Case of the
I Need the Rest of My Money -Solved

The answer can be found in Chapter 7, under the button  Allowed Amounts.

The health carrier issued such a low payment because the Allowed Amount was much lower than the billed amount. 

Allowed Amount is key to setting expectations for payment. Health carriers do not just accept the amount that each provider chooses to bill. EVERY claim is re-priced to determine if the amount billed is in-line with the amount the health carrier will allow for that same procedure, service or treatment.  

Since this was an out of network provider and unless Peggy had a history of billing this exact same procedure to the exact same health carrier, she would have had no idea what the health carrier would deem to be the Allowed Amount. This means, she really had no way to determine what the patient’s upfront payment should be or what the health carrier would reimburse on that claim.

This case just screams for Pre-approval, a Gap Exception and/or a Letter of Agreement.

Since Peggy failed to obtain some type of agreement with the health plan, in advance of service, she should have at least anticipated how Allowed Amount would affect payment. 

Peggy should have consulted the patient about her expectations for payment, including the possibility of additional out of pocket costs. Every patient should have a clear understanding of costs, upfront, with no surprises.  No patient should be blindsided with a huge, unexpected, balance due bill.

In this case, Peggy should have tried to negotiate with the health carrier. If that failed, she should have presented clear options for the patient, including:

  •  Full Payment is required upfront.
  • Acceptance of 30% upfront, patient will be responsible for any remaining balance after the carrier has paid their portion.
  • If not paid as expected, claim can be appealed but the patient would be responsible for any remaining balance if the appeal is unsuccessful.
  • The provider will accept the plan's payment as payment in full and adjust off the balance.   
  • Patient can consult their provider directory and switch to an in-network provider in order to minimize costs.


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