1. 1 Introduction to the Medical Billing Cycle Chapter One lecture 2 OT 232

2. 1.3 Health Care Plans (Continued) 1-14 Managed care offers a more restricted choice of providers and treatments in exchange for lower premiums, deductibles, and other charges Managed care organizations (MCOs) establish links between provider, patient, and payer – How many MCOs may a doctor choose to participate in? Thinking it Through, page 10

3. 1.4 Health Maintenance Organizations 1-15 A health maintenance organization (HMO) combines coverage of medical costs and delivery of health care for a prepaid premium Participation means that a provider has contracted with a health plan to provide services to the plan’s beneficiaries Capitation is a fixed prepayment to a provider for all necessary contracted services provided to each plan member – Per member per month (PMPM) is the capitated rate – Figure 1.3, page 11

4. 1.4 Health Maintenance Organizations (Continued) 1-16 A network is a group of providers having participation agreements with a health plan – Visits to out of-network providers are not covered HMOs… – Health Maintenance Organization… often require preauthorization before the patient receives many types of services When HMO members see a provider, they pay a specified charge called a copayment HMO members choose a primary care physician (PCP), who directs all aspects of their care

5. 1.4 Health Maintenance Organizations (Continued) 1-17 Open-access plans are those HMOs… – Health Maintenance Organization… that allow visits to specialists in the plan’s network without a referral A point-of-service (POS) plan permits patients to receive medical services from non-network providers for a greater charge Thinking it Through, page 14

6. 1.5 Preferred Provider Organizations 1-18 A preferred provider organization (PPO) is an MCO… – Managed Care Organization… where a network of providers supply discounted treatment for plan members – Most popular type of health plan – Creates a network of physicians, hospitals, and other providers with negotiated discounts – Requires payment of a premium and often of a copayment for visits – Does NOT require referrals or PCPs… Primary Care Physicians Thinking it Through, page 16

7. 1.6 Consumer-Driven Health Plans 1-19 A consumer-driven health plan (CDHP) combines a high-deductible health plan with a medical savings plan – The health plan is usually a PPO… Preferred Provider Organization… – with a high deductible and low premiums – The savings account is used to pay medical bills before the deductible has been met

8. 1.7 Medical Insurance Payers 1-20 Three major types of medical insurance payers: 1.Private payers—dominated by large insurance companies 2.Self-funded (self-insured) health plans— organizations that pay for health insurance directly and set up a fund from which to pay 3.Government-sponsored health care programs— includes Medicare, Medicaid, TRICARE, and CHAMPVA The Patient Protection and Affordable Care Act (PPACA) is health system reform legislation that introduced significant benefits for patients