1. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 1 Medical Office Administration 2nd edition Brenda A. Potter, CPC

2. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 2 Chapter 11 Health Insurance and Health Benefits Programs

3. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 3 Important Information about Insurance Processing  Regulations constantly change  Obtain most current information direct from insurance plan or program

4. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 4 Insurance Terminology  Contract, policy  Insurer  Premium  Insured, policyholder, subscriber  Beneficiary  Copayment  Coinsurance  Claim  Deductible

5. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 5 Centers for Medicare and Medicaid Services (CMS)  Agency of federal government  Oversees Medicare, Medicaid, State Children’s Health Insurance Program  Programs service more than 90 million people

6. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 6 CMS-1500 Claim Form  Form used for most insurance claims  Used by both public and private insurance  Each insurance plan develops its own requirements for completion of CMS-1500  Used for paper claims  OCR equipment used to process claims

7. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 7 Electronic Claims Processing  Preferred method of filing insurance claims  Process can speed up payments and save mailing costs  Errors corrected easily  Claim status available online

8. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 8 Life Cycle of a Claim  Necessary insurance information gathered at registration  Superbill generated and completed  Claim created and sent to insurance plan  Insurer checks patient and provider information and coverage

9. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 9  Insurer determines UCR fee  EOB completed and sent to patient and insurer  Payment made to appropriate party

10. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 10 Coordination of Benefits  Ensures that health expenses are not paid twice  Determines the primary and secondary insurer  Birthday rule  determines primary insurance for dependents covered by two policies

11. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 11 Troubleshooting Claims  Mistakes anywhere in the claims process can cause an error on a claim  Mistakes delay receipt of payments  Mistakes often corrected by verifying information in patient’s medical record

12. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 12 Timelines for Filing  Each plan sets deadlines for filing claims

13. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 13 Filing an Appeal  Insured may appeal decision of an insurance plan  Amounts paid or denials can be appealed  Time limits usually apply for appeals

14. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 14 Managed Care  Restricts healthcare choices for patients  Limits referrals and services without approval  Patients usually required to use certain providers in a particular network

15. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 15 Fee-for-Service  Insurance plan pays only when patient receives services  If patient is not seen, insurance company pays nothing

16. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 16 Health Maintenance Organization (HMO)  Prepaid health care  Insurance company pays flat fee every month  Patients may be required to choose primary clinic or physician  Referrals often required for services from a specialist

17. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 17 Preferred Provider Organization (PPO)  Network of healthcare providers  Contract with PPO to provide healthcare services at a discount  Patients may be required to choose primary clinic or physician

18. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 18 Medicare  Largest health insurance program in U.S.  Provides health benefits for individuals  65 and over or  Permanently disabled or  End-stage renal disease  Amyotrophic lateral sclerosis (ALS; Lou Gehrig’s disease)

19. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 19 Medicare Coverage and Enrollment  Part A – Hospital  Part B – Medical Insurance  Part C – Medicare Advantage plans  Part D – Prescription drug coverage  Enrollment in some parts is automatic; some is not

20. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 20 Medicare Part A  Covers inpatient care, skilled nursing facility, hospice, home health care  Premium = most people do not pay for part A coverage  Deductible = $1024 per benefit period (in 2008)  coinsurance applies to some hospital and nursing home stays

21. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 21 Medicare Part B  Covers physician’s services, outpatient care, some preventative care, immunizations, ambulance  Premium = $96.40 (in 2008)  Individuals must enroll (not automatic)  A coverage  Deductible = $135 per year (in 2008)  Coinsurance = 20% of Medicare approved amount (less deductible)

22. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 22 Medicare Part C  Provides HMO, PPO coverage  Different plans available

23. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 23 Medicare Part D  Prescription drug coverage  Individuals must enroll (not automatic)  Premium, deductible, coinsurance vary from plan to plan

24. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 24 Processing Medicare Claims  Fiscal intermediary – insurance plan processing Part A claims  Carrier – insurance plan processing Part B claims  Intermediary or carrier answers questions pertaining to a claim

25. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 25 Medicare Assignment  PAR – participating provider  A PAR agrees to accept what Medicare approves as payment in full  PAR may not charge a patient more than the approved amount  If provider is not a PAR, limiting charge may apply

26. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 26 Advance Beneficiary Notice (ABN)  Medicare document  Patient must sign if Medicare may not cover care  Purpose is to inform patient that Medicare may deny claim for services

27. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 27 Medigap  Policy to help cover costs Medicare doesn’t cover  Must be purchased by patient  Twelve different plans

28. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 28 Medicaid  Medical assistance  Federal program providing benefits for low- income families and medically needy individuals  Supported by federal and state dollars  Physicians must accept Medicaid payments as payment in full

29. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 29 Medicaid Eligibility  Low income  SSI recipients  Medically needy

30. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 30 Medicaid Coverage  Federal government mandates minimum coverage  Basic coverage must be provided in each state  State may add additional coverage  Medicaid restriction program

31. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 31 Medicaid Payments  Benefits paid directly to provider  Some states have small deductible or copayments  Dual eligibles – patients covered by Medicare and Medicaid  Medicaid – payer of last resort

32. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 32 State Children’s Health Insurance Program (SCHIP)  Provides health insurance to uninsured children  Children don’t qualify for Medicaid because income is above limit

33. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 33 TRICARE  Health benefits for active duty service members, retired military, families, survivors  Beneficiaries registered in Defense Enrollment Eligibility Reporting System (DEERS)  Several health and dental plans available

34. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 34 CHAMPVA  Civilian Health and Medical Program of the Department of Veterans Affairs  Health coverage for dependents of veterans who have total, permanent disability, or survivors of persons who died in the line of duty  Sponsor – military member on which eligibility is based  Beneficiary – individual receiving benefits

35. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 35 Workers’ Compensation  Covers persons suffering from work-related injuries  Each state responsible for structuring workers’ compensation  Can be state funded, self-insured, private insurance or combination

36. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 36 Claim Processing for Workers’ Compensation  Injured worker must complete first report of injury in timely manner  Time limits apply for reporting injury  Providers required to file periodic reports for patients requiring extended treatment

37. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 37 Private Health Insurance  Group insurance  Obtained through employer  Basic coverage – hospital  Major medical – office visits

38. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 38 Blue Cross/Blue Shield (BCBS)  National association  Composed of independently owned and operated plans in each state  Blue Cross – hospital coverage  Blue Shield – physician services  Providers may agree to be participating  UCR – usual, customary, reasonable fees may be applied

39. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 39 Disability Insurance  Partial income replacement for individuals  Does not cover medical care  Provides payments if individuals can’t work  Physicians may be required to document patient’s disability  Patient will need to provide form for documentation

40. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 40 Long-Term Care Insurance  Helps cover cost of nursing home care  Nursing home patients may need to apply for Medicaid  Healthy spouse protected from losing everything in order to care for ill spouse in nursing home

41. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 41 Insurance Resources  Internet resources provide valuable up-to- date information  Regional CMS office can provide information

42. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 42 Insurance Fraud and Abuse  Fraud – willful act to deceive  Abuse – more difficult to determine because not as blatant  Example:  Billing for services never performed  Billing for unnecessary items  Inflating charges  Misrepresenting patient’s diagnosis for higher payment of benefits  Reporting fraud or abuse is encouraged

43. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 43 Confidentiality  Patient’s bill contains diagnosis and procedure information  Bill information cannot be released without permission

44. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 44 COBRA  Consolidated Omnibus Budget Reconciliation Act  Allows employees to keep health insurance coverage for a limited time after leaving a job  Employee must pay for coverage; employer not expected to pay

45. Copyright © 2010, 2003 by Saunders, an imprint of Elsevier Inc. All rights reserved. 45 Insurance Industry Statistics  In 2006, 15.8% of people in U.S. (47 million) did not have health insurance  In 2006, 30% of remaining were covered under Medicare, Medicaid, or military health care  Remaining 54% covered by some type of health insurance