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Survey of Medical Insurance pp ch09

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Survey of Medical Insurance pp ch09

  1. 1. 9 Private Payers/Blue Cross and Blue Shield
  2. 2. Learning Outcomes <ul><li>When you finish this chapter, you will be able to: </li></ul><ul><li>9.1 Compare employer-sponsored and self-funded health plans. </li></ul><ul><li>9.2 Describe the major features of group health plans regarding eligibility, portability, and required coverage. </li></ul><ul><li>9.3 Discuss provider payment under preferred provider organizations, health maintenance organizations, point-of-service plans, and indemnity plans. </li></ul><ul><li>9.4 Compare and contrast health reimbursement accounts, health savings accounts, and flexible savings (spending) accounts. </li></ul>9-2
  3. 3. Learning Outcomes (Continued) <ul><li>When you finish this chapter, you will be able to: </li></ul><ul><li>9.5 List and discuss the major private payers. </li></ul><ul><li>9.6 List the five main parts of participation contracts and describe their purpose. </li></ul><ul><li>9.7 Describe the information needed to collect copayments and bill for surgical procedures under contracted plans. </li></ul><ul><li>9.8 Discuss the use of plan summary grids. </li></ul><ul><li>9.9 Describe the steps in the medical billing cycle that ensure correct preparation of private payer claims. </li></ul><ul><li>9.10 Discuss the key points in managing billing for capitated services. </li></ul>9-3
  4. 4. Key Terms <ul><li>administrative services only (ASO) </li></ul><ul><li>BlueCard </li></ul><ul><li>Blue Cross and Blue Shield Association (BCBS) </li></ul><ul><li>carve out </li></ul><ul><li>Consolidated Omnibus Budget Reconciliation Act (COBRA) </li></ul><ul><li>credentialing </li></ul><ul><li>creditable coverage </li></ul>9-4 <ul><li>discounted fee-for-service </li></ul><ul><li>elective surgery </li></ul><ul><li>Employee Retirement Income Security Act (ERISA) of 1974 </li></ul><ul><li>episode of care (EOC) option </li></ul><ul><li>family deductible </li></ul><ul><li>Federal Employees Health Benefits (FEHB) program </li></ul>
  5. 5. Key Terms (Continued) <ul><li>Flexible Blue </li></ul><ul><li>flexible savings (spending) account (FSA) </li></ul><ul><li>formulary </li></ul><ul><li>group health plan (GHP) </li></ul><ul><li>health reimbursement account (HRA) </li></ul><ul><li>health savings account (HSA) </li></ul><ul><li>high-deductible health plan (HDHP) </li></ul>9-5 <ul><li>home plan </li></ul><ul><li>host plan </li></ul><ul><li>independent (or individual) practice association (IPA) </li></ul><ul><li>individual deductible </li></ul><ul><li>individual health plan (IHP) </li></ul><ul><li>late enrollee </li></ul><ul><li>maximum benefit limit </li></ul><ul><li>medical home model </li></ul><ul><li>monthly enrollment list </li></ul>
  6. 6. Key Terms (Continued) <ul><li>open enrollment period </li></ul><ul><li>parity </li></ul><ul><li>pay-for-performance (P4P) </li></ul><ul><li>plan summary grid </li></ul><ul><li>precertification </li></ul><ul><li>repricer </li></ul><ul><li>rider </li></ul><ul><li>Section 125 cafeteria plan </li></ul><ul><li>silent PPOs </li></ul><ul><li>stop-loss provision </li></ul>9-6 <ul><li>subcapitation </li></ul><ul><li>Summary Plan Description (SPD) </li></ul><ul><li>third-party claims administrator (TPAs) </li></ul><ul><li>tiered network </li></ul><ul><li>utilization review </li></ul><ul><li>utilization review organization (URO) </li></ul><ul><li>waiting period </li></ul>
  7. 7. 9.1 Private Insurance <ul><li>People not covered by entitlement programs are usually covered by private insurance </li></ul><ul><li>Employer-sponsored medical insurance </li></ul><ul><ul><li>Group health plan (GHP)— plan of an employer or employee organization to provide health care to employees, former employees, or their families </li></ul></ul><ul><ul><li>Rider— document modifying an insurance contract </li></ul></ul><ul><ul><li>Carve out— part of a standard health plan changed under an employer-sponsored plan </li></ul></ul><ul><ul><li>Open enrollment period— time when a policyholder selects from offered benefits </li></ul></ul>9-7
  8. 8. 9.1 Private Insurance (Continued) <ul><li>Federal Employees Health Benefits (FEHBP) Program— covers employees of the federal program </li></ul><ul><li>Self-funded health plans </li></ul><ul><ul><li>Employee Retirement Income Security Act of 1974 (ERISA)— law providing incentives and protection for companies with employee health and pension plans </li></ul></ul><ul><ul><li>Summary Plan Description (SPD)— required document for self-funded plans stating beneficiaries’ benefits and legal rights </li></ul></ul>9-8
  9. 9. 9.1 Private Insurance (Continued) <ul><li>Self-funded health plans (continued) </li></ul><ul><ul><li>Third-party claims administrator (TPAs)— business associates of health plans </li></ul></ul><ul><ul><li>Administrative services only (ASO)— contract where a third-party administrator or insurer provides administrative services to an employer for a fixed fee per employee </li></ul></ul><ul><li>Individual health plan (IHP)— medical insurance plan purchased by an individual </li></ul>9-9
  10. 10. 9.2 Features of Group Health Plans <ul><li>Section 125 cafeteria plan— employers’ health plans structured to permit funding of premiums with pretax payroll deductions </li></ul><ul><li>Eligibility for benefits: </li></ul><ul><ul><li>GHP specifies the rules for eligibility and the process of enrolling and disenrolling members </li></ul></ul><ul><ul><li>Waiting period— amount of time that must pass before an employee/dependent may enroll in a health plan </li></ul></ul><ul><ul><li>Late enrollee— category of enrollment that may have different eligibility requirements </li></ul></ul>9-10
  11. 11. 9.2 Features of Group Health Plans (Continued) <ul><li>Eligibility for benefits (continued): </li></ul><ul><ul><li>Individual deductible— fixed amount that must be met periodically by each individual of an insured/dependent group </li></ul></ul><ul><ul><li>Family deductible— fixed, periodic amount that must be met by the combined payments of an insured/dependent group before benefits begin </li></ul></ul><ul><ul><li>Maximum benefit limit— amount an insurer agrees to pay for lifetime covered expenses </li></ul></ul><ul><ul><li>Tiered network— network system that reimburses more for quality, cost-effective providers </li></ul></ul>9-11
  12. 12. 9.2 Features of Group Health Plans (Continued) <ul><li>Portability and required coverage: </li></ul><ul><ul><li>Consolidated Omnibus Budget Reconciliation Act (COBRA)— law requiring employers with over twenty employees to allow terminated employees to pay for coverage for eighteen months </li></ul></ul><ul><ul><li>Creditable coverage— history of coverage for calculation of COBRA benefits </li></ul></ul><ul><ul><li>Parity— equality with medical/surgical benefits </li></ul></ul>9-12
  13. 13. 9.3 Types of Private Payers <ul><li>Under preferred provider organizations (PPOs), providers are paid under a discounted fee-for-service structure </li></ul><ul><ul><li>Discounted fee-for-service— payment schedule for services based on a reduced percentage of usual charges </li></ul></ul><ul><li>In health maintenance organizations (HMOs) and point-of-service (POS) plans, payment may be a salary or capitated rate </li></ul><ul><li>Indemnity plans basically pay from the physician’s fee schedule </li></ul>9-13
  14. 14. 9.3 Types of Private Payers (Continued) <ul><li>Subcapitation— arrangement where a capitated provider prepays an ancillary provider </li></ul><ul><li>Episode-of-care (EOC) option— flat payment by a health plan to a provider for a defined set of services </li></ul><ul><li>Independent practice association (IPA)— HMO in which physicians are self-employed and provide services to members and nonmembers </li></ul><ul><li>Medical home model —plan that seeks to improve patient care by rewarding primary care physicians for coordinating patients’ treatments </li></ul>9-14
  15. 15. 9.4 Consumer-Driven Health Plans <ul><li>CDHPs combine two components: </li></ul><ul><ul><li>A high-deductible health plan (HDHP) —health plan that combines high-deductible insurance and a funding option to pay for patients’ out-of-pocket expenses up to the deductible </li></ul></ul><ul><ul><li>One or more tax-preferred savings accounts that the patient directs </li></ul></ul>9-15
  16. 16. 9.4 Consumer-Driven Health Plans (Continued) <ul><li>Three types of CDHP funding options may be combined with HDHPs: </li></ul><ul><ul><li>Health reimbursement account (HRA)— consumer-driven health plan funding option where an employer sets aside an annual amount for health care costs </li></ul></ul><ul><ul><li>Health savings account (HSA)— consumer-driven health plan funding option under which funds are set aside to pay for certain health care costs </li></ul></ul><ul><ul><li>Flexible savings account (FSA)— consumer-driven health plan funding option that has employer and employee contributions </li></ul></ul>9-16
  17. 17. 9.5 Major Private Payers and the Blue Cross and Blue Shield Association <ul><li>The major national payers: </li></ul><ul><ul><li>WellPoint, Inc. </li></ul></ul><ul><ul><li>UnitedHealth Group </li></ul></ul><ul><ul><li>Aetna </li></ul></ul><ul><ul><li>CIGNA Health Care </li></ul></ul><ul><ul><li>Kaiser Permanente </li></ul></ul><ul><ul><li>Health Net </li></ul></ul><ul><ul><li>Humana, Inc. </li></ul></ul><ul><ul><li>Coventry </li></ul></ul><ul><li>Credentialing— periodic verification that a provider or facility meets professional standards </li></ul>9-17
  18. 18. 9.5 Major Private Payers and the Blue Cross and Blue Shield Association (Cont.) <ul><li>The Blue Cross and Blue Shield Association (BCBS)— national organization of independent companies founded in 1930 to provide low-cost medical insurance </li></ul><ul><ul><li>Pay-for-performance (P4P)— health plan financial incentives program based on provider performance </li></ul></ul><ul><ul><li>BlueCard— program that provides benefits for subscribers who are away from their local areas </li></ul></ul>9-18
  19. 19. 9.5 Major Private Payers and the Blue Cross and Blue Shield Association (Cont.) <ul><li>The Blue Cross and Blue Shield Association (BCBS) (continued) </li></ul><ul><ul><li>Host plan— participating provider’s local Blue Cross and Blue Shield plan </li></ul></ul><ul><ul><li>Home plan— Blue Cross and Blue Shield plan in the subscriber’s community </li></ul></ul><ul><ul><li>Flexible Blue— Blue Cross and Blue Shield consumer-driven health plan </li></ul></ul>9-19
  20. 20. 9.6 Participation Contracts <ul><li>Participation contracts have five main parts: </li></ul><ul><ul><li>The introductory section provides the names of the parties to the agreement, contract definitions, and the payer </li></ul></ul><ul><ul><li>The contract purpose and covered medical services section lists the type and purpose of the plan and the medical services it covers for its enrollees </li></ul></ul><ul><ul><li>The third section covers the physician’s responsibilities as a participating provider </li></ul></ul><ul><ul><li>The fourth section covers the plan’s responsibilities toward the participating provider </li></ul></ul>9-20
  21. 21. 9.6 Participation Contracts (Continued) <ul><li>Participation contracts have five main parts (continued): </li></ul><ul><ul><li>The fifth section lists the compensation and billing guidelines, such as fees, billing rules, filing deadlines, patients’ financial responsibilities, and coordination of benefits </li></ul></ul><ul><li>Utilization review— payer’s process for determining medical necessity </li></ul><ul><li>Stop-loss provision— protection against large losses or severely adverse claims experience </li></ul>9-21
  22. 22. 9.7 Interpreting Compensation and Billing Guidelines <ul><li>Under participation contracts, most plans require copayments to be subtracted from the usual fees that are billed to the plans </li></ul><ul><li>Billing for elective surgery requires precertification from the plan </li></ul><ul><ul><li>Precertification— preauthorization for hospital admission or outpatient procedures </li></ul></ul><ul><li>Providers must notify plans about emergency surgery within the specified timeline after the procedure </li></ul>9-22
  23. 23. 9.7 Interpreting Compensation and Billing Guidelines (Continued) <ul><li>Silent PPOs— MCO that purchases a list of participating providers and pays their enrollees’ claims according to the contract’s fee schedule despite the lack of a contract </li></ul><ul><li>Elective surgery— nonemergency surgical procedure </li></ul><ul><li>Utilization review organization (URO)— organization hired by a payer to evaluate medical necessity </li></ul>9-23
  24. 24. 9.8 Private Payer Billing Management: Plan Summary Grids <ul><li>Plan summary grids— quick-reference tables for health plans </li></ul><ul><ul><li>Summarize key items from the contract </li></ul></ul><ul><ul><li>List key information about each contracted plan and provide a shortcut reference for the billing and reimbursement process </li></ul></ul><ul><ul><li>Include information about collecting payments at the time of service and completing claims </li></ul></ul>9-24
  25. 25. 9.9 Medical Billing Cycle <ul><li>The steps of the medical billing cycle: </li></ul><ul><ul><li>Step 1 – Preregister patients: Guidelines apply to the preregistration process for private health plan patients, when basic demographic and insurance information are collected </li></ul></ul><ul><ul><li>Step 2 – Establish financial responsibility for visit: Financial responsibility for the visit is established by verifying insurance eligibility and coverage with the payer for the plan, coordinating benefits, and meeting preauthorization requirements </li></ul></ul><ul><ul><li>Step 3 – Check in patients: Copayments are collected before the encounter </li></ul></ul>9-25
  26. 26. 9.9 Medical Billing Cycle (Continued) <ul><li>Steps of the medical billing cycle (continued): </li></ul><ul><ul><li>Step 4 – Check out patients: Payments after an encounter, such as a deductible, charges for noncovered services, and balances due, are collected </li></ul></ul><ul><ul><li>Step 5 – Review coding compliance: Coding is checked, verifying the use of correct codes as of the date of service that show medical necessity </li></ul></ul><ul><ul><li>Step 6 – Check billing compliance: Billing compliance with the plan’s rules is checked </li></ul></ul><ul><ul><li>Step 7 – Prepare and transmit claims: Claims are completed, checked, and transmitted in accordance with the payer’s billing and claims guidelines </li></ul></ul>9-26
  27. 27. 9.9 Medical Billing Cycle (Continued) <ul><li>Repricer —vendor that processes a payer’s out-of-network claims </li></ul>9-27
  28. 28. 9.10 Capitation Management <ul><li>Under capitated contracts, medical insurance specialists verify patient eligibility with the plan because enrollment data are not always up-to-date </li></ul><ul><li>Encounter information, whether it contains complete coding or just diagnostic coding, must accurately reflect the necessity for the provider’s services </li></ul><ul><li>Monthly enrollment list— document of eligible members of a capitated plan for a monthly period </li></ul>9-28

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