Cost Sharing Complex Example-02

Let us suppose typical terms and conditions of the plan are as follows:

Individual/Family Health Plan(INN & OON Providers)

Plan Year:1-1-2016 to 12-1-2016

Deductible:

INN Individual Deductible: $3000, INN Family Deductible: $6000

Per member INN provider deductible within a family: $6000

OON Individual Deductible: $6500, OON Family Deductible: $12000

Per member OON provider deductible within a family: $12000

Special condition1: If the contract has more than one member, Individual Deductible is not applicable, in this case only Family deductible will be applied. Plan will pay only when the total INN family deductible $6000 or OON family deductible $12000 is paid.

Special condition 2: INN provider deductible will NOT be counted towards OON provider deductible and OON provider deductible will NOT  be counted towards INN provider deductible.

Coinsurance:

In Network (INN) Providers Coinsurance: 70%-30%

Out Of Network(OON) Providers Coinsurance:60%- 40%

Out Of Pocket:

INN Individual Out Of Pocket : $6000, INN  Family Out Of Pocket: $12,000

OON Individual Out Of Pocket : $12500, OON  Family Out Of Pocket: $25000

Special condition 1: If the contract has more than one member, Individual Out Of Pocket is not applicable, in this case only Family Out Of Pocket will be applied. Plan will pay 100% benefits only when the total family Out Of Pocket limit(INN/OON) is paid.

Special condition 2: Deductible, coinsurance will be counted towards out-of-pocket amount. INN provider deductible and coinsurance will NOT be counter towards OON provider Out Of Pocket and OON provider deductible and coinsurance will NOT be counted towards INN provider Out Of Pocket amount.

Now let us suppose, the contract/ policy holder has following members: 

Member Number 1: Tiger Man- Subscriber

Member Number 2: Mrs. Tiger- Member

Member Number 3: Tiger Boy Member

Member Number 4: Tiger Girl- Member

Now let us calculate Cost Sharing for this contract of 4 members:

Step 1: 

Date of treatment: 1/15/2016

Patient: Member Number 1

Place of treatment: Inpatient Hospital 

Revenue codes: Use applicable codes per test case

CTP code: Use applicable codes per test case

ICD 10 diagnosis code: Use applicable code  per test case

Provider: INN provider (Hospital)

Allowable charge: $7000

Note: Though the individual deductible is $3000, yet as per terms and conditions of the plan, the $6000 will be accumulated to family deductible and 30% of $1000 will accumulate to Out Of Pocket amount. 70% of $1000 will be treated as benefits.

Total INN OOP=6300

Break-up:

 Deductible: $6000

+Coinsurance: $300 (30% of $1000)

Step 2: 

Date of treatment: 2/15/2016

Patient: Member Number 1

Place of treatment: Inpatient Hospital

CTP code: Use applicable codes per test case

Rev codes: Use applicable codes per test case

ICD10 diagnosis code: Use applicable code per test case

Provider: OON provider (Hospital)

Allowable charge: $14000.00

Note: Though the individual deductible is $6000, yet as per terms and conditions of the plan, the $12000 will be accumulated to family deductible and 40% of $2000 will accumulate to Out Of Pocket amount. 60% of $2000 will be treated as benefits.

Total OON OOP=$12800

Break-up:

 Deductible: $12000

+Coinsurance: $800 (40% of $2000)

Step 3: 

Date of treatment: 2/25/2016

Patient: Member Number 2

Place of treatment: Inpatient Hospital

Revenue codes: Use applicable codes per test case

CTP code: Use applicable codes per test case

ICD 10 diagnosis code: Use applicable code per test case

Provider: INN provider (Hospital)

Allowable charge: $19,000.00

Note: As family deductible limit $12,000.00 is met in step 1, no deductible will be applicable here. As coinsurance rate for INN provider is 60%- 40%, plan will pay $13,300 as benefit and plan holder will pay $5700 as coinsurance. In this stage, total INN family out of pocket amount will be $12,000.00 breakup is as follows:

From step 1: $6300.00

From step 3:$5700.00 

Step 4: 

Date of treatment: 3/30/2016

Patient: Member Number 2

Place of treatment: Inpatient Hospital

Revenue codes: Use applicable codes from per test case

ICD10 diagnosis code: Use applicable code per test case

CTP code: Use applicable codes per test case

Provider: OON provider (Hospital)

Allowable charge: $30,500.00

Note: As family deductible limit $12000.00 is met in step 2, no deductible will be applicable here. As coinsurance rate for OON provider is 60%- 40%, plan will pay $18,300.00 as benefit and plan holder will pay $12,200.00 as coinsurance. In this stage, total family out of pocket limit $25,000.00 will be met, breakup is as follows:

From step 2: $12,800.00

From step 4:$12,200.00

Step 5: 

Date of treatment: 4/30/2016

Patient: Member Number 3

Place of treatment: Doctor's office

CPT codes: Use applicable codes per test case

ICD 10 diagnosis code: Use applicable code per test case

Provider: INN provider (Cardiologist)

Allowable charge: $1000.00

Note: As INN Family out of pocket  limit $12,000.00 is met in step 2, the plan will pay 100% of the allowable. Subscriber/member will no more pay any treatment cost for  INN providers for the rest of the plan year.

Step 6: 

Date of treatment: 5/15/2016

Patient: Member Number 4

Place of treatment: Doctor's office

CPT codes: Use applicable codes per test case

ICD 10 diagnosis code: Use applicable code per test case

Provider: OON provider (Cardiologist)

Allowable charge: $2000.00

Note: As INN Family out of pocket  limit $12,000.00 is met in step 2 and OON Family out of pocket  limit $25,000.00 is met in step 4, the plan will pay 100% of the allowable. Subscriber/member will no more pay any treatment cost for the rest of the plan year, that is, up to December 31, 2016. So from now on,  no cost sharing will be applicable.