Transcript Chapter 14, Basics of Health Insurance

Basics of Health Insurance
Chapter 14
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The Purpose of Health Insurance
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Helps individuals and families offset costs of
medical care
Defined as contract for protection against
financial losses resulting from illness or injury
Provides payment of monetary benefits for
covered sickness or injury, depending on
policy purchased
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Contract with Patients
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To obtain health insurance, patients apply
either through their employer or privately
Two types of health insurance plans in the
United States:
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Privately sponsored health insurance plans
Government-sponsored health insurance plans
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Health Insurance Plans
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Government-sponsored health insurance
plans
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Employer-sponsored group policies
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Patients must meet the application requirements
Employers usually sponsor a percentage of the
monthly premium
Individual health insurance plans
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Health Insurance Plans (Cont.)
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Affordable Care Act
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Also known as the “Patient Protection and
Affordable Care Act” or “Obamacare”
Increases the quality, availability, and affordability
of private and public health insurance for more
than 44 million uninsured Americans
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Health Insurance Plans (Cont.)
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Benefits
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Benefits (Cont.)
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Hospitalization
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Hospital coverage pays cost of all or part of:
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Hospital room and board
Hospital services, such as having surgery
Hospital policies usually set maximum
amount payable per day and maximum days
of care
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Surgical
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Surgical coverage pays all or part of a
surgeon’s fee
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Some plans also pay for an assistant surgeon
Surgery includes any incision or excision,
removal of foreign bodies, aspiration,
suturing, and reduction of fractures
Insurer frequently provides subscriber with
surgical fee schedule that establishes amount
insurer will pay for commonly performed
procedures
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Basic Medical
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Pays all or part of physician’s fee for
nonsurgical services, including hospital,
home, and office visits
Patient usually pays deductible and a copayment or co-insurance payment each time
May include provision for diagnostic
laboratory, radiology, and pathology fees
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Major Medical
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Provides protection against large medical bills
resulting from catastrophic or prolonged
illnesses
Covers most serious medical expenses up to
a maximum amount, usually after a
deductible and co-insurance have been met
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Disability (Loss of Income) Protection
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Insures beneficiary’s earned income against
risk that a disability will make working
uncomfortable, painful, or impossible
Encompasses paid sick leave and short-term
and long-term disability benefits
Many policies do not start payment until after
a specified number of days or until a certain
number of sick leave days have been used
Payment is made directly to individual,
intended to replace lost income
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Dental Care
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Dental coverage is included in many fringe
benefit packages
Programs offer a variety of options of either
fee-for-service or managed care plans
Some policies are based on a co-payment
and incentive program
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Vision Care
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May include reimbursement for all or a
percentage of cost for refraction, lenses, and
frames
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Medicare Supplement
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A supplemental health insurance policy to
help defray medical costs not covered or only
partially covered by Medicare
Medicare supplements that cover Medicare
recipients’ out-of-pocket expenses, called
Medigap policies
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Liability Insurance
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Liability insurance covers losses to a third
party caused by the insured
Types include automobile, business, and
homeowners’ policies
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Life Insurance
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Provides payment of specified amount on the
insured’s death
Sometimes provides monthly cash benefits if
policyholder becomes permanently and totally
disabled
Sometimes proceeds from life insurance are
used to meet expenses of insured person’s
last illness
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Long-Term Care Insurance
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Covers a broad range of maintenance and
health services for chronically ill, disabled, or
developmentally delayed individuals
Services may be provided on an inpatient
basis, on an outpatient basis, or at home
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Premiums
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Patients covered by an employer-sponsored
group health insurance plan typically share
the cost for the monthly premium
Individual health insurance marketplaces
have monthly premiums
Indigent, elderly, federally employed
employees, or military patients who seek
healthcare from the government have little or
no monthly premiums
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Health Insurance Identification Card
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Verifying Eligibility of Services
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Process of confirming health insurance
coverage for the patient for the medical
service and the date of service
Before scheduling an appointment, health
insurance information should be collected
over the phone
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Accessing Healthcare
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When insured patient seeks care, the
healthcare provider renders medical services
at any in-network healthcare provider
Many health insurance plans do not
reimburse for healthcare services provided at
out-of-network facilities
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Participating Provider Contracts
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Healthcare providers must become
participating providers (PARS)
Healthcare providers can apply to become
PARs through credentialing
Once the healthcare provider is credentialed,
the health insurance plan issues a contract to
become an in-network PAR
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Contracted Fee Schedules
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In the United States, payment for services is
typically made after the health services are
rendered
Healthcare provider has three commodities to
sell:
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Time
Judgment (expertise)
Services
In recent years, health insurance plans have
greatly influenced what healthcare providers
can charge
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How Reimbursements Are Determined
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Determination of the usual, customary, and
reasonable (UCR) fees
Indemnity schedules
Service benefit plans
Relative value scale (RVS)
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Usual, Customary, and Reasonable Fees
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Some insurance companies agree to pay on
the basis of all or a percentage of a UCR fee
Charges for a specific service are compared
with a database showing:
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(1) Charges to other patients for the same service
by the same type of physician
(2) Charges to patients by other physicians
performing the same or similar services in the
same geographic area
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Indemnity Schedules
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More flexible yet more costly option
Traditional health insurance plans that pay for
all or a share of cost of covered services,
regardless of which provider is used
Often called fee-for-service plans
In exchange for premiums members pay,
indemnity plan reimburses members or
provider when claims are filed
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Service Benefit Plans
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Company agrees to pay for certain surgical or
medical services without additional costs to the
person insured
No set fee schedule
Premiums sometimes higher; reimbursements
are larger
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Resource-Based Relative Value Scale
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RBRVS is one of the outcomes of the
Medicare Physician Payment Reform enacted
in the Omnibus Budget Reconciliation Act of
1989
Implementation of RBRVS in 1992 changed
system to a fee schedule, consisting of three
parts:
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Physician work
Charge-based professional liability expenses
Charge-based overhead
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Privately Sponsored
Health Insurance Plans
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Also known as commercial insurance plans
For-profit organizations
Make annual charges to the participating
provider to negotiate lower payments
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Blue Cross/Blue Shield
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America’s oldest and largest system of
privately sponsored insurers
Offers incentive contracts to healthcare
providers
PARs write off the difference or balance
between amount charged by provider and
approved fee established by the insurance
plan
Agree to bill the patient only for the deductible
and co-pay, and the full charge for any
uncovered services
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Other Commercial Insurances
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Aetna
Blue Cross
Blue Shield
Connecticut General
Metropolitan
Prudential
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Learning Objectives
Lesson 14.2: Managed Care, GovernmentSponsored, and Self-Funded Plans
10.
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Differentiate among the different types of
managed care models.
Outline managed care requirements for patient
referral and obtain a referral with documentation.
Describe the process for preauthorization and
how to obtain preauthorization including
documentation.
List and discuss various government-sponsored
plans.
Review employer-established self-funded plans.
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Managed Care
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Umbrella term for all healthcare plans that
provide healthcare in return for preset
scheduled payments and coordinated care
through a defined network of physicians and
hospitals
Health maintenance organizations (HMOs)
provide comprehensive healthcare to an
enrolled group for a fixed periodic payment
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Managed Care (Cont.)
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Be familiar with individual managed care
contract benefits and with procedures and
processes for filing insurance claims
Review managed care plan’s specific
handbook, contracts, and required forms
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Managed Care Policies and Procedures
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Advantages of managed care include the
following:
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Healthcare costs are usually contained
Established fee schedules are used
Authorized services are usually paid for
Most preventive medical treatment is covered
Patients’ out-of-pocket expenses tend to be less
than with traditional insurance
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Disadvantages of Managed Care
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Access to specialized care and referrals can
be limited
Physicians’ choices in the treatment of
patients can be limited
More paperwork may be required
Treatment may be delayed because of
preauthorization requirements
Reimbursement historically is less than with
traditional insurance
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Comparison of HMO Models
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Health Maintenance Organization
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Plan that contracts with a medical center or
group of physicians to provide both
preventive and acute care for insured
Regulated by HMO laws, which require them
to include preventive care as part of their
benefits package
Always requires referrals to specialists, for
precertification and preauthorization, for
hospital admissions, outpatient procedures,
and treatments
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Health Maintenance Organization (Cont.)
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Providers receive payment according to
various structures
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Capitation is payment in advance to provider by
HMO for contracted group of patients
Fees charged for services to group members may
be billed directly to IPA rather than to patient
Most common HMO models are IPA, staff
model, group model, PPO, and EPO
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Independent Practice Association
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IPA is an independent group of physicians
and other healthcare providers under contract
to provide services to members of different
HMOs, in addition to other insurance plans
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Usually at a fixed fee per patient
Payments to providers by an IPA can be
structured either as a capitation or fee-forservice
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Staff Model
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A staff model HMO hires physicians and pays
them a salary
HMO owns the network
Medical care is given or authorized by
patient’s PCP
No capitation or fee-for-service payment
structure is used with this model
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Group Model
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Group model HMO contracts with a
multispecialty medical group to deliver care to
its members
HMO reimburses physicians’ group, which is
responsible for reimbursing physician
members and contracted healthcare facilities
Multispecialty group may organize a
physician association; group members
typically practice together in one facility
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Preferred Provider Organization
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Managed care network of physicians and
hospitals that have joined to contract with
insurance companies, employers, or other
organizations to provide healthcare to
subscribers for a discounted fee
Furnish subscribers with a list of memberproviders from which subscribers can receive
healthcare at PPO reduced rates
A provider who joins a PPO continues to treat
and bill patients on a fee-for-service basis
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Exclusive Provider Organization
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EPO combines features of an HMO and a
PPO
“Exclusive” because providers agree not to
contract with any other plan
Members must choose medical care from
network providers with certain exceptions for
emergency or out-of-area services
Regulated under insurance statutes, not
federal and state HMO regulations
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Referrals
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Patients seeking specialized care must first
visit their assigned PCP to obtain a referral to
a specialist
Approval or denial of a referral can take
anywhere from a few minutes to a few days
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Three Types of Referrals
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Regular referral
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Urgent referral
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Usually takes 3 to 10 days for review; used when
PCP thinks patient must see specialist for further
treatment
Usually takes 24 hours for review; used when
urgent, but not life-threatening situation occurs
STAT referral
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Can be approved immediately by phone; used for
emergencies
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Preauthorization for
Surgical Procedures
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Authorization code
Date on which referral request was received
by utilization review department
Date on which referral was approved and its
expiration date
Diagnosis code
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Preauthorization for
Surgical Procedures (Cont.)
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Name, address, and telephone number of
contracted specialist
Comments section
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This is most critical area of a referral because this
area designates services that have been approved
Specified number of authorized visits to the
patient
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Utilization Management/
Utilization Review
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Utilization management
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Form of patient care review by healthcare
professionals who do not provide the care but are
sponsored by health insurance companies
Utilization review committee reviews
individual cases to make certain the medical
care services are medically necessary
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Government-Sponsored Plans
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Provide health insurance coverage with
reduced or no monthly premiums for the
indigent, the elderly, the military, and
government employees
Variety of plans, but patients need to qualify
either by age, income, government
occupation, or health condition
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Medicare
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Federal health insurance program that
provides healthcare coverage for individuals
65 or older, the disabled, and patients with
end stage renal disease (ESRD)
Divided into four parts: Part A, Part B, Part C,
and Part D
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Medicare (Cont.)
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Medicaid
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All states and District of Columbia have
Medicaid programs, but programs vary widely
Person eligible for Medicaid in one state may
not qualify in another; services may differ
Federal government provides basic funding to
state, after which states individually elect
whether to provide funds for extension of
benefits
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Medicaid (Cont.)
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Physician may accept or decline to treat
Medicaid patients
Physician who does accept Medicaid patients
automatically agrees to accept Medicaid
payment as payment in full
Patient cannot be billed for difference
between Medicaid fee and physician’s normal
fee
Patient can be billed for any services not
covered by Medicaid
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Examples of Those Who
Qualify for Medicaid Benefits
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Individuals who are medically needy
Recipients of Aid to Families with Dependent
Children (AFDC)
Individuals who receive Supplemental Security
Income (SSI)
Individuals who receive certain types of federal
and state aid
Individuals who are qualified Medicare
beneficiaries (QMBs)
Individuals in institutions or receiving long-term
care in nursing and intermediate-care facilities
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Children’s Health
Insurance Program (CHIP)
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State-funded program for children whose
family income is above the Medicaid
qualifying limits
CHIP premiums are typically 5% of the family
monthly income
State CHIP programs cover routine checkups,
immunizations, doctor visits, prescriptions,
dental care, vision care, inpatient and
outpatient hospital care, laboratory tests,
x-rays, and emergency services
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TRICARE
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Comprehensive healthcare program for family
members of active duty personnel, military
retirees and their eligible family members
under age of 65, and survivors of all
uniformed services
Managed by military in partnership with
civilian hospitals and clinics
All military hospitals and clinics are part of
TRICARE program and offer high-quality
healthcare at low costs to plan users
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TRICARE Eligibility
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Individual must be a TRICARE or CHAMPVA
recipient
Entitled to retired, retainer, or equivalent pay
Must be listed in Defense Department’s
Defense Enrollment Eligible Reporting
System (DEERS)
Also available for a TRICARE-eligible spouse
under age 65 and dependent, unmarried
children under age 21, or age 23 if in college
full time
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Types of TRICARE Plans
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TRICARE Prime
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TRICARE Extra
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Department of Defense’s managed care plan, similar
to a civilian HMO
Preferred provider network plan
TRICARE Standard
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Traditional fee-for-service plan (formerly CHAMPUS)
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CHAMPVA
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Health benefits program similar to TRICARE
for spouses and dependent children of
veterans experiencing total, permanent,
service-connected disabilities and for
surviving spouses and dependent children of
veterans who died as result of service-related
disabilities
Department of Veterans Affairs (VA) shares
with eligible beneficiaries cost of certain
healthcare services and supplies
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Workers’ Compensation
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Federal and all state legislatures require
employers to maintain workers’ compensation
coverage for work-related illnesses and
injuries
The law also protects wage earners against
the loss of wages and the cost of medical
care resulting from occupational accident or
disease
No state’s workers’ compensation laws cover
all employees; check with patient’s employer
to verify insurance coverage
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Workers’ Compensation (Cont.)
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Compensation benefits include medical care
benefits, weekly income replacement benefits
for temporary disability, permanent disability
settlements, and survivor benefits when
applicable
Provider of service accepts workers’
compensation payment as payment in full
and does not bill patient
Employee is obligated to promptly notify
employer, who must then notify insurance
company and refer employee to medical care
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Employer-Established Self-Funded Plans
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When a large company or organization has a
big enough employee base that it chooses to
fund its own insurance program
The employer pays employee healthcare
costs from the firm’s own funds
Often a third-party administrator (TPA)
handles paperwork and claim payments
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Closing Comments
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Responsibilities include keeping patient
informed and answering questions as they
arise
Use good communication skills, patience, and
tact when discussing third-party
reimbursement issues with patients
Written release must be given for medical
information to insurance claims processing
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Questions?
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