Transcript Glencoe Medical Insurance

Introduction to
the Medical
Billing Process
Chapter 1
1
© 2010 The McGraw-Hill Companies, Inc. All rights reserved.
Learning Outcomes
After studying this chapter, you should be
able to:
1.1
1.2
1.3
1.4
Describe the basic features of medical
insurance policies.
Compare indemnity and managed care
plans.
Discuss the fee-for-service and the capitation
methods of payment for medical services.
Compare health maintenance organizations,
point-of-service plans, and preferred
provider organizations.
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Learning Outcomes (Continued)
1.5
Describe the key features of a consumerdriven health plan.
1.6 Describe the major types of payers for
medical insurance.
1.7 List the ten steps in the medical billing
process.
1.8 Identify the most important skills of
medical insurance specialists.
1.9 Discuss the types of health care organizations
that employ medical insurance specialists.
1.10 Compare medical ethics and etiquette.
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Key Terms
• Accounts receivable
(A/R)
• Adjudication
• Benefits
• Capitation
• Coinsurance
• Compliance
• Consumer-driven
health plan (CDHP)
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•
•
•
•
•
•
•
•
Copayment
Covered services
Deductible
Diagnosis code
Ethics
Etiquette
Excluded services
Fee-for-service
Health care claim
4
Key Terms (Continued)
• Health maintenance
organization
(HMO)
• Health plan
• Indemnity plan
• Managed care
• Managed care
organization
(MCO)
• Medical coder
• Medical insurance
• Medical insurance
specialist
• Medical necessity
• Network
• Noncovered services
• Open-access plans
• Out-of-network
• Out-of-pocket
Chapter 1 • Participation
5
Key Terms (Continued)
• Patient Ledger
• Payer
• Per member per
month (PMPM)
• Point-of-service
(POS) option
• Policyholder
• Practice
management
program (PMP)
• Preauthorization
• Preexisting
condition
• Preferred provider
organization (PPO)
• Premium
• Preventive medical
services
• Primary care
physician (PCP)
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Key Terms (Continued)
•
•
•
•
•
•
Procedure code
Professionalism
Provider
Referral
Schedule of benefits
Self-funded health
plan
• Third-party payer
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Increasing Employment Opportunities
For Medical Insurance Specialists!
Medical insurance specialists are
valuable because they help ensure
• Top-quality service, and
• increased revenue
for health care practices and facilities
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Rising Spending on Health Care
• Cost of advances in medical technology
• Aging population of the United States
• RAPIDLY GROWING
OPPORTUNITIES FOR
EMPLOYMENT IN THE MEDICAL
ADMINISTRATIVE AREA
Medical insurance specialists display value
to their employers by
– Verifying compliance with various medical
insurance guidelines and governmental
regulations
– Completing health care claims accurately
and in a timely manner
– Understanding billing regulations and filing
procedures
– Using interpersonal skills
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A medical insurance specialist’s
work contributes to
Patient
satisfaction
Financial success
of the practice
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Insurance Basics
Medical Insurance: Financial plan (the payer)
that covers the cost of hospital and medical
care
Policyholder: Person who buys an insurance
plan; the insured, subscriber, or guarantor
Health Plan: Individual or group plan that
provides or pays for the cost of medical care
Benefits: What a health plan pays for services
covered in an insurance policy; listed in the
schedule of benefits.
Medical Necessity: Reasonable services of
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provider (doctor or facility)
consistent with
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Health Care Benefits
• Covered Services:
– Listed on the schedule of benefits
– May include primary care, emergency care,
medical specialists’ services, and surgery
– Coverage may be mandated
• Noncovered Services:
–Most policies do not cover dental services, eye
examinations or eyeglasses, employment-related
injuries, cosmetic procedures, or experimental
procedures
–- May also not cover specific items, drugs, or
preexisting conditions
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Two Types of Medical
Insurance Policies
• Individual
» contract between individual and the
The insured
plan
(individual)
» known as direct pay
is the policyholder
• Group
» contract between an employer or
organization and the plan
The insured
(employer or » the group members are insured as
“subscribers” or “enrollees”
organization)
is the policyholder
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Other Insurance Types
• Disability Insurance:
Replaces income lost because the insured
cannot work
• Workers’ Compensation Insurance:
Provides benefits for an insured injured on the
job
Health Care Plans
Indemnity
Managed Care
• Payment method is
fee-for-service based
on the contract’s
schedule of benefits.
• Payment method is
typically based on
capitation or a
discounted fee-forservice.
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Health Care Plans
Indemnity
• The contract is
between the insured
and the plan.
Managed Care
• The plan has a
contract with both
the policyholder and
provider.
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Health Care Plans
Indemnity
Managed Care
• Patients receive care
from the providers of
their choice.
• Patients receive care
from a limited panel
of providers.
• The contracted
providers have
agreed to a
discounted
reimbursement.
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Indemnity Plans
Key Terms:
• Premium: Periodic payment the patient is
required to make to keep the policy in effect
• Deductible: Amount that the insured pays on
covered services before benefits begin
• Coinsurance: Percentage of each claim that
the insured pays; states the health plan’s
percentage of the charge, followed by the
insured’s percentage
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Indemnity Plans (Continued)
Example:
An indemnity policy states that the deductible is
the first $200 in covered annual medical fees
and that the coinsurance rate is 80-20. A patient
whose first medical charge of the year was
$2,000 would owe $560.
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Health Maintenance
Organizations (HMOs)
Combines coverage of medical costs and
delivery of health care for prepaid premium.
• Prospective Payment: Payment paid before
the patient visit; covers a specific period
of time
• Capitation Method: Fixed prepayment to a
medical provider for all necessary contracted
services provided to each patient who is a plan
member
• PMPM (per memberChapter
per1 month): The
capitated rate
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Health Maintenance
Organizations (HMOs) (Continued)
Cost Containment
• An HMO uses the following containment
methods:
– Restricting patients’ choice of providers
– Requiring preauthorization for services
– Controlling the use of services
– Controlling drug costs
– Cost-sharing
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Health Maintenance
Organizations (HMOs) (Continued)
Health Care Quality Improvement
• The quality improvements made by HMOs
are illustrated by these features, which most
plans contain:
– Disease/case management
– Preventive care
– Pay-for-performance (P4P)
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Point-of-Service Plan
• Also called an “open access HMO”
• Allows members to see providers in or
out of HMO’s network
• Members pay more for out-of-network
providers
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Preferred Provider
Organizations (PPOs)
• Another health care delivery system
• Requires payment of a premium and often of
a copayment for visits
• PPOs control the cost of health care by:
– Directing patients’ choices of providers
– Controlling use of services
– Requiring preauthorization for services
– Requiring Cost-sharing
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Consumer-Driven Health
Plans (CDHP)
Combine two elements:
1) A health plan, usually a PPO, that has a
high deductible (such as $1,000) and low
premiums
2) A special “savings account” that is used to
pay medical bills before the deductible has
been met
Cost containment plan based on consumerism:
Idea that patients who pay for health care
services become more careful consumers
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Private Payers
•
•
•
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•
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For-Profit
Aetna
Cigna
United Healthcare
Group
Health Net
Humana
Pacificare Health
Systems
Nonprofit
• Kaiser Permanente
(the largest nonprofit
HMO)
• Blue Cross/Blue
Shield Associations
(have both profit and
nonprofit
components)
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Self-Funded Health Plans
•
•
•
•
Health insurance provided by employers
Organization assumes the risk of paying
directly for medical services and sets up a
fund from which it pays for claims
Organization establishes the benefit levels
and the plan types it will offer
May set up their own provider networks or
use existing networks from managed care
organizations
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Government-Sponsored Plans
• Medicare: Coverage for those age 65 and older, people with
certain disabilities, and people with permanent kidney
failure
• Medicaid: Coverage for low-income people who cannot
afford medical care
• TRICARE (was CHAMPUS): Coverage for active-duty
military personnel, their spouses, children, and other
dependents; also retired military personnel and their
dependents, as well as family members of deceased activeduty personnel
• CHAMPVA: Coverage for veterans with permanent
service-related disabilities and their dependents
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The Medical Billing Process
Job functions of medical insurance specialists:
• Understand patients’ responsibilities for
paying for medical services
• Analyze charges and insurance coverage to
prepare accurate, timely claims
• Collect payment for medical services from
health plans and from patients
To complete their duties, medical insurance
specialists follow a medical billing process
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The Medical Billing
Process (Continued)
Step 1: Preregister Patients
There are two main tasks:
• Schedule and update appointments
• Collect preregistration demographic and
insurance information
Both new and returning patients are asked
about the medical reason for the visit
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The Medical Billing
Process (Continued)
Step 2: Establish Financial Responsibility for
the Visit
Questions and procedures to follow:
• Questions about covered services, billing
rules, and patient responsibility
• Verify patients’ eligibility and health plan
coverage, determine the first payer, and
meet payers’ conditions for payment
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The Medical Billing
Process (Continued)
Step 3: Check In Patients
Check in individuals as the practice’s patients:
• Collect or confirm detailed and complete
demographic and medical information
with the patient
• Copy and file insurance cards and other
identification cards, such as drivers’
licenses, into the patient’s record
• Complete any other necessary forms
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The Medical Billing
Process (Continued)
Step 4: Check Out Patients
Tasks following a patient’s encounter:
• Assign medical codes to medical diagnoses
and procedures
• Assign a diagnosis code to the patient’s
primary illness
• Assign a procedure code that stands for
the particular service, treatment, or test
• Enter transaction information in the
patient ledger
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The Medical Billing
Process (Continued)
Step 5: Review Coding Compliance
Follow official guidelines when codes are
assigned:
• After diagnosis and procedure codes are
selected, they must be checked for errors
• Link the diagnosis and the medical
services that are documented in the
patient’s medical record, so that the payer
understands the charges’ medical necessity
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The Medical Billing
Process (Continued)
Step 6: Check Billing Compliance
Each charge, or fee, for a visit is related to a
specific procedure code
• Provider’s fees for services are listed on
the medical practice’s fee schedule
• Whether a code can be billed depends on
the payer’s rules; following these rules
when preparing claims results in billing
compliance
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The Medical Billing
Process (Continued)
Step 7: Prepare and Transmit Claims
The preparation of accurate, timely health
care claims
• Communicates information about the
diagnosis, procedures, and charges to a
payer
• May be for reimbursement for services or
to report an encounter to an HMO
• Follow the practice’s schedule
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The Medical Billing
Process (Continued)
Step 8: Monitor Payer Adjudication
Payers review claims by following the
adjudication process
• Puts the claim through a series of steps
designed to judge whether it should be
paid or not
• The payer’s decision is explained on a
report sent back to the provider with the
payment
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The Medical Billing
Process (Continued)
Step 9: Generate Patient Statements
Bills mailed to patients listing the dates and
services provided, any payments made by
the patient and the payer, and the balances
now due
• The amount paid by all payers (the
primary insurance and any other
insurance) plus the amount to be billed to
the patient should equal the expected fee
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The Medical Billing
Process (Continued)
Step 10: Follow Up Patient Payments and
Handle Collections
Analyze patient payments and follow the
collections process
• Patient medical records and financial
records are filed and retained according to
the medical practice’s policy
• Collection process begins when patient
payments are later than permitted
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Procedures, Communication,
and Information Technology
Medical insurance specialists should follow the
office procedures:
•
•
•
Communicate effectively
Use information technology (IT)
Learn to use electronic health records
(EHR) as they are introduced into the
industry
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Procedures, Communication, and
Information Technology
• Most medical practices use information
technology throughout the medical billing
process to:
–
–
–
–
–
Store patient and insurance information
Schedule patient appointments
Create encounter forms for patient encounters
Generate and transmit health care claims
Post payments to patient’s accounts
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Procedures, Communication, and
Information Technology
WHAT INFORMATION
TECHNOLOGY
CANNOT DO:
Change inaccurate data
entry
If the data entered are
wrong, the information
based on them is
wrong as well.
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Employment as a Medical
Insurance Specialist
The health care industry offers many career
paths for well-qualified employees (with
varied tasks or specialized work):
• Positions in physician practices, clinics,
hospitals or nursing homes, and insurance
companies
• Positions are also available in government
and public health agencies
• Self-employment as a claims assistance
professional
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Medical Insurance Specialist Skills
• Knowledge of medical terminology, anatomy,
physiology, and medical coding
Think about your skills…
• Communication skills
& the skills you need to develop
• Attention to detail
to become an insurance
specialist.
• Flexibility
• Information technology (IT) skills
• Honesty and integrity
• Ability to work as a team member
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Medical Insurance Specialist
Attributes
Factors that mostly have to do with the quality
of professionalism, which is key to getting
and keeping employment, include:
• Appearance
• Attendance
• Initiative
• Courtesy
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Medical Ethics and Etiquette
Ethics
• Standards of
behavior shared by
those in the medical
profession.
Etiquette
• Describes proper
protocol and
behavior in a medical
practice.
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Certification and Credentials
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Certification and Credentials
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Certification and Credentials
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Certification and Credentials
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