1. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved 1 Chapter 11 The Blue Plans, Private Insurance, and Managed Care Plans Insurance Handbook for the Medical Office 13 th edition

2. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Insurance Plans 1. State the difference between a traditional indemnity insurance plan and a managed care plan. 2. State the provisions of the Health Maintenance Organization Act of 1973. 3. Explain health maintenance organization benefits and eligibility requirements. 4. List features of an exclusive provider organization. 5. List two types and two different functions of foundations. 2 Lesson 11.1

3. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Insurance Plans (cont’d) 6. Define independent practice associations. 7. Name the features of preferred provider organizations. 8. Explain the features of a point-of-service plan. 9. Explain how the Employee Retirement Income Security Act affects managed care insurance. 3 Lesson 11.1

4. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Private Insurance  Blue Cross/Blue Shield  Pioneers in private insurance  Largest insurance company in the U.S. 4

5. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Prepaid Group Practice Health Plans  Pioneers  Ross-Loos Medical Group became CIGNA  Kaiser Permanente  Direct contact  Individual practice model 5

6. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Health Maintenance Organization Act of 1973  Created authority for federal government to assist HMO development by:  Providing grants, loans, and loan guarantees to offset initial operating deficits of new HMOs that meet federal standards  Requiring most employers to offer an HMO to employees as an alternative to traditional insurance plans 6

7. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Health Maintenance Organizations  Prepaid group practice model  Staff model  Network HMO  Direct contract model 7

8. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Exclusive Provider Organizations  Features similar with HMO  Members must choose care from network providers (emergency exceptions)  Generally, no reimbursement for out-of-network care  Regulated under insurance statutes 8

9. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Exclusive Provider Organizations  Features similar to PPO  Enrolled population  Limited provider panel  Gatekeepers  Utilization management  Capitated provider reimbursement  Authorization system 9

10. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Exclusive Provider Organizations  Features  Negotiated fees  Fee-for-service payments 10

11. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Foundations for Medical Care  Foundations for Medical Care (FMC) First established in 1954, in Stockton, CA  FMC operations  Comprehensive type of foundation  Claims-review type of foundation 11

12. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Independent Practice Organizations  Physicians are not employees, and do not receive salaries  Capitation or fee-for-service program 12

13. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Preferred Provider Organizations  Freedom to use any physician or hospital  Members receive highest level of benefits when using preferred providers  Coinsurance and deductibles 13

14. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Silent Preferred Provider Organizations  Also called blind or phantom PPOs, discounted indemnity plans, nondirected PPOs, or wraparound PPOs  Provider income reduced  Complicates the appeal process 14

15. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Physician Provider Groups  Physician owned (unlike IPA)  Joint ventures with hospitals, labs, etc.  Can combine services for member physicians, cutting business costs 15

16. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Point-of-Service Plans  HMO cost management  PPO freedom of choice  Members choose services from participating and nonparticipating providers, with different benefit levels 16

17. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Triple Option Health Plans  Members choose from HMOs, PPOs, or “traditional” indemnity insurance  Members can change plans  Cost-containment measures 17

18. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Employee Retirement Income Security Act  Regulates all managed care insurance paid by the employer or supplemented by the employee  85% of claims that are non- Medicare/Medicaid/workers’ compensation  Regulated by Department of Labor  Any case relating to employee benefit plans (EBP) falls under federal jurisdiction 18

19. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Medical Review and Management of Plans 10. State reasons for a Quality Improvement Organization program. 11. Define a carve out. 12. Identify four types of referrals for medical services, tests, and procedures. 13. State the purpose of creating a managed care plan reference guide. 14. Describe types of payment mechanisms used for managed care plans. 19 Lesson 11.2

20. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Quality Improvement Organization  Peer review  Utilization review  Churning  Turfing  Buffing 20

21. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Management of Plans  Contracts  Carve outs  Medical services not included in the contract benefits  Paid on a fee-for-service basis 21

22. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Plan Administration  Patient information letter  Medical records  Scheduling appointments  Encounter form 22

23. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Preauthorization or Prior Approval  Formal referral  Direct referral  Verbal referral  Self-referral 23

24. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Managed Care Guide 24

25. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Financial Management  Payment  Deductibles  Copayments  Payment mechanisms  Contract payment time limits  Monitoring payment 25

26. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Financial Management  Statement of remittance  Accounting  Fee-for-service 26

27. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Financial Management  Year-end evaluation  Withhold  Capitation versus fee-for-service 27

28. Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved Questions? 28