Chapter 8 Private Payers

Employer-sponsored  Group health plans  Carve out~designed plan  Open enrollment periods  Regulated by state laws

Features of Group Plans  Specific rules for eligibility  Waiting period  Late enrollees  Premiums, deductibles, limits

COBRA Consolidated Omnibus Budget Reconciliation Act  Continued coverage with employer  HIPAA rules  Preexisting conditions  Credible coverage

Federally Guaranteed Provisions  Newborns’ and Mothers’ Health Protection Act  Women’s Health and Cancer Rights Act  Mental Health Parity Act  Genetic Information Nondiscrimination Act

Thinking It Through 8.2  If a GHP has a 90-day waiting period, on what day does health coverage become effective?  In terms of enrollment in a health plan, what is the status of an infant born to a subscriber in the plan?  A patient pays for a cosmetic procedure that is not medically necessary under the terms of the plan, Does this payment count toward the deductible?

Self-funded Health Plans  Self-insured  Funds set aside for payments  Regulated by federal laws  Third-party claims administrators  Process and pay claims, collect premiums

Individual Health Plans  Students  Self-employed  Early retirees  Part-time employees not on group plan

Private Payers  PPO—most popular  Discount fee for service  More choices than an HMO  HMO—second most popular  Least amount of choices, lowest cost  PCP  Use a business model (financially responsible)  Staff model-physician’s are employees  Group model-owned facilities (capitation)  POS  Choose from a primary or secondary network

Payment Methods  PPO—premium, deductible, coinsurance  HMO—premium and copay  POS—premium and copay  Indemnity—premium, deductible, coinsurance

Capitation Contracts  Patient eligibility  Referral requirements  Reports and write offs  Billing procedures

Consumer-driven Health Plans  High deductible  Tax deferred saving accounts  Consumer makes more decisions about health payments  Have web tools to help with decisions What do you think the dangers are of having a CDHP?

Funding Accounts  Reimbursement  Employer funded  High deductibles  Medical Savings  Funds set aside by employee to be spent on health care costs  Also high deductible  Flexible Savings  Augment a health insurance plan  Pretax dollars put into an account

Consumer-driven Payments 1. Bill the patient 2. Patient submits to reimbursement account  OR withdraws from savings account  OR pays bill and submits for funds from flexible account 3. Once funds are exhausted  Coinsurance is paid by reimbursement account  Patient pays out of pocket from savings accounts

Participating Providers’ Contracts  Determine obligations with the contract  Definitions of medical necessity  Allowable fees  Acceptance of members  Referrals and preauthorizations  Payment guidelines Why would a provider want to participate?

Physician Responsibilities  Services offered  Acceptance of members (all or a percentage)  Referral rules—network only?  Preauthorization necessity  Utilization review (access to records)

Managed Care Plan Responsibilities  Specific identification of enrolled patients  Quick payment turn around  Stop-loss provision (capitation)

Billing Guidelines  Fees  Billing requirements  Filing deadlines  Patient responsibilities  Balance billing rules  Coordination of benefits rules  Timelines for incorrect payments

Billing Guidelines  Bill from provider’s fee schedule—not allowed amounts  Write off happens after all payers have paid before billing patient  Payment for no shows  When and how many copays are made

Preauthorization/Precertification  Elective surgery  Scheduled surgeries  Emergency surgeries (48 hours)  Use of a utilization review organization  Out of network services Forms sent before admitting for surgery

Plan Summary Grid Quick reference showing  Type of plan  What is covered  Patient responsibilities  What needs authorization  Whether patient can go out of network  Process for hospitalization

Preparing Correct Claims