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 HMO—second most popular POS 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

Consumer-driven Health Plans High deductible Tax deferred saving accounts Consumer makes more decisions about health payments Have web tools to help with decisions

Funding Accounts Reimbursement Savings Flexible Savings Employer funded High deductibles 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 Bill the patient Patient submits to reimbursement account OR withdraws from savings account OR pays bill and submits for funds from flexible account Once funds are exhausted” Coinsurance is paid by reimbursement account Patient pays out of pocket for savings accounts

Participating Providers’ Contracts Determine obligations with the contract Definitions of medical necessity Allowable fees Acceptance of members Referrals and preauthorizations Payment guidelines

Physician Responsibilities Services offered Acceptance of members (all or a percentage) Referral rules 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

Preparing Correct Claims

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