Understanding how insurance estimates are calculated (Ledger)

In the Ledger, Ascend Academic calculates insurance portions, write-off adjustments, and patient portions automatically. The explanation that follows covers estimates for primary and secondary plans. The same rules and calculations that apply to secondary plans apply to plans for other coverage orders (tertiary, quaternary, and so forth); however, the calculations are not performed automatically.

Currently, the only types of commercial insurance plans that Ascend Academic supports are PPO (Preferred Provider Organization) and indemnity.

Insurance estimate

The Insurance Portion (I) is calculated in the following manner:

1. Calculate the Remaining Benefits (B).

   Note: No value for a maximum indicates unlimited benefits; zero (0) indicates no benefits.

   • For an orthodontic procedure, use one of the following calculations:

     B_M represents the Maximum Ortho Benefits
     B_U represents the Used Ortho Benefits

     • If B_M has no value, then B = $9,999,999.99

     • If B_M - B_U < 0, then B = 0

     • If B_M > 0, then B = B_M - B_U

   • For a non-orthodontic procedure, use one of the following calculations:

     B_I represents the Maximum Individual Benefits
     B_F represents the Maximum Family Benefits
     B_U represents the Used Benefits

     • If B_I has no value:

       • If B_F has no value, then B = $9,999,999.99

       • If B_F - B_U < 0, then B = 0

       • If B_F > 0, then B = B_F - B_U

     • If B_I - B_U < 0, then B = 0

     • If B_I > 0:

       • If B_F has no value, then B = B_I - B_U

       • If B_F - B_U < 0, then B = 0

       • If B_F > 0:

         • If B_I - B_U > B_F - B_U, then B = B_F - B_U

         • If B_I - B_U < B_F - B_U, then B = B_I - B_U

2. Calculate the Required Deductible (D).

   Note: No value or a zero (0) for a required deductible both indicate that no deductible is required.

   • For an orthodontic procedure, use one of the following calculations:

     D_I represents the Individual Lifetime Ortho Deductible
     D_M represents the Ortho Deductible Met

     • If D_I has no value or is 0, then D = 0

     • If D_I > 0:

       • If D_I - D_M < 0, then D = 0

       • If D_I - D_M > 0, then D = D_I - D_M

   • For a non-orthodontic procedure (using the preventive, basic, or major deductible type), use one of the following calculations:

     D_I represents the Annual Individual Deductible
     D_F represents the Annual Family Deductible
     D_L represents the Lifetime Individual Deductible
     D_M represents the Deductible Met

     • If D_I - D_M < 0, then D = 0

     • If D_I - D_M > 0:

       • If D_F - D_M < 0, then D = 0

       • If D_F - D_M > 0:

         • If D_L - D_M < 0, then D = 0

         • If D_L - D_M > 0:

           • If D_F - D_M > D_I - D_M:

             • If D_I - D_M >= D_L - D_M, then D = D_I - D_M

             • If D_I - D_M < D_L - D_M, then D = D_L - D_M

           • If D_F - D_M < D_I - D_M:

             • If D_F - D_M >= D_L - D_M, then D = D_L - D_M

             • If D_F - D_M < D_L - D_M, then D = D_F - D_M

3. If there is an Insurance Estimate Override (V) for the procedure, then I = V (ignore the steps that follow); otherwise, skip this step.

4. Calculate the Initial Covered Amount (C₁).

   • For a PPO plan (a fee schedule must be attached to the plan, and the provider must be under contract with the carrier), do the following:

     A represents the Procedure Amount
     F represents the Allowed Fee (from the plan's fee schedule)
     A₂ represents the Allowed Amount for Procedure
     P_E represents the Coverage Percentage from Exception
     P represents the Coverage Percentage from Coverage Table
     P_D represents the Coverage Percentage for Downgrade Procedure Code from Coverage Table

     1. Use one of the following calculations:

        • If F < A, then A₂ = F

        • If F > A, then A₂ = A

     2. Use one of the following calculations:

        • If there is an applicable exception in the coverage table, calculate the coverage according to the exception type:

          • Not covered: C₁ = 0

          • Coverage with Maximum Age Limit:

            • If the patient's age does not exceed the specified age, then C₁ = A₂ � P_E

            • If the patient's age exceeds the specified age, then C₁ = A₂ � P

          • Downgrade: C₁ = A₂ � P_D

        • If there is not an applicable exception, then C₁ = A₂ � P

   • For an indemnity plan (a fee schedule must not be attached to the plan), use one of the following calculations:

     A represents the Procedure Amount
     P_E represents the Coverage Percentage from Exception
     P represents the Coverage Percentage from Coverage Table
     P_D represents the Coverage Percentage for Downgrade Procedure Code from Coverage Table

     • If there is an applicable exception in the coverage table, calculate the coverage according to the exception type:

       • Not covered: C₁ = 0

       • Coverage with Maximum Age Limit:

         • If the patient's age does not exceed the specified age, then C₁ = A � P_E

         • If the patient's age exceeds the specified age, then C₁ = A � P

       • Downgrade: C₁ = A � P_D

     • If there is not an applicable exception, then C₁ = A � P

   Note: The exceptions in coverage tables are used by Ascend Academic to automatically calculate insurance estimates. If a patient has dual coverage, the exceptions of the primary insurance coverage are used. Also, a posted procedure with an exception will have a warning icon next to it in the following areas of the Ledger: the Enter payment window, the Enter credit adjustment window, and the Patient Walkout window > Payment tab. You can click the warning icon to view the details of the exception for the corresponding procedure.

   

5. Apply D to calculate the Adjusted Covered Amount (C₂).

   Use one of the following calculations:

   • If D > C₁, then C₂ = 0

   • If D < C₁, then C₂ = C₁ - D

6. Apply B to calculate I.

   Use one of the following calculations:

   • If C₂ > B, then I = C₂ - B

   • If C₂ < B, then I = C₂

   • If B = 0, then I = 0

Write-off adjustment

The Write-off Adjustment (W) is calculated in the following manner (for PPO plans only):

Use one of the following calculations:

• If F < A, then W = F - A

• If F > A, then W = 0

Patient portion

The Patient Portion (P) is calculated in the following manner:

• For a PPO plan, P = A - I - W

• For an indemnity plan, P = A - I