Cost Sharing Complex Example-01

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:

Individual Deductible: $2000

Family Deductible: $4000

Special condition: 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 family deductible $4000 is paid.

Coinsurance:

In Network (INN) Providers Coinsurance: 80%-20%

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

Out Of Pocket:

Individual Out Of Pocket : $4000

Family Out Of Pocket: $8000

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 $8000 is paid.

Special condition 2: Deductible, coinsurance will be counted towards out-of-pocket amount. INN provider deductible and coinsurance will also be counter towards OON providers Out Of Pocket and OON provider deductible and coinsurance will also be counted towards INN provider Out Of Pocket amount.

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

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

ICD 10 diagnosis code:Use applicable code  per test case

Provider: INN provider (Hospital)

Allowable charge: $3000

Note: Though the individual deductible is $2000, yet as per terms and condition of the plan, the entire $3000 will be accumulated to family deductible and Out Of Pocket.

Step 2:

Date of treatment: 1/30/2016

Patient: Member Number 2

Place of treatment: Inpatient Hospital

Rev codes: Use applicable codes per test case

ICD10 diagnosis code: Use applicable code per test case

Provider: OON provider (Hospital)

Allowable charge: $5000

Note: Here $1000 will be applied as deductible and then family deductible limit $4000 will be met. As on coinsurance rate for OON provider is 60%- 40%, plan will pay $2400 as benefit and plan holder will pay $1600 as coinsurance. Total family out of pocket amount will be $$5600, breakup is as follows:

From step 1: $3000

From step 2:$1000+$1600=$2600

Step 3:

Date of treatment: 2/15/2016

Patient: Member Number 3

Place of treatment: Inpatient Hospital

Revenue codes: Use applicable codes per test case

ICD 10 diagnosis code:Use applicable code per test case

Provider: INN provider (Hospital)

Allowable charge: $4000

Note: As family deductible limit $4000 is met in step 2, no deductible will be applicable here. As coinsurance rate for INN provider is 80%- 20%, plan will pay $3200 as benefit and plan holder will pay $800 as coinsurance. In this stage, total family out of pocket amount will be $6400, breakup is as follows:

From step 1: $3000

From step 2:$1000+$1600=$2600

From step 3:$800

Step 4:

Date of treatment: 3/15/2016

Patient: Member Number 4

Place of treatment: Inpatient Hospital

Revenue codes: Use applicable codes from per test case

ICD10 diagnosis code:Use applicable code per test case

Provider: OON provider (Hospital)

Allowable charge: 4000$

Note: As family deductible limit $4000 is met in step 2, no deductible will be applicable here. As coinsurance rate for OON provider is 60%- 40%, plan will pay $2400 as benefit and plan holder will pay $1600 as coinsurance. In this stage, total family out of pocket limit $8000 will be met, breakup is as follows:

From step 1: $3000

From step 2:$1000+$1600=$2600

From step 3:$800

From step 4:$1600

Step 5:

Date of treatment: 4/15/2016

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: 1000$

Note: As out of pocket  limit $8000 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.