2IntroductionHealth Insurance is designed to help individuals and families offset the cost of medical care.There are many types of health insurance available, but many individuals in the United States are not covered by any type of health insurance plan.
3This chapter will examine: The purpose of health insuranceTypes of insurance policiesHow insurance benefits are determinedTypes of and use of fee schedulesPreauthorizations and precertificationsMajor third-party payors
4Cycle of Health Insurance The medical assistant plays a part in the provider’s reimbursement by providing accurate information on claim forms.Follow-up is sometimes necessary to make certain that claims are paid correctly and in a timely manner.
5Cycle of Health Insurance Obtain information from the patient and insured.Verify the patient’s eligibility and benefits.Perform diagnostic and procedural codingCalculate deductibles and co-insurance amounts.
6Cycle of Health Insurance Obtain preauthorization or permission, if applicable, for referral if advance permissions is needed.Complete the insurance claim form and submit it to the third-party payor.Post payments sent by insurance carriers.Bill the patient for remaining balances.Follow up on rejected or unpaid claims.
7Cost of CoveragePatients may have to pay certain expenses related to their health coverage.DeductiblesAmounts paid out of pocket before insurance will pay on a health claimCopaymentsAmount paid at the time of serviceCo-insurancesPercentage paid by insured before insurance pays on a claim
8Types of Health Insurance Group policiesThese policies cover a number of people under a single master contract issued to an employer or other association of individuals.
9Types of Health Insurance Individual policiesUsually more expensive than group policies, these are usually purchased by individuals who do not have access to any other type of health insurance.
10Types of Health Insurance Government plansSometimes called entitlement programs, these plans are sponsored by some branch or division of the government; examples include Medicare, Medicaid, TRICARE, and CHAMPVA.
11Types of Health Insurance MedicaidA government program designed for medically indigent individuals who meet specific eligibility criteria
12Types of Health Insurance MedicareA program established by the federal government for persons 65 and older, as well as persons with certain disabilities
13Types of Health Insurance Workers’ compensationLaws that protect workers against the loss of wages and cost of medical care resulting from an occupational accident or disease
14Types of Health Insurance Self-insured plansOften offered by large employers, which put a certain amount of money in an account per month, per employee; eligible medical bills are paid from that account.
15Types of Health Insurance Medical savings accountsTax-free accounts that allow the individual to make tax-free deposits into the account; the money is in turn used for medically related expenses
17How Benefits Are Determined By indemnity schedulesBy service benefit plansBy determination of the UCR feeBy relative value studies
18Indemnity Schedules Often called fee-for-service plans. Usually any provider can be consulted.Payment is usually made directly to the provider.A certain percentage of the fee is paid by the plan, and the insured is responsible for the balance.
19Service Benefit Plans No set fee schedule. Certain surgical and medical services are paid without any additional cost to the insured.Premiums sometimes higher, but payment is often larger as well.
20Usual, Customary, and Reasonable Fee Charges for specific services are compared with a database of charges by physicians in the same geographic area for the same service.
21Resource-Based Relative Value Scale Fee-scale payment system based on:Physician workCharge-based professional liability expensesCharge-based overhead
22Health Insurance Providers Managed care plansProvide healthcare in return for preset scheduled payments.Care is coordinated through a network of contracted physicians and hospitals.
23Advantages of Managed Care Costs are usually contained.Fee schedules are established.Authorized services are usually paid.Preventative treatment is usually covered.Patient out-of-pocket expenses are usually minimal.
24Disadvantages of Managed Care Access to specialized care and referrals can be limited.Physician choices may be limited.Paperwork may increase.Treatment may be delayed because of preauthorization requirements.Reimbursement is historically less than through traditional insurance.
25Models of Managed Care Health Maintenance Organization (HMO) Preferred Provider Organization (PPO)
26HMOContracts with a medical center or group of physicians to provide preventative and acute care for the insuredRegulated by HMO lawsAlways require referrals to specialistsCommon HMO models are:IPAstaff modelgroup model
28PPO Preserves the fee-for-service concept. Predetermined list of charges is contracted with providers.No capitations or prepaid care.Usually has deductibles and/or copays.Rates for services usually lower than for non-PPO patients.
29Capitation Plans Found in HMOs. Providers are paid per member, per month.Patients may not even see the provider, yet he or she is paid a fee for that month.
30Exclusive Provider Organization Combines features of HMO and PPOs.Employers agree not to contract with any other plan.Members must choose from a list of network providers.Exceptions are made for emergency and out-of-town care.
31Blue Cross/Blue Shield America’s oldest and largest system of independent health insurersOffers incentive contracts to healthcare providersPAR—participating providers accept BC/BS payment as reimbursement in full
33MedicaidFederal government assists states in providing healthcare services.States individually elect to provide funds for extension of benefits.Physicians may decide whether to treat patients with Medicaid coverage.
35Qualifiers for Medicaid Medically needyRecipients of Aid to Families with Dependent ChildrenRecipients of Supplemental Security Income (SSI)Persons receiving certain types of state aidSome Medicare qualifiersPersons in institutions or receiving long-term care in nursing facilities and intermediate care facilities
36Medicare Qualifiers include: People 65 or older People who are permanently disabled or blindPeople receiving dialysis for permanent kidney failure or who have had a kidney transplant
37Medicare Administration Medicare is administered by the Centers for Medicare and Medicaid ServicesFormerly known as the Healthcare Financing Administration (HCFA)Division of the Department of Health and Human Services
38Medicare Parts A and B Part A Inpatient hospital care Skilled nursing facilitiesHome healthcareHospice servicesPart BOutpatient hospital careDurable medical equipmentPhysician’s servicesOther medical services
39Medicare Part “C” Not commonly called Part C Medicare + Choice Expanded benefits similar to those of HMOs and PPOs
40Medicare Part D Drug and prescription benefits. Drug plan is chosen at a reduced cost.Usually a small copayment is required.
42TRICARE Formerly CHAMPUS. Comprehensive healthcare program for military dependents and retirees.Expands access to healthcare.All military hospitals and clinics are a part of TRICARE.
43TRICARE Choices Prime Extra Standard similar to a civilian HMO similar to a civilian PPOStandardtraditional fee-for-service option formerly known as CHAMPUS
44CHAMPVA Similar to TRICARE. Established for spouses and dependent children of veterans who have total, permanent, service-related disabilities.Most participants receive services at VA hospitals.
45Worker’s Compensation Protects wage earners against the loss of wages and the cost of medical care after an occupational accident or illness.Always check for coverage when the patient mentions a work-related illness.Benefits include medical care, weekly income replacement benefits, permanent disability settlements, and more.
46Disability Programs Form of health insurance Provide periodic payments to replace incomeCan be obtained through employer-sponsored and/or government-funded programs
47Commercial Insurance Issued by private companies Secured through employers or individuallyPayment usually made to subscribers unless authorization is given to pay providers
48Verification of Insurance Benefits Identify type of insurance coverage when the patient first calls the office.Photocopy both sides of the insurance ID card.Contact the insurance carrier to verify coverage and eligibility.
49Verification of Insurance Benefits Document information in the patient’s medical record.Explain covered and noncovered procedures and services to the patient, if necessary.Explain the referral procedure to the patient.Collect copayments and/or deductibles.
50Precertification or Preauthorization Information needed:Patient name, address, phone numberPatient ID numberProvider name and informationPlan name and addressPreliminary diagnosisPlanned procedures and treatmentsFacility addresses and phone numbersCopayments and deductiblesHospital benefitsParticipating facilities
51Referrals Can take a few moments or a few days. Urgent referrals usually are done within 24 hours.STAT referrals may be offered.Regular referrals most common.
52Utilization Management Making certain that medical care is necessary for the patientUtilization review committees determine whether certain procedures are medically necessary, which may influence reimbursement amounts
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