In the ever-evolving landscape of healthcare, Health Savings Accounts (HSAs) and Health Reimbursement Accounts (HRAs) have emerged as valuable tools that empower individuals to take control of their healthcare expenses and make informed decisions about their healthcare needs. These two financial instruments not only benefit patients but also play a significant role in facilitating interactions between patients and their doctor’s office. They provide a means for managing costs and addressing expenses that fall outside the scope of traditional health insurance coverage, ultimately fostering a more efficient and patient-centered healthcare system.
Understanding Health Savings Accounts (HSAs)
A Health Savings Account (HSA) is a tax-advantaged savings account that allows individuals with high-deductible health insurance plans to set aside money for qualified medical expenses. These accounts are typically funded with pre-tax dollars, through employers, reducing the individual’s taxable income. The funds within an HSA can be invested and grow over time, and withdrawals used for medical expenses are tax-free. HSAs offer individuals the flexibility to use these funds to cover a wide range of qualified healthcare expenses, including doctor’s visits, prescription medications, dental care, and other treatments. Of course, these dollars could be used for prescribed functional orthotics when there is no coverage through health insurance, due to the patient’s diagnosis or their coverage.
One of the significant benefits of HSAs is their portability. The account is owned by the individual, meaning it remains with them even if they change jobs or insurance plans. This empowers individuals to have greater control over their healthcare decisions, as they can use the accumulated funds to pay for services that align with their personal preferences and needs.
How HSAs Interact with Your Office
For physicians’ offices, HSAs represent an opportunity to enhance patient engagement and foster more open communication about healthcare costs. When patients use their HSA funds to cover their healthcare expenses, it can lead to more transparent discussions about the cost of services. Sometimes, patients fail to consider the HSA option when thinking about paying for chiropractic care and services. We can have informed conversations with patients about treatment options while considering the financial aspect of care during the financial report of findings (FROF). Using an HSA to pay for care in the office can also streamline things. Patients can easily make payments directly from their HSA accounts, reducing administrative burdens on your offices. This simplification of the payment process can contribute to increased efficiency in billing and overall office operations. Sometimes, patients even have a credit or debit card that attaches directly to the account to make things easier.
Exploring Health Reimbursement Accounts (HRAs)
A Health Reimbursement Account (HRA) is another type of employer-funded account designed to assist employees with their healthcare expenses. Unlike HSAs, which are funded by the individual, HRAs are entirely funded by the employer. Employees can use the funds in their HRAs to cover qualified medical expenses, providing an additional layer of financial support for healthcare costs. HRAs often accompany traditional health insurance plans and are designed to help individuals manage their out-of-pocket expenses. They can be used to cover copayments, deductibles, and other costs not covered by insurance. HRAs can vary in their design, with some offering rollover options where unused funds can be carried over from year to year, while others have a “use it or lose it” approach.
How HRAs Benefit Physicians’ Offices
HRAs can play a crucial role in bridging the gap between insurance coverage and actual expenses. Sometimes, patients fail to consider these options when thinking about paying for chiropractic care and services. When patients have an HRA that covers a portion of their out-of-pocket costs, they are more likely to seek necessary care or follow providers’ recommendations without being deterred by financial concerns. This means that the office can ensure their patients receive timely and appropriate care, leading to better health outcomes.
Additionally, HRAs can simplify the reimbursement process for both patients and your office. Since HRAs are designed to cover specific healthcare expenses, the reimbursement procedure is often straightforward. Patients can submit documentation of their out-of-pocket expenses to their employers, who then process the reimbursement. This clarity in the reimbursement process can reduce confusion and potential delays, allowing your office to receive payments for services more efficiently.
Addressing Uncovered Expenses
One of the most significant benefits of both HSAs and HRAs is their role in addressing expenses that are not covered by insurance plans. Patients are often left with financial gaps when it comes to additional services prescribed by the doctor, but not covered by the 3rd Party Payer. A great example is functional orthotics.
Consider the following scenario:
- The patient is scanned on the Foot Levelers Kiosk scanner, and their pronation stability index is in the moderate range at 122. This aligns with the lower back pain that the patient has presented with. The provider explains that the patient’s feet may be contributing to the lower back pain and explains that they will be prescribing functional orthotics to support the chiropractic treatment.
- The team verifies the patient’s insurance and finds that they do have some coverage for functional orthotics, but not for L3020, which is the billing code that describes Foot Levelers’ functional orthotics.
- Secondarily, when the staff reviews the payer’s medical review policy, they find that the only diagnoses that are allowed for coverage for this patient relate to the ankle. Since the patient has no presenting complaints related to the ankle, the patient would be financially responsible for the payment of the orthotics.
- When the team sits with the patient at the Financial Report of Findings (FROF), they explain these details, along with the patient’s other estimated out-of-pocket expenses for co-insurance and deductible. They include the cost of the orthotics as a patient’s responsibility.
- They ask the patient whether they have an HRA or HSA account from which they would like to pay for their out-of-pocket services. The patient provides information for the HRA from their employer which is verified by the team.
- The team provides an “Acknowledgement to Self-Pay” form to the patient, indicating that the orthotics costs will be out-of-pocket, which the patient agrees to and signs. NOTE: Some payers may have their own required form for use by their members so please check with each payer you deal with to avoid any issues.
- The team collects from the patient at the time of ordering the functional orthotics. A receipt is provided which the patient turns in to the employer for reimbursement from their HRA. NOTE: All HRA and HSA plans are a little different. Some may provide the patient with a credit card to swipe when paying. Others may require a bill or invoice to be sent by the patient for reimbursement of their out-of-pocket expenses.
As healthcare costs continue to rise and insurance coverage may not encompass all necessary services or treatments, patients and physicians are often left grappling with financial gaps. HSAs and HRAs provide a means to bridge these gaps, ensuring that patients can access the care they need while also compensating physicians for their services and products. They have innovative approaches to healthcare financing, enabling patients to take control of their healthcare expenses. These financial tools empower patients to make informed decisions about their healthcare while offering a means to address uncovered costs for necessary items and services, like functional orthotics or other rehab equipment for home use. As the healthcare landscape continues to evolve, HSAs and HRAs play a vital role in shaping a more patient-centered and financially sustainable healthcare system.
Help Patients use HSA and HRA Accounts to Cover Custom Orthotics
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Kathy is a globally recognized expert on the compliance and financial operations of a successful chiropractic practice. With 40 years of service to the chiropractic community, she got her start as a CA in 1983. Since then, Kathy has been sharing her expertise on Medicare, compliance, billing, coding, insurance, patient financial procedures and documentation with audiences around the world. A popular and highly experienced speaker, she has served on many national and state level chiropractic organizations, boards and advisory councils. She is also the owner and CEO of KMC University, which she founded in 2007.
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