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Healthcare in the US - Pratik Shrestha
- 1. demystified U.S. Healthcare ~ Pratik Shrestha
- 2. Introduction to U.S. Healthcare Providers People/Institutions providing healthcare products and services Patients People who receive healthcare products and services A trillion dollar industry (3.24T in 2015) with almost 18% of GDP expenditure. Includes thousands of hospitals, nursing homes, specialized care facilities, independent practices and partnerships, web-based and IT supported service companies, managed care organizations, and major manufacturing corporations.. Pratik Shrestha Insurers Institutions that pays the claim amounts for patients
- 4. Providers
- 6. Governing Bodies Migrant/ Seasonal Workers Homeless Persons Public Housing Residents School-aged Children Minority Low Income Uninsured Enrolled in Medicaid Bureau of Primary Health Care (BPHC) Health Resources Services Administration (HRSA) The Department of Health and Human Services (DHHS)
- 7. History of U.S. Healthcare Pratik Shrestha 1901 American Medical Association 1930 The Great Depression 1935 Social Security Act 1965 Medicare and Medicaid 1980 Privatization & Corporatization
- 8. Pratik Shrestha 10% 65% 25% Under 65 years Uninsured Private Insurance Public Insurance http://www.cdc.gov/nchs/fastats/health-insurance.htm Health Insurance Coverage
- 9. Components of Health Insurance Pratik Shrestha •The must have: Maternity Coverage, disability coverage etc. •Cost of the basic coverage •Provider Network •Prescription drugs coverage •Deductibles or Copay •Annual Limits
- 10. Jargons of Health Insurance Industry Pratik Shrestha • Premium • Deductible • CoPay • CoInsurance • Exclusion • Out of Pocket • Capitation Fee • Fee for Service • Prior Authorization • Medicare and Medicaid • National Provider Identifier (NPI) • FACETS and QNXT • HIPAA (Health Insurance Portability and Accountability Act)
- 11. Example Pratik Shrestha Let's say the following amounts apply to your plan and you need a lot of treatment for a serious condition. Allowable costs are $12,000. •Deductible: $3,000 •Coinsurance: 20% •Out-of-pocket maximum: $6,850 1) You'd pay all of the first $3,000 (your deductible). 2) You'll pay 20% of the remaining $9,000, or $1,800 (your coinsurance). 3) So your total out-of-pocket costs would be $4,800 — your $3,000 deductible plus your $1,800 coinsurance. 4) If your total out-of-pocket costs reach $6,850, you'd pay only that amount, including your deductible and coinsurance. The insurance company would pay for all covered services for the rest of your plan year. https://www.healthcare.gov/glossary/co-insurance/
- 12. Types of Health Insurance Pratik Shrestha •Individual Health Insurance •Group Health Insurance •Non-Employer Health Insurance •Student Health Insurance •Short-term Health Insurance •Consolidated Omnibus Budget Reconciliation Act of 1985 – COBRA
- 13. Health Insurance Plans Pratik Shrestha •Indemnity/Reimbursement Plans - reimburses for medical services regardless of who provides the services. - An Indemnity plan may also require that you pay up front for services and then submit a claim to the insurance company for reimbursement. •Managed Care Plans - contracts with healthcare provider and medical facilities to provide care at reduced costs. - HMO/PPO/POS
- 14. Managed Care Organizations - HMO & PPO Pratik Shrestha • Primary Care Physician Required • Referral from PCP Required • Out of Network providers not covered • Do not need to file claims • Lower Cost due to minimum copay and NO deductibles • Periodic fixed premiums • Preventive care Health Maintenance Organizations Preferred Provider Organizations • Primary Care Physician NOT Required • Referral from PCP NOT Required • Out of Network providers covered • Claims must be submitted • Higher Cost • Out of pocket cost limited (deductibles and copay) • Pay for services as they are rendered
- 15. Managed Care Organization Continued Pratik Shrestha • Out of Network Provider covered • Cost high for out of network • Referral from PCP not required. • No deductible or deductible for non-network care • Minimal copayment • Tight controls to get specialized care Point of Service
- 16. Managed Care: Integration of Functions Insurance Delivery (providers) Payment Financing Access Utilization Management Capitation or discounts Risk Under- writing
- 17. Managed Care Organizations - HMO & PPO Pratik Shrestha
- 18. Electronic Data Interchange (EDI) Transactions Pratik Shrestha Name of Transaction Number Business Use Claim/Encounter X12 837 For submitting claim to health plan, insurer or other payer Eligibility enquiry and response X12 270 and 271 For inquiring of health plan, the status of patients eligibility for benefits and details regarding the types of services covered, and for receiving information in response from the health plan or payer Claim status inquiry and response X12 276 and 277 For inquiring about and monitoring outstanding claims and for receiving receiving information in response from the health plan or payer Referrals and prior authorizations X12 278 For obtaining referrals and authorizations accurately and quickly, and for receiving prior authorization response from the payer or utilization management organization (UMO) used by payer Healthcare payment and remittance advise X12 835 For replacing paper EOB/EOP’s and explaining all adjustment data from payers. Also permits auto posting of payments to accounts receivable system Health claims attachments X12 275 For sending detailed clinical information in support of claims, in response to payment denials, and other similar uses
- 20. Government Healthcare Plans Pratik Shrestha 1 Medicare Federal program that provides health insurance to people over the age of 65 or people with severe disability. 2 Medicaid State and Federal program that provides health insurance coverage if you have low income.
- 21. Example Projects Pratik Shrestha 1 A community hospital launches a women’s healthcare service line. 2 A software company develops a smart phone application to assist diabetics with self-management. 3 The state public health department develops and launches an immunization campaign. 4 A health care consulting company develops a workforce needs assessment tool that hospitals use to optimize and plan for clinical workforce needs
- 22. Thank you
Editor's Notes
- Allied Health professionals are involved with the delivery of health or related services pertaining to the identification, evaluation and prevention of diseases and disorders; dietary and nutrition services; rehabilitation and health systems management, among others. Allied health professionals, to name a few, include dental hygienists, diagnostic medical sonographers, dietitians, medical technologists, occupational therapists, physical therapists, radiographers, respiratory therapists, and speech language pathologists. Para-professionals: Personnel who are not members of a health profession but are trained to assist these professionals
- HRSA is agency of DHHS BPHC is a part of HRSA and ensures that
- Brief Background on the Healthcare Industry For most of American history, the maternal figure was responsible for the health needs of the family, performing the duties today traditionally performed by nurses, physicians, and other healthcare professionals when any family member fell ill. However, the mother-ascaregiver health model gradually dissipated with the rise of the American physician, which was based on the English model. The physician was promoted as a profession of learned individuals specializing in medical treatment. The model for the current, expansive healthcare industry was partially the result of one hospital’s reaction to declining revenue during the Great Depression in 1929. American households faced difficult financial choices during the Depression and many chose to forgo healthcare. As a result, Baylor University’s hospital in Dallas, Texas offered school teachers up to 21 days of compensated hospital care for $6 per year. Baylor’s modest plan would grow into Blue Cross, one of the most well-known health insurance plans in the industry, which would later merge with Blue Shield in 1982. The creation of “the Blues” is an important part of the healthcare industry because the pair served as the basis for arguably one of the most important pieces of federal healthcare legislation – Medicare. Medicare provides healthcare coverage for U.S. citizens 65 years of age and older as well as and other special populations. The same day President Lyndon B. Johnson signed Medicare into law in 1965, he also signed Medicaid, which is a joint venture between federal and state governments to provide health coverage for lowincome and disabled individuals. Today, government spending in U.S. healthcare accounts for almost 45% of total expenses. 14 Medicare and Medicaid represent the most significant federal legislation to impact the industry, although not for lack of effort. Presidents Theodore Roosevelt, Franklin D. Roosevelt, Harry Truman, and Bill Clinton proposed some form of national healthcare. However, it was not until March 2010 that the Patient Protection and Affordable Care Act PPACA or ACA) proved to be the most impactful federal legislation on the healthcare industry since Medicare and Medicaid. One of the ACA’s most controversial components is the individual mandate, which is a requirement that all citizens purchase health insurance Chapter 1 – Introduction 17 Copyright 2013 Kathy Schwalbe, LLC or face a tax penalty. The individual mandate’s constitutionality was upheld by the Supreme Court of the United States in a narrow 5-4 vote in June 2012. The Court’s division reflects national opinions of the Act and is a significant component in a vast, complicated network whose humble beginnings have flourished into a $2.6 trillion industry.
- Deductible: Your health insurance deductible is the amount you have to pay out-of-pocket for covered services before your insurance begins to pay. CoPay: fixed amount you pay when you visit for service. Rest is paid by insurance provider. Out of Pocket: AExclusion: Out of network or some diseases that are not covered n out-of-pocket maximum is the total amount you’ll have to pay during a policy period, typically a year, before your health insurance starts to pay 100% for covered essential health benefits. Capitation: fixed amt paid by insurance companies to healthcare provider no matter if the patient goes for service or not Fee for Service: amt paid by insurance companies to healthcare provider only if patients receive services Prior Authorization: Reference needed from primary care physician NPI: is a unique 10-digit identification number issued to health care providers in the United States by the Centers for Medicare and Medicaid Services (CMS). HIPAA: the Health Insurance Portability and Accountability Act, sets the standard for protecting sensitive patient data. Any company that deals with protected health information (PHI) must ensure that all the required physical, network, and process security measures are in place and followed. This includes covered entities (CE), anyone who provides treatment, payment and operations in healthcare, and business associates (BA), anyone with access to patient information and provides support in treatment, payment or operations. Subcontractors, or business associates of business associates, must also be in compliance. Trazetto (FACETS and QNXT)
- COBRA max 18 months
- COBRA max 18 months
- Financing – contract negotiations between employers and MCOs Insurance – The MCO assumes risk The need for an insurance company is eliminated Risk is often shared with the providers Delivery – The MCO must arrange to provide a comprehensive array of services Payment – Capitation Discounted fees Salary Utilization review (UR) is a safeguard against unnecessary and inappropriate medical care. It allows health care providers to review patient care from perspectives of medical necessity, quality of care, appropriateness of decision-making, place of service, and length of hospital stay.