1. Chapter 13 Blue Cross Blue Shield

2. Introduction Blue Cross and Blue Shield
Perhaps the best known plans of medical insurance in the United States

3. Origin of Blue Cross Blue Shield
Baylor University hospital in Dallas, Texas
Offered teachers in the Dallas school district a plan of 21 days of hospitalization every year for the holder and their dependents in exchange for $6 annual premium (prepaid health plan)

4. Origin of Blue Shield
Began as a resolution passed by the House of Delegates at an American Medical Association meeting in 1938
Resolution supported the concept of voluntary health insurance that would encourage physicians to cooperate with prepaid health care plans.

5. Origin of Blue Shield
First known plan was formed in Palo Alto, California, in 1939.
Stipulated that physicians’ fees for covered medical services would be paid in full by the plan if subscriber earned less than $3,000 a year

6. Origin of Blue Shield
When subscriber earned more than $3,000 a year, a small percentage of physicians’ fee would be paid by the patient.
Forerunner of today’s industry-wide required patient coinsurance or co-pay.
The Blue Shield design was first used as a trademark by the Buffalo, New York Plan in The Blue Cross and the Blue Shield Plans were established as a separate, non profit corporate entity that issued it’s own contracts and plans within a specific geographic area

7. Joint Ventures Blue Cross originally covered only hospital bills.
Blue Shield only covered fees for physician services.
Over the years Blue Cross and Blue Shield have increased their coverage to include almost all health care services.
There was a close cooperation between Blue Cross and Blue Shield that resulted in formation of joint ventures in some states where the two corporations were housed in one building. In these joint ventures BCBS shared one building and computer services but maintained separate corporate identities.

8. BCBS Association
Located in Chicago, Illinois, and performs the following functions:
Establishes standards for new plans and programs.
Assists local plans with enrollment activities, national advertising, public education, professional relations, and statistical and research activities.
Today it consists of more than 450 independent, locally operated Blue Cross Blue Shield plans that collectively provide healthcare coverage to more than 80 million Americans and serve more than 1 million enrolled in the Medicare + Choice program

9. BCBS Association
Serves as the primary contractor for processing Medicare hospital, hospice, and home health care claims.
Coordinates nationwide BCBS plans

10. Changing Business Structure
Mergers occurred among BCBS regional corporations (within a state or with neighboring states) and names no longer had regional designations.
BlueCross BlueShield Association no longer required plans to be nonprofit (as of 1994).
An EXAMPLE: Care First BCBS is the name of the corporation that resulted from a merger between BCBS of Maryland and Washington DC Blue Cross Blue Shield

11. Changing Business Structure
Regional corporations needed additional capital to compete with commercial for-profit insurance carriers and petitioned their respective state legislatures to allow conversion from their nonprofit status to for- profit corporations.
Non profit corporations are charitable, educational, civic or humanitarian organizations whose profits are returned to the program of the corporation rather than distributed to shareholders and officers of the corporation. Because no profits of the organization are distributed to share holders, the government does not tax the organization’ s income.
For profit corporations pay taxes on profits generated by the corporations enterprises and pay dividends to shareholders on after-tax profits.

12. Changing Business Structure
Nonprofit corporations
Charitable, educational, civic, or humanitarian organizations whose profits are returned to the program of corporation rather than distributed to shareholders and officers of the corporation

13. Changing Business Structure
For-profit corporations
Pay taxes on profits generated by corporations’ for- profit enterprises and pay dividends to shareholders on after-tax profits.

14. BCBS Distinctive Features
Maintain negotiated contracts with providers of care.

15. BCBS Distinctive Features
In exchange, BCBS agrees to perform the following services:
Make prompt, direct payment of claims.
Maintain regional professional representatives to assist participating providers with claim problems.

16. BCBS Distinctive Features
Provide educational seminars, workshops, billing manuals, and newsletters to keep participating providers up-to-date on BCBS insurance procedures.

17. BCBS Distinctive Features
BCBS plans, in exchange for tax relief for their nonprofit status, are forbidden by state law from canceling coverage for an individual because he or she is in poor health or BCBS payments to providers have far exceeded the average.

18. BCBS Distinctive Features
Individuals can only be dis-enrolled for the following reasons:
When premiums are not paid.
If the plan can prove that fraudulent statements were made on the application for coverage

19. BCBS Distinctive Features
BCBS plans must obtain approval from their respective state insurance commissioners for any rate increases and/or benefit changes that affect BCBS members within the state.
For-profit commercial plans have the right to cancel a policy at renewal time if the patient moves into a region of the country in which the country in which the company is not licensed to sell insurance or if the person is a high user of benefits and has purchased a plan that does not include a non-cancellation clause.

20. BCBS Distinctive Features
BCBS plans must allow conversion from group to individual coverage and guarantee the transferability of membership from one local plan to another when a change in residency moves a policyholder into an area served by a different BCBS corporation.
The insurance claim is submitted to the BCBS plan in the state where services were rendered. That local plan forwards the claim to the home plan for adjudication.

21. BCBS Participating Providers
Submit insurance claims for all BCBS subscribers.
Provide access to the Provider Relations Department, which assists the PAR provider in resolving claims or payment problems

22. BCBS Corporation
Write off the difference or balance between the amount charged by the provider and approved fee established by the insurer.
Bill patients for only the deductible and co- pay/coinsurance amounts that are based on BCBS-allowed fees.

23. BCBS Corporation In return, BCBS corporations agree to
Make direct payments to PARs.
Conduct regular training sessions for PAR billing staff.
Provide free billing manuals and PAR newsletters.
PARS –participating providers

24. BCBS Corporation
Maintain a provider representative department to assist with billing/payment problems.
Publish the name, address, and specialty of all PARs in a directory distributed to BCBS subscribers and PARs.

25. Preferred Providers Required to adhere to managed care provisions
Agrees to accept the PPN allowed rate, which is generally 10 percent lower than the PAR allowed rate
Further agrees to abide by all cost- containment, utilization, and quality assurance provisions of the program
PPN preferred provider network

26. Preferred Providers
The “Blues” agree to notify PPN providers in writing of new employer groups and hospitals that have entered into PPN contracts and to maintain a PPN directory.

27. Non Participating Providers
Have not signed participating provider contracts, and they expect to be paid the full fee charged for services rendered

28. Non Participating Providers
Patient may be asked to pay the provider in full and then be reimbursed by BCBS the allowed fee for each service minus the patient’s deductible and co-payment obligations.

29. Non Participating Providers
Even when the provider agrees to file the claim for the patient, insurance company sends payment for claim directly to the patient and not to provider.

30. Plans Cross Blue Shield coverage includes the following programs:
Fee-for-service
Indemnity

31. Plans Managed care plans Coordinated home health and hospice care
Exclusive provider organization
Health maintenance organization
Outpatient pretreatment authorization plan
Point-of-services plan
Preferred provider opinion
Second surgical opinion

32. Plans Federal Employee Program Medicare supplemental plans
Healthcare Anywhere

33. Fee-for-Service
Fee-for-service is selected by two different kinds of people:
Individuals who do not have access to a group plan
Small business employers

34. Fee-for-Service
Those two contracts have two types of different coverage within one policy:
Basic coverage
Major medical benefits

35. Fee-for-Service – Assistant surgeon fees – Obstetric care
– Intensive care
– Newborn care
– Chemotherapy for cancer

36. Fee-for-Service
BCBS major medical coverage includes the following in addition to the basic:
Office visits
Outpatient nonsurgical treatment
Physical and occupational therapy

37. Fee-for-Service – Purchase of durable medical equipment
– Mental health visits
– Allergy testing and injections
– Prescription drugs
– Private duty nursing
– Dental care required as a result of a covered accidental injury

38. Special Accidental Injury Rider
Covers 100 percent of nonsurgical care sought and rendered within 24 to 72 hours of the accidental injury
Surgical care is subject to nay established contract basic plan deductible and patient copayment requirements. Outpatient follow-up care for these accidental injuries is not included in the accidental injury rider, but will be covered if the patient has supplemental coverage.

39. Medical Emergency Care Rider
Covers immediate treatment sought and received for sudden, severe, and unexpected conditions that if not treated would place patient’s health in permanent jeopardy or cause permanent impairment or dysfunction of an organ or body part

40. Medical Emergency Care Rider
Chronic or subacute conditions do not qualify for treatment under the medical emergency rider unless the symptoms suddenly become acute and require immediate medical attention.

41. Indemnity Coverage
Choice and flexibility to receive full range of benefits
Freedom to use any licensed provider
Coverage includes hospital-only or comprehensive hospital and medical coverage.

42. Indemnity Coverage
Outpatient code editor (OCE) software is used in conjunction with the APC grouper to identify Medicare claims edits and assign APC groups to reported codes

43. Managed Care Plans
Health care delivery system that provides health care and controls costs through a network of physicians, hospitals, and other health care providers

44. Managed Care Plans
Coordinated home health and hospice care program allow patients with this option to elect an alternative to the acute care setting.
Patients’ physician must file a treatment plan with the case manager assigned to review and coordinate the case.

45. Managed Care Plans
All authorized services must be rendered by personnel from a licensed home health agency or approved hospice facility.

46. Managed Care Plans
An EPO (exclusive provider organization) organization that provides health care services through a network of doctors, hospitals, and other health care providers
Members are not required to select a primary care provider (PCP).

47. Managed Care Plans Members do not need a referral to see a specialist.
All services must be obtained from EPO providers only.
If care received from providers not part of the EPO, patient must pay charges in full

48. Managed Care Plans Health maintenance organization (HMO)
Plan that assumes or shares the financial and health care delivery risks associated with providing comprehensive medical services to subscribers in return for a fixed, prepaid fee.

49. Managed Care Plans Outpatient pretreatment authorization plan (OPAP)
Requires preauthorization of outpatient physical, occupational, and speech therapy services
Requires periodic treatment/progress plans to be filed

50. Managed Care Plans
Requirement for the delivery of certain health care services and is issued prior to the provision of services

51. Managed Care Plans Point-of-service plan (POS)
Allows subscribers to choose, at the time medical services are needed, whether they will go to a provider within the plan’s network or outside the network
When subscribers go outside the network to seek care, out-of-pocket expenses and co-payments generally increase.

52. Managed Care Plans
Provide a full range of inpatient and outpatient services, and subscribers choose a primary care provider (PCP) from the payer’s PCP list

53. Managed Care Plans Preferred Provider Organization (PPO)
Offers discounted health care services to subscribers who use designated health care providers (who contract with the PPO)
Also provides coverage for services rendered by health care providers who are not part of the PPO network

54. Managed Care Plans
Subscriber (member) is responsible for remaining within the network of PPO providers and must request referrals to PPO specialists whenever possible.
Subscriber must also adhere to the managed care requirements of the PPO policy.

55. Managed Care Plans
Failure to adhere to requirements will result in denial of the surgical claim or reduced payment to the provider.
Patient is responsible for the difference or balance between the reduced payment and the normal PPO allowed rate.

56. Managed Care Plans Second Surgical Opinion
Necessary when a patient is considering elective, nonemergency surgical care
Initial surgical recommendation must be made by a physician qualified to perform the anticipated surgery.
If a second surgical opinion is not obtained prior to surgery, patients’ out-of-pocket expenses may be greatly increased.

57. Federal Employee Program
An employer-sponsored health benefits program established by an Act of Congress in 1959
FEP is underwritten and administered by participating insurance plans (e.g., Blue Cross and Blue Shield plans) that are called local plans.

58. Federal Employee Program
FEP cards contain the phrase Government- Wide Service Benefit Plan under the BCBS trademark.
Charged differently if in with patient at bed side or coming in and out of room monitoring.

59. Federal Employee Program
Four enrollment options
101—Individual, High Option Plan
102—Family, High Option Plan
104—Individual Standard (Low) Option Plan
105—Family Standard (Low) Option Plan

60. Federal Employee Program
Considered a managed fee-for-service program and has generally operated as a PPO plan

61. Medicare Supplemental Plans
Enhance the Medicare program by paying for Medicare deductibles and co-payments.
Also known as Medigap plans

62. Health Care Anywhere
BlueCard® Program enables such members obtaining health care services while traveling or living in another BCBS plan’s service area to receive the benefits of their home plan contract and access local provider networks.

63. Health Care Anywhere
The insurance claim is submitted to the BC/BS plan in the state where services were rendered. That local plan forwards the claim to the home plan for adjudication.

64. Health Care Anywhere
Away From Home Care® Program allows the participating BCBS plan members who are temporarily residing outside of their home HMO service area for at least 90 days to temporarily enroll with a local HMO.

65. Health Care Anywhere
BlueWorldwide Expat provides global medical coverage for active employees and their dependents who spend more than six months outside the United States.

66. Billing Notes Claims processing Deadline for filing claims Forms used
BCBS plans process their own claims.
Deadline for filing claims
Customarily one year from the date of service, unless specified in subscriber’s or provider’s contract
Forms used
Most BCBS currently accept CMS-1500 claim.

67. Billing Notes Inpatient and outpatient coverage
Many plans require second surgical opinions and prior authorization for elective hospitalizations.

68. Billing Notes Deductible
Look up in the billing manual or call the computerized phone bank for eligibility for that patient.

69. Billing Notes Co-payment/Coinsurance
Most common coinsurance amounts are 20 percent and 25 percent.
Some may go as high as 50 percent for mental health services.

70. Billing Notes Allowable fee determination
Many use the physician fee schedule to determine the allowed fees for each procedure.
Others use a usual, customary, and reasonable (UCR) basis.
Amount commonly charged for a particular medical service by providers within a particular geographic region

71. Billing Notes
Participating providers must accept the allowable rate on all covered services and write off or adjust the difference or balance between the plan determined allowed amount and the amount billed.
Patients are responsible for any deductible and co- pay/coinsurance as well as for full charges for uncovered services.

72. Billing Notes Assignment of benefits
Payment is made directly to the provider by BCBS.

73. Special Handing
Make a habit and priority to have a current copy of the front and back of all patient ID cards in the patient’s file.
Patients with Blue Cross who have more than one insurance policy
Must be billed directly to the plan from which the program originated

74. Special Handing
Non-PARs must bill the patient’s plan for all non-national account patients with BlueCards.
Rebill claims not paid within 30 days.
Some mental health claims are forwarded to a third-party administrator.

75. Primary Claim Status is determined when:
Covered by only one BCBS policy.
Covered by both a government-sponsored plan and employer-sponsored BCBS plan.
Covered by a non-BCBS plan that is not employer-sponsored.

76. Primary Claim Status Is Determined When
Designated as the policyholder of one employer-sponsored plan and also listed as a dependent on another employer-sponsored plan.

77. Secondary Coverage
Modifications are made to the CMS claim when patients are covered by primary and secondary or supplemental health plans.
When the same BCBS payer issues the primary and secondary or supplemental policies, submit just one CMS-1500 claim.

78. Secondary Coverage
If BCBS payers for the primary and secondary or supplemental policies are different
Submit a CMS-1500 claim to the primary payer.

79. Secondary Coverage
After the primary payer processes the claim, generate a second CMS-1500 claim to send to the secondary or supplemental payer and include a copy of the primary payer’s remittance advice.