1. Comprehensive Health Insurance Billing, Coding, and Reimbursement Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Chapter 2 Understanding Managed Care: Insurance Plans

2. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Causes of Managed Care  Technological advances  Rising healthcare costs  Aging population  Increase in malpractice suits  Defensive medicine

3. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Creation of Managed Care  Rapid increase of healthcare costs  Health insurance no longer affordable  Government intervention  Control healthcare costs

4. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Goals of Managed Care  Control cost and delivery of health services.  Deliver high quality care in facility that manages/controls cost.  Decide the medical necessity for treatment of illness.

5. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Goals of Managed Care  Ensure that medical care is delivered by the most appropriate provider.  Ensure that medical care is rendered in the most appropriate setting.  Contract discounted reimbursement fees.

6. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Managed Care Guidelines  The provider is reimbursed for each procedure the usual and customary fee.  The usual fee is the individual provider’s average charge for a procedure.  The customary fee is determined by what a physician with similar training in a similar geographical location would charge.

7. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Managed Care Guidelines  Gatekeeper (primary care physician)  Cost containment  The most appropriate provider conducts patient care.

8. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Discounted Fees for Service  The usual fee is the individual provider’s average charge for a procedure.  The customary fee is determined by what a physician with similar training in a similar geographical location would charge.

9. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Calculate Patient Responsibility  Step 1: Contractual agreement/write-off. Subtract allowed amount from billed amount.  Step 2: Carrier’s responsibility. Subtract any unpaid deductible or copay (if no deductible or copay, go to Step 3)  Step 3: Patient responsibility

10. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Types of Managed Care Plans  HMO: Health maintenance organization  PPO: Preferred provider organization  POS: Point-of-service plan

11. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Health Maintenance Organization  The subscriber chooses a primary care physician (gatekeeper) who directs all care.  The HMO has a contractual agreement with providers and hospitals to form a network.  Members may only use providers within the network.

12. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Health Maintenance Organization  Members may only see a specialist if referred from the gatekeeper.  HMOs are the most restrictive, but have a greater range of health benefits and low (or no) out-of-pocket expense.

13. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Preferred Provider Organization  Similar to an HMO, it forms a network of providers.  Members do not have a gatekeeper.  Members do not need a referral.  It is less restrictive than an HMO, but may have higher out-of-pocket cost.

14. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Point-of-Service Options  Members choose which type of option (HMO or PPO) they will use each time the member seeks health care.  The POS plan has a provider network.  POS plans encourage, but do not require, a gatekeeper.  Referrals may have higher out-of-pocket expense.

15. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Criticisms of Managed Care Plans  In emergent care, the enrollee must use in-network hospital for service to be covered.  Denying care and treatment: There is no patient recourse to appeal the decision of denial of care or treatment.  Preauthorization: This adds an extra layer of time while trying to access health care.

16. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Types of Insurance Coverage  Group: Purchased by employer, and covers employee and all dependents. Premium costs are lower.  Individual: Purchased by individual, and covers purchaser and dependents. Premiums are very expensive.

17. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Indemnity Fee for Service  Provides coverage for all medically necessary services.  Patient may use any provider.  No fee discounts are taken.  No preauthorization is required.

18. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Hospital Insurance  Protects against costs of hospital care  Provides a room allowance  Limits number of days that can be utilized in a year

19. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Hospital Indemnity Insurance  Pays a “per diem” amount to patient  This is a supplemental policy.

20. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Medical Insurance  Covers benefits for outpatient services  Covers physician fees for hospital visits and nonsurgical procedures  Major medical offers protection for large medical expenses.

21. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Miscellaneous Medical Insurance  Special risk  Catastrophic health insurance  Short-term health insurance  COBRA-insured patients may continue healthcare coverage for 18 months after leaving job, but must pay the full premium.

22. Copyright ©2009 by Pearson Education, Inc. Upper Saddle River, New Jersey 07458 All rights reserved. Comprehensive Health Insurance: Billing, Coding, and Reimbursement Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy H. Wright, and Judith S. Haynes Major Insurance Providers  Blue Cross Blue Shield: Private and state regulated  Medicare: Federally funded  Medicaid: Federally and state funded– state managed  CHAMPVA: Veteran’s Administration