3 Understanding Managed Care: Medical Contracts and Ethics

Key Terms and Abbreviations National Committee for Quality Assurance (NCQA) network nonparticipating provider (non-PAR) participating provider (PAR) policyholders schedule of benefits

Chapter Objectives After completing this lecture, you should be able to complete the following learning objectives: 3.1: Understand the key elements of a managed care contract that dictates the provider’s compensation for services.

Chapter Objectives After completing this lecture, you should be able to complete the following learning objectives: 3.2: identify covered services for patients, which can include preventive medical services and type of office visits. 3.3: Recognize the obligation of a medical office specialist to uphold a standard of ethics.

Chapter Objectives After completing this lecture, you should be able to complete the following learning objectives: 3.4: Know definitions that are used in a managed care contract in order to understand the contract and discuss claims issues with the patient and carrier.

Chapter Objectives After completing this lecture, you should be able to complete the following learning objectives: 3.5: Conduct discussions with the patient regarding accounts, following the Patient’s Bill of Rights.

Provider Compensation 3.1: Understand the key elements of a managed care contract that dictates the provider’s compensation for services.

3.1: Provider Compensation Managed Care Contract Legal agreement between a healthcare provider (physician, hospital, clinic, or outpatient center) and an insurer (the MCO).

3.1: Provider Compensation Managed Care Contract Provider agrees to accept discounted fees in exchange for an increase in patient load. Contracted providers become part of a managed care plan’s network.

3.1: Provider Compensation Key Elements of a Managed Care Contract Schedule of benefits (list of covered services) Description of the provider’s compensation for services and payment method: discounted fee-for-service, per diem, per case, percentage of premium, or capitation

3.1: Provider Compensation Key Elements of a Managed Care Contract Time frame for claims submission and payment of claims Requirements for claims submission, such as time limits for submission and forms or electronic format to be used Coordination of benefits requirements

3.1: Provider Compensation Key Elements of a Managed Care Contract Terms regarding late payments and any penalties or interest charges Restrictions or guidelines in regard to seeking payment from members Terms for changes to the fee schedule

Covered Services 3.2: Identify covered serviced for patients, which can include preventive medical services and type of office visits.

3.2: Covered Services The schedule of benefits is the list of covered services for members of a particular managed care plan.

3.2: Covered Services Covered services generally include: Various types of physician office visits, including those for preventive care Diagnostic services and procedures in inpatient and outpatient settings Treatment services and procedures in inpatient and outpatient settings

Obligations for a Standard of Ethics 3.3: Recognize the obligation of a medical office specialist to uphold a standard of ethics.

3.3: Obligations for a Standard of Ethics Ethics are rules or standards that govern the conduct of members of a particular profession. Medical office specialists are obligated to uphold a standard of ethics in all interactions with patients, providers, and insurance carriers.

3.3: Obligations for a Standard of Ethics Medical Office Specialist Should always document, sign, and date all conversations regarding any patient account, including conversations with the provider, patient, and insurance carrier May be held legally liable for fraudulent billing or other unethical practices if involved in the fraudulent activity

Terms Used in Managed Care Contracts 3.4: Know definitions that are used in a managed care contract in order to understand the contract and discuss claims issues with the patient and carrier.

3.4: Terms Used in Managed Care Contracts Terms and Definitions Benefit plan: legally binding plan document or contract issued by a payer that outlines covered services and the terms of insurance coverage Contracted services: covered services provided by a physician or other healthcare provider per the MCO contract

3.4: Terms Used in Managed Care Contracts Terms and Definitions Coordination of benefits (COB): determination of which of two or more health plans will provide benefits as primary or secondary payer when a patient is covered by more than one plan

3.4: Terms Used in Managed Care Contracts Terms and Definitions Copayment: amount that a covered individual must pay to the provider at the time of service

3.4: Terms Used in Managed Care Contracts Terms and Definitions Covered person: individual who is an insured, enrolled participant in a health plan or an enrolled dependent Covered services: services provided to covered persons under the terms of the benefit plan

3.4: Terms Used in Managed Care Contracts Terms and Definitions Emergency services: medical services provided in response to an injury or the sudden onset of an illness that places the covered person’s health in serious jeopardy Fee maximum: maximum allowable fee for a covered service

3.4: Terms Used in Managed Care Contracts Terms and Definitions Medical director: physician employed by an MCO to serve as the organizational leader in regard to medical issues

3.4: Terms Used in Managed Care Contracts Terms and Definitions Medical necessity: determination that the use of particular services and/or supplies is appropriate and necessary for the patient and condition being treated (may also be referred to as medically efficient)

3.4: Terms Used in Managed Care Contracts Terms and Definitions Participating hospital: state-licensed hospital designated by the MCO as a facility to which covered persons may be admitted for covered services

3.4: Terms Used in Managed Care Contracts Terms and Definitions Participating provider: physician or other licensed healthcare professional or a healthcare facility that has entered into an agreement to provide covered services to covered individuals

3.4: Terms Used in Managed Care Contracts Terms and Definitions Payer: insurance company, third-party administrator, or self-insured health benefit plan that is obligated to make payment for covered services provided to covered persons

Patient’s Bill of Rights 3.5: Conduct discussions with the patient regarding accounts, following the Patient’s Bill of Rights.

3.5: Patient’s Bill of Rights All providers and MCOs ethically must abide by the Patient’s Bill of Rights, which was adopted as a consumer protection measure in 1998.

3.5: Patient’s Bill of Rights