1. 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

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 1.8 The Medical Billing Cycle 1-21 A medical insurance specialist is a staff member who handles billing, checks insurance, and processes payments To complete their duties, medical insurance specialists follow a 10-step medical billing cycle – This cycle is a series of steps that leads to maximum, appropriate, timely payment

9. 1.8 The Medical Billing Cycle (Continued) 1-22 Step 1 – Preregister patients Step 2 – Establish financial responsibility for visits – Who is primary payer? Step 3 – Check in patients Step 4 – Check out patients – A medical coder is a staff member with specialized training who handles diagnostic and procedural coding – The patient’s primary illness is assigned a diagnosis code

10. 1.8 The Medical Billing Cycle (Continued) 1-23 Step 4 – Check out patients (continued) – Each procedure the physician performs is assigned a procedure code – Transactions are entered in a patient ledger—a record of a patient’s financial transactions Step 5 – Review coding compliance – Compliance means actions that satisfy official requirements Step 6 – Check billing compliance Step 7 – Prepare and transmit claims

11. 1.8 The Medical Billing Cycle (Continued) 1-24 Step 8 – Monitor payer adjudication – Accounts receivable (A/R) is the monies owed to a medical practice – Adjudication is the process of examining claims and determining benefits Step 9 – Generate patient statements Step 10 – Follow up patient payments and handle collections A practice management program (PMP) is business software that organizes and stores a medical practice’s financial information

12. 1.9 Working Successfully 1-25 Professionalism is acting for the good of the public and the medical practice Medical ethics are standards of behavior requiring truthfulness, honesty, and integrity – Thinking it Through, page 29 Etiquette is comprised of the standards of professional behavior

13. 1.10 Moving Ahead 1-26 Certification is the recognition of a superior level of skill by an official organization – Provides evidence to prospective employers that the applicant has demonstrated a superior level of skill on a national test