1. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 17 Medical Insurance

2. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Understanding the Role of Medical Insurance Medical care consists of: –Diagnosis of diseases/disorders –Care and treatment provided by health care team Health care –Preventive services

3. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Understanding the Role of Medical Insurance Health care insurance –Contract between individual policyholder and a third party that reimburses medical provider or policyholder Changes in health insurance –Goal: health care insurance available to all citizens –2010: Patient Protection and Affordable Care Act (PPACA)

4. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Medical Insurance Terminology Terminology specific to insurance policies –Beneficiary –Deductible –Coinsurance –Co-payment –Health maintenance organizations (HMOs) –Pre-existing condition

5. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Medical Insurance Terminology Terminology specific to insurance policies –Exclusions –Coordination of benefits (COB) –Birthday rule –Explanation of benefits (EOB) –Remittance advice (remit)

6. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Medical Insurance Terminology Terminology specific to billing insurance carriers –Preauthorization –Claim –CMS-1500 (08-05) –Assignment of benefits –Direct payment –Indirect payment

7. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Medical Insurance Coverage Traditional insurance –Fee-for-service basis –Types of coverage Basic insurance Major medical insurance –Primary care provider (PCP)

8. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Medical Insurance Coverage Traditional insurance –Blue Cross and Blue Shield (BC/BS) Function independently in their own service area Organized as not-for-profit corporations or as for-profit companies Network of participating providers (PARs)

9. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Medical Insurance Coverage Managed care organizations (MCOs) –Health care needs of group of enrollees –Health care plan, hospital, provider group, health system –Capitation: system of payment –PCPs as case managers

10. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Medical Insurance Coverage Managed care organizations (MCOs) –Exclusive provider organizations (EPOs) –Integrated delivery systems (IDSs) –Health maintenance organizations (HMOs) –Point-of-service (POS) plans –Preferred provider organization (PPO) –Triple option plan –Independent physician association (IPA)

11. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Medical Insurance Coverage The impact of managed care –Providers network and compete to serve patients better and more cost-efficiently –Contain costs by prevention and lifestyle changes

12. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Medical Insurance Coverage Medicare –Largest medical insurance program in United States –Eligibility: 65 years and older; disability; chronic kidney disease –Part A: hospital admission and stay, home health care, hospice care; substantial deductible –Part B: outpatient expenses –Resource-based relative value scale (RBRVS)

13. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Medical Insurance Coverage Medicare –Part C: Medicare advantage plans; run by private companies –Part D: prescription drug coverage –“Donut hole” or coverage gap –Medicare supplemental insurance (Medigap policies)

14. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Medical Insurance Coverage Medicaid insurance –Medical care for qualifying low-income individuals –Funded by federal government –Administered by each state’s department of Supplemental Security Income (SSI) –Secondary to any supplemental insurance

15. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Medical Insurance Coverage TRICARE –Medical insurance for active duty, activated guard, reserves, retired members of military, families and survivors –TRICARE Prime: active duty, guard, reserve service members automatically enrolled

16. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Medical Insurance Coverage TRICARE –Options: Prime, Extra, Standard (original CHAMPUS) –Defense Enrollment Eligible Reporting System (DEERS)

17. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Medical Insurance Coverage Civilian Health and Medical Program of the Veterans’ Administration (CHAMPVA) –Spouses and unmarried dependent children of veteran with permanent total disability from service-related injury –Surviving spouse and children of veteran who died of service-related disability

18. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Medical Insurance Coverage Workers’ Compensation Insurance –Medical and paycheck insurance for workers who sustain injuries associated with employment –In some instances, covers family members in case of death of worker

19. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Medical Insurance Coverage Self-insurance –Larger companies, nonprofit organizations, state and county governments –Contact plan administrator before scheduling appointments

20. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Medical Insurance Coverage Medical tourism insurance –Health-provider networks paying insured client to go abroad for treatment at internationally accredited hospitals –New to industry

21. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Screening for Insurance Screen all new patients for insurance New patients arrive 15–20 minutes early to complete patient registration form Photocopy patient’s driver’s license and health insurance card and file in chart

22. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Screening for Insurance Each time patient checks in, MA should ask questions to verify insurance information Important to understand philosophy of medical office

23. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Screening for Insurance Please refer to the video library on the Instructor Resources CD to view video “MA Encounters Patient with no Insurance.”

24. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Referrals and Authorizations Referral categories –Regular –Urgent –STAT Authorization: approved referrals Preauthorization and precertification –Authorization/referral number entered in Box 23 of CMS-1500 form

25. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Determining Fee Schedules Fee computation plan common elements –Overhead or practice expenses –Cost of medical malpractice insurance –Hourly rate for services provided by provider

26. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Determining Fee Schedules Usual, customary, reasonable (UCR) fees –Fee system that defines allowable charges –Usual fee: provider’s average fee for service or procedure –Customary fee: average or range of fees within geographic area that insurance carrier will accept –Reasonable fee: generally accepted fee for services or procedures that are extraordinarily difficult or complicated

27. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Determining Fee Schedules Resource-based relative value system (RBRVS) –Used by Medicare –Provider’s services are reimbursed based on relative value units (RVUs)

28. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Determining Fee Schedules Resource-based relative value system (RBRVS) –Each service, procedure, medication assigned a code from CPT or ICD-9-CM manuals –GPCI related to geographic area where provider is located is issued for each RVU category

29. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Determining Fee Schedules Diagnosis-related groups (DRGs) –Ensure all given diagnoses as specific as possible –Justify length of patient’s stay in hospital

30. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Determining Fee Schedules Hospital inpatient prospective payment system (IPPS) –Based on DRGs of inpatients discharged –DRGs based on average cost for treatment of patient’s condition

31. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Determining Fee Schedules Hospital outpatient prospective payment system (OPPS) –Reimbursement system based on ambulatory payment classifications (APCs) –Hospitals may be paid for more than one APC for encounter

32. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Determining Fee Schedules Capitation –Payment system used primarily by MCOs –Requires extensive practice of preventive medicine to be cost effective

33. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Legal and Ethical Issues HIPAA regulates security and privacy of transmitted health care information Medical personnel bound by law to maintain confidentiality of all medical information Must be able to recognize information protected by privacy rules

34. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Legal and Ethical Issues Insurance fraud and abuse –Involved in 10% of submitted medical claims –Be alert for accidental and intentional coding and billing irregularities –Bring them to attention of managers –If no corrective action taken, legally responsible to report irregularities to insurance carrier –Auditor should check all submitted claim forms

35. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Professional Careers in Insurance Training and entry-level requirements Personal attributes that enhance employment possibilities Health insurance specialist career opportunities