Presentation on theme: "Chapter 12 Commercial Insurance. This chapter will talk about how to complete fee-for-service claims that are generally accepted nationwide by most."— Presentation transcript:
Chapter 12 Commercial Insurance
This chapter will talk about how to complete fee-for-service claims that are generally accepted nationwide by most commercial health insurance companies
Separate instructions for primary, secondary, and supplemental commercial insurance plans Instructions in a table format for completing claims
A case study and completed claim to illustrate the instructions A case study exercise, a blank claim, and the completed claim that allows the student to practice completing a claim
Commercial health insurance covers the medical expenses of individuals (e.g., private health insurance) and groups (e.g., employer group health insurance).
Individual health insurance policies are regulated by individual states and include the following: ◦ fee-for-service (or indemnity) insurance: traditional health insurance that covers a portion of services, such as hospital inpatient hospitalizations or physician office visits, with the patient paying the remaining costs
high-risk pools: “last resort” health insurance for individuals who cannot obtain coverage due to a serious medical condition; certain eligibility requirements apply, such as refusal by at least one or two insurance companies.
managed care (e.g., health maintenance organization, preferred provider organization)
◦ association health insurance: offered to members of a professional association and marketed to small business owners as a way to provide coverage to employees The plans are not subject to the same regulations as group health insurance plans and, therefore, are more risky
Available through employers and other organizations (e.g., labor unions, rural and consumer health cooperatives), and all or part of premium costs are paid by employers.
Employer-based group health insurance: ◦ Covers all employees, regardless of health status, and cannot be cancelled if an employee becomes ill
◦ Limits exclusions for preexisting conditions: The payer can exclude an employee from coverage for a preexisting condition but only for 12–18 months, depending on the circumstances.
◦ Is portable: If an employee had insurance before enrolling in employer group health insurance, the payer must reduce the preexisting condition exclusion period by the amount of time covered on the previous plan.
◦ Offers COBRA continuation coverage: When an employee resigns (or has another qualifying event), the employee must be offered COBRA continuation coverage that lasts for 18–36 months, depending on the employee’s situation.
Has employer-limited plan options (e.g., prescription drug plan that covers a certain list of medications, called a formulary)
A contract between an individual and an insurance company whereby the individual pays a premium and, in exchange, the insurance company agrees to pay for specific car-related financial losses during the term of the policy
Available coverage: ◦ Collision (pays for damage to a covered vehicle caused by collision with another object or by an automobile accident; a deductible is required) ◦ Comprehensive (pays for loss of or damage to a covered vehicle, caused by fire, flood, hail, impact with an animal, theft, vandalism, or wind; a deductible may apply)
◦ Emergency road service (pays expenses incurred for having an automobile towed as a result of a breakdown) ◦ Liability (pays for accidental bodily injury and property damage to others, including medical expenses, pain and suffering, lost wages, and other special damages; property damage includes damaged property and may include loss of use)
Medical payments (reimburses medical and funeral expenses for covered individuals, regardless of fault, when those expenses are related to an automobile accident)
Personal injury protection (PIP) (reimburses medical expenses for covered individuals, regardless of fault, for treatment due to an automobile accident; also pays for funeral expenses, lost earnings, rehabilitation, and replacement of services such as child care if a parent is disabled)
◦ Rental reimbursement (pays expenses incurred for renting a car when an automobile is disabled because of an automobile accident) ◦ Underinsured motorist (pays damages when a covered individual is injured in an automobile accident caused by another driver who has insufficient liability insurance—not available in every state)
Medical payments and PIP coverage usually reimburses, up to certain limits, the medical expenses of an injured driver and any passengers in a vehicle that was involved in an automobile accident
Reimbursement for income lost as a result of a temporary or permanent illness or injury. When patients are treated for disability diagnoses and other medical problems, separate patient records must be maintained.
Disability benefits are usually paid if an individual ◦ Has been unable to do regular or customary work for a certain number of days (number of days depends on the policy) ◦ was employed when disabled (lost wages due to disability)
◦ Has disability insurance coverage ◦ Was under the care and treatment of a licensed provider during initial disability; to continue receiving benefits, the individual must remain under care and treatment ◦ Processes a claim within a certain number of days after the date the individual was disabled (number depends on policy)
Has the licensed provider complete the disability medical certification document(s)
Ineligibility for disability benefits due to ◦ Claiming or receiving unemployment insurance benefits ◦ Disability occurred while committing a crime that resulted in a felony conviction ◦ Receiving workers’ compensation benefits at a weekly rate equal to or greater than the disability rate
◦ Being in jail, prison, or a recovery home (e.g., halfway house) because of being convicted of a crime ◦ Failure to have an independent medical examination when requested to do so
A disability claim begins on the date of disability: ◦ Disability payer calculates an individual’s weekly benefit amount using a base period. ◦ Usually covers 12 months and is divided into 4 consecutive quarters.
◦ Includes taxed wages paid approximately 6–18 months before the disability claim begins ◦ Does not include wages being paid at the time the disability began
Covers losses to a third party caused by the insured or on premises owned by the insured. Claims are made to cover the cost of medical care for traumatic injuries and lost wages, and, in many cases, remuneration (compensation) for the “pain and suffering” of the injured party.
Most health insurance contracts state that health insurance benefits are secondary to liability insurance.
When negligence by another party is suspected in an injury claim, the health insurance company will not reimburse the patient for medical treatment of the injury until one of two factors is established:
1.It is determined that there was no third-party negligence. 2.In cases in which third-party negligence did occur, the liability payer determines that the incident is not covered by the negligent party’s liability contract.
Subrogation refers to the contractual right of a third-party payer to recover health care expenses from a liable party.
Determined by one of the following criteria: ◦ Patient is covered by one commercial plan. ◦ Patient is covered by a large employer group health plan (EGHP) and is also a Medicare beneficiary. ◦ Patient is covered by a small or large employer health plan and is the policy holder. Patient is also listed as a dependent on another EGHP.
◦ When the patient is a child who is covered by two or more plans Primary policyholder is the parent whose birthday occurs first in the year.
Changes are made to the CMS-1500 claim when patients are covered by primary and secondary or supplemental health insurance plans.
Secondary health insurance plans provide coverage similar to that of primary plans. Supplemental health insurance plans usually cover just deductible, copayment, and coinsurance expenses.
When the same payer issues the primary and secondary or supplemental policies, submit just one CMS-1500 claim. If primary and secondary or supplemental policies are different, submit a CMS-1500 claim to the primary payer.
When primary payer has processed the claim, generate a second CMS-1500 claim to send to secondary payer, and include a copy of primary payer’s remittance advice
Working aged coverage by an employer group health plan (EGHP) or an individual aged 65 years or older who is covered by a working spouse’s EGHP
Upon claims submission, amount of secondary benefits payable is the lowest of ◦ Actual charges by physician or supplier minus amount paid by primary payer
Amount Medicare would pay if services were not covered by the primary payer Higher of the Medicare physician fee schedule minus the amount actually paid by the primary payer
To calculate amount of Medicare secondary benefits payable on a given claim, the following information is required: ◦ Amount paid by primary payer ◦ Primary payer’s allowable charge