UNIT 1 BUILDING A FOUNDATION CHAPTER 4 TYPES AND SOURCES OF HEALTH INSURANCE Copyright © 2011,...

UNIT 1 UNIT 1 BUILDING A FOUNDATIONBUILDING A FOUNDATION

CHAPTER 4 CHAPTER 4 TYPES AND SOURCES TYPES AND SOURCES

OF HEALTH INSURANCEOF HEALTH INSURANCE

Copyright © 2011, 2009, 2007 by Saunders, an imprint of Elsevier Inc.Copyright © 2011, 2009, 2007 by Saunders, an imprint of Elsevier Inc.

22Copyright © 2011, 2009, 2007 by Saunders, an imprint of Elsevier Inc.Copyright © 2011, 2009, 2007 by Saunders, an imprint of Elsevier Inc.

Two Basic Types Two Basic Types of Health Insuranceof Health Insurance

indemnityindemnity (fee-for-service) (fee-for-service) managed caremanaged care


Main DifferencesMain Differences

Choice of providersChoice of providers Out-of-pocket costs for covered servicesOut-of-pocket costs for covered services How bills are paidHow bills are paid


How UCR is CalculatedHow UCR is Calculated

Charges for same/similar service Charges for same/similar service Charge variance by providers for same Charge variance by providers for same

service; same geographic area service; same geographic area Did procedure require more time, skill, or Did procedure require more time, skill, or

experience than usual? experience than usual? Value of procedure compared to other Value of procedure compared to other

servicesservices


Out-of-Pocket MaximumOut-of-Pocket Maximum

A specified amount the patient must pay A specified amount the patient must pay out-of-pocket for out-of-pocket for coveredcovered services in a benefit services in a benefit periodperiod


Basic Medical CoverageBasic Medical Coverage

Basic medical coverage pays for room and Basic medical coverage pays for room and care while the patient is hospitalized. care while the patient is hospitalized.

It may also cover certain hospital services It may also cover certain hospital services and supplies.and supplies.

It pays toward the cost of surgery, whether it It pays toward the cost of surgery, whether it is performed in or out of the hospital, and for is performed in or out of the hospital, and for some doctor visits.some doctor visits.


Major Medical CoverageMajor Medical Coverage

Major Medical coverage takes over where Major Medical coverage takes over where basic coverage leaves off. basic coverage leaves off.

It covers cost of long and high-cost illnesses It covers cost of long and high-cost illnesses or injuries. or injuries.

It combines basic and major medical It combines basic and major medical coverage into one plan = coverage into one plan = comprehensive comprehensive plan.plan.


Preexisting ConditionsPreexisting Conditions

A physical or mental condition that: A physical or mental condition that: existed before the issuance of a health insurance existed before the issuance of a health insurance

policy orpolicy or existed before issuance and for which treatment existed before issuance and for which treatment

was receivedwas received


Managed CareManaged Care

Managed care is an organized way to Managed care is an organized way to manage the cost, use, and quality of a manage the cost, use, and quality of a healthcare system.healthcare system.

There are several major forms of There are several major forms of managed care.managed care.


Managed Care OrganizationsManaged Care Organizations

Managed Care Organizations tell patients Managed Care Organizations tell patients which physicians they can see. which physicians they can see.

They monitor the medications and treatments They monitor the medications and treatments they prescribe. they prescribe.

They ensure enrollees that their costs will They ensure enrollees that their costs will remain as low as possible.remain as low as possible.


Managed Care Organizations (MCOs)Managed Care Organizations (MCOs) hire a medical staffhire a medical staff under contractunder contract staff takes orders from MCOstaff takes orders from MCO

Managed Care OrganizationsManaged Care Organizations


Sources of Health InsuranceSources of Health Insurance

Group ContractsGroup Contracts Individual PoliciesIndividual Policies Medicare & Medicare Supplement PlansMedicare & Medicare Supplement Plans MedicaidMedicaid TRICARE/CHAMPVATRICARE/CHAMPVA Disability InsuranceDisability Insurance


Medical Savings Account (MSA)Medical Savings Account (MSA)

A MSA is a special tax shelter set up for the A MSA is a special tax shelter set up for the purpose of paying medical bills for individuals purpose of paying medical bills for individuals who choose a low cost, high deductible who choose a low cost, high deductible healthcare policy.healthcare policy.


Flexible Spending Account (FSA)Flexible Spending Account (FSA)

An FSA is a tax advantaged savings account An FSA is a tax advantaged savings account set up through an employer to allow tax-free set up through an employer to allow tax-free savings for qualified medical or dependent savings for qualified medical or dependent care expenses.care expenses.


Health Reimbursement Health Reimbursement Arrangement (HRA)Arrangement (HRA)

The HRA is a type of health insurance plan The HRA is a type of health insurance plan that reimburses employees for certain that reimburses employees for certain qualifying medical expenses.qualifying medical expenses.

It is open to employees of companies of It is open to employees of companies of any size. any size.

It provides first-dollar medical coverage until It provides first-dollar medical coverage until funds are used up.funds are used up.


Long-Term CareLong-Term Care

Long-term care is medical, social, and/or Long-term care is medical, social, and/or personal care services, required over a long personal care services, required over a long period of time by a person with a chronic period of time by a person with a chronic illness or disability.illness or disability.

Long-term care is not necessarily medical Long-term care is not necessarily medical care but rather custodial care.care but rather custodial care.


COBRACOBRA

COBRA extends healthcare coverage after COBRA extends healthcare coverage after an individual leaves his or her place of an individual leaves his or her place of employment.employment.

Individual must pay the entire premium.Individual must pay the entire premium.


Birthday RuleBirthday Rule

This is a rule used to determine the primary This is a rule used to determine the primary and secondary carrier in administering and secondary carrier in administering benefits for a patient who has dual coverage benefits for a patient who has dual coverage and a coordination of benefits clause.and a coordination of benefits clause.

Person whose birthday comes first in the year Person whose birthday comes first in the year (not the person who is oldest).(not the person who is oldest).


Other Terms to KnowOther Terms to Know

Coordination of BenefitsCoordination of Benefits Medical Necessity Medical Necessity Usual, Reasonable and Customary (UCR)Usual, Reasonable and Customary (UCR) Balance BillingBalance Billing Participating Provider (PAR)Participating Provider (PAR) NonPARNonPAR


CMS-1500CMS-1500

This is the universal form created by the This is the universal form created by the government for Medicare claims.government for Medicare claims.

It has since been adopted by most third party It has since been adopted by most third party carriers.carriers.

It may be submitted in paper form or It may be submitted in paper form or electronically.electronically.

UNIT 1 BUILDING A FOUNDATION CHAPTER 4 TYPES AND SOURCES OF HEALTH INSURANCE Copyright © 2011,...

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