What Does Responsible Party Mean in Medical Insurance?

As patients are choosing High Deductible Health Plans, they don’t understand their responsibility towards deductibles and premiums, and for this, providers are witnessing a great surge in balances from patients.

This becomes a big problem for the providers when instead of relying on the insurance providers for their revenue e management, they have to depend on the patient balances to sustain their revenue. Many times, payment delays happen when patients don’t know what does responsible party mean in practice forms that they have signed on their visit.

This is one of the reasons that providers have to find ways to collect payments to balance their revenue cycle smoothly. Are you also confused while figuring out what does responsible party mean in the medical industry? Let’s discuss the scenarios later in the article today and understand what exactly the responsible party means and how can physicians improve the collection of payments from patients.

What does responsible party mean?

What does responsible party mean
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To make it simple, the patient’s responsibility is to pay the part of the bill that providers submitted to the insurers as a claim. This portion is the patient’s responsibility and they have to pay it instead of their insurance provider. For instance, patients with no insurance coverage have to pay the full amount of their medical bills, insured patients with HDHP have to pay the portion of the bill that doesn’t meet their deductible plans, and patients having primary and secondary insurance in place, have to pay the portion left to be paid by both insurance options.

Many patients choose HDHP and assume that they don’t have to seek medical help more often after that. But the result ends up opposing their thoughts because they have to visit providers and seek medical help at a larger number than before which ends up leaving a high balance. This happens because they might think that high deductibles will cover every treatment under a plan, so they see providers more often. And this approach most of the time backfires. 

Determining responsible party

It would become simple to determine patient responsibility through medical billing software. In medical billing software, once you input the required information about patient insurance, covered treatments, and costs under insurance, it will automatically make it possible for you as a provider to bring outpatient payable amounts through a patient cost estimator.

Previously, providers needed to wait for their claims to be denied in order to know the portion of the patient cost they have to pay. OR – they have to make continuous calls to remain in contact with the insurance to know the patient’s portion so their claims do not get rejected at the end of treatment.

Through billing software, it becomes easier and quicker to figure out how much a patient owes and that determination of responsibility is made before a patient leaves the provider’s office.

Now that you have the information about patient liability and you have informed the patient about it as well, how will you recover your money? If you are stuck in collecting payments, an RCM company might help.

RCM services can help collect payments

Whether you have completed a treatment or your patient is still at the office, a resourceful revenue cycle management service can help you collect your payments timely. Also, they’ll help you figure out who owes what payment responsibility so that you know how much to collect from whom.

Here’s how you can use RCM services to manage your payment schedules;

1. Credit card processing

Nowadays people are more inclined towards paying simply using their credit card otherwise they don’t like to pay at all. When there’s an integrated payment mechanism in the medical billing software, it makes it simpler at the front desk for your office to collect the payments at hand.

In addition, the software has a patient portal where they can pay their bills using their credentials to log in and make payments through credit cards. The best way to collect the required payment is when their appointments are scheduled and through credit cards during their visits.

RCM services can help collect payments
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2. Outsource complex collection cases

You can hand over your complex collection cases to an outsourcing company and ease your burden from overly time-consuming patients with balanced responsibility. With an RCM service, you can rest assured that they will provide your patients with the required confidence and empathy that leads to paying their medical expenses. This will increase your focus on the patient and resolve other critical tasks.

3. Claim denial and rejection management

The best way to ensure that you will be paid completely for your services is to hire an RCM service provider. Why? Because the experts are trained and know the updated guidelines of codes and billing issued by the CMS and AMA. Many times, claims are rejected and denied because of the wrong code selection. These codes are designed to define the diagnosis of disease and associated treatments.

With the right team of experts at RCM service, you get 99% of your claims reimbursed which will improve your revenue growth. However, you cannot always rely on timely patient collection when they owe payment responsibility, but you can make sure that your claims are properly documented with the correct information and submitted timely to the concerned insurance payers.

This is how you can restore your revenue cycle when the patient is responsible for medical payments. How to collect amounts from patients who are not insured but have someone who is responsible for their treatment?

Adding a responsible party who is not a patient

In cases where a person who is not enrolled in practice as a patient can be listed as a policyholder and will be liable for insurance for someone who is a patient.

In medical billing software, when you’re adding a patient’s information, you will find options that say whether a person visited is a patient themselves, a policyholder, or a responsible party.

While you create a new database for a patient in the system, start by asking about the responsible party for the insurance. It is not necessary that the policyholder has the responsibility to pay for a patient. A person can be selected as a patient, policyholder, and responsible party – if all statuses belong to them.

For further complicated options that you might have in your system that you don’t always understand, just talk to your experts and they’ll do the things for you.