Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Basics of...

Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved.

Basics of Health Insurance

Chapter 19

Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 2

Introduction

Health Insurance is designed to help individuals and families offset the cost of medical care.

There are many types of health insurance available, but many individuals in the United States are not covered by any type of health insurance plan.


This chapter will examine:

The purpose of health insurance

Types of insurance policies

How insurance benefits are determined

Types of and use of fee schedules

Preauthorizations and precertifications

Major third-party payors


Cycle of Health Insurance

The medical assistant plays a part in the provider’s reimbursement by providing accurate information on claim forms.

Follow-up is sometimes necessary to make certain that claims are paid correctly and in a timely manner.



Obtain information from the patient and insured.

Verify the patient’s eligibility and benefits.

Perform diagnostic and procedural coding

Calculate deductibles and co-insurance amounts.



Obtain preauthorization or permission, if applicable, for referral if advance permissions is needed.

Complete the insurance claim form and submit it to the third-party payor.

Post payments sent by insurance carriers.

Bill the patient for remaining balances.

Follow up on rejected or unpaid claims.


Cost of Coverage

Patients may have to pay certain expenses related to their health coverage.

Deductibles– Amounts paid out of pocket before insurance will pay on

a health claim

Copayments– Amount paid at the time of service

Co-insurances– Percentage paid by insured before insurance pays on a

claim


Types of Health Insurance

Group policies

These policies cover a number of people under a single master contract issued to an employer or other association of individuals.



Individual policies

Usually more expensive than group policies, these are usually purchased by individuals who do not have access to any other type of health insurance.



Government plans

Sometimes called entitlement programs, these plans are sponsored by some branch or division of the government; examples include Medicare, Medicaid, TRICARE, and CHAMPVA.



Medicaid

A government program designed for medically indigent individuals who meet specific eligibility criteria



Medicare

A program established by the federal government for persons 65 and older, as well as persons with certain disabilities



Workers’ compensation

Laws that protect workers against the loss of wages and cost of medical care resulting from an occupational accident or disease



Self-insured plans

Often offered by large employers, which put a certain amount of money in an account per month, per employee; eligible medical bills are paid from that account.



Medical savings accounts

Tax-free accounts that allow the individual to make tax-free deposits into the account; the money is in turn used for medically related expenses


Types of Insurance Plan Benefits


How Benefits Are Determined

By indemnity schedules

By service benefit plans

By determination of the UCR fee

By relative value studies


Indemnity Schedules

Often called fee-for-service plans.

Usually any provider can be consulted.

Payment is usually made directly to the provider.

A certain percentage of the fee is paid by the plan, and the insured is responsible for the balance.


Service Benefit Plans

No set fee schedule.

Certain surgical and medical services are paid without any additional cost to the insured.

Premiums sometimes higher, but payment is often larger as well.


Usual, Customary, and Reasonable Fee

Charges for specific services are compared with a database of charges by physicians in the same geographic area for the same service.


Resource-Based Relative Value Scale

Fee-scale payment system based on:

Physician work

Charge-based professional liability expenses

Charge-based overhead


Health Insurance Providers

Managed care plans

Provide healthcare in return for preset scheduled payments.

Care is coordinated through a network of contracted physicians and hospitals.


Advantages of Managed Care

Costs are usually contained.

Fee schedules are established.

Authorized services are usually paid.

Preventative treatment is usually covered.

Patient out-of-pocket expenses are usually minimal.


Disadvantages of Managed Care

Access to specialized care and referrals can be limited.

Physician choices may be limited.

Paperwork may increase.

Treatment may be delayed because of preauthorization requirements.

Reimbursement is historically less than through traditional insurance.


Models of Managed Care

Health Maintenance Organization (HMO)

Preferred Provider Organization (PPO)


HMO

Contracts with a medical center or group of physicians to provide preventative and acute care for the insured

Regulated by HMO laws

Always require referrals to specialists

Common HMO models are:– IPA

– staff model

– group model


Comparison of HMO Models


PPO

Preserves the fee-for-service concept.

Predetermined list of charges is contracted with providers.

No capitations or prepaid care.

Usually has deductibles and/or copays.

Rates for services usually lower than for non-PPO patients.


Capitation Plans

Found in HMOs.

Providers are paid per member, per month.

Patients may not even see the provider, yet he or she is paid a fee for that month.


Exclusive Provider Organization

Combines features of HMO and PPOs.

Employers agree not to contract with any other plan.

Members must choose from a list of network providers.

Exceptions are made for emergency and out-of-town care.


Blue Cross/Blue Shield

America’s oldest and largest system of independent health insurers

Offers incentive contracts to healthcare providers

PAR—participating providers accept BC/BS payment as reimbursement in full


BC/BS ID Card


Medicaid

Federal government assists states in providing healthcare services.

States individually elect to provide funds for extension of benefits.

Physicians may decide whether to treat patients with Medicaid coverage.


Medicaid ID Card


Qualifiers for Medicaid

Medically needy Recipients of Aid to Families with Dependent

Children Recipients of Supplemental Security Income (SSI) Persons receiving certain types of state aid Some Medicare qualifiers Persons in institutions or receiving long-term care

in nursing facilities and intermediate care facilities


Medicare

Qualifiers include:

People 65 or older

People who are permanently disabled or blind

People receiving dialysis for permanent kidney failure or who have had a kidney transplant


Medicare Administration

Medicare is administered by the Centers for Medicare and Medicaid Services

Formerly known as the Healthcare Financing Administration (HCFA)

Division of the Department of Health and Human Services


Medicare Parts A and B

Part A

Inpatient hospital care

Skilled nursing facilities

Home healthcare

Hospice services

Part B

Outpatient hospital care

Durable medical equipment

Physician’s services

Other medical services


Medicare Part “C”

Not commonly called Part C

Medicare + Choice

Expanded benefits similar to those of HMOs and PPOs


Medicare Part D

Drug and prescription benefits.

Drug plan is chosen at a reduced cost.

Usually a small copayment is required.


Medicare ID Card


TRICARE

Formerly CHAMPUS.

Comprehensive healthcare program for military dependents and retirees.

Expands access to healthcare.

All military hospitals and clinics are a part of TRICARE.


TRICARE Choices

Prime– similar to a civilian HMO

Extra– similar to a civilian PPO

Standard– traditional fee-for-service option formerly known as

CHAMPUS


CHAMPVA

Similar to TRICARE.

Established for spouses and dependent children of veterans who have total, permanent, service-related disabilities.

Most participants receive services at VA hospitals.


Worker’s Compensation

Protects wage earners against the loss of wages and the cost of medical care after an occupational accident or illness.

Always check for coverage when the patient mentions a work-related illness.

Benefits include medical care, weekly income replacement benefits, permanent disability settlements, and more.


Disability Programs

Form of health insurance

Provide periodic payments to replace income

Can be obtained through employer-sponsored and/or government-funded programs


Commercial Insurance

Issued by private companies

Secured through employers or individually

Payment usually made to subscribers unless authorization is given to pay providers


Verification of Insurance Benefits

Identify type of insurance coverage when the patient first calls the office.

Photocopy both sides of the insurance ID card.

Contact the insurance carrier to verify coverage and eligibility.


Verification of Insurance Benefits

Document information in the patient’s medical record.

Explain covered and noncovered procedures and services to the patient, if necessary.

Explain the referral procedure to the patient.

Collect copayments and/or deductibles.


Precertification or Preauthorization

Information needed: Patient name, address, phone number Patient ID number Provider name and information Plan name and address Preliminary diagnosis Planned procedures and treatments Facility addresses and phone numbers Copayments and deductibles Hospital benefits Participating facilities


Referrals

Can take a few moments or a few days.

Urgent referrals usually are done within 24 hours.

STAT referrals may be offered.

Regular referrals most common.


Utilization Management

Making certain that medical care is necessary for the patient

Utilization review committees determine whether certain procedures are medically necessary, which may influence reimbursement amounts


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Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Basics of...

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