How do I Take Coinsurance Penalty on an Insurance Claim?

Some health insurance policies like those offered by Horizon-Blue Cross Blue Shield and Cigna require the insured/member to share in the financial responsibility. This shared responsibility is seen in the application of a coinsurance penalty. A coinsurance penalty occurs when an insurance company makes a partial payment on a benefit claim. The coinsurance is a part of the doctor's or facility's fee. The insurance company pays a percentage of the bill and the member is responsible for the remaining balance. Insurance policies have different requirements on the percentage a member and insurance company is responsible for paying. For example, a policy may require the member to pay 20 percent of all medical bills up to $5,000. The member will pay at least $1,000 in coinsurance and the insurance company is responsible for paying the remaining $4,000.

Instructions

• 1

  Evaluate if co-pays and deductibles are required and have been met by the member. Some policies also require co-pays and deductibles to be paid prior to or in conjunction with applying a coinsurance penalty.

• 2

  Determine the policy's coinsurance percentage. Member coinsurance percentages can range from 10 to 50 percent per medical claim. This information must be accurate in calculating the member and insurance company's responsibilities.

• 3

  Review the physician's charges on the medical claim after applicable deductions from fee schedules. Medical provider claims are typically reduced according to what the insurance company believes is reasonable to pay for these charges. The reduction is passed on to the member and insurance company when sharing in the responsibility of the medical claim.

• 4

  Multiply the coinsurance percentage required in the policy by the reduced medical claim amount. If the medical after all deductions is $250 and the coinsurance percentage is 20 percent, the member is responsible for $50 of this medical claim.

• 5

  Repeat the above steps for all medical claims received.