims serve as a backup option when electronic submission isn’t possible. Use the CMS-1500 form for professional services or the UB-04 form for institutional services. Complete all required fields and include supporting documentation when necessary.

Medicare Advantage patients require different claim submission procedures. Send these claims directly to the patient’s specific plan administrator, not to traditional Medicare. Each Medicare Advantage plan has its own submission requirements and contact information.

7. Respond to MAC Communications and Track Claims

Your MAC processes all Medicare claims and manages communications throughout the billing cycle. Monitor your submissions regularly and respond promptly to any requests for additional information. Delays in responding can result in claim denials.

Track claim status through your MAC’s provider portal or electronic systems. Claims typically process within 14-30 days depending on complexity. Follow up on any claims that exceed normal processing times.

Address claim rejections immediately by reviewing error messages and correcting problems. Common rejection reasons include invalid patient information, coding errors, or missing documentation. Resubmit corrected claims as soon as possible.

Appeal denied claims when you believe Medicare’s decision is incorrect. Submit additional documentation or clarification to support your position. Follow the appeals process outlined by your MAC and meet all required deadlines.

8. Receive Payment and Reconcile Accounts

Medicare payments arrive via electronic funds transfer to your designated bank account. Payment amounts reflect the Medicare fee schedule minus any applicable deductibles or coinsurance. Reconcile payments against your submitted claims to identify any discrepancies.

Review your Medicare Summary Notice (MSN) or Electronic Remittance Advice (ERA) for payment details. These documents explain what Medicare paid, what the patient owes, and any claim adjustments. Use this information to bill patients for their portion of costs.

Handle patient billing carefully to comply with Medicare regulations. You cannot bill patients for services that Medicare doesn’t cover unless you provide proper advance notice. Use Advance Beneficiary Notices (ABNs) when services may not be covered.

Track your accounts receivable to ensure timely payment collection. Follow up on unpaid claims and patient balances according to your practice’s policies. Maintain detailed records of all collection efforts for audit purposes.

Tip: Some visits can be billed incident-to and pay the full doctor rate even if a nurse practitioner saw the patient. Learn the rules here → [Medicare incident-to billing guide]

9. Maintain Records and Compliance

Medicare requires providers to maintain comprehensive records for audit and compliance purposes. Keep all billing documentation, patient records, and correspondence for at least five years. Some states have longer retention requirements.

Update your PECOS enrollment information whenever changes occur. Report new locations, ownership changes, or changes in services provided. Keep your contact information current to ensure you receive important Medicare communications.

Participate in Medicare audit requests promptly and thoroughly. Provide requested documentation within specified timeframes. Maintain organized records that allow quick retrieval of information during audits.

Stay informed about Medicare policy changes and updates. Subscribe to your MAC’s newsletters and attend provider education sessions. Changes in coverage, coding, or billing requirements can affect your reimbursement if not implemented properly.

Medicare Provider Billing Guidelines

Medicare billing guidelines are a set of rules that providers must follow when submitting claims for reimbursement. Following these guidelines helps providers submit claims accurately. This also protects healthcare providers and beneficiaries.

Key Medicare provider billing guidelines include:

• Document medical necessity for all services in patient records
• Use accurate CPT, HCPCS, and ICD-10 codes for all procedures and diagnoses
• Apply modifiers correctly to indicate service variations or special circumstances
• Submit claims within 12 months of service date
• Determine primary vs. secondary payer status for each patient
• Bundle services appropriately and avoid improper unbundling
• Accept Medicare’s approved amounts when participating in the program
• Maintain accurate patient insurance and employment information
• Coordinate benefits with other insurance carriers when applicable
• Respond promptly to MAC requests for additional information
• Keep detailed records for audit and compliance purposes
• Update enrollment information within required timeframes
• Follow appeals procedures for denied claims
• Bill patients appropriately for non-covered services with proper notices
• Use electronic submission methods when possible
• Protect patient information according to HIPAA requirements

Common Medicare Medical Billing Questions

Let us answer some of the most common Medicare billing questions for providers.

1. What is the Medicare billing process?

The Medicare billing process involves submitting claims electronically to your assigned Medicare Administrative Contractor (MAC) for covered services. You must first enroll in Medicare, obtain an NPI number, and verify patient eligibility before providing services.

After treatment, you code the services using appropriate CPT and ICD-10 codes and submit the claim within one year. Your MAC reviews the claim for accuracy and compliance with Medicare guidelines. They may request additional documentation or clarification before processing payment. Once approved, Medicare pays 80% of the approved amount for Part B services. Patients remain responsible for deductibles and coinsurance.

2. What providers can bill Medicare?

Medicare accepts claims from a wide range of healthcare providers including physicians, nurse practitioners, physician assistants, and clinical specialists. Hospitals, skilled nursing facilities, home health agencies, and hospice organizations also qualify for Medicare billing.

Other eligible providers include physical therapists, occupational therapists, speech-language pathologists, and clinical social workers.

Suppliers such as ambulance services, durable medical equipment companies, and independent diagnostic testing facilities can also bill Medicare. Healthcare providers must enroll in the Medicare program and meet requirements established by CMS. Enrollment requirements vary by provider type and may include licensing, accreditation, or certification standards.

3. Is provider based billing only for Medicare?

Provider-based billing extends beyond Medicare to include Medicaid and some Medicare Advantage plans. This billing method separates professional and facility charges for services provided in hospital-based outpatient clinics or departments. CMS requires this approach for government programs. But some insurance companies also use provider-based billing models.

The requirement affects facilities that have relationships with hospitals and bills under the hospital’s NPI number. Private insurance plans may combine professional and facility charges into single bills, but Medicare and Medicaid maintain separate billing requirements.

4. Are providers required to bill Medicare?

Most providers must submit claims to Medicare for covered services provided to Medicare beneficiaries, regardless of their participation status. Participating providers agree to accept Medicare’s approved amounts and must file claims for all covered services. Non-participating providers can accept assignments on a case-by-case basis but must still submit claims.

Providers can opt out of Medicare entirely by entering into private contracts with patients. In this arrangement, providers cannot bill Medicare and patients pay entirely out-of-pocket. Certain exceptions exist for small providers, roster billing, and demonstration projects. But the general rule requires claim submission for covered services.

5. How to Bill Medicare Electronically?

Electronic Medicare billing uses HIPAA-compliant systems to submit claims through Electronic Data Interchange (EDI) transactions. Providers transmit claims to their MAC using direct data entry screens or practice management software. The system automatically checks claims for errors and returns rejected submissions for correction before final processing.

Most healthcare facilities use clearinghouses or billing services that handle electronic transmission. These intermediaries convert claims into proper EDI formats and manage the submission process. Electronic billing reduces processing time, minimizes errors, and provides faster payment compared to paper submissions.

6. What Payment Will I Receive From Medicare?

Medicare payments follow the resource-based relative value scale (RBRVS) system that calculates reimbursement based on resources required for specific services. Payment amounts vary by geographic location, provider specialty, and service complexity. The Medicare Physician Fee Schedule provides specific payment rates updated annually.

Medicare pays 80% of approved amounts for Part B services, with patients responsible for remaining costs. Part A payments vary by service type and may include deductibles or coinsurance. Providers who accept assignments agree to Medicare’s approved amounts as full payment. Non-participating providers can charge limited additional amounts above Medicare’s rates.

That is why it’s important for individual providers and clinic owners to fully understand MIPS penalties and how to avoid them. Read on to dive deeper and contact us if you need help staying proactive and avoiding these penalties.

What are MIPS Penalties?

MIPS penalties are payment reductions given by the Centers for Medicare & Medicaid Services (CMS) to eligible clinicians who don’t meet the MIPS program’s performance standards.

MIPS, short for the Merit-Based Incentive Payment System, is CMS’s method for tying Part B Medicare payment to performance. While top performers can earn financial bonuses, those who don’t meet CMS’s annual performance threshold face penalties. These are reductions to future Medicare reimbursements.

MIPS penalties are calculated as a negative percentage adjustment, ranging up to -9%, based on a provider’s Composite Performance Score (CPS). Scores below the national threshold trigger penalties, applied two years after the performance year. For example, 2023 MIPS scores affect 2025 payments.

As CMS continues to raise standards, more clinicians, including physicians, nurse practitioners (NPs), and Physician Assistant (PAs), are being penalized. Unless exempt, any MIPS-eligible provider who fails to meet the required benchmarks is at risk.

Why Are MIPS Penalties Applied?

CMS uses MIPS penalties as a way to push providers toward better performance. The goal is simple: move the US healthcare system from volume-based to value-based care. This way, CMS encourages clinicians to improve outcomes, reduce costs, and report their data accurately.

These penalties are part of a budget-neutral system. That means money taken from low-performing clinicians is used to reward high performers. The structure helps promote fairness and continuous improvement, but it also creates pressure. Even small mistakes or missed submissions can lead to a loss in revenue.

CMS enforces MIPS penalties through the Quality Payment Program (QPP). Each year, it reviews submitted data, sets a performance threshold based on national averages, and determines payment adjustments. As participation grows and thresholds rise, more providers risk falling below the cut-off. The system is built to reward effort, but it also punishes gaps.

How Do MIPS Penalties Work?

MIPS penalties work by cutting into a provider’s Medicare Part B payments. If you don’t meet the minimum score set by CMS for a given year, you get paid less, up to 9% less, depending on how far below the cutoff your score falls.

Here’s how the process works:

First, CMS evaluates each provider’s performance across four categories:

• Quality (30%)
• Promoting Interoperability (25%)
• Improvement Activities (15%)
• Cost (30%)

Your performance in each category is scored and combined into one number: your Composite Performance Score (CPS). Each year, CMS sets a performance threshold, a minimum CPS you must reach to avoid penalties.

For example, the threshold for the 2023 performance year (which affects 2025 payments) is 75 points out of 100.

If your CPS is below that threshold, CMS applies a negative payment adjustment to your Medicare claims. The size of the penalty depends on how far below the cutoff your score is. Clinicians who score 0 to 18.75 points receive the maximum penalty: -9%. Those closer to the threshold receive smaller cuts on a sliding scale.

The penalty doesn’t come all at once. It’s applied throughout the year to every Medicare Part B payment you receive, starting two years after the performance year.

Penalties are calculated at the TIN/NPI level, which means CMS can apply them to an individual clinician or to everyone in a group.

What Triggers a MIPS Penalty?

MIPS penalties are triggered when your Composite Performance Score (CPS) falls below the annual performance threshold set by CMS. For the 2025 payment year, that threshold is 75 points.

The most common triggers include:

Not Reporting Data

If you skip MIPS reporting entirely, CMS assigns you a score of zero. That means the maximum penalty of -9% is automatically applied.

Reporting Incomplete Data

Submitting data for only some categories or leaving out required fields lowers your score. Partial reporting can easily push your CPS below the threshold, even if your performance is decent.

Poor Scores Across Categories

You might submit everything, but low scores in one or more categories (like Quality or Cost) can drag down your overall CPS.

Falling Just Short of the Threshold

Even if you score 74.99 points, you still get penalized. That’s because CMS enforces the threshold strictly. There’s no rounding up.

Tech or Submission Errors

Using outdated software, submitting incorrect files, or missing deadlines can all impact your score, or cause your data to be rejected entirely.

Misunderstanding the Rules

MIPS rules change each year. Many providers get penalized not for poor care, but for not keeping up with the latest requirements.

In short, MIPS penalties aren’t just for those who do nothing. They can hit providers who try to comply but fall short on score, submission quality, or simply due to an oversight. And once triggered, those penalties affect every dollar billed to Medicare Part B for the entire adjustment year.

What Is the Penalty for Not Reporting MIPS?

If you don’t report MIPS data at all, and you’re not exempt, you’ll get hit with the maximum penalty. That means a 9% cut on all your Medicare Part B payments for the corresponding payment year. No data? Full penalty.

Here’s what that looks like in practice:

If a clinician bills $250,000 to Medicare Part B in a year, a 9% penalty means losing $22,500 in revenue. That’s a serious drop, especially for small or solo practices where margins are tight. This penalty doesn’t come in one lump sum. Instead, CMS reduces every Medicare payment by 9% throughout the year.

Does Practice Size Matter for MIPS Penalties?

Yes. The impact of MIPS penalties can be especially hard on small practices.

➜ Small practices: In 2022, about 27% of small practices and nearly 30% of solo clinicians received MIPS penalties (Source).

➜ Larger organizations: Bigger practices are more likely to have teams and tech to handle MIPS reporting, so they tend to avoid penalties more easily.

Even if you’re part of a group, failing to report individually (or not participating as a group) can still lead to individual-level penalties.

And it’s not just financial.

Not reporting MIPS also means you lose:

• A chance to earn positive payment adjustments.
• Visibility on CMS’s Care Compare site (which can affect patient trust).
• Access to performance feedback reports that help you improve care quality.

Some clinicians are exempt from MIPS automatically. These include:

• Providers new to Medicare in their first year.
• Those below the low-volume threshold (Under $90,000 in Part B charges or fewer than 200 Medicare patients).
• Participants in Advanced Alternative Payment Models (APMs).

If you’re not sure whether you qualify for an exemption, check directly with CMS or use their QPP participation status here.

MIPS Penalties by Year (Historical Trends)

Since MIPS began, CMS has steadily increased both the penalty amounts and the difficulty to avoid them. The performance threshold has gone from just 3 points in 2017 to a demanding 75 points by 2022, and it’s stayed there.

Here’s a clear breakdown:

MIPS Penalties: Impact, Criticism, and What Lies Ahead

For providers, the effects of MIPS penalties are wide-reaching. Financial losses from a full -9% cut can total tens of thousands of dollars, hitting small and solo practices the hardest.

Beyond lost revenue, compliance itself is resource-heavy. Accurate reporting across MIPS’s four categories; quality, cost, improvement activities, and interoperability, requires time, technology, and staff many practices lack. This burden often forces operational changes, from hiring consultants to investing in new EHRs or reorganizing workflows.

But the toll is more than operational.

Clinicians report burnout and frustration, especially when penalties stem from reporting technicalities rather than actual care quality. The pressure to meet metrics can pull focus from patient care, reducing both outcomes and satisfaction.

Also, MIPS scores are public, and a low rating can hurt a provider’s reputation, regardless of clinical performance. Appeals are allowed, but limited and often ineffective.

Criticism of the system is mounting. MIPS disproportionately penalizes small, rural, and independent practices that lack the resources for full compliance.

In 2024 alone, 27% of small practices and 18% of rural ones were penalized. Specialty providers, such as anesthesiologists and orthopedic surgeons, have also faced outsized challenges.

MIPS requires physicians to track and report across multiple categories, quality, cost, improvement activities, and interoperability. A JAMA study found that MIPS compliance costs about $12,811 per physician each year and eats up over 200 hours, time that could be spent on patient care.

Calls to cut MIPS burden are gaining traction. Physician groups like the American Medical Association (AMA) support replacing MIPS with the Data-Driven Performance Payment System. The new proposed program is reported to reduce penalties, simplify reporting, and better align metrics with care quality.

How to Avoid MIPS Penalties

Avoiding MIPS penalties takes more than last-minute reporting. It requires proactive steps throughout the year. Here are proven ways to stay penalty-free:

• Check your MIPS eligibility with CMS at the start of the year
• Know the annual performance threshold (75 points for 2024)
• Start early with your data collection and tracking
• Submit complete and accurate data in all four MIPS categories
• Choose quality measures that match your specialty and practice
• Use certified EHR systems effectively to boost your Promoting Interoperability score
• Engage in high-impact Improvement Activities like care coordination and telehealth
• Track your MIPS performance monthly to catch issues early
• Involve your entire care team in documentation and workflow alignment
• Standardize checklists for visits to capture key MIPS data points
• Use dashboards or tools that show your real-time performance
• Conduct internal audits before submitting your final data
• Report bonus-eligible activities to gain extra points
• Document everything, CMS may request proof of activities
• Partner with MIPS consulting services if unsure how to improve your score

This guide helps therapy and mental health providers understand BCBS reimbursement for therapy services across different states. This will help optimize payments, avoid medical billing errors, and manage insurance complexities. Let’s dive in!

Understanding the Ins and Out of Therapy Reimbursement

Reimbursement means getting paid by insurance after providing therapy. As a provider, you send a claim to Blue Cross Blue Shield for each session. They then pay you based on your contract or the patient’s plan. If you’re in-network, BCBS usually pays more and faster. If you’re out-of-network, payments are lower, and the process is slower.

Common Challenges Mental Health Therapists Face

• BCBS reimbursement isn’t always smooth.
• Providers often deal with delayed payments, claim denials, or partial reimbursements.
• Each state’s BCBS company may follow different rules.
• Keeping up with their requirements takes time.
• Missed coding or documentation issues can also delay or reduce payment.
• To stay on top, know your local BCBS policies and track each claim carefully.

How Much Does Blue Cross Blue Shield Reimburse for Therapy (Mental Health)?

Blue Cross Blue Shield reimburses therapy costs based on the patient’s coverage details like deductibles, copays, or coinsurance. In-network therapists generally have lower copays, ranging from $15 to $80 per session. Some plans allow coverage before the deductible is met, while others require patients to pay the full session fee until the deductible is reached.

Remember, these are just the estimates!

Reimbursement rates for therapy vary widely depending on where you practice. Since BCBS is made up of 33+ independent companies across the US, each with its own fee schedules and policies, rates can shift from one state to another, even for the same CPT code.

If you’re a therapy provider, knowing these state-specific benchmarks can help you:

• Set realistic rates.
• Negotiate better contracts with BCBS.
• Decide whether going in-network is financially worthwhile.
• Understand potential revenue when expanding to new states or offering telehealth.

BCBS Therapy Reimbursement Rates (State-wise)

The below-given table provides real-world estimates for 60-minute psychotherapy sessions (CPT Code 90837) across all 50 states, based on provider reports, claims data, and BCBS regional trends. These figures are approximate and can vary based on specific BCBS affiliates, provider contracts, and geographic regions within each state.

Factors Influencing BCBS Therapy Reimbursement Rates for Providers

In-network rates are based on negotiated contracts with local BCBS affiliates. Out-of-network payouts are often a percentage of the plan’s “allowed amount” (typically 60–80%) and subject to balance billing. Urban providers generally receive slightly better reimbursements due to market demand and parity compliance. Let us quickly discuss the many factors that affect how much BCBS reimburses for therapy services.

1. Geographic Location and Cost of Living

Reimbursement rates often reflect the local cost of living and provider density. Urban areas with higher living costs and more providers may offer higher rates to attract professionals. And rural areas might offer increased rates to incentivize providers to serve underserved populations.

2. Type of BCBS Plan

The specific BCBS plan type, such as PPO, HMO, or HDHP, can influence reimbursement rates. PPO plans often provide higher reimbursement rates due to their broader network flexibility, whereas HMO plans may offer lower rates but with more controlled access to services.

3. Provider’s Contract Status with BCBS

Providers contracted with BCBS typically receive higher reimbursement rates compared to out-of-network providers. In-network status ensures adherence to negotiated rates and reduces administrative burdens, leading to more predictable payments.

4. Session Length and Complexity

The duration and complexity of therapy sessions directly impact reimbursement rates. Longer sessions or those involving complex therapeutic techniques may warrant higher reimbursement due to the increased time and expertise required.

5. Legislative and Policy Factors

Legislative actions, such as changes in Medicare payment policies, can significantly affect reimbursement rates. For example, the Centers for Medicare & Medicaid Services (CMS) has implemented reductions in the Medicare conversion factor, leading to decreased payments for services unless offset by legislative intervention.

6. Economic and Cost Factors

Economic indices, like the Medicare Economic Index (MEI), reflect the rising costs of providing services. However, reimbursement rates may not always align with these increases due to budget constraints, potentially leading to financial strain for providers.

7. Therapy-Related Clinical Factors

The type of therapy provided influences reimbursement rates. Specialized services, such as psychiatric evaluations or neuropsychological testing, often command higher reimbursement due to their complexity and resource requirements.

8. Provider Credentials and Network Status

Providers with advanced qualifications such as, LCSW, PsyD, or MD may receive higher reimbursement rates due to their expertise. Additionally, being in-network with BCBS can lead to better reimbursement rates compared to out-of-network providers.

9. Insurance Plan and Payer Differences

Reimbursement rates vary among different insurance panels and plans. For instance, Medicare Advantage plans have seen reimbursement increases, while traditional Medicare rates have declined, highlighting the differences in payer policies.

10. Practice Expense and Procedure Mix

The reimbursement impact of changes in practice expenses depends on the share of Relative Value Units (RVUs) attributed to practice expenses for a given service. Services with a higher practice expense share may experience more significant reimbursement changes when adjustments are made.

How Telehealth Affects How Much Does Blue Cross Blue Shield Reimburse for Therapy?

Telehealth has become a key component of therapy services, especially post-COVID-19. BCBS now reimburses telehealth sessions, typically at rates similar to in-person therapy. However, reimbursement can vary based on location, therapy type, and the specific BCBS plan. Some regions may offer lower rates for telehealth, so providers must be aware of these differences.

BCBS Telehealth Reimbursement Policies

State-specific telehealth parity laws impact BCBS reimbursement policies. These laws require BCBS to reimburse telehealth sessions at the same rate as in-person visits, but the rules differ by state. Mental health and therapy providers should check local telehealth regulations and ensure they follow BCBS’s policies when submitting claims.

How to Ensure Telehealth Claims Are Paid Correctly

To ensure correct reimbursement for telehealth, therapists must use the correct billing codes, such as the “GT” modifier for telehealth services. It’s crucial to verify patient eligibility, document sessions thoroughly, and apply the right modifiers and CPT codes. Following these practices helps avoid claim denials and delays, ensuring timely reimbursement for virtual therapy sessions.

How BCBS Plans and Their Therapy Coverage Compare

Blue Cross Blue Shield offers a variety of health insurance plans, each with unique structures and therapy coverage options. Understanding how these plans compare is essential for providers seeking to navigate reimbursement processes.

1. HMO (Health Maintenance Organization) Plans

HMO plans require members to use in-network providers and often need a referral from a primary care physician (PCP) for therapy. Therapy coverage is generally limited to in-network services, except for emergencies. These plans tend to have lower premiums and out-of-pocket costs, but the flexibility is restricted.

2. PPO (Preferred Provider Organization) Plans

PPO plans offer more flexibility, allowing members to see out-of-network providers, though at a higher cost. Therapy services are typically covered, with better rates for in-network visits. Members can still access therapy outside the network, but at higher out-of-pocket costs and lower reimbursement rates for providers.

3. EPO (Exclusive Provider Organization) Plans

EPO plans are similar to PPOs but only cover in-network therapy services. They do not require a referral from a PCP to see a therapist, which offers more convenience for patients. However, out-of-network therapy is not covered under EPO plans, making it important for providers to ensure they are in-network to receive reimbursement.

4. POS (Point of Service) Plans

POS plans require a PCP referral for therapy services but offer some flexibility to access out-of-network care. Therapy is covered, but costs are lower when providers are in-network. Out-of-network services may be reimbursed, but at a higher cost to the patient and potentially lower reimbursement to the provider.

5. Consumer Directed Health Plans (CDHP) and High Deductible Health Plans (HDHP)

These plans feature high deductibles but allow members to use Health Savings Accounts (HSAs) or Health Reimbursement Arrangements (HRAs) to cover therapy costs. Therapy services are covered but require the deductible to be met first. CDHP and HDHP plans are suitable for providers seeking patients who prefer a lower monthly premium, but reimbursement rates may be delayed until deductibles are satisfied.

6. Catastrophic Plans

Catastrophic plans offer low premiums but high deductibles. They are designed for young adults or those facing financial hardship. Therapy coverage is minimal until the deductible is met, meaning therapy services are generally not reimbursed unless the patient has high healthcare needs.

7. Medicare and Medicaid Plans

BCBS offers Medicare Advantage and Medicaid plans, both of which provide comprehensive therapy coverage. Medicare Advantage plans typically cover outpatient therapy and psychiatric services, with cost-sharing based on Medicare rules.

Medicaid plans provide extensive behavioral health coverage, including therapy services, usually with low or no out-of-pocket costs for those who qualify.

Benefits of Using BCBS Insurance for Mental Health Conditions

Blue Cross Blue Shield insurance offers these valuable advantages for therapy providers.

• Reduces out-of-pocket costs for clients, increasing access to your services
• Expands your client base through BCBS’s extensive network
• Provides reimbursement for various treatment types, including specialized therapies
• Offers flexibility with telehealth and in-person service coverage
• Ensures privacy and compliance, protecting both your practice and client data

FAQs on BCBS Therapy Coverage and Reimbursements

Let us answer a few questions about BCBS therapy reimbursements now.

Do I need to verify patient eligibility for therapy services?

Yes, providers must verify patient eligibility before delivering therapy services. This ensures that the patient’s insurance plan covers the required therapy and that there are no issues with eligibility. To verify, you can use the BCBS provider portal, contact BCBS customer service, or use an eligibility verification system if your practice has one. Always confirm the patient’s benefits to avoid claim rejections.

How do I file a claim for therapy services under BCBS?

To file a claim for therapy services under BCBS, follow these steps:

1. Ensure you have the correct CPT codes, dates of service, and diagnosis codes.
2. Use the BCBS provider portal for electronic submission or mail the claim to BCBS using the address specified on the provider’s website.
3. Track the claim status through the portal or by calling BCBS if needed. Comply with any specific instructions provided by BCBS to avoid delays.

How long does BCBS take to process therapy claims?

On average, BCBS processes therapy claims within 30 to 45 days. However, this time frame can vary depending on several factors, such as claim complexity, network status (in-network or out-of-network), and plan type. You can track the status of claims through the BCBS provider portal for updates.

What should I do if BCBS refuses to pay for therapy services?

If BCBS denies a therapy claim:

1. Check the reason provided in the denial notice.
2. Call the BCBS provider support line for clarification on the denial and gather more information.
3. If you believe the denial was made in error, follow the appeal instructions. This may involve submitting additional documentation to support the claim. Use the correct appeals forms and ensure all required information is provided to avoid further delays.

Does Blue Cross Blue Shield cover therapy services?

Yes, BCBS generally covers therapy services, including individual and group psychotherapy, psychiatric evaluations, and other mental health services. However, coverage can vary based on the patient’s specific plan type, network status, and location. Ensure to check the patient’s plan benefits for details on coverage, limitations, and reimbursement rates.

How do I verify if therapy is covered by a patient’s BCBS plan?

To verify coverage for therapy, check the patient’s Summary of Benefits for the “Outpatient Mental Health” section. You can also use the BCBS provider portal or call BCBS member services to confirm the patient’s therapy benefits, network requirements, and any prior authorization needs.

Can I submit claims for telehealth therapy sessions?

Yes, BCBS covers telehealth therapy, but reimbursement rates may differ from in-person therapy. Providers should use the appropriate telehealth CPT codes (such as 90834 for psychotherapy, 30 minutes) and include the GT modifier to indicate telehealth. Ensure you follow BCBS’s telehealth guidelines and claim submission procedures to ensure timely and accurate reimbursement.

What if the patient chooses an out-of-network therapist with BCBS?

If the patient is seeing an out-of-network therapist, reimbursement will likely be at a lower rate. The patient may be responsible for higher out-of-pocket costs, and you may need to submit a claim for reimbursement if you’re an out-of-network provider. PPO plans typically reimburse some portion of the out-of-network therapy fees, while HMO or EPO plans usually do not reimburse for out-of-network services.

How can I avoid claim denials and ensure correct payment?

To reduce the likelihood of claim denials, follow these best practices:

1. Always verify patient eligibility and coverage before delivering services.
2. Use accurate CPT, ICD-10, and modifier codes.
3. Ensure thorough and complete documentation of each session, including the treatment provided and progress made.
4. Submit claims within the required timeframe and use electronic medical billing service whenever possible to speed up processing.
5. Regularly track claims status and follow up with BCBS if necessary.

Yet the most powerful gift you offer may be your voice.

A few words of encouragement for hospice patients can ease fear and bring calm when nothing else will.

Picture a quiet room…

a patient lies there, tired and unsure.

You step in, take a breath, and share simple, steady hope: “I’m here with you.”

In that small moment, pain softens and dignity grows.

These are more than “nice phrases.” They are good words for hospice patients—short, honest lines that remind them they are seen, valued, and never alone.

Why does this matter so much in clinics, hospitals, and hospice houses across the United States?

Because every day you meet people at the edge of life. Drugs ease the body, but encouraging words ease the spirit. They give patients and their families, the strength to face each hour.

Which Uplifting Words Can Bring Comfort to Hospice Patients?

These short, good words for hospice patients do more than fill silence; they give hope, calm nerves, and show respect. When you share them in a clinic, hospital, or home across the United States, you tell every patient, “You matter, right here, right now.”

Use these encouraging words to:

• Ease pain with kindness
• Strengthen the bond between caregiver and patient
• Remind families their loved one is safe and seen

Every phrase is plain-spoken so you can recall it in a rush and speak it with care. One honest sentence, placed at the right moment, can turn fear into peace and make the room feel lighter for everyone.

1). “You are sheltered by love and care.”

That single line may be the most reassuring sentence you speak all day. It tells the person in front of you that they are not facing this stretch of the road alone.

Use gentle, varied language to deepen the message:

• Comforting phrases such as “We’re right here with you” or “Your story matters to us.”
• Supportive messages like “You bring light to this place” or “Your courage guides us.”
• Hopeful words like “I see your strength,” “Your calm inspires your family,” “You are safe.”
• Soothing lines that pair touch with sound: “Let’s breathe together,” “Feel the quiet around you.”

2). “Your courage inspires us all.”

Speak this simple line, and watch a patient’s eyes brighten. Naming their bravery gives them a fresh view of themselves (strong, steady, still in charge of their story).

In hospice rooms and palliative wings all over the United States, such comforting words do real work:

• Honor the fight. You admit the struggle while lifting up the strength it takes to face each day.
• Create trust. A plain, heartfelt compliment turns the care team into true partners, not just staff in scrubs.
• Spread hope. When families hear sincere praise, calm rolls through the hall.

Keep the feeling alive with other supportive phrases you can swap in:

• “Your spirit stays steady, and I admire that.”
• “The way you greet this day teaches all of us.”
• “Your quiet strength guides the people who love you.”

Mix these uplifting remarks, kind sayings, and positive affirmations so your language stays warm and real, never stiff or stuffed with repeats.

3). “May you find peace and comfort today.”

Peace lives in small, real things—soft light on a pillow, the hum of a friend’s voice, the steady hands of a nurse. When you speak this soothing phrase for hospice patients, you guide their mind to the calm that’s already near. In clinics and hospice homes across the United States, such comforting words slow racing thoughts and ease tight breaths. You remind each person that the present moment can still feel warm and safe.

4). “We are available at every step for you.”

Fear often whispers, “I’m on my own.” Your promise silences that fear. These supportive messages tell patients and their families that help is close from dawn to dark. Every aide, nurse, and doctor stands on the same side. This bond builds trust, which is the heart of good end-of-life care. When folks know the team will not leave, worries shrink, and rest comes easier.

5). “You have achieved more than you could ever imagine.”

Pride is powerful medicine. By naming a patient’s wins—kind deeds, strong love, quiet grit—you refill their spirit. These uplifting words honor a life well-lived and leave a spark of joy that lingers. Staff in busy hospital wings can use this gentle affirmation to help someone see their own story in bright colors, not dull tones. It’s a gift that costs nothing yet gives back to everyone who hears it.

6). “Your kindness has left a permanent impression on all of us.”

Tell your patient this truth, then add why it matters. Their gentle acts have lifted nurses, aides, and loved ones alike. Naming that impact gives real comfort. It is one of those comforting words for hospice patients that says, “You will be remembered, always.”

7). “The strength you show every day is special.”

Hard days call for brave hearts, and your patient proves it shift after shift. By pointing out that courage, you hand them a mirror filled with pride. This short, uplifting phrase keeps dignity front and center and reminds families how much resolve lives in the room.

8). “You are surrounded by compassion and grace.”

Pain can make anyone feel exposed. This gentle line paints a blanket of care around body and spirit. Use it when you adjust a blanket or pull a chair closer. Words like compassion and grace are powerful supportive messages that ground the person in safety and respect.

9). “You are always in our thoughts and hearts, even when we are not with you.”

Quiet hours can feel empty, so fill that space with connection. This reassuring statement lets patients know your team’s concern never clocks out. The promise eases loneliness and keeps hope close by.

10). “Your journey is meaningful, and every moment matters.”

Close the conversation by honoring their full life story. Whether the day holds laughter, tears, or long rests, each minute counts. This gentle affirmation places value on the small details and turns the spotlight toward the patient’s unique path.

What Words Should Healthcare Providers Avoid When Speaking to Hospice Patients?

Our words can heal or hurt. In a hospice room, tone and choice make all the difference. Below are phrases to skip, why they sting, and gentle options that keep hope and dignity alive. Use this guide in clinics, hospitals, and hospice homes across the United States to keep your language caring, clear, and kind.

“We can’t do anything else for you”

“We can’t do anything else for you” can land like a door slamming shut. A patient may hear it as, “You’re on your own now.” Instead, keep the door wide open with a comforting line such as, “We’re here to ease your comfort and stand beside you.” This short, warm promise tells the person that skilled hands and kind hearts remain fully engaged in their care.

“You are getting closer to the end”

“You are getting closer to the end” feels blunt and cold, stripping away dignity. Choose a gentler path—acknowledge emotion without announcing a countdown: “It’s normal to feel many things right now, and we’re here with you.” That calming phrase lets patients share fears or hopes while reminding them they’re not walking alone.

“It’s time to say goodbye”

“It’s time to say goodbye” can spark panic or grief long before the moment is right. Try a more soothing message: “You matter to us, and each moment we share is precious.” This keeps the focus on living the time that’s left, wrapping the patient in respect instead of finality.

“You just have to be positive”

“You just have to be positive” shuts down honest feelings and piles on guilt. Invite real talk with a supportive question: “Tell me what feels heavy today so we can make it lighter together.” By welcoming all emotions, you strengthen trust and give the person space to breathe.

“All have to go through it eventually”

“All have to go through it eventually” flattens a unique story into a blunt statistic. Swap in a heartening remark like, “Your journey is your own, and we value every step of it.” That single, kind sentence validates the patient’s lived life and keeps their individuality front-and-center.

“At least you’ve lived a full life”

“At least you’ve lived a full life” can feel like a brush-off, ignoring current sorrow or unfinished dreams. Offer comfort instead: “You are surrounded by love and kindness right here and now.” These encouraging words shine light on present support rather than judging past milestones.

“You should focus on getting stronger for your family”

This phrase places a heavy burden on someone already tired. Shift the weight with a positive statement: “Your life has already brought so much good to the people you love.” This reminds the patient of their lasting impact without demanding fresh effort.

“Why are you upset? You should be grateful”

“Why are you upset? You should be grateful” scolds rather than soothes. Trade it for a gentle assurance: “You don’t have to face any feeling alone—our team is here for you.” By naming your presence and care, you create safe space for tears, hope, or silence, whichever arrives.

How Can Encouraging Words Lift a Hospice Patient’s Spirit?

Kind speech works like gentle care—quiet but strong. The right sentence can ease pain, clear fear, and remind a person that their life still shines.

Below are eight simple ways U.S. hospice teams can use comforting words, uplifting phrases, soothing statements, and gentle affirmations to brighten each day.

Open every talk with true concern

Begin with a soft check-in: “How are you feeling this morning? Your spirit guides us.” A short, kind greeting sets a safe tone and invites the patient to share. When people feel heard first, trust follows.

Praise the strength you see

Say, “Your courage amazes me,” or “The grit you show each day is remarkable.” Naming their bravery lifts self-esteem and turns hard hours into proof of resolve.

Add calm, spiritual notes when welcome

Some patients lean on faith. Phrases such as “May peace fill this moment” or “Light and hope surround you” offer deep comfort. Always match your words to the person’s own beliefs.

Accept every feeling

Swap “Don’t be sad” for “It’s normal to feel this way, and we’re right beside you.” Validating fear or grief lowers loneliness and builds an honest bond.

Stress that no one walks alone

Remind them, “You’re never on your own; our team is here every step.” Knowing a strong net of care is close cuts worry and brings ease.

Keep the focus on comfort

Say, “Our goal is to make you as comfortable as possible,” or “Let us handle the hard parts so you can rest.” Shifting talk from illness to ease calms the mind and body.

Create small pockets of quiet

During tense moments, use a soft cue: “Take a slow breath—you are deeply cared for.” Short, soothing lines ground the patient and soften stress.

Make each message personal

Link your words to what matters most to them. For the gardener: “The roses outside bloom because of growers like you.” Tailored remarks show you see the whole person, not just the diagnosis.

Ideas for Healthcare Providers to Use Encouraging Words Inspired by These Quotes

When we speak with people in hospice care, every word carries weight. Below are practical ways you and your care team can weave famous quotes into daily visits.

➔ Celebrate the small win

“It always seems impossible until it’s done.” – Nelson Mandela

Hospice days can feel long. Point out each completed task—finishing lunch, sitting up, making a call. Simple good words like “You did it” or “That was a big step” remind the patient that hard moments end, and a new calm follows.

➔ Spark belief in the next step

“Believe you can and you’re halfway there.” – Theodore Roosevelt

Slip this quote into conversation when a patient tries something new, such as guided breathing or a short walk to the window. Follow with short, clear phrases: “I trust you.” “Your effort matters.” Confidence grows, and so does emotional ease.

➔ Reframe struggle as strength

“Strength does not come from winning. Your struggles develop your strengths.” – Arnold Schwarzenegger

After a tough symptom flare-up, speak to the growth you see: “Yesterday was rough, yet you met it with courage.” Acknowledge effort, not just outcome. It turns a hard night into proof of inner power.

➔ Give hardship a greater story

“Hardships often prepare ordinary people for an extraordinary destiny.” – C. S. Lewis

Families sometimes question “Why now?” Share this line, then connect it to legacy: photos, letters, or stories the patient wants to pass on. You honor struggle while guiding them toward meaning.

➔ Boost self-worth during vulnerable hours

“You are braver than you believe, stronger than you seem, and smarter than you think.” – A. A. Milne

Night brings worry. Read this quote aloud at bedtime checks, then add: “Your wisdom helps me care for you better.” The patient feels seen, and fear eases.

➔ Plant the idea of quiet miracles

“Out of difficulties grow miracles.” – Jean de La Bruyère

After pain medication takes hold, note small “miracles”: a deeper breath, a relaxed brow, a laugh between spouses. Naming these moments brings hope back into the room.

➔ Keep light in sight

“Hope is being able to see that there is light despite all of the darkness.” – Desmond Tutu

When a patient talks about fear of the unknown, turn off harsh overhead lights, open curtains, and say: “Let’s look for today’s light together.” Pair the quote with a real glow—morning sun, a candle, or a soft lamp.

➔ Honor the unbreakable spirit

“The human spirit is stronger than anything that can happen to it.” – C. C. Scott

During care-plan reviews, remind both patient and family of strengths already shown—staying kind, sharing jokes, choosing their care goals. These words of encouragement for hospice patients reinforce dignity and control.

How Can Hospice Teams Weave Encouraging Words into Everyday Care?

When you lean over a bedside in a U.S. hospice, the right sentence can feel like a warm hand on the shoulder.

Below are simple, human-sounding ways nurses, aides, social workers, chaplains, and physicians can fold words of encouragement for hospice patients into each shift and keep the conversation honest, hopeful, and kind.

Bedside chats that honor the person

Pull up a chair, meet the patient’s eyes, and speak in short, warm phrases:

• “I see how much strength you show.”
• “Your story matters to me.”

These good words for hospice patients recognize the struggle without glossing over it. Listen more than you talk, and let the next line come from what you hear.

Pocket-size notes and cards

A handwritten card that reads, “You are loved and never alone,” can rest on a nightstand long after you leave. Volunteers, family members, and staff can all add their own uplifting phrases and supportive words, turning fleeting moments into lasting comfort.

Circle-up groups

If patients are able, gather in the garden or day room. Invite them to share favorite inspiring words or brief positive affirmations. Peer-to-peer sharing often feels more genuine than any speech—building a small community of hope inside the clinic or hospital.

Digital touchpoints

Many U.S. hospice units now use tablets or room monitors that display rotating comfort words such as “Your courage shines today.” This low-tech step delivers steady reassuring words every time the screen wakes, even when staff are busy elsewhere.

Family coaching

Loved ones sometimes freeze, unsure what to say at the end of life. Offer a one-page cheat sheet of encouraging words for hospice patients, like:

• “Dad, your laugh still fills the room.”
• “Your love keeps teaching us.”

Giving families the language they crave lets them stay present rather than retreat into silence.

Staff huddles that refill your own word bank

Begin each shift with a 60-second round where team members share a new motivational word or phrase they plan to use that day. This habit keeps language fresh and reminds everyone that the voice is a clinical tool, just like medication or touch.

It might seem like a small thing, but in medical billing, it’s a big deal. If you bill the wrong insurance first, the claim can get denied. Payments can be delayed. Worst of all, your patient might get charged for something that should have been covered.

This simple guide will help you figure out the correct billing order. You’ll learn how to spot the primary insurance and the secondary insurance. So that you can bill the right one at the right time. And get paid faster for your services provided to the patients.

What Does “Primary” vs. “Secondary” Mean in Insurance?

Knowing who pays first is key in healthcare billing. It helps you avoid surprise bills. It also ensures claims are handled the right way. And if a claim is denied, you’ll know which insurance to follow up with first.

If the primary insurance denies a claim—because of eligibility issues or wrong details—the secondary insurance usually won’t pay either. That’s because they wait for the primary to process everything first.

So, before billing, it’s important to understand what primary insurance means—and how it’s different from a secondary plan.

1⃣ Primary Insurance in Healthcare Billing

Primary insurance is the first plan that pays when a patient gets medical care and a bill is generated. Think of it like the first responder in the billing process.

If a patient has more than one health insurance plan—like one through their job and another through a spouse or parent—one plan must take the lead. That lead plan is called the primary insurance.

This plan processes the claim first. It reviews the bill, decides what’s covered, and then pays its part to the healthcare provider.

For example:

If the total bill is $1,000 and the primary plan covers $700, it pays that $700 directly to the provider. The remaining $300 may then be sent to the secondary insurance, if there is one.

Knowing which plan is primary helps healthcare providers bill correctly and helps patients avoid delays or unexpected charges.

In short:

• Primary insurance pays first
• It sends payment to the healthcare provider
• It guides the rest of the billing process
• It’s important for both patients and providers to get this right

2⃣ Secondary Insurance in Healthcare Billing

Secondary insurance is the plan that pays after the primary insurance has done its part. It works like a backup—a financial safety net for both the patient and the healthcare provider.

Why a safety net? ➜ Because it helps catch leftover costs that the primary plan doesn’t fully cover. This could include things like co-pays, deductibles, or any unpaid portion of a medical bill. For the patient, this means fewer out-of-pocket expenses. For the provider, it means a better chance of receiving full payment without chasing it later.

Once the primary plan processes the claim and pays its share, the secondary insurance takes a look at the rest. It may cover all or part of the remaining balance.

For example:

• A medical bill is $1,000
• Primary insurance pays $700
• $300 remains

That’s when the secondary insurance steps in. Depending on its rules, it might cover some or all of that leftover amount.

It may help pay for:

• Co-pays
• Co-insurance
• Deductibles
• Services not fully covered by the primary insurance

*Note: Secondary Insurance never pays first. It waits for the primary insurer to finish. And it will never pay more than the actual cost of the service.

Primary vs. Secondary Insurance Comparison Table

Step-by-step Process to determine Primary and Secondary Insurance Plans

You’re treating a patient who has more than one health insurance plan—now what? No need to stress.

As a healthcare provider, it’s important to know exactly which plan is primary and which is secondary. This way you can bill correctly and avoid insurance reimbursement delays or denials.

This section walks you through a simple, step-by-step process to help you identify the correct billing order for your patient’s insurance plans.

Step 1: Gather Complete Insurance Information

Before you can figure out which insurance is primary and which is secondary, you need accurate and latest details on the patient’s health insurance plans. This step should always happen during patient registration—whether it’s a new patient or someone you’ve seen before.

Start by asking the right questions:

• “Do you currently have more than one active insurance plan?”
• “Who is the policyholder for each plan—you, your spouse, or a parent?”
• “Is the coverage through an employer, government program, or private provider?”
• “Have there been any recent changes in your job, marital status, or insurance plans?”

Also, don’t just take one insurance card—ask for all of them. Patients often forget they’re still covered under a spouse’s or parent’s policy, which could affect the primary vs. secondary insurance order.

Check and record these key details for every plan:

• Effective dates
• Group numbers
• Coverage type
• Policyholder relationship

Be sure to document everything clearly in the patient’s chart, and flag the account for eligibility verification.

Pro Tip: Scan both sides of every patient insurance card into your EHR. The back usually includes critical info like payer contact details and instructions for coordinating benefits. This thing is key when determining which insurance is primary or secondary.

Step 2: Use the COB Rules to Determine the Primary Payer

Once you’ve gathered the patient’s insurance details, the next step is to apply the Coordination of Benefits (COB) rules. These are standard guidelines used by insurance companies to figure out which insurance is primary and which is secondary.

This step helps you as a healthcare provider avoid claim denials, billing delays, and confusion over who pays first.

If the Patient Has Two Employer-Sponsored Plans

The general rule is simple:

• The plan provided through the patient’s own employer is primary.
• The plan from a spouse’s employer is secondary.

Example:

Amanda works full-time and has insurance through her job. She’s also listed on her husband James’s plan.

→ Amanda’s plan is primary, and James’s is secondary.

This rule ensures that the plan covering the individual directly pays first—not one where the patient is just a dependent.

If a Dependent Child Is Covered by Both Parents

Here, the “birthday rule” usually applies:

• The parent whose birthday falls earlier in the calendar year (month and day, not year) has the primary plan.
• The other parent’s plan is secondary.

Example:

Parent A’s birthday is February 15.

Parent B’s birthday is July 9.

→ Parent A’s plan is primary.

This is a common industry rule. But some insurance companies may follow different methods, especially in divorce or court-ordered custody situations.

If the Parents Are Divorced or Separated

The COB rules shift slightly:

• If there’s a court order assigning health coverage, that parent’s plan is primary.
• If there’s no court order, the custodial parent’s plan is usually primary.
• If the custodial parent remarries, the step-parent’s plan becomes secondary, and the non-custodial parent’s plan becomes tertiary (third in line).

These rules ensure the correct plan pays first, reducing delays for providers and out-of-pocket surprises for patients.

When Medicare Is Involved

Medicare follows its own COB rules, which are governed by federal billing laws.

In these cases, it’s crucial to verify:

• Is Medicare the primary payer?
• Or is it secondary to a group or employer-sponsored plan?

Getting this right is essential to avoid denied claims and compliance issues with federal regulations.

Here are the most common Medicare scenarios:

Pro Tip: Never assume Medicare is automatically primary.

Step 3: The Secondary Insurance Becomes Clear

Once you’ve identified the primary insurance, the next step is easy—the secondary insurance is the other active plan the patient has.

The role of secondary insurance is to review what the primary plan has already paid, and then decide whether it will cover any remaining balance.

Secondary insurance often helps cover:

• Deductibles
• Co-insurance
• Co-pays
• Extra services not fully covered by the primary plan

But keep in mind that it’s not a guarantee of full coverage. The secondary plan will only pay up to the allowed amount based on its own policy rules. That’s where Coordination of Benefits (COB) comes in.

Example:

A $200 office visit is billed.

• The primary insurance pays $140, and applies the remaining $60 to the deductible.
• The secondary plan may pay some or all of that $60, depending on its coverage rules.

This helps patients lower out-of-pocket costs and helps healthcare providers collect full reimbursement for their medical services that they provide to their patient.

Step 4: Verify the patient’s COB Status with the Insurance Companies

Even when everything looks clear on paper, don’t stop there. Always verify the Coordination of Benefits (COB) status directly with the insurance companies.

Why? Because patient’s insurance information can change and this quick step can save you from billing headaches down the road.

As a healthcare provider, it’s your job (or your billing team’s job) to check which plan is officially listed as primary and which one is secondary for that specific patient—on that specific date of service.

You’re not just assuming, you’re confirming!

How to verify it:

You’ve got a few solid options:

• Use payer portals like Availity, or the insurance company’s direct system
• Check through a clearinghouse like Change Healthcare
• Or go the old-school route and call a payer rep on the phone

What to Ask the Rep:

When you get a payer rep on the line, ask clearly:

“Can you confirm whether this plan is primary or secondary for [patient’s name] as of [date of service]?”

This gives you a firm answer straight from the source and avoids errors due to outdated or missing info in your own system.

Don’t Forget to Document:

Always record the details of your verification:

• Name of the representative you spoke to
• The call reference number
• Date and time of the call
• Any notes about COB confirmation

This becomes your backup if a claim is ever questioned or denied.

Common Pitfalls to Avoid When Determining Primary vs. Secondary Insurance

Dealing with patients who have more than one insurance plan is pretty common stuff. Making sure you know which plan pays first is the key step. When that’s clear from the start, claims have a much better chance of going through cleanly. This really helps your office run smoother, and gives patients one less thing to worry about. Let’s walk through the usual mix-ups so you can spot them ahead of time.

Medicare Isn’t Always Primary

Yes, Medicare is often the primary payer. But there are key situations where it’s secondary instead. For example:

• The patient is still working and has a group health plan through an employer with 20 or more employees
• The patient is disabled and covered under a large group plan (100+ employees)
• The patient’s treatment is related to a workplace accident, and it’s covered by workers’ comp or liability insurance

In these cases, Medicare becomes the secondary payer, and the other insurance must be billed first.

Medicaid Is Never Primary

Unlike Medicare, Medicaid is governed by a strict federal rule: it is always the payer of last resort.

That means if a patient has any other form of insurance—whether it’s through an employer, spouse, or Medicare—you must bill that plan first. Medicaid only steps in after all other insurance options have been exhausted.

If you fail to do this, then your claim will almost certainly be denied.

Pro Tip: Always ask patients, “Are you still working?” and “Is your coverage through a current employer?”

Billing the Wrong Payer First

Even if you’ve gathered all the right info, billing the wrong insurance first can mess up everything. This is one of the most frustrating (and totally avoidable) issues for healthcare providers.

When you bill the incorrect payer—let’s say you guess wrong on which insurance is primary vs secondary—the claim will likely get denied. That denial means you now have to send it again to the correct payer, and the whole process starts over.

Pro Tip: Use electronic eligibility tools (e.g., Availity, clearinghouse portals) to verify COB before submitting claims. It’s faster than guessing.

Forgetting to Verify the Effective Dates of Each Policy

This one’s easy to miss. But it can cost you valuable time. Just because a patient shows a valid-looking insurance card doesn’t mean their coverage is still active. Insurance coverage isn’t always continuous. If a plan has expired or hasn’t started yet, and you bill it anyway, your medical claim is going to bounce back.

Here’s What Can Happen:

Let’s say a patient gives you a current insurance card. Everything looks fine and you bill the plan. But what you might not know is they changed jobs last month, and that plan might no longer be active.

As a result of this, you submit the claim only to get a denial. Now your team has to scramble to track down the new insurance info and resubmit the claim—and hope it’s not too late.

Pro Tip: Always confirm the effective start and end dates for every insurance policy—especially during eligibility checks. This is extra important at the start of the year, when many insurance plans renew, update, or switch altogether.

Not Asking Patients About Coverage Changes During Open Enrollment or Life Events

Here’s a pitfall that happens more often than you’d think: patients forget to mention their insurance has changed.

Why? It’s human nature. This kind of oversight is known as an “assumption trap”—people assume everything is fine and forget the details. They may not realize their update matters, or they think the process happens automatically.

This is especially common during:

• Open enrollment season
• Life changes like marriage, divorce, changing jobs, or turning 65 (and becoming eligible for Medicare)

If you don’t ask, they often won’t tell—until something goes wrong with their insurance claim.

Example:

A patient turns 65 and signs up for Medicare. But they don’t tell you, because they assume it “just kicks in.” So, you continue billing their employer-sponsored plan, not knowing Medicare should have been involved.

→ Result? The claim gets stuck. You’re left fixing a billing mess that could’ve been avoided with a quick question upfront.

Not Updating COB Can Lead to Costly Mistakes

Many providers make a common mistake: they don’t update the Coordination of Benefits (COB) each year. But COB status can change anytime, not just yearly — even mid-year.

Here’s why: employers often switch insurance carriers. Patients may change jobs. Parents may shift custody arrangements. If your system still uses old COB info, you’re likely billing the wrong plan. That means claim denials and unhappy patients.

For example: if a child’s custody changes mid-year but your EHR still lists the old parent’s insurance as primary, you’ll bill the wrong payer. The correct insurer then says, “We’re secondary,” and denies the claim.

This creates confusion about which insurance is primary and which is secondary. When a patient has two plans, it’s crucial to know how to determine primary vs secondary insurance to avoid billing issues.

Pro Tip: Always confirm and update COB at least once a year, and anytime a patient mentions new coverage. Better yet, flag patients with more than one plan in your EHR. Set reminders to review COB details regularly. This helps ensure you’re billing the correct primary insurance and avoids claim rejections.

Tools to Identify Primary and Secondary Insurance

With the right tools, your team can verify coverage orders in real time, catch COB issues before billing, and ensure claims are submitted correctly the first time. Let’s break them down by type and how they specifically help identify primary vs. secondary insurance.

Eligibility Verification Tools (Real-Time)

These are your first line of defense when verifying patient insurance. They pull live data from payers, including plan status, coverage order, and sometimes COB remarks.

Key platforms that provide these tools include: 

• Availity (for BCBS, Aetna, Humana, and more)
• Experian Health
• Office Ally
• Navinet (for Independence, AmeriHealth, etc.)
• Your clearinghouse portal (e.g., BellMedEx’s FusionEDI)

How do they help?

• Show the active vs. inactive status of policies
• Reveal if the plan is listed as primary or secondary
• Display COB indicators (like “COB on file,” “other coverage exists,” or “secondary to Medicare”)
• Include effective and termination dates for each plan

Insurance Company Portals (Direct Payer Access)

Logging into each payer’s official provider portal gives you the most accurate and updated COB details—especially for complex cases.

These insurance company portals are:

• UnitedHealthcare Provider Portal
• Cigna for Health Care Professionals
• Aetna Payer Space
• Blue Cross Blue Shield portals (via Availity or direct login)
• Medicare MAC portals (Noridian, Novitas, etc.)

How do they help?

• View plan hierarchy when multiple policies exist
• See which plan is listed as primary in the insurer’s system
• Often provide member plan history and previous COB notes
• May include recent COB questionnaires submitted by patients

Clearinghouses

Clearinghouses act as intermediaries between your EHR and payers. Many have built-in tools for identifying primary and secondary coverage during pre-claim.

Common Clearinghouses are:

• TriZetto (now part of Waystar)
• BellMedEx Clearinghouse
• Change Healthcare
• Office Ally
• Claim. MD

How do they help:

• Show payer response messages that indicate COB issues or mismatches
• Let you run batch eligibility checks for patients with dual coverage
• Provide denial codes and explanations that signal incorrect payer order (e.g., “this plan is secondary to another policy”)

Patient Intake & EHR Tools

Never underestimate the power of your intake process and EHR system to help identify primary and secondary insurance — when used correctly.

These EHRs and patient intake tools include:

• Luma Health
• Mend
• Medifusion by BellMedEx
• Florence
• SolutionReach
• IntakeQ

How do they help?

• Some EHRs (e.g., Epic, Athenahealth, Kareo) offer custom insurance fields to mark payer order
• Intake forms can be set to prompt patients about other coverage, Medicare status, or recent insurance changes
• Patient self-check-in kiosks and portals can be used to update COB info digitally

CAQH (Council for Affordable Quality Healthcare)

Though CAQH is primarily for medical credentialing, many payers sync COB and provider data. It helps keep your practice’s information accurate, which impacts how claims are processed.

CAQH helps identify insurance using:

• CAQH ProView
• Payor portals

 How it helps:

• Keeps your practice’s data in sync across multiple payers
• Some patients’ COB data gets stored/updated through CAQH
• Ensures payer systems recognize you correctly as a participating provider for both plans (impacts COB logic)

Coordination of Benefits Questionnaires (Direct from Payers or Patients)

Sometimes, the best way to determine an insurance order is straight from the source: the patient.

Most insurance companies send COB questionnaires when they detect multiple coverages. If unanswered, this can pause claims or delay processing.

A Coordination of Benefits (COB) Questionnaire is typically used to gather information about a patient’s multiple insurance policies to determine which insurance plan should be billed first (primary) and which will be billed second (secondary).

Healthcare providers and insurance companies often use these questionnaires to ensure that claims are processed correctly and that the right plan is responsible for the payment.

Here’s a list of common questions you might find on a COB Questionnaire:

Primary Insurance Information:

• What is the name of the primary insurance carrier?
• What is the policy number of the primary insurance plan?
• Is the primary insurance policy under the patient’s name or someone else’s (e.g., spouse or parent)?

Secondary Insurance Information:

• Do you have secondary insurance coverage? (Yes/No)
• What is the name of the secondary insurance carrier?
• What is the policy number of the secondary insurance plan?

Relationship to the Insured:

• What is your relationship to the primary policyholder? (e.g., self, spouse, child, etc.)
• If not the primary policyholder, who is? (Name and relationship)

Employment-Related Insurance:

• Does an insurance plan cover you through your employer? (Yes/No)
• If yes, provide the employer’s name and your group number.
• Does your spouse or another family member have employment-based insurance? (Yes/No)

Medicare Information (if applicable):

• Are you enrolled in Medicare? (Yes/No)
• Is Medicare your primary insurance? (Yes/No)
• What is your Medicare number?

Coverage for Dependents:

• Does another insurance plan cover any of your dependents? (Yes/No)
• If yes, provide the details (name, policyholder, policy number).
• Changes in Coverage:
• Have there been any recent changes to your insurance coverage? (Yes/No)
• If yes, provide details (e.g., change in policyholder, employment status, etc.).

Other Health Coverage:

• Do you or your family members have other health coverage not listed above? (Yes/No)
• If yes, provide details about the other health coverage.
• Coordination of Benefits Confirmation:
• Do you understand the coordination of the benefits process? (Yes/No)
• Have you provided accurate and complete information regarding your insurance coverage? (Yes/No)

Final Thoughts

Understanding which plan is primary might seem difficult initially, but with a consistent system and precise knowledge of the rules, it becomes much more manageable.

Always focus on the relationship to the policy, the employment situation, and whether government programs are involved.

When in doubt, ask detailed questions, document everything, and use online tools when available.

Training your staff to follow a reliable process will reduce claim errors, avoid payment delays, and offer better patient service.

Every detail in these records must be easy to read and legally valid. One small but important factor in medical documentation is the color of ink used.

The ink color can affect how readable a record is, whether it looks official, and how easy it is to prevent changes or fraud. But which color is best: blue, black, or something else?

In this blog, we’ll discuss the ink colors for medical records, why they matter, and which ones should you choose?

Most Preferred Ink Colors & Their Importance

The color of ink used in medical records matters more than most people realize. It affects how easy the records are to read, copy, and verify for legal purposes.

Some ink colors are easy to read and widely accepted, while others cause problems when scanned or copied.

Here are the ink colors most healthcare professionals prefer for medical records:

Black Ink – The Best Choice for Medical Records

Black ink is the preferred and most widely accepted choice for medical records. It is easy to read, creates a strong contrast against white paper, and scans or photocopies clearly.

Many hospitals, clinics, and legal institutions use black ink because it ensures consistency and avoids issues when records need to be stored or shared.

Since legal documents and court records also accept black ink, it is the safest and most reliable option for medical documentation.

Blue Ink – Top Choice for Signing Medical Records

Sometimes, medical practices use blue ink instead of black because it helps distinguish original documents from photocopies.

This can be useful in verifying whether a document is authentic. So it is best to use blue ink for signing the documents.

However, not all healthcare facilities accept blue ink for medical records. This shade may not scan well, so certain institutions have strict policies requiring black ink only.

If you’re considering using blue ink, it’s best to check the rules of your workplace first.

Red & Other Colors – for Special Use Only

Healthcare professionals generally do not use red ink, green, or purple for writing standard medical records. Instead, they reserve these colors for highlighting important information, such as allergies, urgent notes, or warnings.

While red ink can make important details stand out, it does not photocopy or scan well, making it a poor choice for official documentation. Other colors, like green or purple, may be used for internal notes but are not suitable for legal records.

Sometimes, medical practices use different ink colors for special purposes. For example, in facilities with three shifts, each shift’s medical staff uses a different ink color. This helps to distinguish between medical records created on the same day.

Rules on Ink Color (HIPAA, Medicare, and State Regulations)

The Health Insurance Portability and Accountability Act (HIPAA), Medicare, and state laws require medical records to be clear, legible, and permanent.

While no single federal rule specifies which ink to use, black or dark blue ink is recommended. These colors work best for scanning, copying, and long-term storage.

Problems with Using the Wrong Ink Color

Using the wrong ink color can cause serious issues, such as:

• Light or bright ink colors may not scan well, making it hard to store or read records. Making the records illegible over time.
• If medical records are unclear or altered, they may not be accepted in court.
• If a healthcare facility fails to meet documentation standards, it could face audits, fines, or loss of accreditation.

How to Stay Compliant?

To avoid issues, healthcare providers should establish clear guidelines requiring black or dark blue ink for all handwritten records.

They should also educate employees about proper documentation practices and the risks of using non-compliant ink colors.

Regular audits should be conducted to ensure that the staff follow these rules and maintain accurate, legally compliant records.

Common Mistakes & Best Practices

Here are the mistakes that a medical staff commonly commits while choosing ink color, along with tips on how you can change those into best practices:

➜ Choosing Ink That Lasts

Medical records must stay readable for years. Some inks fade, smudge, or disappear over time, making them unreliable. 

To prevent this:

• Avoid gel pens and light ink as these may not last or scan well.
• Use permanent, water-resistant ink such as black or dark blue ballpoint pens are the best choice because they are long-lasting and clear.

➜ Keeping Consistency Across a Medical Facility

Using different ink colors can create confusion and inconsistency. 

How can you ensure uniformity?

• Set clear guidelines by establishing a rule that only black or dark blue ink is used.
• Switch to electronic records (EHRs). Digital records reduce the need for handwritten notes and prevent ink-related issues.
• Assign someone to check that staff follow the ink color policy to monitor compliance.

➜ Training Staff on Proper Documentation

To avoid mistakes, staff should be well-trained in proper documentation practices. You can achieve this by educating new employees on ink guidelines during training.

You can conduct regular refresher sessions to keep staff updated on best practices, and placing visual reminders in work areas to reinforce proper ink use.

Conclusion

The color of ink used in medical records may seem like a small detail, but it plays a big role in keeping records clear, legal, and easy to access.

Black ink is the best choice because it is easy to read, scans well, and most people accept it in hospitals and legal settings.

Blue ink can help distinguish original documents from copies, but not all healthcare facilities allow it. You should use red and other colors only for special notes, such as warnings or shift identification.

Using the wrong ink can lead to problems, such as unreadable records, legal issues, and failure to meet healthcare regulations.

To avoid these risks, medical facilities should set clear rules requiring black or dark blue ink, train staff on proper documentation, and regularly check for compliance.

By following these best practices, healthcare providers can ensure that medical records remain accurate, professional, and legally valid, ultimately improving patient care and communication.

Imagine you’re running a healthcare practice, and a new physician joins your team. They’re experienced, talented, and eager to start helping patients.

However, there’s a hiccup—they haven’t been credentialed yet. Now, the clock’s ticking, and you’ve got patients to see.

What do you do? Do you hit pause until the credentialing process is complete, or is there a way to move forward?

It’s a scenario many healthcare providers face, and while it may seem like a sticky situation, it’s not all doom and gloom.

There are some ways to navigate these waters, and it’s essential to understand the dos and don’ts to keep things running smoothly.

Credentialing is a big deal. It’s how medical professionals get recognized and reimbursed by insurance companies like Medicare.

Essentially, the stamp of approval says, “Yes, this provider meets the necessary standards to offer services safely and effectively.”

Without it, patient safety and the integrity of the healthcare system could be at risk.

But here’s the kicker:

What happens if that new physician isn’t credentialed yet, and you need to see patients anyway?

It is a very critical situation, but the truth is, there are temporary solutions that can keep your practice moving forward.

Let’s see when and how a physician can see patients without being credentialed.

What Does It Mean to Be Credentialed?

Credentialing is the process where healthcare providers, like doctors, nurses, or specialists, are verified for their qualifications.

This process involves reviewing a provider’s education, training, licensing, malpractice history, and work experience to ensure they meet the standards of the healthcare institution and are eligible for insurance reimbursements.

While credentialing is typically a standard process for doctors, nurses, and other healthcare professionals, sometimes there is a delay between when a provider joins a new facility or health plan and when their credentialing is officially completed.

If a physician isn’t credentialed, they can’t officially bill insurance companies, including big players like Medicare.

Without that credentialing stamp of approval, they’re not recognized as a valid provider under those insurance contracts.

This can lead to a few complications:

First, you won’t be reimbursed for the services provided, and second, it could even raise concerns about compliance and patient safety, depending on the situation.

Without credentialing, health plans, including Medicare, Medicaid, or private insurers, don’t recognize a provider.

This means that:

• The provider cannot bill for services rendered.
• Patients might face out-of-pocket expenses if they choose to see a non-credentialed provider.
• Insurance companies won’t reimburse for services rendered by the non-credentialed provider.

Can Non-Credentialed Providers See Patients: Potential Risks

YES, in certain circumstances, non-credentialed providers can see patients—but it’s not as simple as just letting them dive in.

There are significant restrictions and potential risks involved that you need to consider before allowing any provider to treat patients without full credentialing.

Everything runs on high standards, strict protocols, and paperwork in healthcare.

Why?

Because patient well-being, legal obligations, and the financial health of a healthcare organization all depend on it.

Credentialing plays a considerable role in this system. It ensures that a provider meets specific qualifications and standards to safely treat patients and be authorized to bill insurance companies, including large payors like Medicare and private insurers.

But what happens when a provider isn’t credentialed yet and still sees patients?

Well, here’s where things get tricky.

Allowing a non-credentialed provider to see patients before completing the credentialing process can open the door to several risks that could harm your practice financially and legally.

Let’s take a closer look at these risks:

1). Reimbursement Denial

One of the most significant risks of seeing patients before completing the credentialing process is the potential for reimbursement denial.

Insurance companies, including major payers like Medicare and private insurance providers, have strict rules regarding credentialing.

They typically require that healthcare providers are officially credentialed and authorized before any services are eligible for reimbursement.

Insurers require that healthcare providers meet specific qualifications and have the necessary approvals before they are eligible for reimbursement.

Without proper credentialing, any services provided will likely be denied payment.

If a provider has seen patients without credentialing approval, they cannot collect payment for the services rendered until their application is processed.

This could lead to significant financial challenges for the practice, especially if the provider has seen many patients.

2). Out-of-Pocket Costs for Patients

Patients typically rely on their insurance coverage to help pay for medical services.

If a provider is not credentialed with the patient’s insurance, patients may be required to pay out-of-pocket for the services they receive.

This can create several problems for both the patient and the provider.

Insurance companies generally won’t reimburse for services rendered by non-credentialed providers.

As a result, patients will likely be responsible for the full cost of their care, which they may not have budgeted for.

Most patients expect their medical expenses to be covered by their insurance.

When faced with unexpected costs because their provider isn’t credentialed, it can lead to frustration, dissatisfaction, and even a loss of trust in the provider.

This can result in a negative impact on patient retention and the provider’s reputation.

3). Compliance and Liability Issues

Seeing patients without the necessary payer credentialing poses a significant legal risk, including compliance and liability issues.

Providers who fail to adhere to proper credentialing protocols may face legal challenges, especially if something goes wrong during care provision.

If a non-credentialed provider is involved in a malpractice case or any legal issue, they may find themselves without legal protection or coverage under their malpractice insurance.

This could leave the provider personally liable for the financial and legal consequences.

Healthcare organizations must comply with various regulations, including credentialing-related ones.

Providing services without completing the credentialing process could be seen as a violation of these regulations.

Failure to comply with credentialing requirements could sometimes lead to fines, sanctions, or even the termination of a provider’s license.

Physicians who see patients before their credentialing is complete take on considerable legal and financial risks. Malpractice claims, insurance issues, and violations of healthcare regulations could jeopardize their practice and professional standing.

When Can a Non-Credentialed Provider See Patients? Key Scenarios Explained

While proper credentialing is a cornerstone of healthcare compliance and reimbursement, there are specific circumstances where providers can legally see patients before their credentialing process is complete.

These exceptions provide necessary flexibility in the healthcare system while maintaining patient safety standards.

We’ve outlined the key scenarios below where providers may be permitted to practice prior to full credentialing approval:

Temporary Credentialing or “Provisional” Status

Sometimes, a provider may be granted temporary or provisional credentialing to see patients while the complete credentialing process is underway.

This is commonly seen when a physician joins a hospital or practice and needs to start seeing patients immediately, even if their full background check isn’t completed yet.

From an insurance perspective, provisional status can lead to service reimbursement, but it’s not guaranteed.

For example, Medicare might reimburse for the care a temporarily credentialed physician provides, but this arrangement is typically short-term and subject to various conditions.

Supervision by a Credentialed Provider

A non-credentialed provider may be able to see patients if they are working under the supervision of a credentialed provider.

This is common for non-physician providers, such as nurse practitioners (NPs) or physician assistants (PAs), who work under a supervising physician.

Let’s say a Nurse Practitioner is in the process of being credentialed by Medicare but has already started working at a primary care clinic.

While the nurse waits for her credentials, she may see patients if her supervising physician is present or available to oversee her care decisions.

When it comes to insurance, Medicare and other insurers typically reimburse the credentialed supervising provider for services rendered.

This means that while the supervising physician can bill for the care provided, the non-credentialed NP won’t be reimbursed directly.

The supervision arrangement ensures that the supervising physician remains legally responsible for the care provided and that billing is tied to the supervising physician’s credentials.

Emergency or Unforeseen Circumstances

There are situations in which emergency care or urgent needs arise, and a non-credentialed provider may be the only one available to treat patients.

In these cases, insurance companies like Medicare has specific emergency services and coverage guidelines.

For example, a doctor is not yet credentialed with Medicare but works in an urgent care facility.

One day, an unexpected influx of patients requires her to step in and see a patient with a complex condition.

While they are not credentialed, the facility calls her in due to the emergency, and she provides care.

For emergencies, Medicare and most other insurers will generally cover care provided by a non-credentialed provider.

This is because patient health and safety are prioritized in emergencies, and credentialing delays are recognized as an administrative issue.

Out-of-Network Providers

In some instances, a non-credentialed provider may not be in-network for an insurance plan, but patients may still be able to see them as out-of-network providers.

The patient would typically be responsible for a higher out-of-pocket cost, but the insurance may offer partial reimbursement.

For instance, a specialist who isn’t credentialed with a specific insurance company.

However, he agrees to see a patient who has that insurance.

The patient might still be able to get some reimbursement from their insurance provider, but it will likely be at a reduced rate, and they may need to pay higher co-pays or deductibles.

Medicare, for example, has a network of approved providers, but it does not allow patients to see out-of-network doctors.

However, if the provider is non-credentialed, reimbursement will likely be limited or unavailable, and patients might have to pay the full cost.

Telemedicine and Cross-State Licensing

With the rise of telemedicine, non-credentialed providers might also encounter questions related to cross-state licensing or telehealth provisions.

A physician who isn’t credentialed in a particular state may still offer services via telemedicine to patients in that state.

For example, a licensed physician in Texas hasn’t yet been credentialed by an insurance provider in Louisiana.

However, she offers telemedicine consultations to patients in Louisiana, raising the question of whether Medicare will reimburse those services.

Many insurance companies, including Medicare, are adapting to the rise of telemedicine.

Reimbursement policies are evolving, but if a provider is often licensed in the state where the patient is located, they may still be able to offer telehealth services, even if they are not yet credentialed with the insurance provider.

Proper storage of EOBs isn’t just about keeping your office organized. But it’s also about protecting patient information, staying compliant with regulations, and having the records you need when billing questions arise.

You know the ones: a patient calls saying, “I don’t think I should’ve been charged for this,” or an insurance company asks, “Can you justify this claim?” With EOBs on hand, you’re ready to respond.

In this guide, we’ll walk through everything you need to know about EOB retention periods, from IRS guidelines to HIPAA requirements, and help you develop a storage system that works for your practice.

Keep your EOB documents for at least 7 years to comply with IRS tax guidelines. However, HIPAA has different requirements, mandating a 6-year retention period from creation or last use. Meanwhile, CMS sets the most variable standard, requiring between 5 and 10 years of retention depending on your provider type. Although these timelines differ, all three authorities agree that EOBs, despite being financial rather than clinical documents, must be properly maintained.

What Is an Explanation of Benefits (EOB) Statement?

An EOB is a statement that insurance companies send to patients after they receive medical care. This document isn’t a medical bill. Instead, it explains what medical treatments and services the insurance company paid for on behalf of the patient. Each EOB breaks down:

• The medical services provided
• How much the provider charged
• What portion the insurance covered
• What the patient still owes (if anything)

Think of an EOB as a healthcare receipt that helps everyone understand who paid for what.

Picture this ➜ A patient comes in for a routine exam, and you bill $150. The EOB shows the insurance covered $120, leaving a $30 copay. It’s your roadmap to understanding who paid what, and it’s a lifesaver when patients or insurers start asking questions.

Why EOBs Matter for Your Practice?

EOBs several important purposes which include:

They Verify Billing Accuracy

EOBs help both you and your patients check that services were billed correctly. You can use them to spot errors before they become bigger problems, like charges for services that weren’t provided or incorrect procedure codes.

For instance, suppose a patient was billed for a blood test they didn’t receive. By reviewing the EOB, you notice the error and correct it before the patient is overcharged or your practice faces a claim denial.

They Help Resolve Billing Disputes Quickly

When questions arise about charges or payments, EOBs provide a clear record of what was billed and paid. Having these documents readily available can turn a potentially frustrating dispute into a quick resolution.

For example, a patient might dispute a $50 charge, believing it was already paid. You refer to the EOB, which shows it was for a specialist consultation with only partial insurance coverage, and explain this to resolve the confusion on the spot.

They Provide a Clear Picture of Healthcare Costs

EOBs outline exactly what services cost, what insurance paid, and what patients owe. This transparency helps everyone understand the financial side of healthcare.

For example, after a surgery costing $5,000, a patient’s EOB shows insurance covered $4,000, leaving them with $1,000 to pay. This clarity helps the patient budget for future medical expenses, like planning for upcoming procedures.

They Help Track Healthcare Spending Patterns

By reviewing EOBs over time, you can identify trends in services, payments, and denials that might affect your practice’s financial health.

For instance, you might notice an increase in denied claims for a specific procedure code. Analyzing the EOBs reveals the code is being used incorrectly, allowing you to adjust billing practices to reduce denials and improve revenue.

They Clarify Insurance Coverage for Patients

EOBs help patients understand their insurance benefits, including coverage limits and out-of-pocket costs. This knowledge empowers them to make better healthcare decisions.

They Help Detect and Prevent Fraud

Regular review of EOBs can reveal suspicious patterns or unauthorized charges, allowing you to address potential fraud early.

For example, you might notice multiple EOBs with duplicate charges for the same patient on the same day, a pattern known as “double billing.” This could indicate fraudulent activity, like billing for services not rendered, prompting you to investigate further.

They Demonstrate Compliance with Healthcare Regulations

During audits or investigations, EOBs serve as evidence that your billing practices follow state and federal regulations. Examples of applicable regulations include:

• HIPAA (Health Insurance Portability and Accountability Act): Ensuring privacy and security of patient information tied to billing.
• False Claims Act (FCA): Avoiding fraudulent billing by maintaining proper documentation like EOBs to substantiate services rendered and billed.
• State Insurance Codes: Each state (e.g., California Insurance Code, Texas Insurance Code) has regulations governing claims processing, patient billing disclosures, and timelines for communication — EOBs help demonstrate that you’ve followed these requirements.

Are EOBs Part of the Medical Record?

An Explanation of Benefits (EOB) is a formal document issued by insurance providers following the processing of healthcare claims. This document itemizes the services rendered, associated costs, insurance coverage applied, and the patient’s financial responsibility.

So are EOBs a part of the medical records? Here’s the answer:

Medical Records consist of clinical documentation that chronicles a patient’s health status and care.

These include:

• Clinical notes and observations
• Diagnostic test results
• Treatment plans and medication orders
• Progress notes and clinical correspondence
• Surgical reports and procedural documentation

Financial Records, where EOBs are properly categorized, document the economic aspects of healthcare delivery.

These include:

• Billing information and payment processing
• Insurance claim documentation
• Patient payment history
• Cost accounting for services rendered

Explanation of Benefits (EOBs) are financial documents that detail insurance coverage and payment obligations, not clinical documentation, and thus remain separate from medical records. While medical records document a patient’s health status, diagnoses, and treatment plans, EOBs serve as financial instruments that track the monetary aspects of healthcare services, including insurance payments, patient responsibilities, and provider reimbursements.

Healthcare organizations maintain EOBs as part of their financial record-keeping systems, subject to different retention policies and regulatory requirements than those governing clinical documentation.

IRS Guidelines for Keeping Explanation of Benefits (EOBs)

The Internal Revenue Service (IRS) is a federal agency that collects taxes and enforces tax laws. The IRS provides specific guidelines for keeping Explanation of Benefits (EOBs), which help taxpayers verify their medical expense deductions on tax returns.

➜ Retention Period for EOBs

The IRS recommends that both healthcare providers and individuals keep EOBs for at least 7 years. This timeframe is important for several reasons:

Tax Deductions

EOBs serve as proof of medical expenses that can be claimed as deductions on tax returns. The IRS allows taxpayers to deduct qualified medical expenses that exceed a certain percentage of their adjusted gross income. Keeping EOBs for 7 years ensures you have the necessary documentation to support these deductions if questioned.

Audit Protection

The IRS can audit tax returns for up to 6 years if they suspect income underreporting of more than 25%. By keeping EOBs for 7 years, taxpayers can provide evidence of their medical expenses and avoid penalties.

Remember: Keeping organized records not only helps during potential audits but also makes your annual tax filing process much simpler.

HIPAA and CMS Guidelines for Keeping Explanation of Benefits (EOBs)

When providing healthcare services, it’s important to follow federal regulations like HIPAA and CMS guidelines. These rules outline how Explanations of Benefits (EOBs) should be handled. This includes how they are delivered, stored securely, and how long they must be kept to protect patient privacy and ensure compliance.

HIPAA Guidelines

The Health Insurance Portability and Accountability Act (HIPAA) was created to protect patient health information. Under HIPAA, healthcare providers are required to maintain EOBs for 6 years from the date they were created or last used. This ensures that patient information is available if needed for audits, investigations, or other official purposes.

Example: If an EOB is created on January 1, 2022, it must be kept until January 1, 2028. This way, the document is available if questions or audits arise during that period.

CMS Guidelines

The Centers for Medicare & Medicaid Services (CMS) also set guidelines for retaining EOBs, depending on the type of healthcare service provider.

Under the general CMS retention rule for cost reporting, providers must keep all patient records, including EOBs, for 5 years after the completion of a cost report. This allows records to be available for review or audit.

Example: If a cost report is finalized on December 31, 2020, all related EOBs must be kept until December 31, 2025.

CMS Guidelines for Medicare Managed Care Providers

Providers under Medicare Managed Care programs must retain EOBs and related records for 10 years. This longer period ensures full documentation of patient care and billing for potential audits.

Example: If a Medicare Managed Care contract ends on December 31, 2020, all relevant records must be retained until December 31, 2030.

How Long To Keep EOBs for Routine/Standard Health Conditions?

For routine medical care or one-time treatments, most healthcare experts recommend keeping EOBs for approximately 3 years. This timeframe allows patients to resolve any potential billing issues that might arise and provides adequate documentation for tax purposes if needed.

During this retention period, patients should organize their EOBs by keeping related documents together – for instance, grouping an office visit with any associated lab work or prescriptions. This organization helps patients track their deductible status throughout the year and ensures they can quickly identify any duplicate billings.

Once three years have passed, patients can typically dispose of these records if all payments have been settled, no billing disputes remain, and they aren’t claiming medical tax deductions. However, if there’s any uncertainty, it’s always better to retain these documents longer.

How Long To Keep EOBs for Serious/Chronic Health Conditions?

For patients managing serious or chronic health conditions, the retention guidelines become more stringent. In these cases, medical experts recommend keeping EOBs and related medical records for 5-7 years, depending on circumstances.

Patients dealing with ongoing health issues should establish a more comprehensive filing system, preferably organizing documents chronologically while still maintaining related services together. This approach creates a valuable historical record that can help providers understand treatment histories and insurance coverage patterns over time.

For chronic conditions specifically, patients should retain all records for at least 5 years following their final treatment date. If they’re claiming medical expenses as tax deductions, this retention period extends to 7 years after filing the tax return, in accordance with IRS requirements.

Retention Period for Different Types of Medical Records

Medical records must stay in file cabinets or computer systems for different lengths of time. Doctors cannot throw them away early because they might need them later. The government has rules about keeping these papers. Patients also expect their health stories to be available when they return for more care.

There are many kinds of health records, and each type stays for a different amount of time. The guide below shows how long each type should be kept. Healthcare workers should know these timeframes. This ensures they do not lose important information that could save a life someday.

How to Store Explanation of Benefits (EOBs) Effectively

EOBs are the papers from insurance companies that show what medical care the patient got and who paid for it and they have important information that must be kept safe and organized so both the patient and the healthcare provider can find them when they need them and so others cannot see those private health details. The way you store these papers matters because good storage saves time and keeps information private and follows the laws about medical records.

Physical Storage Solutions for EOBs

When you have paper EOBs that you can hold in your hand, you need to put them somewhere safe where they will not get lost or damaged or seen by people who should not see them and this means thinking about special places to keep them.

➜ Secure File Cabinet Systems

Tip: Keep paper EOBs in a locked, fireproof, and waterproof file cabinet where only certain people can open it.

The paper EOBs should go in a strong cabinet that has locks on the drawers and will not burn in a fire and will stay dry if water spills and the cabinet should be:

• Locked all the time so no one can just open it and look inside
• Made to not burn even in very hot fires for at least half an hour
• Built to keep water out if pipes break or sprinklers turn on
• Placed in a room where not many people walk through
• Hard to open without someone knowing it was opened

Buying a good strong cabinet costs money but it keeps patient information safe and follows the laws about privacy in healthcare.

➜ Logical Filing and Categorization

Tip: Make a simple system with different colored folders and clear labels so you can find papers quickly.

You should organize your files in a way that makes sense so you can find what you need without looking through every paper:

• Use folders that are different colors for different insurance companies or different years
• Put the patient folders in ABC order so names are easy to find
• Write clearly on each folder the patient name and when they got care and which insurance they had
• Make a list that shows how your filing system works
• Sometimes put information in more than one place if it belongs in more than one category
• Keep track of who takes folders out so nothing gets lost

When your filing system works well, you can find what you need in seconds instead of minutes and this makes your work easier every day.

Electronic Storage Systems

Keeping EOBs on computers or in the cloud takes less space and lets you search for things quickly but you must be very careful about computer security so private information stays private.

➜ Encrypted Storage Solutions

Tip: Use special healthcare computer systems that scramble the information so hackers cannot read it.

When you store EOBs on computers:

• Use computer programs made specially for healthcare information
• Make sure all information is scrambled with strong codes when it travels and when it sits on the computer
• Check that any cloud service has signed papers saying they will protect health information
• Think about using healthcare document systems instead of regular storage like normal Google Drive
• Set up two different ways to prove who you are when you log in
• Have a plan for managing the secret codes that unscramble the information

Remember that regular cloud storage like basic Dropbox is not automatically safe enough for health information without extra security steps and special agreements.

➜ Comprehensive Backup Procedures

Tip: Always have three copies of your EOB information in different places.

A good backup plan means:

• Having the original information plus two backup copies
• Keeping backups on different types of storage like your computer and also the cloud
• Having one backup in a different building
• Setting up automatic daily backups of new information
• Doing complete backups every week
• Checking monthly that you can actually get your information back from the backups
• Writing down the steps for how to recover information if something goes wrong

This way even if computers crash or buildings burn down your important EOB information will not be lost forever and you should regularly test your backups to make sure they work.

➜ Granular Access Controls

Tip: Control exactly who can see which EOBs and keep track of who looks at them.

Protect electronic EOBs by carefully managing who can see them:

• Give each staff member only the access they need for their job
• Make it so some people can look but not change information
• Set computers to log out automatically if no one uses them for a while
• Keep detailed records of who looked at which documents and when
• Regularly check the list of who has access and remove people who no longer need it
• Give each staff member their own login and never share accounts
• Make everyone change their passwords every few months

These steps not only keep patient information safe but also show exactly who looked at what information and when they looked at it.

Organization of Patient Data

How you organize your EOBs makes a big difference in how easily you can find them when you need them and a good system saves time and reduces frustration.

➜ Chronological and Categorical Sorting

Tip: Organize EOBs by patient name, then by date, then by type of medical service.

Design your filing system to help find information in different ways:

• First organize by patient name or ID number
• Then organize by year and month
• Then organize by what kind of medical service it was
• Make it possible to find all records for family members if needed
• Keep newer active records separate from older archived records
• Have clear steps for moving records from active to archive status
• Create special ways to get records quickly in emergencies

This system with multiple layers works well because sometimes you need to find recent activity and sometimes you need to find all records for one kind of medical service and sometimes you need a patient’s complete history.

➜ Searchable Metadata Implementation

Tip: Add extra information to each EOB file so you can search for many different things.

For computer systems, make searching easier by including:

• Patient information like name, birth date, and ID numbers
• Doctor information like name and facility
• Dates when service happened and what kind of service it was
• Claim numbers and whether they were paid
• Insurance plan details
• How much was paid and adjusted
• Medical codes for diagnosis and procedures
• Special tags for unusual cases or common searches

When you add all this extra information, your simple file storage becomes a powerful system that can quickly answer complex questions like “Show me all EOBs for heart procedures done in March that patients still need to pay.”

Retention and Disposal Protocols

Your storage plan should include clear rules about how long to keep records and how to safely get rid of them when that time is up.

➜ Scheduled Review System

Tip: Every three months, check for records that no longer need to be kept.

Create a system to:

• Mark records that are getting close to the end of their keeping time
• Look at each marked record to see if there is any special reason to keep it longer
• Write down all decisions about keeping or not keeping with reasons why
• Schedule safe destruction for records that can be removed
• Keep a list of what was destroyed and when it happened

How to Destroy Medical Records Safely

Medical records like EOBs must be destroyed carefully to protect patient information. Here’s how to do it right:

Destroying Paper Records

Paper medical records can be seen by the wrong people if not destroyed properly.

• Use a cross-cut or micro-cut shredder that cuts paper into tiny pieces
• Consider hiring professional shredding services – they give you a certificate proving destruction
• On-site shredding happens at your location so you can watch
• Regular shredding services work well for medical offices with many records

Destroying Digital Records

Deleting files normally doesn’t really remove them from your computer.

• Use special wiping software like DBAN or BitRaser that truly erases files
• Encrypt (scramble) sensitive files before deleting them for extra protection
• For complete safety, physically destroy old hard drives, USB drives and CDs

Important Steps to Remember

• Keep track of which records you destroy and when
• Train all staff on proper record destruction
• Check local laws about how long to keep records before destroying
• Make sure any company you hire signs agreements to protect patient information

Medical Records Retention Laws by State

Different U.S. states have different rules about how long doctors and hospitals must keep medical records. Here’s what you need to know:

• Most states say to keep records for 5-10 years
• Records for children usually must be kept longer – until they become adults (age 21) or even longer
• Some states use simple language like “keep as long as needed” (Alabama)
• A few states have special rules:
  • Hawaii has different times for “Full” records versus “Basic” records
  • Some states have separate rules for hospitals and private doctors

While many states follow the basic federal HIPAA rule (keep records for 6 years), always check your state’s specific rules to make sure you’re following the law correctly.

Below is a table summarizing the retention periods for medical doctors and hospitals, with distinctions for adults and minors where applicable:

While write-offs can sometimes be an agreed-upon reduction, they can also lead to bad debt and significant revenue loss if not managed correctly. This article breaks down what write-offs are, how they differ from adjustments, when to write off a claim, and how to avoid unapproved or unnecessary write-offs.

One quick thing; we know that effective provider write-offs and precise claim management are important. That’s why, we help you manage them with our expert medical billing RCM specialists. Get free consultation with us to learn how.

What is Provider Write Off in Medical Billing?

A provider write-off in medical billing is the portion of a billed charge that a healthcare provider decides not to collect, either from the patient or insurance company. It occurs when a provider is unable to collect the full amount for a service rendered, usually due to agreements with insurance companies, legal requirements, or internal policies.

Write-offs are important for maintaining accurate financial records and ensuring compliance with various contractual or regulatory standards. Instead of continuing to pursue payment for these uncollectible amounts, providers “write them off” as unpayable.

For example, if a healthcare provider charges $700 for a procedure, but the insurance company’s contract stipulates a payment of only $500, the $200 difference is written off as a contractual adjustment. This is a common form of write-off that happens in healthcare. Another example could be when a patient’s balance is too small to justify collection efforts.

Major Types of Provider Write Offs

Here are some examples of provider’s write offs:

• Contractual Write-Offs
• Bad Debt Write-Offs
• Charity Care Write-Offs
• Small Balance Write-Offs
• No Insurance Write-Offs
• Promotional Write-Offs
• Timely Filing Write-Offs
• Uncredentialed Write-Offs

➜ Approved or Necessary Write-Offs

These write-offs are unavoidable and are part of the financial policies or contractual agreements between the provider and the payer.

Contractual Write-Offs

Contractual write-offs are necessary when a healthcare provider agrees to accept a lower payment from an insurance company than what was billed. This write-off is due to the allowable fee set by the payer, as per the terms of the contract.

For example, if a provider bills $1,000 for a service but the insurer’s contract allows only $700, the $300 difference is written off.

Charity Write-Offs

Charity write-offs are offered when a provider forgives a portion or the entire bill for patients who cannot afford to pay. This usually occurs when the patient qualifies for a financial assistance program due to their low income. These write-offs reflect the provider’s commitment to serving the community.

Small Balance Write-Offs

Small balance write-offs occur when the outstanding amount is too small to justify the administrative effort of billing or collection. For example, if a patient owes $12, the provider may choose to write off the balance rather than spending time and resources to collect it.

These write-offs are commonly seen when the amount is under $15 or $20, and the provider may add it to a future visit or simply let it go.

Promotional Write-Offs

Promotional write-offs are offered to encourage patients to pay in full at the time of service. This is common for self-pay patients who do not have insurance. For example, if patients paying out of pocket agree to pay in full during their visit, doctors might offer a discount or reduce the bill.

➜ Unnecessary Write-Offs

Unnecessary write-offs are avoidable and occur due to errors or inefficiencies in the billing process and are avoidable.

Timely Filing Write-Offs

Timely filing write-offs occur when claims are submitted after the payer’s deadline. Each insurer has specific filing timeframes, such as Medicare requiring claims to be filed within 12 months. If your practice misses these deadlines, you may have to write off the charges.

To avoid this, track claim submission deadlines carefully and set reminders to ensure timely filings for each payer.

Uncredentialed Provider Write-Offs

Uncredentialed provider write-offs happen when claims are filed for a provider who isn’t yet credentialed with the insurance company. This results in a denial of the claim and a write-off of the amount.

To avoid this, always verify the provider’s credentialing status with the payer before providing services. If needed, inform patients about non-covered services or self-pay options in advance.

Administrative Write-Offs

Administrative write-offs are granted when mistakes occur in the practice, such as when a provider mistakenly tells a patient that they are in-network with their insurance, but they are not. These situations may result in the practice writing off the charges as a courtesy.

To minimize these errors, ensure your team is well-trained on insurance verification and communicate clearly with patients about in-network and out-of-network status.

Collection Agency Write-Offs

Collection agency write-offs occur when unpaid balances are transferred to a third-party agency. These amounts are no longer pursued by the provider but are instead handled by the collection agency. However, they should not be forgotten entirely.

Monitor accounts with unpaid balances and only schedule new appointments after patients agree to a payment plan.

Bad Debt Write-Offs

Bad debt write-offs occur when a provider chooses not to pursue payment from a patient or insurance company due to unsuccessful collection efforts. This usually happens after several attempts to collect payments have failed.

To reduce bad debt, ensure your practice follows up on outstanding balances, verifies insurance coverage before services are rendered, and offers payment plans when necessary.

How to Avoid Unnecessary Write Offs

Avoiding unnecessary write-offs can significantly improve your practice’s bottom line.

Here are effective strategies to minimize revenue loss.

1. Use Reporting and Analytics Tools

Take advantage of medical billing software with built-in analytics. These tools can spot trends and areas where you’re losing money, allowing you to act before write-offs happen.

2. Conduct Regular Audits

Perform internal audits to identify any recurring issues, such as incorrect coding or billing mistakes. By catching these errors early, you can avoid unnecessary write-offs.

3. Train Your Staff

Ongoing training for your billing and coding team is essential. Ensure they understand the latest industry regulations and know the correct procedures to follow. Well-trained staff make fewer errors, which reduces write-offs.

4. Stay Compliant

To prevent denials and bad debts, make sure to follow all payer requirements, including insurance verification, pre-authorizations, and timely claims submission. Compliance with these rules is key to avoiding unnecessary write-offs.

Can Doctors Write Off Unpaid Bills?

Yes, doctors can write off unpaid bills, but the process and reasons behind it vary based on the situation and the policies of the medical practice. There are several scenarios where write-offs may be appropriate, for example, bad debt, charity care, small balance, etc.

But you must take care of these points, when writing off unpaid bills:

• Ensure that write-offs are well-documented and compliant with internal policies.
• Constantly monitor unpaid bills and analyze patterns to minimize future write-offs.
• Adhere to IRS guidelines for bad debt deductions while maintaining efficient billing practices to minimize unnecessary write-offs.

Can a Provider Write Off a Deductible?

Providers cannot write off deductibles because these amounts are parts of the patient’s financial responsibility. Writing off deductibles, copayments, or coinsurance can violate insurance contracts and may lead to contract termination, HIPAA violations, or even charges of fraud. It can also run afoul of the federal Anti-Kickback Statute (AKS), which is a felony.

But there are limited exceptions where providers might waive fees, such as in hardship cases or charity care. Even so, the decision to lower or remove a copay or deductible must be made for each case separately and cannot be done regularly.

Always, consult with an attorney or a billing specialist like BellMedEx to understand the specific rules and regulations that apply to your situation. Speak to our medical billing specialist now.

When Can You Write Off Medical Bills?

You can write off medical bills on your taxes if they exceed 7.5% of your adjusted gross income (AGI) and you itemize your deductions on Schedule A (Form 1040). This includes payments for diagnosis, treatment, prevention, and other medical care expenses that aren’t reimbursed by insurance.

🛈 How to Properly Write Off Medical Bills as a Provider?

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Let us share quick, actionable steps on how to rightly write off as a provider.

1. Identify Eligible Write-offs

• Review the claim to determine if it qualifies for a write-off.
• Look for reasons like insurance denials, patient financial hardship, or billing errors.
• Assess if the bill is uncollectible due to coverage limits or patient circumstances.

2. Document the Reasoning

• Keep detailed records of why you are writing off the bill.
• Note if it’s due to a payer’s denial, a patient’s inability to pay, or a contract issue.
• Ensure you document any supporting evidence like financial hardship applications or denial letters.

3. Follow Internal Policies

• Establish clear guidelines for when and how to write off claims.
• Ensure your policies are consistent with legal and ethical standards.
• Review your policies regularly to prevent unnecessary write-offs.

4. Make Timely Write-offs

• Once eligibility is determined, write off the claim immediately.
• Enter the write-off in your general ledger to avoid confusion later.
• Promptly mark unpaid claims as “not to be pursued” for future follow-ups.

5. Review and Audit Regularly

• Periodically audit your revenue cycle to identify trends in write-offs.
• Review your practice’s financial health to ensure you’re not overusing write-offs.
• Retrain your billing staff as needed to maintain accuracy and efficiency in the process.

Sometimes, however, a GP (General Practitioner) may not be able to fully assess and manage a patient’s health condition. In such cases, the referral feature allows healthcare providers to direct their patients to another specialist.

As a healthcare provider, you manage your patients’ health conditions and facilitate their referrals to other health professionals for better assessment and care. For instance, a cardiologist might refer a patient to a neurologist if the symptoms suggest a neurological issue.

This interdisciplinary approach ensures that patients receive the most appropriate and comprehensive care for their health needs.

Why Does a Specialist Refer Patients to Another Specialist?

Referring a patient to another specialist is common, but it is not always necessary. A primary care physician or specialist may choose to refer patients for various reasons.

Therefore, to understand the best times to refer a patient to a fellow specialist, let’s discuss some reasons and scenarios below:

1). Lack of Procedural Expertise or Technology

When it comes to healthcare, specialists often refer patients to other specialists. This happens for a variety of reasons, but one common one is a lack of procedural expertise or technology.

The goal is to connect each patient with the most qualified specialist for their condition. This ensures patients receive the safest and most effective care.

2). Regulatory or Payer Requirements

Regulatory statutes like Stark Law exceptions and payer mandates often dictate when healthcare providers must refer patients elsewhere for certain treatments, tests or equipment. This system aims to provide appropriate, unbiased care while controlling costs.

For example, the Stark Law is a federal regulation that prohibits physicians from referring Medicare patients for designated health services to entities in which they have a financial interest. This law has exceptions that require referrals in certain situations.

One such exception is for Medicare patients needing durable medical equipment (DME) or advanced imaging services like MRI or CT scans. In these cases, the referring physician must send the patient to an approved, independent provider for those services.

This referral process ensures patients receive care from qualified providers without conflicts of interest influencing the referral decision. It helps maintain objectivity and prioritizes the patient’s best interests.

In addition…

Insurance payer rules like prior authorization requirements or in-network restrictions also drive many specialist referrals. If a procedure or service requires pre-approval or must be performed at specific in-network facilities, the referring doctor has no choice but to make that referral per the payer’s guidelines.

3). Patient Preference or Cultural Needs

When it comes to health care, it’s not just about skills and know-how. Patient needs and wants play a big role too. That’s why healthcare specialists may refer patients to other specialists at times.

One key reason is patient choice. Some want a specialist who gets their way of life and beliefs. Like, a female patient may feel more at ease with a female specialist for some check-ups. Or someone who speaks their tongue may be a better fit to make sure they grasp the whole health plan.

Language and cultural barriers can also lead to referrals. A cardiologist who only speaks English may refer a Spanish-speaking patient to a bilingual colleague. This allows the patient to communicate symptoms and understand treatment plans more easily.

At the end of the day, specialists just want their patients to get the best care possible. Sometimes that means looping in an expert who’s a better fit, culture-wise or just vibe-wise. It’s all about keeping the patient’s needs first.

4). High-Risk or Complex Comorbidities

Healthcare specialists also refer patients to other specialists when dealing with high-risk or complex comorbidities. Comorbidities mean having two or more medical conditions in one patient. Dealing with overlapping conditions can be tough for a single specialist. Therefore, it often needs help from different specialists who work together.

Sometimes, a patient’s primary condition is compounded by additional health issues. This makes their overall medical situation more complicated. In such cases, the primary care doctor or specialist may send the patient to another specialist for shared care.

For example, a diabetic patient with renal failure might be referred to a nephrologist (kidney specialist) to help manage the kidney-related complications alongside the primary care provider managing the diabetes.

By involving specialists with expertise in specific areas, healthcare providers can ensure that patients receive comprehensive and coordinated care. This teamwork helps manage complex medical situations better.

5). Legal or Risk Management

Many patients are referred to specialists by their healthcare providers for legal or risk management reasons. This means that the provider wants to make sure they are giving the patient the best possible care and avoiding potential medical mistakes that could lead to a lawsuit.

Say a patient comes to their family physician with stomach pain. The doctor examines them but isn’t sure if it’s something routine like acid reflux or a more serious issue like appendicitis. To ensure the patient gets the right diagnosis and treatment, the family physician refers them to a gastroenterologist who focuses on digestive health.

The takeaway is that referring to specialists is often done to get patients the best quality care for their specific health needs. It also reduces the potential for errors that could lead to lawsuits and other legal issues. Doctors want what’s best for their patients while also making sure they don’t expose themselves to excess risk.

6). Emergent Complications

Healthcare specialists often refer their patients to other specialists for emergent complications that arise during treatment. This means that a patient’s condition suddenly and unexpectedly worsens while under the care of one doctor, requiring urgent attention from another specialist.

For example, a patient with stomach ulcers sees a gastroenterologist for treatment. But during the course of care, one of the ulcers perforates or ruptures, creating a life-threatening emergency. The gastroenterologist immediately refers the patient to a trauma surgeon who can operate right away to repair the perforation.

The same is true across healthcare. A psychiatrist treating a suicidal patient may need to urgently involve an endocrinologist and psychiatric hospital if a thyroid storm suddenly develops.

In this way, emergent complications often require a team of specialists with focused expertise to provide the best patient care and prevent catastrophic outcomes. Referrals allow doctors to rapidly deploy the right specialist for the situation at hand.

7). Participation in Clinical Trials

Clinical trials are research studies that test new treatments or drugs to see if they are safe and effective. They are an important way for doctors to gain more knowledge and provide patients access to cutting-edge therapies.

For example, a dermatologist treating a patient with severe psoriasis may refer them to an oncologist running a clinical trial of a new biologic medication. The oncologist is testing whether this new drug can clear up stubborn plaques better than existing treatments. By enrolling in the study, the patient gains a chance to try this promising new option. They also get carefully monitored care from the expert trial doctors. And they are helping advance medical research that could benefit many future patients.

How to Refer a Patient to Another Specialist?

Referring a patient takes coordination, but is manageable if you break it down. This quick how-to guide will walk you through making a seamless referral:

1⃣

Document Medical Necessity & Obtain Informed Consent

➜ Document the Reason for Referral: Include details like the clinical findings, test results, and any treatments that didn’t work. This is important for legal and insurance purposes.

➜ Explain the Referral to the Patient: Clearly discuss why the referral is needed, the risks, benefits, and any alternatives.

➜ Obtain Verbal Consent: Get the patient’s agreement after explaining the referral, and make a note of it (e.g., “Patient agreed after explanation”).

➜ Provide Written Summary: Send a written summary of the referral and the discussion to the patient through a portal or email to ensure they understand.

2⃣

Coordinate with the Receiving Specialist

➜ Contact the Specialist: Before sending the referral, make sure the specialist accepts the patient’s insurance, has room for new patients, and agrees with the medical reasoning for the referral.

➜ Use Secure Communication: Use a HIPAA-compliant system like EHR messaging to maintain patient confidentiality.

➜ Share Relevant Records: Send all necessary patient records electronically, including test results, imaging, and progress notes, to avoid repeating tests.

3⃣

Prioritize Urgency & Define Responsibilities

➜ Categorize Referrals by Urgency:

• Emergent: Schedule immediately for life-threatening conditions (e.g., unstable angina).
• Urgent: Schedule within 72 hours for serious conditions (e.g., new cancer diagnosis).
• Routine: Schedule within 14–30 days for stable conditions (e.g., osteoarthritis).

➜ Define Responsibilities: Clarify, in writing, who is responsible for the patient’s care during the referral process, including tasks like prescribing medications and monitoring symptoms.

4⃣

Streamline Appointment Scheduling

➜ Train Staff for Scheduling: Ensure your team is trained to help patients book appointments while still in the office, especially for urgent referrals.

➜ Provide Appointment Details: Give the patient all the necessary details, including the specialist’s contact info, office location, and insurance pre-authorization info (if needed).

➜ Track Follow-Up: Use EHR tools to set reminders for follow-ups and ensure appointments are not missed or overdue.

5⃣

Use Standardized Referral Agreements

➜ Create Referral Agreements: Set up agreements with specialists that include:

• Timeline: When the initial consultation and report should happen (e.g., consult within 7 days, report within 48 hours).
• Communication Protocol: A clear way to contact specialists for urgent updates (e.g., direct phone line).
• Billing Responsibilities: Avoid duplicate charges for shared tests.

6⃣

Monitor Specialist Performance

➜ Track Specialist Performance: Monitor the timeliness of consultation reports and patient outcomes through your system (EHR).

➜ Address Delays: If the specialist misses deadlines:

• Discuss Privately: Start by addressing the issue directly with the specialist to understand any workflow barriers.
• Escalate If Needed: If the problem continues, consider escalating it to a peer review committee or ending the referral relationship.

7⃣

Navigate Insurance Barriers

➜ Out-of-Network Referrals: If an out-of-network specialist is necessary:

• Submit a Letter of Medical Necessity to the insurance company to explain why the referral is important.
• Use State Laws: Cite relevant state laws (e.g., New York’s Emergency Surprise Bill Law) that support out-of-network referrals.

8⃣

Document Patient Refusals

➜ Document the Refusal: If a patient declines a referral, make a note of the reason (e.g., transportation issues).

➜ Offer Alternatives: Suggest other options, like telehealth consultations, to meet the patient’s needs.

➜ Reassess at Follow-Up: During follow-up visits, check if the patient’s concerns have been addressed, and reassess the situation as necessary.

Patients have the choice of whether or not to see a specialist if their physician recommends it. Should they decide not to go, the doctor will inquire as to why at their next appointment and document the reason. This concludes the referral process, however providers can still urge patients to reconsider seeing specialists later on if they have a change of heart.

Key Regulations Governing Referrals

Healthcare specialists in the United States often need to refer patients to other specialists for optimal care. However, there are important legal considerations around these referrals that specialists should understand.

Stark Law (Physician Self-Referral Law)

The Stark Law has a section called the Physician Self-Referral Law. This law generally prohibits doctors from referring patients to other healthcare providers for certain “designated health services” if the doctor has a financial relationship with that provider.

For example, if a cardiologist has an ownership stake in a diagnostic imaging center, they cannot refer patients to that imaging center for MRIs, CT scans, etc.

Specialist-to-Specialist Referrals: When are they allowed?

While the Stark Law aims to prevent improper financial relationships from influencing referrals, it does not prohibit all specialist-to-specialist referrals. In fact, these referrals are permitted as long as there is no improper financial incentive involved.

For example, if a cardiologist refers a patient to an orthopedic surgeon for a knee replacement, this referral would be allowed under the Stark Law, provided that the cardiologist does not have an ownership interest in the orthopedic surgeon’s practice or receive any financial compensation for the referral.

Exceptions to the Stark Law

The Stark Law provides several exceptions that allow physicians to refer patients for DHS, even when a financial relationship exists. Some of these exceptions include:

Referrals within the same group practice: If both the referring physician and the specialist are part of the same group practice, the referral is permitted.

Medically necessary services: Referrals for services that are deemed medically necessary for the patient’s treatment are allowed, even if a financial relationship exists.

Certain compensation arrangements: The Stark Law provides exceptions for specific compensation arrangements, such as bona fide employment relationships or personal service arrangements, as long as they meet certain requirements.

The key is that specialists can freely refer patients to other specialists, as long as the referring provider does not stand to improperly profit off that referral.

Anti-Kickback Statute (AKS)

The AKS makes it illegal for healthcare providers to receive any sort of compensation, whether financial or otherwise, in exchange for patient referrals. This includes referrals between specialists.

Ethical Guidelines (AMA)

The American Medical Association’s Code of Medical Ethics offers clear guidance on referrals. It states that referrals should be based on the patient’s needs, not the physician’s financial interests. As specialists, we have a duty to recommend the most appropriate doctor for our patient’s condition, not the one who provides us the greatest financial incentive.

For example, if I am a cardiologist treating a patient who could benefit from seeing a gastroenterologist for an issue unrelated to their heart, I should refer them to the GI doctor best suited to treat their condition. I should not refer them to a GI doc just because he and I share ownership in an ambulatory surgery center. That would constitute self-referral and violate ethical principles.

The key is to think, “What physician would I send a family member to for this issue?” That should guide your referral choice. Always act in the patient’s best medical interest, not your own financial interest. Document your rationale for referrals to show you considered quality of care.

Making referrals based on financial gain erodes patient trust and violates our ethical responsibility as physicians. But when we refer with integrity, we uphold our duty to put patients first.

Who Receives Reimbursement? Referring Specialist or Receiving Specialist?

When a specialist refers a patient to another specialist for care, who gets paid for what? This is an important issue for specialists to understand.

The Receiving Specialist Bills for Their Services

The specialist who directly treats the patient can bill for the care they provide. This includes things like:

• Consultations
• Procedures
• Tests
• Follow-up care

So if a cardiologist refers a patient to a surgeon for bypass surgery, the surgeon can bill for performing the surgery.

The Referring Specialist Bills Only for Their Own Services

The referring specialist can only bill for the services they personally delivered prior to the referral. For example, they could bill for:

• The initial patient evaluation
• Diagnostic tests they performed
• Office visits prior to the referral

In the surgery example, the referring cardiologist could bill for the initial consult and tests leading to the referral. But not the surgery itself.

References:

• CMS Stark Law (Physician Referrals)
• HHS OIG Anti-Kickback Statute (Fraud & Abuse Laws)
• AMA Ethics on Referrals – Opinion 1.2.3 (Consultation, Referral & Second Opinions)
• Medicare Claims Processing Manual-Chapter 12