Transcript Blue Cross Blue Shield

Chapter 13
Blue Cross Blue Shield
Blue Cross and Blue
Shield
Perhaps the best
known plans of
medical insurance in
the United States
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Blue Cross,1929
◦ 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)
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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.
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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
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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.
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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.
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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.
◦ Serves as the primary contractor for processing
Medicare hospital, hospice, and home health care
claims.
◦ Coordinates nationwide BCBS plans
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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).
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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 forprofit corporations.
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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
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For-profit corporations
◦ Pay taxes on profits generated by corporations’ forprofit enterprises and pay dividends to
shareholders on after-tax profits.
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Maintain negotiated contracts with providers
of care.
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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.
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Provide educational seminars, workshops, billing
manuals, and newsletters to keep participating
providers up-to-date on BCBS insurance procedures.
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.
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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
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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.
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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.
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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
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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 copay/coinsurance amounts that are based on
BCBS-allowed fees.
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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.
◦ 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.
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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 costcontainment, utilization, and quality
assurance provisions of the program
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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.
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Have not signed participating provider
contracts, and they expect to be paid the full
fee charged for services rendered
◦ 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.
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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.
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Cross Blue Shield coverage includes the
following programs:
◦ Fee-for-service
◦ Indemnity
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Managed care plans
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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
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Federal Employee Program
Medicare supplemental plans
Healthcare Anywhere
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Fee-for-service is selected by two different
kinds of people:
◦ Individuals who do not have access to a group
plan
◦ Small business employers
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Those two contracts have two types of
different coverage within one policy:
◦ Basic coverage
◦ Major medical benefits
– Assistant surgeon fees
– Obstetric care
– Intensive care
– Newborn care
– Chemotherapy for cancer
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BCBS major medical coverage includes the
following in addition to the basic:
◦ Office visits
◦ Outpatient nonsurgical treatment
◦ Physical and occupational therapy
– 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
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Covers 100 percent of nonsurgical care
sought and rendered within 24 to 72 hours of
the accidental injury
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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
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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.
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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.
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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
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Health care delivery system that provides
health care and controls costs through a
network of physicians, hospitals, and other
health care providers
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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.
◦ All authorized services must be rendered by
personnel from a licensed home health agency or
approved hospice facility.
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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).
◦ 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
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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.
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Outpatient pretreatment authorization plan
(OPAP)
◦ Requires preauthorization of outpatient physical,
occupational, and speech therapy services
◦ Requires periodic treatment/progress plans to be
filed
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Requirement for the delivery of certain health care
services and is issued prior to the provision of
services
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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.
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Provide a full range of inpatient and
outpatient services, and subscribers choose
a primary care provider (PCP) from the
payer’s PCP list
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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
◦ 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.
◦ 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.
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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.
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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.
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FEP cards contain the phrase GovernmentWide Service Benefit Plan under the BCBS
trademark.
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Four enrollment options
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101—Individual, High Option Plan
102—Family, High Option Plan
104—Individual Standard (Low) Option Plan
105—Family Standard (Low) Option Plan
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Considered a managed fee-for-service
program and has generally operated as a PPO
plan
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Enhance the Medicare program by paying for
Medicare deductibles and co-payments.
Also known as Medigap plans
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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.
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.
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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.
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BlueWorldwide Expat provides global medical
coverage for active employees and their
dependents who spend more than six months
outside the United States.
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Claims processing
◦ BCBS plans process their own claims.
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Deadline for filing claims
◦ Customarily one year from the date of service,
unless specified in subscriber’s or provider’s
contract
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Forms used
◦ Most BCBS currently accept CMS-1500 claim.
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Inpatient and outpatient coverage
◦ Many plans require second surgical opinions and
prior authorization for elective hospitalizations.
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Deductible
◦ Look up in the billing manual or call the
computerized phone bank for eligibility for that
patient.
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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.
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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
◦ 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 copay/coinsurance as well as for full charges for
uncovered services.
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Assignment of benefits
◦ Payment is made directly to the provider by BCBS.
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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
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Must be billed directly to the plan from which the
program originated
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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.
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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.
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Designated as the policyholder of one
employer-sponsored plan and also listed as a
dependent on another employer-sponsored
plan.
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Modifications are made to the CMS-1500
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.
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If BCBS payers for the primary and secondary
or supplemental policies are different
◦ Submit a CMS-1500 claim to the primary payer.
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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.