Allied Health Assisting Unit 7, Chapter 14: Health Insurance

THE PURPOSE OF HEALTH INSURANCE Introduced as a mechanism for consumers to prepay for health care Only covered catastrophic illness and injuries when introduced Now pays for preventative care and services Traditional private insurance is called “fee-for-service” care Patient has the flexibility to seek medical care from the professionals of their choosing More expensive Quickly becoming extinct

THE PURPOSE OF HEALTH INSURANCE Terms Used in Health Insurance Advance beneficiary notice (ABN) Required by Medicare when a service is provided to a beneficiary that is either not covered or the provider is unsure of the coverage Allowed amount The maximum amount an insurer will pay for any given service Assignment of benefits The authorization, by signature of the patient, for payment to be made directly by the patient’s insurance to the provider for services. Authorization to release medical information A form that must be signed by the patient before any additional information may be given to the insurance company or third party

THE PURPOSE OF HEALTH INSURANCE Terms Used in Health Insurance Beneficiary Person entitiled to benefits of an insurance policy Capitation The health care provider is paid a fixed aount per member per month for each patient who is a member of a particular insurance organization regardless of whether services were provided Carrier Term used to refer to insurance companies that reimburse for health care services

THE PURPOSE OF HEALTH INSURANCE Terms Used in Health Insurance Civilian Health and Medical Program of the Veterans’ Administration (CHAMPVA) Established in 1973 for the spouses and dependent children of veterans who have total, permanent, service-connected disabilities CMS-1500 The standard claim form designed by the Centers for Medicare and Medicaid Services to submit provider services or third-party (insurance companies) payment Coinsurance The percentage owed by the patient for services rendered after a deductible has been met and a copayment has be paid

THE PURPOSE OF HEALTH INSURANCE Terms Used in Health Insurance Coordination of benefits (COB) Procedures insurers use to avoid duplication of payment on claims when the patient has more than one policy. One insurer becomes the primary payer, and no more than 100 percent of the costs are covered Copayment A specified amount the insured must pay toward the charge for professional services rendered at the time of service Deductible A predetermined amount the insured must pay each year before the insurance company will pay for an accident or illness

THE PURPOSE OF HEALTH INSURANCE Terms Used in Health Insurance Diagnosis-related group (DRG) A prospective payment system developed by Yale University and used by Medicare and other insurers to classify illnesses according to diagnosis and treatment. DRGs group all charges for hospital inpatient services into a single bundle for payment purposes Effective date The date when an insurance policy goes into effect Explanation of benefits (EOB) A printed description of the benefits provided to the beneficiary by the insurer

THE PURPOSE OF HEALTH INSURANCE Terms Used in Health Insurance Fee disclosure The action of health care providers informing the patients of charges before the services are performed Fee schedule A list of predetermined payment amounts for professional services provided to patients Gatekeeper A term given to primary care providers because they are responsible for coordinating the patient’s care to specialists, hospital admissions, and so on

THE PURPOSE OF HEALTH INSURANCE Terms Used in Health Insurance Group insurance Insurance offered to all employees by an employer Health Maintenance Organization (HMO) Group insurance that entitles members to services provided by participation hospitals, clinics, and providers Indemnity plan A commercial plan in which the company (insurance) or group reimburses providers or beneficiaries for services; allows subscribers more flexibility in obtaining services

THE PURPOSE OF HEALTH INSURANCE Terms Used in Health Insurance Independent practice association (IPA) A type of HMO in which contracted services are provided by providers who maintain their own offices Individual insurance Insurance purchased by an individual or family who does not have access to group health insurance. Applicants for coverage can be denied based on preexisting conditions or subjected to higher premiums. This is scheduled to be eliminated in 2014 as part of the Affordable Care Act passed in 2010 Limiting Charge The maximum amount a nonparticipating provider can collect for services provided to a Medicare patient

THE PURPOSE OF HEALTH INSURANCE Terms Used in Health Insurance Loss-of-income benefits Payments made to an insured person to help replace income lost through inability to work because of an insured disability Managed care A health care delivery system that combines the delivery of health care and payment of the services Medicaid A joint funding program by federal and state governments (excluding Arizona) for the medical care of low-income patients on public assistance

THE PURPOSE OF HEALTH INSURANCE Terms Used in Health Insurance Medicare A federal program for providing health care coverage for individuals over the age of 65 and those who are are disabled Medicare fee schedule A list of approved professional services Medicare will pay for with the maximum fee it pays for each service Medigap (Medifill) Private insurance to supplement Medicare benefits for payment of the deductible, copayment, and coinsurance

THE PURPOSE OF HEALTH INSURANCE Terms Used in Health Insurance Member provider A provider who has contracted to participate with an insurance company to be reimbursed for services according to the company’s plan National Committee for Quality Assurance (NCQA) A nonprofit organization created to improve paitent care quality and health plan performance in partnership with managed care plans, purchasers, consumers, and the public sector Nonparticipating provider A provider who is not contracted with an insurer and can collect total charges for services provided. Exception: provider and collect only 115 percent of the Medicare Provider Fee Schedule allowed amount for Medicare beneficiaries

THE PURPOSE OF HEALTH INSURANCE Terms Used in Health Insurance Out-of-area The term used to identify services HMO members receive outside of their specified geographic area Participating provider A provider who has contracted with an insurer and accepts whatever the insurance pays and payment in full Patient status Refers to a patient’s eligibility for benefits; the basis upon which benefits are being provided (i.e., inpatient, outpatient, ER, office, and so on)

THE PURPOSE OF HEALTH INSURANCE Terms Used in Health Insurance Point-of-service (POS) plan An open-ended HMO, which delivers health care services using both a managed care network and traditional indemnity coverage. Care sought outside the managed care network results in higher out-of-pocket costs for the member Preexisting condition A condition that existed before the insured’s policy was issued Preferred provider organization (PPO) A network of providers and hospitals that are joined together to contract with insurance companies, employers, or other organizations to provide health care to subscribers and their families for a discounted fee

THE PURPOSE OF HEALTH INSURANCE Terms Used in Health Insurance Premium Monies paid for an insurance contract Relative Value Units Numeric values assigned to payment components of the Resource-Based Relative Value Scale (RBRVS) Resource-bases relative value scale (RBRVS) Fee schedule based on relative value units assigned for resources providers use to provide services for patients; provider work, practice expense, malpractice expense

THE PURPOSE OF HEALTH INSURANCE Terms Used in Health Insurance Service area The geographic area served by an insurance carrier Subscriber The person who has been insured Third-party payer An insurance carrier who is not the doctor or patient but who intervened to pay the hospital or medical bills per contract with one of the first two parties

THE PURPOSE OF HEALTH INSURANCE Terms Used in Health Insurance TRICARE (Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) Established to aid dependents of active service personnel, retired service personnel, and their dependents, and dependents of service personnel who died on active duty, with a supplement for medical care in military or public health service facilities Usual, customary, and reasonable (UCR) fee The amount commonly charged for a particular medical service by providers in a specific geographical area; amounts are used to develop allowed amounts

THE PURPOSE OF HEALTH INSURANCE Terms Used in Health Insurance Utilization management (review) A method of controlling health care costs by reviewing services to be provided to members of a plan to determine the appropriateness and medical necessity of the care prior to the delivery of the care Waiver A document outlining services that will not be covered by a patient’s insurance carrier and the cost associated with those services. Patient signature indicated that he or she understands that these services will not be covered and that he or she agrees to pay for the services out of pocket Worker’s compensation Government program that provides insurance coverage for those who are injured on the job or who have developed work related disorders

MANAGED CARE DELIVERY SYSTEMS System that integrates the delivery and payment of health care for covered persons Contracting with selected providers for services at a reduced cost Emphasis on prevention Plans require certain things for compliance National Commission on Quality Assurance (NCQA) Asses quality of managed care plans

TYPES OF INSURANCE PLANS Commercial Health Insurance Plans Private companies control the price of premiums paid, and specify the benefits they will provide Have indemnity, HMO, PPO, and POS plans available Indemnity-Type Insurance Least amount of structural guidelines Patients able to select provider of their choice No referrals for specialists Higher premiums Deductibles 80/20 type coinsurance

TYPES OF INSURANCE PLANS Health Maintenance Organizations (HMOs) Requires members to choose primary care Requires referrals All providers must be contracted with the HMO Encourage preventative care More affordable Staff-Model HMOs Providers are employed by the HMO and all services are provided by the practice

TYPES OF INSURANCE PLANS Group-Model HMOs Contracted multispecialty practices Reimbursed by capitation Preferred Provider Organization (PPO) Type of HMO Provide services to their members at a discounted fee Typically more expensive than traditional HMO Point-of-Service (POS) Plans Allows members greater freedom with choice of care Do not have to have a PCP No referrals Similar to an indemnity plan

CONSUMER-DRIVEN HEALTH PLANS (CDHP) Created by the federal government in 2003 Helps overuse of health care systems Higher deductibles and lower premiums Health Savings Account (HSA) Tax sheltered Used to pay for medical expenses Any amount given to account remains and gains interest Preventative care not subject to deductible PPO type coverage kicks in after deductible is met

CONSUMER-DRIVEN HEALTH PLANS (CDHP) Health Reimbursement Account (HRA) Employers not employees contribute to the account No restrictions on amount of money that can be deposited Employer owns money in account Can be rolled from year to year Flexible Spending Account (FSA) Funded by employee pre-tax “use it or loose it”

GOVERNMENT HEALTH PLANS Medicare Enacted in 1965 For people 65 and older who are eligible and have filed for coverage People who are disabled, receiving Social Security benefits, or in end-stage renal disease, regardless of age Issued a membership card Part A of Medicare is for hospital coverage Part B is for payment of other medical expenses Part C Medicare Advantage Plan Managed care plan provided by private insurance companies Usually offers patients additional serviced Medicare won’t cover

GOVERNMENT HEALTH PLANS Medicare Part D Prescription coverage for both generic and brand-name drugs Members responsible for paying monthly premiums Medicare uses SSN along with an alpha character to define the beneficiary’s health insurance claim (HIC) number Letter A indicates number belongs to the cardholder Letter B indicates number belongs to spouse

GOVERNMENT HEALTH PLANS Medicare

GOVERNMENT HEALTH PLANS Medicare Medicare Administration and Claims CMAA must keep current with the regulations governing the process of claims Various seminars are offered All claims must be submitted on an original CMS-1500 form Effective October 2005, all claims must be submitted electronically (HIPAA) Can still use hard copy if you have less than 10 employees including provider Deductible for Medicare part B is expected to rise due to increasing costs and less government funding

GOVERNMENT HEALTH PLANS Medicare

GOVERNMENT HEALTH PLANS Medicare Medical Necessity and Services Not Covered Medicare only pays for services that are considered medically reasonable and necessary for the diagnosis given Starting in 2005, medicare benefits pay for ONE physical exam Advance beneficiary notice “Medicare does not usually pay for this service” “Medicare usually does not pay for this injection” “Medicare does not pay for this service because it is considered experimental”

GOVERNMENT HEALTH PLANS Medicare

GOVERNMENT HEALTH PLANS Medicaid Implemented in 1965 Funded by both federal and state governments Coverage for individuals of limited or low income Federal government sets standards for coverage Each state can enhance benefits to a higher level if desired This is paid for by the states themselves

GOVERNMENT HEALTH PLANS Medicaid Different categories of eligible recipients Pregnant women Aged Blind Disabled and so on… Cards issued on a monthly basis Always verify coverage Time limits for filing claims

GOVERNMENT HEALTH PLANS Medicaid Must seek care from a participating provider Providers not required to participate

GOVERNMENT HEALTH PLANS Worker’s Compensation Covers employees who are injured while working Four principle types of state benefits Patient may have treatment in or out of the hospital If a temporary disability is present, the patient may receive weekly cash benefits is addition to medical care When a percentage of permanent disability is found, the patient is given weekly, or monthly benefits, and sometimes a lump-sum settlement Payments are made to dependents of employees who are fatally injured

GOVERNMENT HEALTH PLANS Worker’s Compensation Medical assistant must keep current files of procedures and forms because these are frequently changed The following details are necessary for reimbursement An accurate claim number appears on all forms and bills Patient’s complete name, the date, and nature of treatments Payee name, address, and number Fees for labs and x-rays with interpretations attached Copy of any operative reports Fees and totals are accurate Forms must be legible Forms signed by provider

GOVERNMENT HEALTH PLANS TRICARE and CHAMPVA Established to aid active service personnel and their dependents, retired personnel and their dependents, and dependents of service personnel who died in active duty All members over the age of 10 are issued an ID card A patient who lives within 40 miles of a uniformed-services hospital needs a nonavailability statement to be cared for in a civilian provider’s office

Patients with no insurance In 2009 50.7 million people in the US did not have health insurance Classified as “self-pay” Advisable to require payment at the time of service

Primary and Secondary Insurance Coverage Coordination of benefits Make sure duplicate payments are not made Ex: If a child is covered by both parent’s policies Leftover charges from primary policy may be submitted to secondary policy Birthday rule for determining coverage (only if coverage is equal) The plan of the parent whose birthday occurs first in the calendar year is primary If both parents have the same birthday, the plan in effect the longest is primary If parents are divorces, the parent with custody is primary If a court order dictates which parent is responsible for expenses, the court order supersedes the birthday rule

Primary and Secondary Insurance Coverage Medicare and Supplemental Insurance Medigap Always ask patients about supplemental coverage If patient is covered by Medicare but still employed, the group policy is billed as primary ALWAYS VERIFY COVERAGE

Verifying Insurance Coverage Always Ask Every visit Make sure records are current Phone Online Apps

Utilization Review Managed care plans use utilization review/management to assess the quality and appropriateness of care provided Prospectively = performed before care provided Retrospectively = performed after care provided Precertification = refers to seeking approval for a treatment under the patient’s insurance contract Preauthorization = relates not only to whether the services are covered but also whether they are medically necessary Predetermination = refers to the discovery of the maximum amount of money the carrier will pay for the service

Utilization Review Concurrent Review and Discharge Planning Once a patient is being discharged, planning is used to assure that the patient is being discharged to the most appropriate setting