What the patient owes after insurance pays.

Start from the PR amounts

Every adjustment on an electronic remittance advice carries a group code. Amounts in the PR group, patient responsibility, are the ones the payer says your patient owes. Add them up for a claim and you have the patient’s share; the payer also reports that total for the whole claim. If you have not read a remittance line by line before, start with how to read an ERA.

Three reason codes make up most patient balances in a chiropractic office:

Take one CMT visit billed at $65.00 with an allowed amount of $42.00. Early in the year, the payer applies all $42.00 to the deductible: PR-1 $42.00, payment $0.00. That is not a denial. The claim was processed and the patient owes the full allowed amount. Later in the year, after the deductible is met, the same visit comes back as a $33.60 payment and PR-2 $8.40. The patient owes $8.40.

In both cases the $23.00 between your charge and the allowed amount comes back as CO-45, and it is not the patient’s.

What you write off

Amounts in the CO group, contractual obligation, belong to your practice. They are generally written off, not billed to the patient. For a Medicare patient that is a rule: you may bill the patient only for amounts in the PR group. For a commercial plan, your contract governs, and an in-network contract usually has you accept the allowed amount as payment in full. That is what CO-45 means: your charge exceeds the fee schedule or contracted rate.

Before you write a CO-45 off, check that the allowed amount matches your contract rate for that code. A CO-45 that is bigger than it should be is an underpayment dressed as a contractual adjustment. It is the payer’s to correct, not yours to absorb and not the patient’s to pay.

A CO denial, such as CO-50 for medical necessity or CO-197 for a missing authorization, is not a write-off either, at least not yet. It is a claim to correct or appeal, and with a CO group code it is not the patient’s to pay. The guide to chiropractic denial codes covers what to do with each one.

The copay you already collected

Your front desk often collects a copay at check-in, before the payer has said anything. When the remittance arrives, compare the two:

• The PR-3 amount matches what you collected. Apply the payment and the visit is settled.
• The patient owes more than you collected. Often the plan applied the visit to the deductible or charged coinsurance instead of a flat copay. Bill the difference, and say which it was.
• You collected more than the patient owes. That leaves a credit on the patient’s account. Refund it or, with the patient’s agreement, apply it to an open balance. Many states and payer contracts set a deadline for refunds, so do not let credits sit.

If the deposit for this payment came in short, check the deposit match before you change any patient balance. A recovery on another claim does not change what this patient owes.

When a second payer covers the patient

If the patient has a secondary plan, the PR amounts on the primary payer’s remittance are not the patient’s bill yet. They are what the secondary plan gets to consider. Send the secondary claim with the primary payer’s payment and adjustments from the remittance, and wait for the secondary payer’s answer before you bill the patient for what is left.

Two things go wrong here. A statement goes to the patient before the secondary claim is filed, and the patient pays an amount their second plan would have covered. Or the secondary claim goes out without the primary payer’s adjustments, and the secondary payer rejects or denies it. Both start from reading the primary remittance first.

Amounts that need a question first

Some adjustments do not tell you who should pay until someone looks:

• OA adjustments. Other adjustments fit neither group. Read the reason code and the remark code before you post them anywhere.
• Non-covered services (96, 204). Reported as PR, the patient owes them under the plan. Reported as CO, your practice carries them. If your office uses a financial agreement for services a plan may not cover, your contract decides whether it applies.
• Benefit limits (119). When a patient has used the plan’s visit allowance for the year, the group code and your contract decide whether the patient can be billed for further visits. Check the remaining visit count before the visit, not after.
• Short payments. If a payment comes in below what your contract supports, the difference is a question for the payer. It does not move to the patient’s statement by default.

Explaining the balance to the patient

Your patient receives an explanation of benefits from the payer with the same numbers you see on the remittance. A statement that uses the payer’s words and amounts lands without a phone call: date of service, what the plan allowed, what the plan paid, and what the patient owes and why, whether deductible, coinsurance or copay.

A statement that shows only a total invites the question you least want to answer at the front desk: “Why do I owe this?” The answer is already on the remittance. Put it on the statement.

How Claims Native handles patient balances

We work out what the patient owes from the payer’s payment and explanation, and post it into your EHR with every adjustment. When a payment is short and your contract supports more, the difference stays open with the payer instead of turning into a patient bill. Collecting the patient’s balance stays with your office: we tell you what is owed and why, and your front desk decides how and when to ask for it.

Sources

• X12, Claim Adjustment Reason Codes. X12 maintains the code list and updates it three times a year; check the current wording there.
• X12, Claim Adjustment Group Codes.
• CMS, Health Care Payment and Remittance Advice. CO assigns responsibility to the provider; PR to the patient.
• CMS, Medicare Claims Processing Manual, Chapter 22: Remittance Advice.
• CMS, Medicare Secondary Payer Manual, Chapter 5. Report the primary payer’s CAS adjustments unchanged on the secondary claim.