Guide to Medical Billing CHAPTER Third Edition Health Insurance Programs 4

Guide to Medical Billing, Third Edition Sharon Brown Lori Tyler Indemnity Insurance Plans (1 of 2) Also called fee-for-service Was the traditional form of commercial health insurance Allows covered person to choose own provider, specialist, hospital, or other provider Require insured person to pay insurance premium

Guide to Medical Billing, Third Edition Sharon Brown Lori Tyler Indemnity Insurance Plans (2 of 2) Require insured to pay a deductible Require covered person to pay predetermined percentage of additional annual expenses up to a preset maximum Often pay benefits at a set amount, such as 80% of covered services

Guide to Medical Billing, Third Edition Sharon Brown Lori Tyler Contract Provisions Eligibility Effective date Termination of coverage Preauthorization Authorized Treatment Record Form

Guide to Medical Billing, Third Edition Sharon Brown Lori Tyler Contract Benefits (1 of 3) Section of the contract that usually details benefits that contract covers Can include basic benefits and major medical benefits

Guide to Medical Billing, Third Edition Sharon Brown Lori Tyler Contract Benefits (2 of 3) Premiums based on number and amount of benefits that a contract covers The greater the coverage, the higher the cost of premiums

Guide to Medical Billing, Third Edition Sharon Brown Lori Tyler Contract Benefits (3 of 3) Basic benefits Accident benefits Preadmission testing Second surgical opinions Outpatient facility charges Major medical benefits Mental and nervous expenses

Guide to Medical Billing, Third Edition Sharon Brown Lori Tyler HIPAA/Health Insurance Portability (1 of 2) Signed into law August 26, 1996 Under law, preexisting exclusions limited to six months, and credit must be given for prior coverage Preexisting limitations not allowed for pregnancy or newborns

Guide to Medical Billing, Third Edition Sharon Brown Lori Tyler HIPAA/Health Insurance Portability (2 of 2) Preexisting limitations not applicable to those who transfer from one plan to another during a company’s open- enrollment period Companies required to provide written certification of all prior coverage

Guide to Medical Billing, Third Edition Sharon Brown Lori Tyler Consolidated Omnibus Budget Reconciliation Act (COBRA) Passed in 1986 Contains provisions giving certain individuals the right to temporary continuation of health coverage at group rates Employees cannot continue COBRA coverage on a policy if they are covered under a new policy.

Guide to Medical Billing, Third Edition Sharon Brown Lori Tyler Insurance Terms (1 of 3) Deductible Carryover provision Family deductible Aggregate deductible Nonaggregate deductible Health savings account

Guide to Medical Billing, Third Edition Sharon Brown Lori Tyler Insurance Terms (2 of 3) Coinsurance Copayments Coinsurance limit Preexisting limitations Exclusions Allowed amounts

Guide to Medical Billing, Third Edition Sharon Brown Lori Tyler Insurance Terms (3 of 3) Usual, customary, and reasonable (UCR) Relative value unit Fee schedule Precertification Utilization review

Guide to Medical Billing, Third Edition Sharon Brown Lori Tyler Components of a Utilization Review Precertification (before) or prospective review Concurrent review (during confinement) Retrospective review (after termination of confinement)

Guide to Medical Billing, Third Edition Sharon Brown Lori Tyler Second Surgical Opinion Consultations Goal is to eliminate elective surgical procedures that are classified as unnecessary

Guide to Medical Billing, Third Edition Sharon Brown Lori Tyler Coordination of Benefits (COB) Process occurs when two or more plans provide coverage on the same person Rules to determine the order of payment: Order of Benefit Determinations (OBD)