Health Insurance

1
Chapter 16

• Health Insurance

2
Health Insurance

• Before 1930, access to care based on ability to
  pay
• Plans originally designed to avoid financial
  burdens
• Blue Cross and Blue Shield
• A federation of 42 independent companies
• Insure 30 of Americans

3
Health Insurance (continued)

• U. S. health insurance funded by employer,
  employee, and tax contributions
• 80 of Americans enrolled in some type of plan
• Medical assistants must understand differences
  and special terminology with claims
• Medical assistants must instruct patients about
  insurance

4
Health Benefit Plans

• Group health benefit plans
• Individual health benefits
• Government-sponsored (public) health benefits
• Medicare
• Medicaid
• TRICARE/CHAMPVA

5
Group Health Benefits

• Sponsored by employer, union, or association
• Person covered is employee or union member
• Eligibility varies between different plans

6
Group Health Benefits (continued)

• Benefits may be insured or self-funded
• Insured benefits
• Monthly premium paid to insurance company
• Insurance company pays for benefits
• Self-funded benefits
• Money invested by insured
• Insurance company processes claims and make
  payment
• Third-party payer acts as agent

7
Group Health Benefits (continued)

• For a group benefit plan to cover (pay for)
  eligible expenses, the patient must meet several
  criteria, called eligibility requirements.
• Criteria defined in policy or plan
• May include minimum number of hours worked and a
  waiting period from date of employment
• Dependents eligibility based on employees
  eligibility

8
Group Health Benefits (continued)

• Confirm eligibility through claims administrator
  with benefits plan
• Number usually found on patients ID card

9
Checkpoint Question 1

• What is the difference between an insured
  benefits plan and one that is self-funded?

10
Answer

• With insured benefits, a monthly premium is paid
  by the employer or organization to an insurance
  company. The insurance company in turn is
  obligated to pay for any eligible health
  benefits. In contrast, self-funded benefits are
  provided to eligible employees or members by
  their employer or organization. Claims are
  processed by a professional claims administrator,
  such as a third-party administrator.

11
Individual Health Benefits

• Individual health benefits policies are purchased
  by an individual from an insurance company.
• Individual pays premium to insurance company
• Insurance company pays doctor or hospital
• Usually less generous coverage than group plans
• Medical assistants must know primary and
  secondary insurance carriers for patients with
  multiple coverage

12
Government-Sponsored (Public) Health Benefits

• Government-sponsored benefit programs are funded
  and regulated by the federal government or
  individual states.
• Assist citizens without coverage
• Programs include
• Medicare
• Medicaid
• TRICARE/CHAMPVA
• Workers compensation

13
Medicare

• In 1965, the Social Security Act established
  Medicare to provide health insurance for the
  elderly. Elderly persons were defined as Social
  Security recipients age 65 or older.
• 1972 amendments expanded coverage

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Medicare (continued)

• Medicare Part A
• Hospital expenses
• No additional charge to eligible persons
• Medicare Part B
• Physician fees
• Optional
• Monthly fees, deducted from Social Security
  payments

15
Medicare (continued)

• Social Security recipients automatically enrolled
  in Medicare at age 65 years
• Must decline Part B if not wanted
• Deductibles for both Parts A and B

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Medicare (continued)

• A patient with Medicare coverage who is actively
  employed and covered by the employers plan will
  have secondary Medicare benefits.
• Retired person over 65 with additional insurance
  has primary Medicare benefits
• Physicians must submit claims to Medicare on
  behalf of patients

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Medicare (continued)

• Medicare Part B reimburses 80 after deductible
• Medicaid may cover remaining 20 if patient
  unable to pay
• Known as crossover claim
• Centers for Medicare and Medicaid Services (CMS)
  formerly known as Health Care Financing
  Administration (HCFA)

18
Medicare (continued)

• CMS oversees financial aspects of U. S. health
  care
• Current procedural terminology (CPT) coding
  system must be used for Medicare claims
• Ask patients about secondary coverage in addition
  to Medicare

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Checkpoint Question 2

• What is the difference between parts A and B of
  Medicare coverage?

20
Answer

• Persons enrolled in Social Security are
  automatically enrolled in Medicare Part A, which
  covers hospital services and expenses only, and
  Medicare Part B, which covers the physicians
  charges for inpatient or outpatient care as well
  as diagnostic services. Part B does not cover
  routine examinations, well care, routine
  immunizations, or cosmetic surgery. Part A is
  provided at no charge to Social Security
  recipients, and Part B carries a monthly fee. If
  Part B is not wanted, it must be declined.

21
Medicaid

• Medicaid provides health benefits to low-income
  or indigent persons of all ages.
• Federal government provides funds to each state
  for costs
• Benefits vary between states

22
Medicaid (continued)

• At a minimum, 100 coverage for
• Inpatient care
• Outpatient treatment and services
• Diagnostic services
• Family planning
• Skilled nursing facilities
• Diagnostic screening for children

23
Medicaid (continued)

• Most states require co-payment based on income
• Recipients receive a new ID card each month
• Medicaid carriers require authorization before
  services are given
• Reimbursement is usually less
• Physicians may choose to not accept Medicaid
  patients

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Checkpoint Question 3

• How often do Medicaid recipients receive a new
  card?

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Answer

• Medicaid patients receive a new ID card each
  month.

26
TRICARE/CHAMPVA

• TRICARE, the new name for CHAMPUS, is
  administered by the U. S. Department of Defense
  and provides medical coverage for dependents of
  active service personnel, dependents of service
  personnel who died during active duty, and
  retired service personnel.

27
TRICARE/CHAMPVA (continued)

• TRICARE
• Three-part system with managed care, HMOs, and
  PPOs
• Participants assigned primary care manager (PCM)
• Patients who live with 40 miles of a uniformed
  services hospital must use that facility
• Patients who live more than 40 miles from a
  uniformed services hospital receive care in
  physicians office or civilian hospital

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TRICARE/CHAMPVA (continued)

• Civilian Health and Medical Program of the
  Veterans Administration (CHAMPVA)
• Covers dependents of veterans with
  service-related disabilities
• Administered by VA hospitals
• Patients select their own physician
• Same benefits as private insurance

29
Managed Care

• United States spends most for health care in
  world
• Most obtain health coverage from employer
• Managed care programs
• Less expensive
• Different relationship between insurer, provider,
  and covered individual from that of traditional
  programs

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Managed Care (continued)

• Traditional systems
• Covered patient seeks care from any provider
• Insurer pays a portion of fees
• Insurer has no relationship with provider
• In managed care systems, however, the insurer has
  a contractual relationship with the provider.

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Managed Care (continued)

• Contract usually establishes prices and
  conditions for coverage
• Most programs contain
• Percertification of hospital admissions
• Approved referrals
• Network
• Assignment of benefits

32
Managed Care (continued)

• Precertification of hospital admissions
• Often called utilization management (UM) or
  utilization review (UR)
• Insurer must approve admission of patient to
  hospital for certain conditions
• Goal to ensure care given in most cost-efficient
  setting
• Conflicts between UR guideline and physician
  requirements appealed to peer review organization

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Managed Care (continued)

• Approved referrals
• Specialty physicians provide care only after
  referral from primary physician
• Ensures that services are necessary and delivered
  in most cost-efficient setting

34
Managed Care (continued)

• Network
• Consists of providers who have signed contracts
  with insurer or health maintenance organization
  (HMO)
• Patients required to use network providers to
  receive full coverage

35
Managed Care (continued)

• Assignment of benefits
• Network provider cannot bill patients for any
  amounts not paid by insurer (no balance billing)
• Exceptions co-payments, coinsurance, deductibles
• If payment denied by insurer due to improper
  organization, patient cannot be billed

36
Managed Care (continued)

• Most physicians contract with multiple programs
• Consider requirements for each patient
• Check ID cards for details on UM or
  precertification requirements

37
Managed Care (continued)

• Until you are very familiar with the requirements
  of each of your patients managed care programs,
  you should call the number on the ID card before
  a patient is admitted to a hospital (on a
  nonemergency basis), referred to another
  physician, or scheduled for specific laboratory,
  radiological, or other test or evaluation.

38
Managed Care (continued)

• Failure to comply with precertification
  requirements results in a financial penalty for
  the patient and possibly also for the physician
  and the hospital.

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Checkpoint Question 4

• What are the four key elements of a managed care
  program?

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Answer

• The four elements of managed care programs are
  precertification of hospital admissions (often
  called utilization management or utilization
  reviewUM or UR), approved referrals, network,
  and assignment of benefits.

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Health Maintenance Organizations

• In contrast to traditional insurance companies, a
  HMO promises to provide covered services rather
  than pay for them.
• HMO acts as insurer and provider
• HMO policy lists covered services and service
  providers
• HMO contracts with patient and provider

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Health Maintenance Organizations (continued)

• The HMO, rather than the patient, is responsible
  for the costs of medical services, and providers
  bill the HMO rather than the patient when a
  reimbursable service is rendered to a HMO member.
• Deductibles and coinsurance costs do not apply

43
Health Maintenance Organizations (continued)

• Kaiser Permanente Health Plan recognized as first
  HMO
• Built medical group to service employees in
  remote areas
• Paid providers per employee vs. fee-for-service
• Evolved into current company serving 6 million
  members

44
Health Maintenance Organizations (continued)

• Capitation payment per capita, rather than
  fee-for-service payment
• Independent practice associations (IPA) allowed
  nongroup physicians to compete
• Medical assistant must know types of
  relationships a practice has with HMOs
• Most HMOs require claims even with capitation
• Most require collection and transmission of other
  patient information

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Checkpoint Question 5

• How does a HMO differ from a traditional health
  insurance program?

46
Answer

• In a traditional insurance system, the
  individual, not the insurer, seeks medical
  services and thereby incurs the expense. A HMO
  promises to provide covered services rather than
  pay for them.

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Preferred Provider Organizations

• PPOs contract with providers and lease network to
  health care plans
• PPOs not financial involved in plan
• Offer in network and out of network benefits
  to patients
• Patients choose any provider for services
• Benefits are better for in network or
  participating providers

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Preferred Provider Organizations (continued)

• Medical assistant must understand administrative
  requirements for physicians PPO relationships
• Most PPOs have provider relations representative
  to answer questions
• PPOs typically operated by a group of hospitals,
  physicians, an insurance company, or other
  organization
• Physicians participate to accommodate patients

49
Preferred Provider Organizations (continued)

• Participating physicians agree to perform some
  administrative services
• Must accept assignment of benefits and file
  claims for patients
• Agree to accept reimbursement as payment
• Agree not to bill patient
• Agree to comply with precertification requirements

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Checkpoint Question 6

• What is the primary difference between a HMO and
  a PPO?

51
Answer

• A primary difference between a HMO and a PPO is
  that patients with PPO coverage can see any
  physician of their choice and receive benefits
  they simply have an incentive in the form of
  higher benefits when they see an in-network
  provider.

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Physician Hospital Organizations

• A physician hospital organization (PHO) is a
  coalition of physicians and a hospital
  contracting with large employers, insurance
  carriers, and other benefits groups to provide
  discounted health services.

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Other Managed Care Programs

• Patient sees primary caregiver (gatekeeper) for
  all nonemergencies
• Physician treats or refers patient to specialist
• The gatekeeper provision seeks to reduce the plan
  cost of specialists.
• The gatekeeper approach also encourages patients
  to establish a relationship with a primary care
  physician, who is then in a position to manage
  the patients care.

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The Future of Managed Care

• Organization of health care changed by managed
  care environment
• Size of medical practices increasing
• Hospitals are purchasing physician practices
• Small-group or solo-practice physicians are
  combining
• Some forming public companies and raising capital

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The Future of Managed Care (continued)

• Physicians role is affected
• Physicians now act as patient care managers or
  gatekeepers

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The Future of Managed Care (continued)

• Quality measurement increasingly important
• HEDIS (Healthplan Employer Data Information Set)
  reports indicators of health care quality
• Upgraded continuously
• Being adopted by governmental agencies and
  employers as a prerequisite for HMO participation

57
The Future of Managed Care (continued)

• Increasingly sophisticated patient care protocols
• Providers must document efficacy and quality of
  service through medical records
• Automated medical records
• Improve coordination among providers
• Reduce illness
• Improve quality of care

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The Future of Managed Care (continued)

• Medical assistants affected by managed care
• Increasing cooperation among physician groups
• Expanded responsibilities in managing patient
  care, specialist care, and hospitalization
• Uniform care protocols and outcomes measurement
• Data collection and management vital to
  physicians practice

59
Workers Compensation

• Employees in every state are covered by a
  workers compensation program administered by the
  state. Workers compensation benefits were
  developed to cover the expenses resulting from a
  work-related illness or injury.

60
Workers Compensation (continued)

• Work-related illness or injury claims are
  returned with instructions to file with workers
  compensation administrator
• Before service, determine if illness or injury is
  work-related
• If so, account for services separately
• Know your states workers compensation
  regulations and procedures

61
Filing Claims

• If the provider requires patients to make full
  payment at the time of the visit, the physician
  may still submit a claim on the patients behalf
  however, the patient may need to submit claims to
  the claims administrator for reimbursement.
• Most providers accept assignment of benefits
• Medical assistant should obtain all claims
  information before submitting for payment

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Filing Claims (continued)

• Patient ID card contains claims information
• Copy card and file with medical record
• Update annually or with each visit

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Filing Claims (continued)

• Determine primary plan
• Submission destination
• Prepare claim for filing
• CMS-1500 is most widely used claim form
• Preexisting conditions may be excluded from
  coverage for a stated period

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Filing Claims (continued)

• The insurance company or managed care plan cannot
  process claims with incomplete or inaccurate
  information and will return them to the provider
  for completion, correction, and resubmission.
• Lengthens time before reimbursement
• Critical aspect of medical assistants role

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Filing Claims (continued)

• Frequent causes of denial and corrective actions
  you can take
• Cause
• Cannot identify patient as covered person
• Corrective action
• Confirm that information on file is current
  check insurance company, group number, and Social
  Security number

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Filing Claims (continued)

• Cause
• Coding deemed inappropriate for services provided
• Corrective action
• Review services provided and recode as necessary

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Filing Claims (continued)

• Cause
• Patient no longer covered
• Corrective action
• Bill patient for charges
• Patient may confirm new coverage

68
Filing Claims (continued)

• Cause
• Incomplete data
• Corrective action
• Complete data and resubmit

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Filing Claims (continued)

• Cause
• Services not covered
• Corrective action
• Bill patient unless there is basis for appeal

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What If?

• The reason for a rejection or denial of a claim
  is not clear. What should you do?

71
Electronic Claims Submission

• All claims required to be submitted
  electronically according to HIPAA (effective
  10/03)
• Office software includes the CMS-1500 format

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Electronic Claims Submission (continued)

• With a computer and a modem, health claims can be
  filed immediately, reducing the time for the
  reimbursement cycle.
• You will need to work closely with your
  practices software vendor to ensure
  compatibility with the insurance companys
  computer systems.

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Electronic Claims Submission (continued)

• Regional clearinghouses collect and distribute
  all electronic claims to appropriate
  administrators
• Require that all fields be completed in correct
  format
• Claims submitted electronically that do not meet
  the plans criteria will be rejected by the
  clearinghouse and must be submitted by mail.

74
Electronic Claims Submission (continued)

• In addition, claims that are particularly
  complicated or cumbersome, have attachments, or
  are otherwise unsuitable for electronic
  submission should be filed on paper with the
  claims administrator.

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Explanation of Benefits

• When the claims administrator settles a claim,
  that is, makes a payment, an explanation of
  benefits (EOB) is issued to both the provider and
  the patient.
• Tells how payment was made
• May include several claims during a particular
  period

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Policies in the Practice

• Medical assistant must be knowledgeable and
  precise when administering policies
• Assignment of benefits
• Balance billing

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Policies in the Practice (continued)

• Assignment of benefits
• Patients signature must be on file
• Patient must pay all charges and file claim if
  assignment not accepted

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Policies in the Practice (continued)

• Balance billing
• Difference between physicians usual charge and
  allowable charge by plan
• Prohibited by most managed care contracts
• Not prohibited with other plan types

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Policies in the Practice (continued)

• UCR (usual, customary, and reasonable) data
  calculated from surveys of amounts physicians
  charge for services
• Adjusted for regional differences
• Reimbursements based on maximum allowable charge
  according to UCR (for non managed care plan
  physicians)
• May bill patient for difference between amount
  charged and UCR amount