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Survey of Medical Insurance pp ch01

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Survey of Medical Insurance pp ch01

  1. 1. 1 Introduction to the Medical Billing Cycle
  2. 2. Learning Outcomes <ul><li>When you finish this chapter, you will be able to: </li></ul><ul><li>1.1 Explain the reason that employment opportunities for medical insurance specialists in physician practices are increasing rapidly. </li></ul><ul><li>1.2 Describe covered services and noncovered services under medical insurance policies. </li></ul><ul><li>1.3 Compare indemnity and managed care approaches to health plan organization. </li></ul><ul><li>1.4 Cite three examples of cost containment under health maintenance organizations. </li></ul><ul><li>1.5 Define a preferred provider organization. </li></ul>1-2
  3. 3. Learning Outcomes (Continued) <ul><li>When you finish this chapter, you will be able to: </li></ul><ul><li>1.6 State the two elements that are combined in a consumer-driven health plan. </li></ul><ul><li>1.7 Recognize the three major types of medical insurance payers. </li></ul><ul><li>1.8 List the ten steps in the medical billing cycle. </li></ul><ul><li>1.9 Define professionalism. </li></ul><ul><li>1.10 Explain the purpose of certification. </li></ul>1-3
  4. 4. Key Terms <ul><li>accounts receivable (A/R) </li></ul><ul><li>adjudication </li></ul><ul><li>benefits </li></ul><ul><li>capitation </li></ul><ul><li>coinsurance </li></ul><ul><li>compliance </li></ul><ul><li>consumer-driven health plan (CDHP) </li></ul><ul><li>copayment </li></ul><ul><li>covered services </li></ul>1-4 <ul><li>deductible </li></ul><ul><li>diagnosis code </li></ul><ul><li>ethics </li></ul><ul><li>etiquette </li></ul><ul><li>excluded services </li></ul><ul><li>fee-for-service </li></ul><ul><li>health care claim </li></ul><ul><li>health maintenance organization (HMO) </li></ul><ul><li>health plan </li></ul><ul><li>indemnity plan </li></ul><ul><li>managed care </li></ul>
  5. 5. Key Terms (Continued) <ul><li>managed care organization (MCO) </li></ul><ul><li>medical coder </li></ul><ul><li>medical insurance </li></ul><ul><li>medical insurance specialist </li></ul><ul><li>medical necessity </li></ul><ul><li>network </li></ul><ul><li>noncovered services </li></ul><ul><li>open-access plan </li></ul><ul><li>out-of-network </li></ul><ul><li>out-of-pocket </li></ul>1-5 <ul><li>participation </li></ul><ul><li>patient ledger </li></ul><ul><li>Patient Protection and Affordable Care Act (PPACA) </li></ul><ul><li>payer </li></ul><ul><li>per member per month (PMPM) </li></ul><ul><li>point-of-service (POS) plan </li></ul><ul><li>policyholder </li></ul><ul><li>practice management program (PMP) </li></ul>
  6. 6. Key Terms (Continued) <ul><li>preauthorization </li></ul><ul><li>preexisting condition </li></ul><ul><li>preferred provider organization (PPO) </li></ul><ul><li>premium </li></ul><ul><li>preventive medical services </li></ul><ul><li>primary care physician (PCP) </li></ul><ul><li>procedure code </li></ul><ul><li>professionalism </li></ul><ul><li>provider </li></ul>1-6 <ul><li>referral </li></ul><ul><li>schedule of benefits </li></ul><ul><li>self-funded (self-insured) health plan </li></ul><ul><li>third-party payer </li></ul>
  7. 7. 1.1 The Medical Insurance Field <ul><li>Spending on health care in the United States is rising due to the cost of advances in medical technology and an aging population </li></ul><ul><li>There are many job opportunities in the health care field as a result </li></ul>1-7
  8. 8. 1.2 Medical Insurance Terms <ul><li>Medical insurance is a written policy that states the terms of an agreement between a policyholder (an individual) and a health plan (an insurance company) </li></ul><ul><li>Health plans provide benefits (payments for medical services) </li></ul><ul><li>Health plans are often referred to as payers </li></ul><ul><li>A third-party payer is a private or government organization that insures or pays for health care on behalf of beneficiaries </li></ul>1-8
  9. 9. 1.2 Medical Insurance Terms (Continued) <ul><li>Insurance policies contain a schedule of benefits that summarizes payments that may be made for medical services </li></ul><ul><li>Payer’s definition of medical necessity determines coverage and payment </li></ul><ul><li>A provider must meet the payer’s professional standards </li></ul><ul><ul><li>Providers include physicians, nurse-practitioners, physician assistants, therapists, hospitals, laboratories, long-term care facilities, and suppliers such as pharmacies and medical supply companies </li></ul></ul>1-9
  10. 10. 1.2 Medical Insurance Terms (Continued) <ul><li>Covered services may include primary care, emergency care, medical specialists’ services, and surgery </li></ul><ul><li>Preventive medical services include physical examinations, pediatric and adolescent immunizations, prenatal care, and routine screening procedures </li></ul>1-10
  11. 11. 1.2 Medical Insurance Terms (Continued) <ul><li>Noncovered services are those not paid for by a health plan </li></ul><ul><li>Excluded services may include: </li></ul><ul><ul><li>Dental services, eye care, employment-related injuries, cosmetic procedures, or experimental procedures </li></ul></ul><ul><ul><li>Some other specific items </li></ul></ul><ul><ul><li>A preexisting condition— a medical condition diagnosed before the policy took effect </li></ul></ul>1-11
  12. 12. 1.3 Health Care Plans <ul><li>An indemnity plan provides protection against loss </li></ul><ul><li>Physicians send the health care claim —a formal insurance claim that reports data about the patient and the services provided—to the payer on behalf of the patient </li></ul><ul><li>Patients pay a premium —the periodic payment they are required to make to keep a policy in effect </li></ul>1-12
  13. 13. 1.3 Health Care Plans (Continued) <ul><li>Most policies have a deductible —the amount that the insured pays on covered services before benefits begin </li></ul><ul><li>Coinsurance is the percentage of each claim that the insured pays </li></ul><ul><li>Some patients must pay out-of-pocket expenses prior to benefits </li></ul><ul><li>Fee-for-service is a charging method based on each service performed </li></ul>1-13
  14. 14. 1.3 Health Care Plans (Continued) <ul><li>Managed care offers a more restricted choice of providers and treatments in exchange for lower premiums, deductibles, and other charges </li></ul><ul><li>Managed care organizations (MCOs) establish links between provider, patient, and payer </li></ul>1-14
  15. 15. 1.4 Health Maintenance Organizations <ul><li>A health maintenance organization (HMO) combines coverage of medical costs and delivery of health care for a prepaid premium </li></ul><ul><li>Participation means that a provider has contracted with a health plan to provide services to the plan’s beneficiaries </li></ul><ul><li>Capitation is a fixed prepayment to a provider for all necessary contracted services provided to each plan member </li></ul><ul><ul><li>Per member per month (PMPM) is the capitated rate </li></ul></ul>1-15
  16. 16. 1.4 Health Maintenance Organizations (Continued) <ul><li>A network is a group of providers having participation agreements with a health plan </li></ul><ul><ul><li>Visits to out of-network providers are not covered </li></ul></ul><ul><li>HMOs often require preauthorization before the patient receives many types of services </li></ul><ul><li>When HMO members see a provider, they pay a specified charge called a copayment </li></ul><ul><li>HMO members choose a primary care physician (PCP) , who directs all aspects of their care </li></ul>1-16
  17. 17. 1.4 Health Maintenance Organizations (Continued) <ul><li>Open-access plans are those HMOs that allow visits to specialists in the plan’s network without a referral </li></ul><ul><li>A point-of-service (POS) plan permits patients to receive medical services from non-network providers </li></ul>1-17
  18. 18. 1.5 Preferred Provider Organizations <ul><li>A preferred provider organization (PPO) is an MCO where a network of providers supply discounted treatment for plan members </li></ul><ul><ul><li>Most popular type of health plan </li></ul></ul><ul><ul><li>Creates a network of physicians, hospitals, and other providers with negotiated discounts </li></ul></ul><ul><ul><li>Requires payment of a premium and often of a copayment for visits </li></ul></ul>1-18
  19. 19. 1.6 Consumer-Driven Health Plans <ul><li>A consumer-driven health plan (CDHP) combines a high-deductible health plan with a medical savings plan </li></ul><ul><ul><li>The health plan is usually a PPO with a high deductible and low premiums </li></ul></ul><ul><ul><li>The savings account is used to pay medical bills before the deductible has been met </li></ul></ul>1-19
  20. 20. 1.7 Medical Insurance Payers <ul><li>Three major types of medical insurance payers: </li></ul><ul><ul><li>Private payers—dominated by large insurance companies </li></ul></ul><ul><ul><li>Self-funded (self-insured) health plans— organizations that pay for health insurance directly and set up a fund from which to pay </li></ul></ul><ul><ul><li>Government-sponsored health care programs—includes Medicare, Medicaid, TRICARE, and CHAMPVA </li></ul></ul><ul><li>The Patient Protection and Affordable Care Act (PPACA) is health system reform legislation that introduced significant benefits for patients </li></ul>1-20
  21. 21. 1.8 The Medical Billing Cycle <ul><li>A medical insurance specialist is a staff member who handles billing, checks insurance, and processes payments </li></ul><ul><li>To complete their duties, medical insurance specialists follow a 10-step medical billing cycle </li></ul><ul><ul><li>This cycle is a series of steps that leads to maximum, appropriate, timely payment </li></ul></ul>1-21
  22. 22. 1.8 The Medical Billing Cycle (Continued) <ul><li>Step 1 – Preregister patients </li></ul><ul><li>Step 2 – Establish financial responsibility for visits </li></ul><ul><li>Step 3 – Check in patients </li></ul><ul><li>Step 4 – Check out patients </li></ul><ul><ul><li>A medical coder is a staff member with specialized training who handles diagnostic and procedural coding </li></ul></ul><ul><ul><li>The patient’s primary illness is assigned a diagnosis code </li></ul></ul>1-22
  23. 23. 1.8 The Medical Billing Cycle (Continued) <ul><li>Step 4 – Check out patients (continued) </li></ul><ul><ul><li>Each procedure the physician performs is assigned a procedure code </li></ul></ul><ul><ul><li>Transactions are entered in a patient ledger —a record of a patient’s financial transactions </li></ul></ul><ul><li>Step 5 – Review coding compliance </li></ul><ul><ul><li>Compliance means actions that satisfy official requirements </li></ul></ul><ul><li>Step 6 – Check billing compliance </li></ul><ul><li>Step 7 – Prepare and transmit claims </li></ul>1-23
  24. 24. 1.8 The Medical Billing Cycle (Continued) <ul><li>Step 8 – Monitor payer adjudication </li></ul><ul><ul><li>Accounts receivable (A/R) is the monies owed to a medical practice </li></ul></ul><ul><ul><li>Adjudication is the process of examining claims and determining benefits </li></ul></ul><ul><li>Step 9 – Generate patient statements </li></ul><ul><li>Step 10 – Follow up patient payments and handle collections </li></ul><ul><li>A practice management program (PMP) is business software that organizes and stores a medical practice’s financial information </li></ul>1-24
  25. 25. 1.9 Working Successfully <ul><li>Professionalism is acting for the good of the public and the medical practice </li></ul><ul><li>Medical ethics are standards of behavior requiring truthfulness, honesty, and integrity </li></ul><ul><li>Etiquette is comprised of the standards of professional behavior </li></ul>1-25
  26. 26. 1.10 Moving Ahead <ul><li>Certification is the recognition of a superior level of skill by an official organization </li></ul><ul><ul><li>Provides evidence to prospective employers that the applicant has demonstrated a superior level of skill on a national test </li></ul></ul>1-26

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