Entitlements and insurance are two of the most common partial payment methods practices encounter on a daily basis. Each entitlement and insurance policy grants the holder different benefits, so it is critical to understand the differences between the two.
Entitlements guarantee access to a certain range of benefits by either established rights or by federal or state legislation. Entitlement benefit programs are not just restricted to healthcare, and include Social Security Disability Insurance, Social Security Retirement Income and Medicare. Some of the common entitlements you will encounter at your private practice include Medicaid, Medicare, TRICARE and CHAMPVA.
Every practice chooses to see patients with certain types of insurance or certain entitlements. Since each entitlement has different requirements, they each offer a certain amount of reimbursement to your practice. On average, Medicaid only pays 60% of what Medicare pays. Medicare already only pays a portion of the “retail” value of your services, so if your patient sees a large number of patients with entitlements, you will also need to see patients who pay in full to offset the cost.
Entitlements vs. Insurance
Unlike insurance, entitlements are either promised or needs-based. Medicare is a federally guaranteed health insurance offering for adults who are 65 years or older or disabled. Anyone receiving Social Security Disability Insurance payments will be able to use Medicare after 24 months of benefits. Medicaid, on the other hand, is needs-based. Medicaid is a state program that also receives federal funding. It is used to provide healthcare for low-income people.
Insurance, on the other hand, can be purchased by individuals through a variety of sources, whether it is their employer or the ACA exchange. Most private practices choose to accept at least one or two types of insurance, but not all of them choose to accept Medicare and Medicaid.
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