Maximizing Patient Collections

A Complete Guide to Collecting Self-Pay Accounts

Contents
Section I. Helping your patients understand their billing and payment responsibilities -
This booklet, produced by the American Medical Association, contains a wide variety of tools
and information to help your practice do a better job of collecting on patient accounts. Includ-
ed are sample forms that you can personalize for your practice, including patient registration
sheets, new patient welcome letters, insurance verification forms and appeal letters.

Section II. Understanding your health insurance policy and payment practices - The AMA
and OSMA produced this brochure to help you educate your patients about their health in-
surance coverage. You can photocopy this brochure and use it as a patient handout or bill
stuffer.

Section III. Talking to patients about their financial responsibilities - Verbal prompts that
staff can use to help them be more successful when talking to patients about their financial
obligations.

Section IV. Calling patients about past due accounts - Step by step guidelines to help staff
more easily and more effectively contact patients about past due accounts.

Section V. Legal Aspects of Patient Collections - A brief overview of state and federal laws
regarding collections prepared by the OSMA Legal Services Group.
Helping your patients
understand their
billing and payment
responsibilities
 Table of contents

Topic Page Number

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Pre-registration/appointment scheduling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Sample form: New patient registration sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Practice Web site . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Welcome letter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Sample form: New patient welcome letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Insurance verification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Sample form: Employer/insurance verification information form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Sample form: Patient/insurance coverage verification form. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Appointment reminder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Patient check-in. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Patient check-out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Sample form: Patient responsibility form (2-sided form) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Sample form: Patient responsibility form (1-sided form) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Claim processing/patient invoice/claim collections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Sample form: Physician practice claims management process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Physician appeal letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Sample form: Pre-appeal letter requesting additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Sample form: Appeal letter to the payer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Sample form: Patient notification of a claim denial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Sample form: Confirmation of a claim denial rationale to the payer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Patient education opportunity grid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

 Introduction
Helping your patients understand their billing
and payment responsibilities

Physicians and their office staff are encouraged to involve and educate patients about their medical treatment decisions and
payer payment policies and procedures (for most patients, their payer is generally a health insurance company). Industry
trends indicate that both payers and employers are shifting more of the cost and responsibility of health care treatment and
payment to the patient. In response to this shift, physicians and their office staff need to consider proactively establishing
and revising their practice’s payment and collections policies accordingly. The established policies in this booklet will assist
physicians and their office staff in educating patients about complying and consistently adhering to the physician practice
and payer requirements. Physicians and their office staff need to work with patients by sharing with each patient:
What personal and insurance information the practice needs to process the patient’s
bill in order to receive accurate payment
What is the co-payment, deductible or co-insurance
How the physician is paid
What is coordination of benefits and how it occurs
What happens if the payer does not pay or only pays a portion of the medical bill
Why a payer may not pay for medical treatment
The effort that the practice expends on behalf of the patients, in order to send the patients’ bills on
time to their respective payer for payment
This booklet lists examples of patient education opportunities and contains tools for physicians and their office staff.
By implementing some or all of these resources, a practice encourages patients to take a greater role in their medical
treatment decisions and payment.
The physician and the office staff should review the practice’s current claims management cycle to determine which
patient education opportunities compliment the practice’s existing claims management processes. Additionally, the
physician and the office staff should consider which patient opportunities are best performed on a recurring basis to
encourage increased patient compliance.
The patient education opportunity grid is located on page 27. This grid provides a snapshot of the various
opportunities and ways for the physician office staff to provide patient education about the practice’s policies,
procedures and expectations.

Co-payment – The cost-sharing part of your bill that is a fixed dollar amount designated by your payer
(i.e., insurance company, health plan) that is your responsibility to pay at each visit (also known as
“co-pay”). Common co-payment rates are $10 or $20 per visit, but be aware that co-payment rates
vary from payer to payer.
Deductible – The amount of cost sharing that you must pay for medical services often before your
payer starts to pay.
Co-insurance – The part of your bill, in addition to a co-pay, that you must pay. Co-insurance is usually
a percentage of the total medical bill—for example 20 percent.

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The American Medical Association (AMA) has resources available to help physicians and their office staff with
the claims management process. AMA members can visit www.ama-assn.org/go/psa to obtain complimentary copies
of several AMA products, including:
Appointment scheduling to improve your bottom line, a flyer that encourages front office staff to
obtain basic patient information before the patient visit to allow the verification of the patient’s
health insurance information in order to improve the practice’s administrative efficiency.
Understanding your health insurance policy and payment practices, a flyer created to help patients
better understand their health insurance policy and the health care payment processes.
Prepare that claim, a booklet designed to help physicians and their office staff review the efficiency
of their current claims management process.
Appeal that claim, a booklet which explains the process of appealing an underpaid, delayed or
inappropriately denied claim and includes claim appeal form letters for modification by the practice.

2
 Pre-registration/appointment scheduling
Patient education opportunity #1
Pre-registration of a patient is one opportunity for a practice office staff to collect and accurately enter into the practice
management database the patient’s demographic and payer-specific information. A pre-registration checklist may be
used by the practice office staff to assist in the collection of the pertinent information required to verify the patient’s
eligibility and cost-share of the physician service and/or procedure. The cost-share information may include the co-
payment, deductible and/or co-insurance information from the patient’s health insurance plan. A sample of a new patient
information sheet is found on page 5. A patient could confirm this information by signing a similar form during the
patient check-in process to ensure accuracy.

Practice resource tip: The Appointment scheduling to improve your bottom line flyer encourages
front office staff to obtain basic patient information before the patient visit to allow the
verification of the patient’s health insurance information. This will improve the practice’s
administrative efficiency. AMA members can visit www.ama-assn.org/go/psa to download a
complimentary flyer.

Gathering the patient’s demographic and insurance information and verifying patient coverage and cost-sharing
requirements before the scheduled visit allows extra time for the physician office staff to ensure that a prompt and
complete claim is submitted to the payer. A complete and accurate claim that is submitted timely to a payer may
help eliminate the need for staff-intensive follow up and collections efforts.

Pre-registration
When a patient calls the practice to schedule an appointment, the physician office staff is encouraged to identify
whether the patient is new to the practice/physician, an existing patient or a referral from another physician.
The following information may then be gathered by the physician office staff from the patient (as appropriate):

New or referral patient

Identify the specific reason for the patient visit
Record the patient’s full name as it is spelled on his/her insurance card
Gather the general patient registration information, such as the patient’s demographics
and payer information. This information includes:
— name of the payer
— type of plan
— policy holder and/or participant name
— identification number
— group/plan
— policy number
— payer telephone number for benefit verification

3
Pre-registration/appointment scheduling, continued

Schedule a convenient appointment time for the patient and physician

Collect the patient’s contact information and his/her preferred place of contact
Review the practice’s payment policy
Indicate which credit cards are accepted by the practice
Inform the patient that, at the time of the appointment, he/she should bring in an updated insurance
card and drivers license, or another type of photo identification
Record the referring physician’s contact information, if appropriate
Remind the patient that the referral authorization, records (e.g., child’s immunization record)
and/or test results should be available at the time of the visit
Remind the patient, at the time of the appointment, to bring in all current medications
Request that the patient complete the history form that will be placed in the mail or provide the
Web site where the patient can download the form prior to the appointment
Identify any additional practice policies (i.e., prescription refills)
Provide the patient with a contact number to use, if the patient is unable to make the scheduled
patient visit or has additional administrative and/or clinical questions
Provide the practice’s Web site address for additional resources

Established patient
Record or confirm the patient’s full name as it is spelled on his/her insurance card
Identify the specific reason for the patient visit
Schedule a convenient appointment time for the patient and physician
Record any change in the patient’s registration information, such as the patient’s demographics and
payer information or reconfirm that the information remains the same
Reconfirm the practice’s payment policy
Indicate which credit cards are accepted by the practice
Collect or remind the patient of any outstanding balance
Reconfirm any additional practice policies (i.e., prescription refills)
Provide the patient with a contact number to use, if the patient is unable to make the scheduled patient
visit or has additional administrative and/or clinical questions
Remind the patient that he/she should bring in an updated insurance card and drivers license or
another type of photo identification at the time of the visit
Collect the patient’s outstanding balance

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 New patient information sheet

PATIENT INFORMATION

Name: (First) (MI) (Last)

Date of Birth Age Sex: M F Marital Status: S M W D
Address: (Street)
(City, State, ZIP)
Phone #: Social Security #: Driver License #:
Work #: Employer:
Employer’s Address:
Referring Physician: If Student, School Name: Full/Part Time

RESPONSIBLE PARTY OR SPOUSE INFORMATION

Name: Relationship to Patient:

Address: (Street)
(City, State, ZIP)
Phone #: Social Security #: Driver License #:
Work #: Employer:
Employer’s Address:
Friend or Relative Not Living with You: Phone #:

INSURANCE INFORMATION

Medicare #: Medicaid #:
Insurance Co: Phone #:
Insurance Address:
Group #: Certificate or I.D. #:
Insured’s Name: Relationship to Patient: Self Spouse Dependent
Insured’s Employer: Phone #:
Employer’s Address:
Insured’s Social Security #: Date of Birth: Sex: M F

If the patient it covered by another insurance policy, please complete the following information for coordination of benefits. This information will enable your
insurance company to process your claim more quickly. Thank you!

INSURANCE INFORMATION

Insurance Co: Phone #:

Insurance Address:
Group #: Certificate or I.D. #:
Insured’s Name: Relationship to Patient: Self Spouse Dependent
Insured’s Employer: Phone #:
Employer’s Address:
Insured’s Social Security #: Date of Birth: Sex: M F

I hereby assign, transfer, and send over to {Name of Practice} all of my rights, title, and interest to my medical reimbursement benefits under my insurance
policy. I authorize the release of any medical information needed to determine these benefits. This authorization shall remain valid until written notice is given
by me revoking said authorization. I understand that I am financially responsible for all charges whether or not they are covered by insurance.

Patient’s Signature Date

Source: Mastering the Reimbursement Process, 3rd Edition, AMA Press, 2000. To order call (800) 621-8335.

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 Practice Web site
Patient education opportunity #2

Patients are looking for more convenience and communication options from their physicians through easier appointment
scheduling, prescription refills, access to test results, non-urgent consulting with nurses and physicians, as well as other
administrative and clinical options that may be accessed through the Internet. A practice’s Web site that contains contact
information, such as location, physician names and phone numbers, can be another essential practice management tool.
Physicians who choose to add one or more of these features to their Web-based tools may experience reduced telephone
calls and increased staff time to handle patient service. There are many potential cost-saving benefits of establishing a
secure Web site for the practice. Patient education and access opportunities1 that may be considered for placement on a
practice’s Web site may include:

Established patient and referral appointment scheduling

Identify the specific reason for the patient visit
Inform the patient that, at the time of the visit, he/she should bring in an updated insurance card
and drivers license or another type of photo identification
Collect the referring physician’s contact information, if appropriate

Patient account update

Gather or reconfirm the general patient registration information, such as the patient’s demographics
and payer information
Collect the patient’s contact information and his/her preferred place of contact
Request that the patient download and complete the history form prior to the visit

Practice policy information

Indicate the practice’s hours and holiday schedule
Review the practice’s payment policy
Identify any additional practice policies (i.e., prescription refills)
Indicate which credit cards are accepted by the practice
Provide a list of physicians’ names and specialties
Provide a list of payers and the associated products (i.e., PPO, POS, HMO, etc.)
that the physician accepts
Provide a list of hospitals with which the physician is affiliated
Inform the patient that, at the time of the visit, he/she should bring in an updated insurance card
and drivers license or another type of photo identification
Remind the patient that the referral authorization, records (e.g., child’s immunization record)
and/or test results should be available at the time of the visit
Remind the patient to bring in all current medications at the time of the visit

Patient online payments

Collect the patient’s outstanding balance

1 Clinical benefits may be experienced through patient-physician communication (i.e., online consultation, secure messaging), intra-office communication,
prescription handling, laboratory test request, results and review, along with other services.

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 Welcome letter
Patient education opportunity #3

A practice’s welcome letter provides an excellent opportunity to familiarize a new patient with an unfamiliar practice.
The simple gesture of sending a welcome letter may reduce new patient anxiety prior to the initial visit. A sample welcome
letter is found on page 8. Some practices have created a patient newsletter that they either send to all of their patients,
or make available for their patients to download from the practice’s Web site. These innovative communication tools can
build patient loyalty and serve as great ways to manage patients’ expectations of physicians and their office staff. A new
patient welcome letter can include patient education information that allows the office staff to:
Confirm the date and time of the scheduled visit
Provide a list of physicians’ names and specialties
Indicate the practice’s hours and holiday schedule
Provide the practice’s Web site address for additional resources
Provide a list of payers and the associated products (i.e., PPO, POS, HMO, etc.)
that the physician accepts
Provide the patient with a contact number to use, if the patient is unable to make the scheduled
patient visit or has additional administrative and clinical questions
Review the practice’s payment policy
Indicate which credit cards are accepted by the practice
Inform the patient that, at the time of the visit, he/she should bring in an updated insurance card and
drivers license or another type of photo identification
Remind the patient that the referral authorization, records (e.g., child’s immunization record) and/or
test results should be available at the time of the visit
Remind the patient to bring in all current medications at the time of the visit
Identify any additional practice policies (i.e., prescription refills)
Request that the patient complete the history form that is enclosed, or provide the Web site where
the patient can download the form prior to the visit
Provide a list of hospitals with which the physician is affiliated

Practice resource tip: The Understanding your health insurance policy and payment practices flyer
was created to help patients better understand their health insurance policy and the health care
payment processes. AMA members can visit www.ama-assn.org/go/psa to download a
complimentary copy.

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 New patient welcome letter
Date

Dear [name of patient],

Thank you for scheduling an appointment with Dr. [name] on [day], [date]. It is my pleasure to welcome you to
[name of practice] in advance of your first visit.
Following is some information that will help familiarize you with our practice.
[Practice name, address, phone, fax and Web site address]
Practicing physicians Specialty
[insert additional physicians and their specialty]
Business hours
[insert days and appropriate hours]
Contact person
[insert staff name, telephone and hours available]
Payment policy
It is our payment policy to collect the appropriate payment due from the patient at the time the
service is rendered. This may only be your co-payment, deductible and/or co-insurance, but we do
ask for payment at the time of your visit. We accept all major credit cards.
Co-payment – The cost-sharing part of your bill that is a fixed dollar amount designated by your
insurance company that is your responsibility to pay at each visit (also known as “co-pay”). Common
co-payment rates are $10 or $20 per visit, but be aware that co-payment rates vary from insurance
company to insurance company.
Deductible – The amount of cost sharing that you must pay for medical services often before your
health insurance company starts to pay.
Co-insurance – The part of your bill, in addition to a co-pay, that you must pay. Co-insurance is
usually a percentage of the total medical bill—for example 20 percent.
If you have any questions after reading this information, I will be happy to answer them for you prior to your visit by
telephone at [insert telephone number]. Also enclosed is a patient registration form and privacy form to be completed
prior to your scheduled visit. These forms may be faxed to [insert fax number] or you can bring them to your appointment.
Please bring the following information to your visit, if you have not already faxed or brought this information to the
practice prior to your scheduled visit:
Insurance card(s)
Drivers license or other photo identification
Completed patient history form
Completed privacy form
We appreciate your selecting Dr. [name] for your medical care, and will work hard to serve your needs.
Sincerely,

8
American Medical Association 2005.
 Insurance verification
Patient education opportunity #4

The best practice is to verify the patient’s insurance coverage (i.e., co-payment, deductible and co-insurance), which may
not be known at the time of the visit by all patients prior to the patient’s scheduled visit so that this information can
be confirmed with the patient. The goal is to manage the patient’s payment expectations before he/she arrives at the
practice to receive medical services.
Insurance verification, depending on the payer, can be performed by telephone (manual or automated), fax, online, or
through a Web portal (application service provider, clearinghouse, payer or other Web portal). A sample employer/
insurance verification information form can be found on page 10 and a sample patient/insurance coverage verification form
can be found on page 11. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) transaction standards
(270/271) will assist in the prompt confirmation of patient eligibility.

Practice resource tip: The Prepare that claim booklet is designed to help physicians and their
office staff review the efficiency of their current claims management process. AMA members can
visit www.ama-assn.org/go/psa to download a complimentary booklet.

Application service provider (ASP) – A company that contracts with a payer and/or physician practice to
supply software application and/or software-related services over the Internet via a browser. ASPs are also
commonly referred to as online transaction partners, Web-based claims portals and payer transaction partners.
ASPs allow physicians and payers, primarily health insurance companies, to connect and interact via the
Internet.
Clearinghouse – A private or public company that provides connectivity and often serves as a “middleman”
between physicians and billing entities, payers and other health care partners for transmission and
translation of claims information (primarily electronic) into the specific format required by payers.

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 Exhibit 5.2
Employer/insurance verification information form
Employer/Insurance Verification Information Form

Date:

Employer Name:

Employer Address:

Benefits Coordinator: Phone:

Insurance Carrier: Plan Name:

Policy #: Plan #: Group #:

Type of Plan: Traditional 80/20 HMO PPO Other:

Mail Insurance Forms to: Carrier Employer

Billing Address:

Contact Person: Phone Number:

Renewal Period – Medical Benefits and Limits Are Renewed on ( M/D/Y ): (Date):

Basic Coverage

Physician Payment Schedule: UCR RBRVS Other Data

Percentage of COB (ie, 80/20 ?): % Insurance Coverage % Patient Copayment

Annual Outpatient Deductible: Amount of Deductible Remaining:

Maximum Benefit:

Noncovered Services:

Diagnostic Benefits

Percentage of COB (ie, 80/20 ?): % Insurance Coverage % Patient Copayment

Annual Outpatient Deductible: Amount of Deductible Remaining:

Maximum Benefit:

Noncovered Services:

Major Medical Coverage

Annual Outpatient Deductible:

Amount of Deductible Remaining:

Maximum Benefit:

Noncovered Services:

Form Used: Company-Specific Form HCFA-1500

Notes:

Source: Mastering the Reimbursement Process, 3rd Edition, AMA Press, 2000. To order call (800) 621-8335.

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 Exhibit 5.3
Patient/insurance coverage verification form
Patient/Insurance Coverage Verification Form

Date: Practice: Verification By:

Patient Name: Account #:
Date of Birth: Social Security #:
Employer: Phone/Contact:
Accident Date: Accident Location:
Patient Care Plan
Dx: (1) (2)
Dx: (3) (4)
Patient Care Plans/Services:
Insurance Data
Insurance – 1
Billing Address:
Ins. Contact Name: Phone:
Policy #: Plan: Group:
Coverage Effective Dates – (From) (To)
Policyholder: Relationship:
Insurance – 2
Billing Address:
Ins. Contact Name: Phone:
Policy #: Plan: Group:
Coverage Effective Dates – (From) (To)
Policyholder: Relationship:
Basic Benefits Primary Secondary
1. Preexisting Wait Period
2. Annual Deductible Amount ($)
3. Deductible Paid to Date
4. Out-of-Pocket Expenses:
a. Coinsurance ( $ or % )
b. Copayment @ TOS?
5. Calendar Year Maximum: $ / days $ / days
6. Lifetime Maximum: $ / days $ / days
7. Remaining Benefits: $ / days $ / days
8. Medical Records Required? Y / N Y / N
9. Coordinate Benefits (X-Over)? Y / N Y / N
10. 2nd Opinion Requirements? Y / N Y / N
11. Verified with (name):
12. Phone # of Above:
13. Date Verified:
Procedures & Services Covered? Coverage Details / Limits
1. Office Services Y / N
2. Hospital Y / N
3. Consultations Y / N
4. ER Visits Y / N
5. Laboratory (Chem) Y / N
6. Procedures Y / N
7. Injections / Tx Y / N
8. Supplies Y / N
9. Drugs / Medications Y / N
10. Exclusions:

Source: Mastering the Reimbursement Process, 3rd Edition, AMA Press, 2000. To order call (800) 621-8335.

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 Patient appointment reminder (i.e., call, e-mail, postcard)
Patient education opportunity #5

The patient reminder call may consist of a voice recording (with prior permission from the patient). A prepared,
condensed message containing only the pertinent patient information can be available in the event of a voice
recording. The following information can be reconfirmed with the patient during the appointment reminder call:
Identify if the patient is new, existing or a referral
Identify the specific reason for the patient visit
Record or confirm the patient’s full name as it is spelled on his/her insurance card
Confirm the date and time of the scheduled patient visit
Inform the patient that, at the time of the visit, he/she should bring in an updated insurance card and
drivers license or another type of photo identification
Remind the patient that the referral authorization, records (e.g., child’s immunization record) and/or
test results should be available at the time of the visit
Remind the patient to bring in all current medications at the time of the visit
Provide the patient with a contact number to use, if the patient is unable to make the scheduled
visit or has additional administrative and clinical questions
Review the practice’s payment policy

Sample practice payment policy script

“It is our payment policy to collect the appropriate payment due from the patient at the time
the service is rendered. This may only be your co-payment and deductible, but we do ask for
payment at the time of your visit.”

Identify any additional practice policies (i.e., prescription refills)

Collect or remind the patient of any outstanding balance
Indicate which credit cards are accepted by the practice
Provide the practice’s Web site address for additional resources

12
 On-site patient check-in
Patient education opportunity #6

The on-site registration for a new or returning patient is minimal provided the patient’s demographic and insurance
information is recorded and verified prior to the scheduled patient visit. The physician office staff may:
Identify if the patient is new, existing or a referral
Identify the specific reason for the patient visit
Record the patient’s full name as it is spelled on his/her insurance card
Verify whether there has been any change in the patient’s health insurance information
(For a return or established patient)
Request any missing or incorrect patient information previously received
Make a copy of the patient’s health insurance card
Collect the patient’s contact information and his/her preferred place of contact
Review the practice’s payment policy
Indicate which credit cards are accepted by the practice
Collect or remind the patient of any outstanding balance
Request that the patient complete the history form
Identify any additional practice policies (i.e., prescription refills)
Explain and distribute the practice’s payment and privacy policies
Explain and receive a signed acknowledgement from the patient that should include the practice’s
policies on patient billing, primary and secondary payer processing and patient payment expectations
Explain when and how test results will be communicated back to the patient and receive a signed
waiver that acknowledges if the patient gives permission for leaving test results on an answering
machine or in a voice mail
Explain and collect the patient’s co-payment and/or deductible, if not collected during the
check-in process

13
 Patient check-out
Patient education opportunity #7

The patient checkout is a critical opportunity to educate patients regarding their payment responsibility and to make sure
that the patient understands the physician’s instruction. It will be extremely difficult to provide patient education and
manage the patient’s expectations at a later date. The physician office staff should:
Schedule a convenient follow-up appointment time for the patient and physician
Collect the patient’s contact information and his/her preferred place of contact
Review the practice’s payment policy
Indicate which credit cards are accepted by the practice
Collect or remind the patient of any outstanding balance
Provide patient with a contact number to use, if the patient is unable to make the scheduled patient
visit or has additional administrative and/or clinical questions
Explain when and how test results will be communicated back to the patient and receive a signed
waiver that acknowledges if the patient gives permission for leaving test results on an answering
machine or in a voice mail
Provide a physician referral form, obtain an authorization (if required by payer) and advise the patient
if the referred physician is considered out-of-network by his/her payer
Explain and collect the patient’s co-payment and/or deductible, if not collected during the
check-in process
Explain and complete the patient responsibility sheet
Determine and agree upon a payment plan with the patient, if the patient indicates he or she is unable
to make a payment for the procedures and/or services provided

A sample patient responsibility form that includes a payment policy and a glossary of terms is found on page 15.
The form is shown in two different layouts; each form can be adapted to fit the distinct practice requirements.

14
 Patient responsibility form
[Insert physician practice logo or letterhead]

[Insert physician practice name]

Payment policy
It is our payment policy to collect the appropriate payment due from the patient at the time the service is rendered.
This may only be your co-payment or “co-pay,” deductible and/or co-insurance according to your health insurance
company benefit plan, but we do ask for payment at the time of your visit.

We have not contacted your health insurance company, but anticipate the following payment responsibility.

We contacted your health insurance company ___________________________________________ for an estimate

of your health care benefits for the following procedure(s)/service(s).

________________________________________ _____________________________________
________________________________________ _____________________________________

Your health insurance company benefit plan indicates that you are responsible for
the following estimated charges:
The physician is considered (check one) in network out-of-network by your insurance company.

$ __________________ Deductible
$ __________________ Co-payment
$ __________________ Co-insurance
$ __________________ Other charge (s): _______________

Your plan policy indicates that a pre-admission approval or certification number is required. The physician office staff
received the following authorization number ________________________________ from your health insurance company.

Patient medical billing process

The physician office staff, as a courtesy to you, will submit a medical bill to your primary health insurance company for
processing. It is important to give your updated information to the physician office staff, since your complete and current
information is necessary to submit an accurate claim form to your health insurance company. The remaining claim will
be sent to a secondary health insurance company, if provided, after payment is received by the primary health insurance
company.
The physician office staff will mail to you a bill/invoice/statement that contains the total cost of your service(s) and/or
procedure(s) received during your office visit. You may expect this bill within ____ days. The health insurance company
payment will be deducted from the bill when it is received by the physician office staff.
You are responsible for any outstanding balance, such as non-covered charges as outlined in your health insurance policy.
These charges are listed on the Advance medical services payment agreement or Advanced beneficiary notice.

For questions about your bill, please call ______________________________________________ at

(_____) _________________________ Monday through Friday between the hours of ____ and ____.

15
American Medical Association 2005.
 Patient glossary of terms

Advance medical services payment agreement – If your health insurance company will not pay for a procedure or service,
the physician or hospital will request you review and sign an Advance medical services payment agreement. This notice
will assist you in determining whether you wish to have the procedure or service performed and how you prefer to pay for it.

Advanced beneficiary notice (ABN) – If Medicare will not pay for a procedure or service, the physician or hospital will
request you to review and sign an Advanced beneficiary notice. This notice will assist you in determining whether you
wish to have the procedure or service performed and how you prefer to pay for it.

Benefit – The amount your plan will pay a physician, group or hospital, as stated in your policy, toward the cost of the
procedure or service to be performed by the physician.

Bill/invoice/statement – The summary of your medical bill.

Claim – The form that the physician files with a health insurance company that details the services and procedures
performed by the physician, on your behalf, and other pertinent data that is required by the health insurance company
to receive payment.

Co-payment or “co-pay” – The part of your medical bill you must pay each time you visit the physician. This is a pre-set
fee determined by your health insurance policy.

Co-insurance – The part of your bill, often in addition to a co-pay, that you must pay. Co-insurance is usually a
percentage of the total medical bill—for example, 20 percent.

Deductible – The amount you must pay for medical treatment before your health insurance company starts to pay—
for example, $500 per individual or $1,500 per family. In most cases, a new deductible must be satisfied each calendar year.

In-network – The physician has a contract with the health insurance company to provide you with medical care. The
physician will submit your medical bill directly to the health insurance company for payment. However, you may be
responsible for a co-payment, deductible and/or co-insurance according to your health insurance company benefit plan.

Non-covered charges – Costs for medical treatment that your health insurance company does not pay. You may wish
to determine if your treatment is covered by your health insurance policy before you are billed for these charges by the
physician’s office.

Out-of-network – The physician is not contracted with the health insurance company to provide you with medical
treatment. You are responsible for the payment of the medical care. The physician may agree to submit your medical
bill directly to the payer for payment. However, you may be responsible for an increased co-payment, deductible,
co-insurance and/or additional charges according to your insurance company benefit plan.

Pre-admission approval or certification number – A number authorizing the health insurance company to pay benefits
for your care. You may need to obtain an approval number from your health insurance representative before you see the
physician in order for the health insurance company to pay for your medical treatment. Your physician office staff might
be able to help you obtain the approval from the health insurance company.

Primary health insurance company – The health insurance company that is responsible to pay your benefits first when
you have more than one health insurance plan.

Secondary health insurance company – The secondary health insurance company is not the first payer of your claims.
The remaining claim balance will be sent to a secondary health insurance company, if provided, after payment is received
by the primary health insurance company.

16
American Medical Association 2005.
 Patient responsibility form
[Insert physician practice logo or letterhead]
Payment Policy
It is our payment policy to collect the appropriate payment due
from the patient at the time the service is rendered. This may only
be your co-payment or “co-pay,” deductible and/or co-insurance,
but we do ask for payment at the time of your visit.
We have not contacted your health insurance company, but
anticipate the following payment responsibility.
We contacted your health insurance company
__________________________________________for an
estimate of your health care benefits for the following
procedure(s)/service(s).
________________________________________________
________________________________________________
________________________________________________
Your health insurance company benefit plan identifies that
you are responsible for the following estimated charges:
The physician is considered (check one)
in-network out-of-network by your insurance company
$_____________ Deductible
$_____________ Co-payment
$_____________ Co-insurance
$_____________ Other charge(s):____________
Your plan policy indicates that a pre-admission approval or
certification is required. The physician office staff received the
following authorization number ________________ from your
health insurance company.
Patient medical billing process
The physician office staff, as a courtesy to you, will submit a medical
bill to your primary health insurance company for processing.
It is important to give your updated information to the physician
office staff, since your complete and current information is
necessary to submit an accurate claim form to your insurance
company. The remaining claim will be sent to a secondary health
insurance company, if provided, after the payment is received by
the primary health insurance company.
The physician office staff will mail to you a bill/invoice/statement
that contains the total cost of your service(s) and/or procedure(s)
received during your office visit. You may expect this bill within
____ days. The health insurance company payment will be
deducted from the bill when it is received by the office staff.
You are responsible for any outstanding balance, such as non-
covered charges as outlined in your health insurance company
policy. These charges are listed on the Advance medical services
payment agreement or Advanced beneficiary notice (ABN).
Patient glossary of terms
Advance medical services payment agreement—If your health
insurance company will not pay for a procedure or service, the
physician or hospital will request you review and sign an Advance
medical services payment agreement. This notice will assist you in
determining whether you wish to have the procedure or service
performed and how you prefer to pay for it.
17
Advanced beneficiary notice (ABN) – If Medicare will not pay
for a procedure or service, the physician or hospital will request
you to review and sign an Advanced beneficiary notice. This
notice will assist you in determining whether you wish to have the
procedure or service performed and how you prefer to pay for it.
Benefit – The amount your plan will pay a physician, group or
hospital, as stated in your policy, toward the cost of the service or
procedure to be performed by the physician.
Bill/invoice/statement – The summary of your medical bill.
Claim – The form that the physician files with a health insurance
company that details the services and procedures performed by the
physician, on your behalf, and other pertinent data that is required
by the health insurance company to receive payment.
Co-payment or “co-pay” – The part of your medical bill you
must pay each time you visit the doctor. This is a pre-set fee
determined by your health insurance policy.
Co-insurance – The part of your bill, in addition to a co-pay,
that you must pay. Co-insurance is usually a percentage of the
total medical bill – for example, 20 percent.
Deductible – The amount you must pay for medical treatment
before your health insurance company starts to pay—for example,
$500 per individual or $1,500 per family. In most cases, a new
deductible must be satisfied each calendar year.
In-network – The physician has contracted a payment schedule
with the health insurance company to provide you with medical
care. The physician will submit your medical bill directly to the
health insurance company for payment. However, you may be
responsible for a co-payment, deductible and/or co-insurance
according to your health insurance company benefit plan.
Non-covered charges – Costs for medical treatment that your
health insurance company does not pay. You may wish to determine
if your treatment is covered by your health insurance policy before
you are billed for these charges by the doctor’s office.
Out-of-network – The physician is not contracted with the
health insurance company to provide you with medical treatment.
You are responsible for the payment of the medical care. The
physician may agree to submit your medical bill directly to the
payer for payment. However, you may be responsible for an
increased co-payment, deductible, co-insurance and/or additional
charges according to your insurance company benefit plan.
Pre-admission approval or certification number – A number
authorizing the health insurance company to pay benefits for
your care. You may need to obtain an approval number from
your health insurance representative before you see the doctor in
order for the health insurance company to pay for your medical
treatment. Your doctor’s office staff might be able to help you
obtain the approval from the health insurance company.
Primary health insurance company – The health insurance
company that is responsible to pay your benefits first when you
have more than one health insurance plan.
Secondary health insurance company – The secondary health
insurance company is not the first payer of your claims. The
remaining claim balance will be sent to a secondary health
insurance company, if provided, after payment is received by
the primary health insurance company.
For questions about your bill, please call
______________________________________________ at
( ) _________________________
Monday through Friday between the hours of ____ and ____.
American Medical Association 2005.
 Claim processing/patient invoice/claim collections
Patient education opportunity #8

The patient should be made aware of the time-intensive role the physician office staff undertakes in preparing and
submitting claims to secure payment for the patient’s medical treatment. Physician office staff follow the complex rules
of the patient’s health insurance policy when submitting the patient’s medical bill on time to his/her health insurance
company for payment. This helps to ensure that the patient will not have to pay for the health insurance company’s
portion of the covered medical care. Physician office staff should let the patient know that he/she may be asked for help,
if the medical bill is not paid in a timely manner by his/her health insurance company.
A sample of a physician practice claims management process is found on page 19.

18
 Sample claims management process

Registration Registration
1 Pre-registration
1 Pre-registration
2 Patient encounter Collect the patient’s demographic information and the health
insurance company’s information and accurately enter them into
3 Health insurance the practice management database.
benefit verification
2 Patient encounter
Make a copy of the patient’s health insurance card to obtain the
Clinical documentation patient’s health insurance information. For a return or established
4 Documentation of patient, verify whether there has been any change in the patient’s
services provided health insurance information. The practice’s payment and
privacy policies should be distributed to the patient at check-in.
5 Assignment of codes
3 Health insurance benefit verification
Call the health insurance company or verify on-line to confirm the
Registration
patient’s benefits, applicable deductibles and/or co-payments.
6 Patient check-out

Coding
7 Code verification Clinical documentation
and review
4 Documentation of services provided
8 Pre-authorization, Document in the medical record the patient’s history, symptoms,
pre-certification or diagnosis, and treatment plan, including appropriate tests that may
pre-determination
be ordered.

5 Assignment of codes
Billing
The physician and/or clinical staff assigns the appropriate International
9 Claim generation Classification of Disease–9th Edition–Clinical Modification (ICD-9-CM) code(s)
and AMA Current Procedural Terminology (CPT®)* code(s), documents these
10 Claim review
codes in the medical record and records code information on the
practice’s super bill.
Health plan
11 Claims processing,
adjudication and
payment

Collection International Classification of Disease – 9th Edition – Clinical Modification (ICD-9-CM) The standard diagnosis
coding system for health care claims coordinated by the National Centers for Vital and Health Statistics
12 Collections — (NCVHS). ICD-9-CM codes assist physicians in transforming verbal descriptions of diseases, injuries,
claim follow-up conditions and certain procedures into numerical destinations (diagnostic coding).

13 Posting of health Current Procedural Terminology (CPT®) A set of codes, descriptions and guidelines intended to describe
procedures and services performed by physicians and other health care providers. Each procedure or
insurance company’s service is identified with a five-digit code. The use of CPT codes simplifies the reporting of services.
payment
*
CPT is a registered trademark of the American Medical Association.
14 Claim appeal

19
Registration Registration
1 Pre-registration
6 Patient check-out
2 Patient encounter Collect the patient’s balance (eg, deductible, co-payment) and
schedule the next appointment.
3 Health insurance
benefit verification

Clinical documentation
Coding
4 Documentation of
services provided 7 Code verification and review
The practice coding professional verifies and reviews the codes
5 Assignment of codes provided by the physician and/or other clinical staff based on the
documentation in the medical record.
Registration
8 Pre-authorization, pre-certification or
6 Patient check-out pre-determination, as needed
The practice coding professional contacts the health insurance
Coding company for pre-authorization, pre-certification or pre-determination of the
patient’s benefit coverage prior to a procedure or service, which may
7 Code verification be required by the health insurance company. The practice coding
and review
professional documents the health insurance company’s authorization
8 number and supporting documentation and forwards this information
Pre-authorization,
to the staff person responsible for the billing function.
pre-certification or
pre-determination

Billing
9 Claim generation

10 Claim review

Health plan
11 Claims processing,
adjudication and
payment

Collection
12 Collections — Pre-authorization A prospective process to verify coverage of proposed care, and to establish covered
length of stay.
claim follow-up
Pre-certification A utilization management program that requires the member or the physician to
notify the health insurance company prior to a hospitalization, diagnostic test or surgical procedure.
13 Posting of health The notification allows the health insurance company to provide an authorization number.
insurance company’s Pre-determination A health insurance company requirement that a practice must request confirmation
payment from the health insurance company. In some cases this confirmation must be in writing, ensuring that
a service or procedure to be performed by the physician or health care provider is contained in the
patient’s benefit coverage.
14 Claim appeal
20
Registration Billing
1 Pre-registration
9 Claim generation
2 Patient encounter The practice billing professional enters the codes and fees accurately
as they appear on the practice’s super bill or patient encounter form
3 Health insurance and then generates a paper or electronic claim.
benefit verification
10 Claim review
The practice billing professional reviews each claim for completeness
Clinical documentation and accuracy before submitting it to the health insurance company.
4 Documentation of
services provided

5 Assignment of codes
Health plan
Registration
11 Claims processing, adjudication and payment
6 Patient check-out The health insurance company processes the claim and, if approved,
a payment may be routed to the practice along with a copy of the
Coding explanation of benefits (EOB). The original EOB is routed to
the patient.
7 Code verification
and review

8 Pre-authorization,
pre-certification or
pre-determination
Collections
12 Collections—claim follow-up
Billing The collections staff follows up with the health insurance company
after the claim is submitted to ensure it was received and is being
9 Claim generation
processed by the health insurance company.
10 Claim review
13 Posting of the health insurance company’s payment
The payment is verified and posted in the practice’s accounts receivable.
Health plan
14 Claim appeal
11 Claims processing, If the payment is deemed inappropriate, the practice should investigate
adjudication and why the claim was not paid appropriately and determine whether it
payment
should be appealed.

Collection
12 Collections —
claim follow-up

13 Posting of health
insurance company’s
payment

14 Claim appeal
21
 Physician appeal letter
Patient education opportunity #9

The AMA encourages physicians to assist their patients when a payer issues a medical necessity denial that is
counterintuitive to the treating physician’s assessment of the necessity of the service. The patient should be kept informed
of the physician’s efforts to resolve the denial of patient services, since a need may arise, when the patient should be
involved in the appeal of his/her claim denial by the payer, such as a medical necessity denial. The physician office staff
should consider sending the patient a copy of the claim appeal letters that are sent to the payer.

Practice resource tip: The Appeal that claim booklet explains the process of appealing an
underpaid, delayed or inappropriately denied claim and includes claim appeal form letters
for modification by the practice. AMA members can visit www.ama-assn.org/go/psa to
download a complimentary copy.

The following steps and sample forms are designed to keep the patient informed about a claim appeal effort conducted
by the physician office staff on the patient’s behalf. The physician office staff may consider including the following steps
in their claims management appeal process:
Copy the patient on the initial medical necessity appeal letter that requests the rationale for the denial
by the payer. A sample pre-appeal letter requesting additional information letter is found on page 23.
Send a follow-up appeal letter that contains the clinical support for the procedure or service in response
to the payer’s stated rationale. A sample appeal letter to the payer letter is found on page 24.
Send a notification letter to the patient requesting his/her involvement. A sample of a patient
notification of an appeal to a payer letter is found on page 25.
Send a confirmation follow-up appeal letter to the payer with the adverse decision clearly stated and
copy the patient. A sample of a confirmation of a claim denial rationale to the payer letter is found
on page 26.

22
 Pre-appeal letter requesting additional information

Date

Attn:
Provider Appeals Department
Address
City, State, ZIP Code

Dear [Director of claims/medical director]:

On [date denial letter received], I received a letter from [name/title of sender] stating [treatment/service] was denied
for [patient name] due to lack of medical necessity.
The American Medical Association (AMA) defines medical necessity as: “health care services or products that a prudent
physician would provide to a patient for the purpose of preventing, diagnosing or treating an illness, injury, disease or its
symptoms in a manner that is: (a) in accordance with the generally accepted standards of medical practice; (b) clinically
appropriate in terms of type, frequency, extent, site and duration; and (c) not primarily for the convenience of the patient,
treating physician or other health care provider.”
We request that [payer] use the AMA definition of medical necessity when making determinations on medically
necessary treatments and/or health care services.
The accompanying explanation of benefits did not provide adequate information to support this denial. Therefore, I am
requesting the following information: [list requested information].
Please furnish the source and content of the information on which the medical necessity denial decision was based.
Also, please provide a description of the information necessary for approval of the treatment/service.
We also would appreciate copies of any expert medical opinions that have been secured by your company about
treatment/service of this nature and its efficacy so the treating physician may respond to its applicability to this
patient’s condition.

Thank you for your assistance.

Sincerely,

[Patient accounts manager]

cc: Patient’s name

Source: Claims management tools CD-Rom, American Medical Association 2003. AMA members can visit www.ama-assn.org/go/psa to download a
copy of this letter.

23
 Appeal letter to the payer

Date

Attn:
Provider Appeals Department
Address
City, State, ZIP Code

Re: Claim denial

Insured/plan member:
Payer identification number:
Group number:
Patient name:
Claim number:
Claim date:

Dear Mr./Mrs.:
We are appealing your decision and request reconsideration of the attached claim that you denied on [date].
We feel these charges should be allowed for the following reason(s):
[insert reasons]

Thank you for reviewing and reversing this claim denial. If you require any additional information, please contact
[staff name] at [telephone number] between the hours of [insert time period that staff is available to answer calls,
eg, 8:00 a.m. – 5:00 p.m.].

Sincerely,
[Physician name]

Source: Claims management tools CD-Rom, American Medical Association 2003. AMA members can visit www.ama-assn.org/go/psa to download a
copy of this letter.

24
 Patient notification of a claim denial

Date

Mr./Mrs./Ms.
Address
City, State, ZIP Code

Dear [patient name],

This letter is being sent to notify you that your health insurance company denied the following service [procedure name]
that was provided to you on [date].
Our office filed an appeal challenging your health insurance company’s position and we are requesting that the claim be
reconsidered for payment. A copy of the appeal letter is enclosed for your reference.
Although our office will follow up on the status of the appeal, we request that you contact your health insurance company
regarding this matter. Our experience has proven that health insurance companies are most responsive to the patient’s
request. Your contacting the health insurance company will expedite the review process as well as the likelihood of claim
payment. If your health insurance company refuses to issue payment despite our appeal efforts, you may need to pursue
the matter further with assistance from your company’s benefits department and/or state insurance commissioner’s office.
We appreciate your cooperation through this appeal process. Should you have any questions, please contact
[staff name/department] at [telephone number].

Sincerely,
[Practice contact name/department]

enclosure

Source: Claims management tools CD-Rom, American Medical Association 2003. AMA members can visit www.ama-assn.org/go/psa to download a
copy of this letter.

25
 Confirmation of a claim denial rationale to the payer

Date

Attn:
Provider Appeals Department
Address
City, State, ZIP Code
Re: Medical necessity denial
Insured/Plan member:
Payer Identification Number:
Group number:
Patient name:
Claim number:
Claim date:

Dear Mr./Ms.:
This letter confirms our conversation today about the care of [patient name] and requests a review of this clinically
inappropriate denial. As a physician, I have an ethical and legal duty to advocate for any care I believe will materially
benefit my patients. As you will recall, I recommended [describe procedure, course of treatment referral etc.], which
I believe is medically necessary for the following reasons: [reason procedure or service was performed].
[Payer] has made a decision to deny this care. I will inform the patient in writing of this decision, including the
alternative treatment options: [list alternative treatment options]. In addition, I will include this letter as part of the
patient’s medical record.
If this is not accurate, please advise me promptly. Again, I believe this [procedure, test, course of treatment] is
medically necessary. In my clinical judgment the [plan]’s denial of coverage is not in the best interest of the patient.
In the event that [patient name], the family or an employer wishes to hear your reasoning, I will refer them directly
to you to avoid any misrepresentation.

Sincerely,
[Physician name]

cc: patient name

Source: Claims management tools CD-Rom, American Medical Association 2003. AMA members can visit www.ama-assn.org/go/psa to download a
copy of this letter.

26
 Patient education opportunity grid
Column 1 – Pre-registration/appointment scheduling (patient education opportunity #1)
Column 2 – Practice Web site (patient education opportunity #2)
Column 3 – Welcome letter (patient education opportunity #3)
Column 4 – Insurance verification (patient education opportunity #4)
Column 5 – Appointment reminder (patient education opportunity #5)
Column 6 – Patient check-in (patient education opportunity #6)
Column 7 – Patient check-out (patient education opportunity #7)
Column 8 – Claim processessing/patient invoice/claim collections (patient education opportunity #8)
Column 9 – Physician appeal letter (patient education opportunity #9)

1 2 3 4 5 6 7 8 9
Identify if the patient is new, existing or a referral X X X
Identify the specific reason for the patient visit X X X X
Record the patient’s full name as it is spelled on his/her insurance card X X X
Gather the general patient registration information, such as the patient’s
demographics and payer information X X
Complete insurance verification X
Schedule a convenient appointment time for the patient and physician X X X
Collect the patient’s contact information and his/her preferred place of contact X X X X
Review the practice’s payment policy X X X X X X
Indicate which credit cards are accepted by the practice X X X X X X
Collect or remind the patient of any outstanding balance X X X X X
Inform the patient that, at the time of the visit, he/she should bring in an updated
insurance card and drivers license or another type of photo identification X X X X
Collect and record the referring physician’s contact information, if appropriate X X
Remind the patient that the referral authorization, records (e.g., child’s immunization
record) and/or test results should be available at the time of the visit X X X X
Remind the patient to bring in all current medications at the time of the visit X X X X
Request that the patient complete the history form that will be placed in the
mail or provide the Web site where the patient can download the form prior to
the visit X X X X
Identify any additional practice policies (i.e., prescription refills) X X X X X
Provide the patient with a contact number to use, if the patient is unable to make
the scheduled visit or has additional administrative and clinical questions X X X X X
Provide a list of physicians’ names and specialties X X
Indicate the practice’s hours and holiday schedule X X
Provide a list of hospitals with which the physician is affiliated X X

27
Patient education opportunity grid (continued)
1 2 3 4 5 6 7 8 9
Provide the practice’s Web site address for additional resources X X X
Provide a list of payers and the associated products (i.e., PPO, POS, HMO, etc.)
that the physician accepts X X
Confirm the date and time of the scheduled patient visit X X
Verify whether there has been any change in the patient’s health insurance
information (For a return or established patient) X
Request any missing or incorrect patient information previously received X
Make a copy of the patient’s health insurance card X
Explain and distribute the practice’s payment and privacy policies X
Explain and receive a signed acknowledgement from the patient that should include
the practice’s policies on patient billing, primary and secondary payer processing and
patient payment expectations X
Explain when and how test results will be communicated back to the patient and
receive a signed waiver that acknowledges if the patient gives permission for leaving
test results on an answering machine or in a voice mail X X
Provide a physician referral form, obtain an authorization (if required by payer)
and advise the patient if the referred physician is considered out-of-network by X
his/her payer
Explain and collect the patient’s co-payment and/or deductible, if not collected X X
during the check-in process
Explain and complete the patient responsibility sheet X
Determine and agree upon a payment plan with the patient, if the patient indicates
he/she is unable to make a payment for the procedures and/or services provided X
Explain the claim processing/patient invoice/claim collections processes X
Copy the patient on the initial medical necessity appeal letter that requests the
rationale for the denial by the payer X
Send a follow-up appeal letter that contains the clinical support for the procedure
or service in response to the payer’s stated rationale X
Send a notification letter to the patient requesting his/her involvement X
Send a confirmation follow-up appeal letter to the payer with the adverse decision
clearly stated and copy the patient X

28
American Medical Association Private Sector Advocacy 515 North State Street, Chicago, Illinois, 60610
phone: 312 464-5000
www.ama-assn.org/go/psa

GEA:05-0012:2500:10/05
Understanding your health insurance policy and
payment practices
As a patient, you should be involved in your medical treatment and in paying for your health care. This flyer will help you
understand your health insurance policy and the health care payment process.
Your doctor’s office staff follows the rules of your health insur-
ance policy. The office staff works hard to send bills on time
to your health insurance company for payment so you will
not have to pay for medical care covered by your health
insurance. In some cases, the doctor’s office staff may ask for
your help when bills are sent to your health insurance
company to make sure your bills are paid on time.
Ten frequently asked questions about
paying medical bills
1. What is a health insurance policy?
Your health insurance policy is a contract between you
and your health insurance company. It is an agreement
that your health insurance company will pay for covered
medical care as long as your premium is paid. The
health insurance company may not pay for every bill.
This is why it is important for you to know which
medical treatments the health insurance company will
pay for and which expenses it will not cover. You are
responsible for paying any medical costs that the health
insurance company does not pay for.
2. What are some common insurance terms I should know?
Be sure to check with your health insurance company to
see how these terms apply to your health insurance
coverage.
■ Co-payment or “co-pay” The part of your medical
bill you must pay each time you visit the doctor.
This is a pre-set fee determined by your health
insurance policy.
■ Co-insurance The part of your bill, in addition to a
co-pay, that you must pay. Co-insurance is usually a
percentage of the total medical bill—for example, 20%.
This educational flyer was developed through a cooperative effort between the American Medical Association and the Kentucky
Medical Association with thanks to the members of the Kentucky Medical Group Management Association for their contributions.
© 2007 American Medical Association
■ Deductible The cost you must pay for medical treat-
ment before your health insurance company starts to
pay — for example, $500 per individual or $1,500 per
family. In most cases, a new deductible must be satis-
fied each calendar year.
■ Non-covered charges Costs for medical treatment
that your health insurance company does not pay. You
may wish to determine if your treatment is covered by
your health insurance policy before you are billed for
these charges by the doctor’s office.
■ Approval number A number authorizing the health
insurance company to pay benefits for your care. You
may need to obtain an approval number from your
health insurance representative before you see the
doctor in order for the health insurance company to
pay for your medical treatment. Your doctor’s office
staff might be able to help you obtain the approval
from the health insurance company.
3. How is my doctor’s office paid?
You should pay your co-payment and deductible, if
required, during your visit to the doctor. While you are
responsible for your medical treatment, your doctor’s
office will make every effort to seek payment from your
health insurance company for the amount owed under
your policy. The process by which the office seeks
payment is very complicated, which is why the doctor’s
office needs correct information from you.
4. What information should I bring to the doctor’s office?
■ Photo identification, such as a driver’s license or passport;
■ Your current health insurance card; and
■ Any change in personal information such as your
name, address, employer or phone number.
Understanding your health insurance policy and payment practices
5. If the doctor is seeing my child, what information
should I bring to the doctor’s office?
■ Your health insurance card or the card of the person
who covers the child’s medical care; and
■ The name of the person responsible for the child’s
medical care decisions and payment.
The doctor’s office will also need to know your relation-
ship to the child.
6. Why does the doctor’s office need my personal and
health insurance information to get paid?
The doctor’s office staff uses this information to confirm
your health insurance coverage and to send your health
insurance company a request for payment of your
medical bill. The health insurance company requires
your personal and health insurance policy information
before it will pay your bill. Be sure the doctor’s office
staff has your current health insurance policy informa-
tion, including the health insurance company name and
address, policy number, group number, etc., so the
health insurance company can pay your medical bill on
time. Much of this information may have changed since
your last visit to the doctor. The services covered by
your health insurer also may have changed. That is why
many doctors’ offices require you to provide this infor-
mation at each visit.
7. What steps should be followed if I am expecting a baby?
Before the baby is born:
■ Contact the mother’s or father’s health insurance
company to ask how to add the newborn to the health
insurance coverage;
■ Select a pediatrician’s office to treat the baby; and
■ Sign up the expected baby with the pediatrician’s
office. The newborn’s hospital stay and follow-up care
are typically not covered under your health insurance
policy. Therefore, the doctor’s office will ask for the
newborn’s health insurance information.
8. What is a “coordination of benefits” form?
Many health insurance companies require you to fill out
a form that tells the company whether you or another
family member have other health insurance. Your health
insurance company needs this information to work with
other insurers to determine which company pays for
what service. It is important that you fill out this form
and return it to the health insurance company.
Otherwise, your medical bills may not get paid or
payment may be delayed.
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9. What if the health insurance company does not pay or
pays only a portion of my medical bill?
As a courtesy to you, the doctor’s office staff will contact
the health insurance company to ask why the medical
bill was not paid. The health insurance company may
ask the doctor’s office staff to appeal or re-send the
medical bill with more information. This typically
happens when the health insurance company has not
paid for a procedure or service listed on your bill even if
your doctor said it was medically necessary. You may
receive a copy of your doctor’s appeal letter to your
health insurance company.
The doctor would like your help to get the medical bill
paid when your health insurance company does not pay.
You may be asked to call your health insurance company
or your employer to ask why your medical bill has not
been paid.
10. What are some common reasons a health insurance
company may not pay for medical treatment?
■ Services were provided for a pre-existing condition.
Most health insurance companies will not cover treat-
ment for medical conditions you had before obtaining
coverage through the health insurance company.
Your health insurance policy should discuss pre-
existing conditions in more detail;
■ Medical treatment provided to you is not covered by
your health insurance policy;
■ The coordination of benefits form (see above) or
other required health insurance forms were not
completed by you;
■ The health insurance premium has not been paid,
either by you or your employer;
■ A spouse, child and/or newborn is not covered under
your health insurance, since he or she was not added
to the policy;
■ The doctor is “out-of-network,” which means your
doctor does not have a contract or agreement with
your health insurance company. If your doctor refers
you to another doctor, be aware that if the referred
doctor is “out-of-network” you may be responsible for
a portion of the payment; and
■ Another health insurance policy requirement, such as
obtaining prior approval for your medical treatment,
was not followed.
Talking to Patients Regarding Financial Responsibilities
Calling Patients About Past Due Accounts