When the insurance process the claim towards PR 1 denial code – Deductible amount, it means they have processed and applied the claim towards patient annual deductible amount of that calendar year.
Now let us see definition of deductible amount and In-network and Out of Network to better understand PR 1 Denial Code.
Patient has to pay the fixed fee annually to provider as per contractual for the healthcare services rendered, before the insurance company starts paying the benefits to the healthcare provider for the service rendered.
This is only paid if the healthcare services are obtained by patient from healthcare provider, until patient meets the deductible amount every calendar year.
For example let us consider below scenario to understand PR 1 denial code:
Let us consider Alex annual deductible amount is $1000 of that calendar year and he has obtained the below services from the provider during that period.
DOS | Billed Amount | Allowed Amount | Insurance Deductible | Insurance Paid amount | Remarks |
---|---|---|---|---|---|
January, 6 2019 | 500 | 400 | 400 | 0 | Patient has paid $400.00 towards this claim. So remaining deductible amount is $600.00. |
February, 2 2019 | 1000 | 800 | 600 | 200 | Met annual deductible once the patient pays $600.00 towards this claim. |
March, 15 2019 | 800 | 600 | 0 | 600 | Insurance not applied the claim towards deductible amount has its previously met. |
In the above scenario, Alex has to pay the $1000 annual deductible amount of that calendar year to the provider for the health care services. Once the annual deductible amount $1000 met, then insurance company starts paying to the provider for the health care services performed.
Some of the insurance company plans have both, In-network deductibles for the services you receive from In-Network provider and Out of network deductibles for the services you receive from Out of Network provider.
For Example:
Let us consider Alex annual in-network deductible amount is $500.00 and out of network deductible amount is $1000.00 and has obtained services from both In-Network (Participating Providers) as well as Out of Network providers (Non-Participating providers).
In this scenario insurance company start’s paying the benefit for in-network services after patient completes paying the in-network annual deductible amount i.e. $500.00 towards in-network bills. Same like that, insurance company start’s paying the benefit for out of network services after patient completes paying the out of network annual deductible amount i.e. $1,000.00 towards out of network bills.
It means the amount paid by Alex i.e. $500.00 towards in-network bill doesn’t count towards out of network bills. So, Alex has to pay $1,000.00 separately towards out of network bills if the health care services obtained from out of network providers.
Important Note: Some of the insurances do count out of network deductible amount towards in-network deductible amount. So it totally depends on the patient insurance plans.
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