Chapter 17 Medical Insurance

Understanding the Role of Medical Insurance Medical care consists of: Diagnosis of diseases/disorders Care and treatment provided by health care team Health care Preventive services

Understanding the Role of Medical Insurance Health care insurance Contract between an individual policyholder and a third party that reimburses the medical provider or policyholder Changes in health insurance

Medical Insurance Terminology Terminology specific to insurance policies Beneficiary Deductible Coinsurance Co-payment Pre-existing condition

Medical Insurance Terminology Terminology specific to insurance policies Exclusions Coordination of benefits Birthday rule Explanation of benefits (EOB) Remittance advice

Medical Insurance Terminology Terminology specific to billing insurance carriers Preauthorization Claim CMS-1500 (05-08) Assignment of benefits Direct payment

Types of Medical Insurance Coverage Traditional insurance policies Fee-for-service basis Types of coverage Basic insurance Major medical insurance Primary care provider (PCP)

Types of Medical Insurance Coverage Blue Cross and Blue Shield Organized as not-for-profit corporations or as for-profit companies Network of participating providers

Types of Medical Insurance Coverage Managed care organizations (MCOs) Case managers Six primary models listed Exclusive provider organizations (EPOs) Integrated deliver systems (IDSs) Health maintenance organizations (HMOs) Point-of-service (POS) plans Preferred provider organization (PPO) Triple option plan Capitation

Types of Medical Insurance Coverage Medicare Largest medical insurance program in the U.S. Continuing medical coverage to senior citizens Parts A, B, C, D Annual deductible Resource-Based Relative Value Scale PARs and non-PARs Medicare supplemental insurance

Types of Medical Insurance Coverage Other types of coverage Medicaid Funding for medical care for qualifying persons Eligibility Medicaid is always secondary to any supplemental insurance

Types of Medical Insurance Coverage Other types of coverage TRICARE Military personnel coverage Three options available Qualified subscribers must be listed with DEERS

Types of Medical Insurance Coverage Other types of coverage CHAMPVA (Civilian Health and Medical Program of the Veterans’ Administration) Covers spouse and unmarried dependent children of veterans with permanent total disability from a service-related injury Covers surviving spouse and children of veterans who died of service-related disability

Types of Medical Insurance Coverage Other types of coverage Workers’ compensation or state industrial insurance On-the-job accident or illness Workers’ compensation insurance

Types of Medical Insurance Coverage Other types of coverage Self-insurance Larger companies, nonprofit organizations, state and county governments Contact plan administrator before scheduling appointments

Screening for Insurance Screen all new patients for insurance New patients arrive 15–20 minutes early to complete patient registration form Photocopy patient’s driver’s license and insurance card(s) and file in chart Procedure 17-2 Screening for Insurance

Screening for Insurance Verify insurance information on all patients

Screening for Insurance Watch the video

Referrals and Authorizations Referral categories Preauthorization and precertification Authorization/referral number entered in Box 23 of CMS-1500 (05/08) form Procedure 17-3 Obtaining Referrals and Authorizations

Determining Fee Schedules Common elements used to determine fee schedules Overhead or practice expenses Cost of medical malpractice insurance Hourly rate for the services provided by the provider

Determining Fee Schedules Usual, Customary, and Reasonable (UCR) fees Fee system that defines allowable charges Usual fee is the physician’s average fee for a service or procedure Customary fee is the average or range of fees within the geographic area that an insurance carrier will accept Reasonable fee is the generally accepted fee for services or procedures that are extraordinarily difficult or complicated

Determining Fee Schedules Resource-Based Relative Value System (RBRVS) Used by Medicare Provider’s services are reimbursed based on RVUs

Determining Fee Schedules Resource-Based Relative Value System (RBRVS) Each service, procedure, or medication is assigned a code from the CPT or ICD-9-CM manuals GPCI related to geographic area where physician is located is issued for each RVU category Review and study Table 17-2 Assign or discuss critical thinking box Procedure 17-4 Computing the Medicare Fee Schedule

Determining Fee Schedules Hospital Inpatient Prospective Payment System (IPPS) Based on DRGs DRGs are based on an average cost for treatment of a patient’s condition

Determining Fee Schedules Hospital Outpatient Prospective Payment System (OPPS) Reimbursement system based on Ambulatory Payment Classifications (APCs) APCs group services according to clinical characteristics

Determining Fee Schedules Capitation Payment system used primarily by MCOs

Legal and Ethical Issues Medical personnel are bound by law to maintain confidentiality of all medical information Must be able to recognize information that is protected by privacy rules

HIPAA Implications Provide patient with a “notice of privacy practices” and obtain acknowledgment of receiving the notice Obtain patient’s specific authorization to use or disclose personal information

HIPAA Implications Provide patient, upon request, with an accounting of disclosures of PHI Give patient access to his/her PHI and provide opportunity to amend

Insurance Fraud and Abuse Definition of fraud and examples Insurance abuse and examples Protect the practice from committing insurance fraud and abuse

Insurance Fraud and Abuse HIPAA regulations that apply to PHI