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Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Basics of Health Insurance Chapter 19.

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Presentation on theme: "Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Basics of Health Insurance Chapter 19."— Presentation transcript:

1 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Basics of Health Insurance Chapter 19

2 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 2 Introduction Health 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.

3 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 3 This chapter will examine: The purpose of health insurance Types of insurance policies How insurance benefits are determined Types of and use of fee schedules Preauthorizations and precertifications Major third-party payors

4 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 4 Cycle of Health Insurance The medical assistant plays a part in the providers 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.

5 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 5 Cycle of Health Insurance Obtain information from the patient and insured. Verify the patients eligibility and benefits. Perform diagnostic and procedural coding Calculate deductibles and co-insurance amounts.

6 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 6 Cycle 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.

7 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 7 Cost of Coverage Patients may have to pay certain expenses related to their health coverage. Deductibles – Amounts paid out of pocket before insurance will pay on a health claim Copayments – Amount paid at the time of service Co-insurances – Percentage paid by insured before insurance pays on a claim

8 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 8 Types of Health Insurance Group policies These policies cover a number of people under a single master contract issued to an employer or other association of individuals.

9 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 9 Types of Health Insurance Individual policies Usually more expensive than group policies, these are usually purchased by individuals who do not have access to any other type of health insurance.

10 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 10 Types of Health Insurance Government plans Sometimes called entitlement programs, these plans are sponsored by some branch or division of the government; examples include Medicare, Medicaid, TRICARE, and CHAMPVA.

11 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 11 Types of Health Insurance Medicaid A government program designed for medically indigent individuals who meet specific eligibility criteria

12 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 12 Types of Health Insurance Medicare A program established by the federal government for persons 65 and older, as well as persons with certain disabilities

13 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 13 Types of Health Insurance Workers compensation Laws that protect workers against the loss of wages and cost of medical care resulting from an occupational accident or disease

14 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 14 Types of Health Insurance Self-insured plans Often 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.

15 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 15 Types of Health Insurance Medical savings accounts Tax-free accounts that allow the individual to make tax- free deposits into the account; the money is in turn used for medically related expenses

16 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 16 Types of Insurance Plan Benefits

17 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 17 How Benefits Are Determined By indemnity schedules By service benefit plans By determination of the UCR fee By relative value studies

18 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 18 Indemnity 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.

19 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 19 Service 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.

20 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 20 Usual, 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.

21 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 21 Resource-Based Relative Value Scale Fee-scale payment system based on: Physician work Charge-based professional liability expenses Charge-based overhead

22 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 22 Health Insurance Providers Managed care plans Provide healthcare in return for preset scheduled payments. Care is coordinated through a network of contracted physicians and hospitals.

23 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 23 Advantages 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.

24 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 24 Disadvantages 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.

25 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 25 Models of Managed Care Health Maintenance Organization (HMO) Preferred Provider Organization (PPO)

26 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 26 HMO Contracts with a medical center or group of physicians to provide preventative and acute care for the insured Regulated by HMO laws Always require referrals to specialists Common HMO models are: – IPA – staff model – group model

27 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 27 Comparison of HMO Models

28 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 28 PPO 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.

29 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 29 Capitation 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.

30 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 30 Exclusive 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.

31 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 31 Blue Cross/Blue Shield Americas oldest and largest system of independent health insurers Offers incentive contracts to healthcare providers PARparticipating providers accept BC/BS payment as reimbursement in full

32 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 32 BC/BS ID Card

33 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 33 Medicaid Federal 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.

34 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 34 Medicaid ID Card

35 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 35 Qualifiers for Medicaid Medically needy Recipients of Aid to Families with Dependent Children Recipients of Supplemental Security Income (SSI) Persons receiving certain types of state aid Some Medicare qualifiers Persons in institutions or receiving long-term care in nursing facilities and intermediate care facilities

36 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 36 Medicare Qualifiers include: People 65 or older People who are permanently disabled or blind People receiving dialysis for permanent kidney failure or who have had a kidney transplant

37 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 37 Medicare Administration Medicare is administered by the Centers for Medicare and Medicaid Services Formerly known as the Healthcare Financing Administration (HCFA) Division of the Department of Health and Human Services

38 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 38 Medicare Parts A and B Part A Inpatient hospital care Skilled nursing facilities Home healthcare Hospice services Part B Outpatient hospital care Durable medical equipment Physicians services Other medical services

39 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 39 Medicare Part C Not commonly called Part C Medicare + Choice Expanded benefits similar to those of HMOs and PPOs

40 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 40 Medicare Part D Drug and prescription benefits. Drug plan is chosen at a reduced cost. Usually a small copayment is required.

41 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 41 Medicare ID Card

42 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 42 TRICARE Formerly CHAMPUS. Comprehensive healthcare program for military dependents and retirees. Expands access to healthcare. All military hospitals and clinics are a part of TRICARE.

43 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 43 TRICARE Choices Prime – similar to a civilian HMO Extra – similar to a civilian PPO Standard – traditional fee-for-service option formerly known as CHAMPUS

44 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 44 CHAMPVA 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.

45 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 45 Workers 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.

46 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 46 Disability Programs Form of health insurance Provide periodic payments to replace income Can be obtained through employer-sponsored and/or government-funded programs

47 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 47 Commercial Insurance Issued by private companies Secured through employers or individually Payment usually made to subscribers unless authorization is given to pay providers

48 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 48 Verification 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.

49 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 49 Verification of Insurance Benefits Document information in the patients 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.

50 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 50 Precertification or Preauthorization Information needed: Patient name, address, phone number Patient ID number Provider name and information Plan name and address Preliminary diagnosis Planned procedures and treatments Facility addresses and phone numbers Copayments and deductibles Hospital benefits Participating facilities

51 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 51 Referrals 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.

52 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 52 Utilization Management Making certain that medical care is necessary for the patient Utilization review committees determine whether certain procedures are medically necessary, which may influence reimbursement amounts

53 Copyright © 2008, 2005, by Saunders, an imprint of Elsevier Inc. All rights reserved. Slide 53 The Federal Register Official daily publication for rules, proposed rules, and notices of federal agencies and organizations Sponsored by the Office of the Federal Register (OFR)


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