GeBBS GEBBS Healthcare Solutions Private Lid All Rights Reserved. Basic Medical Billing DISCLAIMER The content, concepts, approaches and methods proposed in this document are confidential and proprietary and are provided solely for the purpose of training at GeBBS Healthcare Solutions. This document may not be reproduced or reviewed by any person not an employee of GeBBS. Reci using this manual agree to be bound by the copyright and intellectual property laws of the United States of America. 2[ Page GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS GEBBS Healthcare Solutions Private Lid All Rights Reserved. Contents 1.0 Introduction to US Healthcare. 1.1 Healthcare in India and the US 12. Patient, Provider and Payer relationshij 13. Generic Healthcare Terminology: 2.0 Concept of Health Insurance 2.1 Insurance Classification 2.2. Introduction to Indemnity and MCO.. 2.3. Traditional Indemnity 2.3.1 Classification of Traditional Plans 2.4 Managed Care Plans 2.41 HMO 2.42 2.43 2.44 2.5 Types of Physician Groups... 2.5.1 Physician Hospital Organization (PHO) 2.5.2 _ Independent Practice Association (IPA). 2.6 Federal Insurance .. 2.61 2.62 2.63 2.64 SCHIP. 2.65 CHAMPUS/TRICARE. 2.66 CHAMPVA.. 2.6.7 FEHB (Federal Employees Health Benefit Plan). 3| Pace GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS GEBBS Healthcare Solutions Private Lid All Rights Reserved. 2.7 Liability insurance .. 2.7.1 General Lial 2.7.2 Auto Accidents Insurance 2.7.3 Worker's Compensation 28 Commercial Insurance .. 2.81 Individual Plans 2.82 Group plans. 2.83 BCE: 3.0 Bi 4.0 Introduction to Medical Billing 41 BPO/Outsourcing 4.2 Revenue Cycle Management ....csrsnrreorsnnenean 4.21 Patient Scheduling 4.2.2 Benefit and Eligibility Verification 4.23 Pre-registration/Pre-admissi 4.24 Patient Encounter. 4.25 _ Registration/Patient Demographic Entry. 4.26 — Medical Transcription. 4.27 Medical Coding. 4.28 Charge Capture 4.29 _ Life Cycle of an Insurance Clai 4.2.10 Types of Claims 4.211 Clearing House 4.2.12 Cash Posting/Payment Posting .. 4.213 Accounts Receivables ..ccsenn 5.0 _ Related forms/document: 6.0 _List of Abbreviations .. MEDICAL SPECIALTIES alPage GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS GEBBS Healthcare Solutions Private Lid All Rights Reserved. Glossary. 122 1.0 Introduction to US Healthcare Objectives At the end of this session you will be able to understand > Major differences between the Indian and US Healthcare System > Patient, Provider and Payer relationship > Basic Healthcare Terminology 1.1 Healthcare in India and the US Health care industry in the US is completely different from the healthcare setup in India. People in the US believe in the “Prevention” model rather than the “Cure” model. The average life span of an individual in US is around 75 years and it is still in the increasing trend with advancement in disease management techniques. According to 2 very recent survey, almost 89% of the US Population has a health insurance plan to help them share the medical expense. The Medical Insurance Industry alone consumes about 14% of the US Gross Domestic Product (GDP). The entire Healthcare system revolves around 3 P: Patient, Provider and Payer relationship. The diagram below helps us understand it better. INDIA Us boctor PATIENT GETS TREATMENT PAYS TREATS PAYS PREMIUM PATIENT 5| Page Gus/ ProvioeR | @ nitro”® professionalGeBBS GE Healthcare Solutions Private Lid All Rights Reserved. Some of the major differences can be listed as follows:- INDIA us Targe % (more than 85%) of the population is Less % of Health Insured covered under Medical Insurance. Scope of coverage of plans is li ited Scope of coverage is high Pay first and claim later (No credit facility) Credit facility is extended to the Patient Filing of claims with insurance is the of claims with insurance is the responsibility of the insured responsibility of the Provider. 1.2Patient, Provider and Payer relationship The three entities in healthcare industry can be denoted as the as the three “P”s of the healthcare industry. "Patient - AKA Client; Subscribers; Members; Policy Holders; Beneficiaries; Enrollees; Employees; Dependents; Insured Provider — Doctors; Hospitals; SNF; Hospice; DME Suppliers; Home Health Agencies; Rehab Centers; Pharmacy "Payer — Insurances; Carriers; Insurer Health Insurance Overview: Insurance is all about managing risk. Itis purchased to protect oneself and the loved ones from a devastating financial loss. It is like a gamble betw Sl oase GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS GE Healthcare Solutions Private Lid All Rights Reserved. payer. The insurance company bets that they will take in more money in premiums than they have to pay out in benefits, whether it is for health or life or accident or homeowners insurance. The patients also pay monthly premiums thinking just in case something happens then they will have coverage from the Insurance Company and hence not a big financial risk on their head rather a shared cost between the two. Health insurance is a contract that a patient has. the insurance company wherein the payer pays a portion of medical expenses if the patient develops some health related concerns e.g. gets sick or hurt and have to visit a doctor's office or hospital. Some contracts also specify that insurance company will pay a portion of your medical expenses to ensure the patient doesn’t get sick such as paying for annual physicians or immunizations (Prevention is better than Cure concept). However the amount of the bill th surance company will pay and under what circumstances they'll pay itis known as ‘coverage’ and will vary from policy to policy. 1.3 Generic Healthcare Terminology: Provider — Someone who provides the health care service or treatment to a patient in the US is called ‘Healthcare Service Provider’ or only ‘Provider.’ E.g. Doctor, Hospitals, Pathology lab, etc... Carrier Health Insurance companies in the US are called ‘Carriers’ or ‘Administrative Agents’ or ‘Underwriters’ or ‘Insurers’; they carry the risk of healthcare cost reimbursement to policy holders. Insurance ~ Insurance is defined as contract the equitable transfer of a risk or loss; from one entity to another in exchange for a premium. It can be thought of as a guaranteed small loss to prevent a large one. It is also defined as a contract between two pa whereby one party called insurer undertakes tthe risk/loss in exchange of a Premium and care rendered. Subscriber ~ An individual who buys an insurance policy (either through employer or other means) is called a ‘Subscriber’ or ‘Enrollee’ or ‘Certificate Holder’ The Insured is the term used to designate the person who represents the family unit in relation to the insurance program. This may be the employee, whose employment makes this coverage possible. This person may also be known as the T)Page GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS GE Healthcare Solutions Private Lid All Rights Reserved. enrollee, certificate holder, policyholder or subscriber i.e. an insured is the person who takes an insurance policy to cover the risks that the person might incur. Underwriter - The officer/person at Insurance end, who approves or disapproves the policy, is called 25 Underwriter. The entire process of approving or disapproving the policy to a subscriber is called as Underwriting. Pre-existing Condition - The pre-exis fing condition is a health conditi n or illness that a subscriber has even before the start of coverage of his health insurance plan. It’s an illness that exists before the Insurance coverage starts. Generally the insurances do not give coverage for pre-existing conditions and the patient needs to specify about it at the time of appointment itself to his doctor. This will help avoid the unnecessary billing of the provider to the insurance and the correct billing to the patient. For e.g. If a patient has Diabetes from birth and he appli for a health insurance plan, then the treatments related to Diabetes will not be covered by the insurance. When this patient visits the doctor for treatment; the insurance will cover for all the other treatments but not anything related to treatment of Diabetes. Hence the patient should clearly specify the doctor at the time of treatment only that the Insurance will cover only those treatments not related to Diabetes only. The office staff shall also keep in mind the same and do correct billing/recommend for correct billing through notes. Premium - The periodic payment to an insurance company or a health care plan for health care coverage is a premium Copayment / Co-pay- It is a flat amount that a patient/subscriber pays at the time of medical service or to receive a medication. Each health surance plan establishes this cost earlier and it has to be paid up front by the patient before taking the service. Insurance companies use these co-pays in part to share expenses with a subscriber. The concept of giving co-pay upfront helps insurances avoid unnecessary visits a patient wants to make to a doctor for nontrivial injuries/ilness. Deduetible- The fixed amount apart from co-pay that a patient has to meet prior to coverage given by the Insurance is called as deductible. This 's normally in annual terms for e.g. a patient has to pay a BI Page GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS GE Healthcare Solutions Private Lid All Rights Reserved. deductible of $1049 annually apart from the $10 co-pay (which he gives for every visit). Till the time patient doesn’t cover $1049 from his pocket for all medical expenses in a year the insurance will not start the reimbursement from its side. Hence it becomes very necessary for a patient to meet his deductible before the insurance starts reimbursing. Co-insurance - A percentage cost share between a patient and his different insurance payers is called as co-Insurance. It’s a percentage of the bill that a patient is required to pay which may be in addition of deductible & co-pay. Life time maximum - The total amount that the insurance company pays for the life of the policy is called as life time maximum. Stop Loss Clause (Catastrophic limit) - It is # slab amount fixed by the patient which would be his / her total out of pocket expense. Once the cumulative total reaches this slab amount, the Insurance Company would start paying 100% of the allowed amount. There would not be any patient's, responsibility. Out-Of-Pocket Expense- The amount that a patient has to pay for his medical treatment is called as 00Ps. They comprise of co-pay, deductible & co: Service - Treatment rendered to a patient is called as ‘Service’ or ‘Healthcare Delivery.’ Place of Service — Dispensary/Clinic/Hospital where the patient encounter occurs. It’s also referred as an ‘office’ or a ‘Facility.” Encounter - When a patient meets with a doctor in a clinic/converses in regards to his health status; it is called a Patient-Provider encounter. Guarantor - is a person who takes any responsibility on behalf of the patient. Guarantor promises payment due to provider, in case insurance or patient does not make payments either partially or fully. If there is no other person to guarantee, then the patient becomes his/her own guarantor O] Page GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS GE Healthcare Solutions Private Lid All Rights Reserved. AOB - Assignment of Benefits: This is a written authorization / Declaration given by the patient stating that the benefits (payment) due to the Provider could be directly sent to the prt not signed the payment by default would be sent to the patient. This document is used due to the fact -IFAOB is that it is the patient who authorizes the benefits to be assigned to the provider for the services rendered by the provider. Hence in the US health care industry patient plays a very important role and contributes greatly towards the providers functioning on the billing cycle. ROI - Release of information: is is a written authori rion / Declaration given by the patient stating that the “Patient Medical information” could be released to the insurance / payer by the provider necessary for the claim to be processed and paid. led Amount: The amount billed/charged by a provider for the service he has rendered is called as Billed amount/charged amount/charges billed. Allowed Amount: The maximum allowable amount a insurance approves & agrees to pay for the services rendered by a providers called as allowed amount/approved amount. Participating Provider: A provider who agrees to get in contract with an insurance company and accepts the pricing they have set for the different procedures keeping in mind that the remaining balance (the difference between illed amount and allowed amount & termed as contractual agreement) will not be billed to the patient; is called as Participating Provider. The provider waives off the contractual agreement amount if he is a participating provider. They are also called as Par Pre Hence for Participating Providers, the concept is, Billed Amount ~ Allowed Amount = Contractual Agreement Waived Off (Par Provider) 10|P age GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS GE Healthcare Solutions Private Lid All Rights Reserved. Non Participating Provider: A provider that doesn't accept the terms for contract with an insurance company is called as Non Participating provider. They bill the patient for the remaining balance (Contractual Agreement). They are also called as Non Par Pr Hence for Non Participating Providers, the concept is, Billed Amount- Allowed Amount = Balance Bill - Flipped to Patient account for payment (Non Par) In-network provider: When the Insurance makes a group of pr iders for a plan; all the different providers inside this group or network are called as in-network provider. These all in network providers are participating providers. ‘Out of Network provider (OON): When there are providers who may be participating with a insurance but are not part of a network formed for ce plan, they are referred as Out of network provider. They are called as Out of Network Providers (OON). Claims: A Claim is a document /a pre defined template with patient & visit details that would be sent across by the provider to the Insurance. The purpose of filing this claim to the insurance is to get payment from the insurance for the services rendered to the Patient by the Provider. Types of Claims: Paper Claim: Submitted on paper by Billing Office or Providers Office including optically scanned claims that are converted to electronic form by the Insurance Carrier. The forms used are: HCFA 1500, HCFA 1450 or UB-92. Electronic Claims: This is submitted to the Insurance carrier via a CPU, tape disk, digital fax etc. Different Formats used for electronic claims are: 1) NSF {National Standard Format}: This is used by Govt. itis ar format with 320 bytes. 2) ANSI {American National Standard Institutior flexible one unlike NSF. rivate Institution uses this It is of 132 bytes, and itis a [Page GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS GE Healthcare Solutions Private Lid All Rights Reserved. Exercise 1, Compare the Indian and US Healthcare Systems Compare the Patient-Provider-Payer relationship between India and the US How does the Healthcare System works Revise the basic healthcare terms that you have studied in this session vVvvvy Discuss on can ON be participating or non participating provider 2.0 Concept of Health Insurance Objectives [At the end of this session you will be able to understand What is health insurance and policy Group Insurance vs. Individual Insurance vvy Classification of Insurance v Concept of indemnity and MCO > Types of Traditional Indemnity Plans and MCO 12|Page GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS GE Healthcare Solutions Private Lid All Rights Reserved. What is Health Insurance? “Health insurance isa contract between a patient and an insurance company. This contract covers the risk of any losses against future illness or injury for the insured.” The person giving the assurance called the insurer (insurance company) and the person who receives the protection is called the insured (policy holder jimply put, health insurance is protection against any medical costs. A health insurance policy is a contract between an insurer and an i which the insurer vidual or group, i agrees to provide specified health insurance at an agreed-upon price (the premium) to the insured. There are very much possibilities that this coverage is not just given to the subscriber but also to his dependants. For e.g. a policy may not just cover a husband but also the spouse; children; parents etc. These policies are taken up by the subscribers either individually or through groups. Group Insurance gle insurance policy that covers a specific group of people. Examples of groups include: employees of a company, members of 2 professional organization, or alumni of a college. Many group policies include dependants of the group members too. It is very important for a subscriber to know about kind of coverage that will be provided by the Insurance organizations. While there are lots of different ways to get health insurance, it is good for a subscriber to know what benefits he may be eligible for before he starts his Health insurance search. Most of the Americans get their health insurances through their employers (EGHP: Employer Group Health Plan). These health plans are subject to state and federal law. According to National Coal on Health Care, in 2005 round 83% of employees in the US were covered by their employers health group plans because of better rates(as it depends on number of employees in 2 firm: SGHP: Small Group Health Plan/LGHP: Large Group Health Plan). The insurances offered under group plans include health, dental, vision, life, accidental death & dismemberment, short term disability, long term disability, prescription drugs, long term care and dependent care. More established employer groups may get better rates than new ones because the insurer has more claims history to rely on. The insurance company sees it as good risk for group plans because they will probably end up paying out very little for many people in the group while collecting premiums from everyone. Most group policies guarantee to accept any member of the group as the purpose of a group plan is to spread the risk of claims over wider group of people. We will always have a mix of healthy people to some with iliness. Normally this also translates into premiums that are much lower than those found in individual health insurance plans and are at same price for everyone in the group regardless of their health. Also sharing of the part of premium by the Employer makes it even better for an 13|Page GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS GEBBS Healthcare Solutions Private Lid All Rights Reserved. The Individual health plans on the other hand are subject to state laws and differ from state to state. These are bought by the individuals for themselves and their dependants. Because the family is being insured, this type of insurance costs more. Individual plans are used by those who are not working with an employer or are self employed. Also the scope of coverage is more in group health plans than individual ones because the groups get good deals of plans from the Insurance companies. OOPS incase of group plans are less than the individual plans. An ividual may purchase an individual plan separately to increase the coverage given by his employer; the two policies just might give him all the coverage. In group policies, the choice of service is however limited to what was offered and agreed by the employer. For individual plans, under the process of underwriting the physical examination report helps an underwriter to decide policy details whereas in group plan this may not necessarily be a mandate for the employees. The group health plan is uniform for all the employees of a firm and. cannot be changed as per individual discretion where as the individuals can upgrade or change their plans as and when required. 14 [Page GHS/WI/TRAR/O1 Y @ nitro” professionalGEBBS Healthcare Solutions Private Lid All Rights Reserved. 2.1 Insurance Classification Insurances are of many kinds: Life; Health; Accident; House owners insurance etc. For all our purposes at GeBBS, we shall lay stress on Medical (Health) and Liability insurance. Conceptually insurances can broadly be classified as under: Kindsof Insurance | Liability insurance >> 1. AutoAccidentins 2. Workers Compensation Ins / Traditionaly CONCEPTS Managed are Plans (MCO) Indemnity Plans 1. Basic Coverage Plan 1. HMO . 2, POS 2. MajorMedical Plan 3. Comprehensive Plan 3. PPO “ 4. EPO GHS/WI/TRAR/O1 Y @ nitro” professional 15|PaceGeBBS GE Healthcare Solutions Private Lid All Rights Reserved. 2.2 Introduction to Indemnity and MCO Health care in America has dramatically changed from what it was used to be and what it Twenty-five years ago, most people in the United States had Traditional/Indemnity insurence coverage. A person with indemnity insurance could go to any doctor, hospital, or other provider (which would bill for each service given), and the patient would pay part of the bill & claim later from the Insurance. Today however, more than half of all Americans who have health insurance are enrolled in some kind of a managed care plan, an organized way of both providing services and paying for them. The cost of treatment is well shared between the Insurance and the patient now. Different types of managed care plans work differently and include Preferred Provider Organizations (PPOs), Heaith Maintenance Organizations (HMOs), and Point-Of-Service (POS) plans. Let us understand what traditional indemnity plans consist of. 2.3 Traditional Indemnity Indemnity Plan or Fee for Service (FFS) plans gives options of basic coverage, major medical or ual/group. With a | provider (Dr/Hospital) and the patient or the doctor (very rarely) sends the bill to comprehensive coverage to an ini iemnity plan (or fee-for-service), 2 person can use any mer the insurance company using their reimbursement forms, which pays part of it. There are certain requirements before the reimbursement stage, full deductible has to be paid; they focus on treating health problems but not preventing them(These plans don’t usually cover annual Check Ups); FFS plans may also limit the number of days for stay in hospital and still receive coverage. Usually, there is meets the deductible, most indemnity plans pay a percentage of what they consider the "Usual and Customary" charge for covered services. They generally pays 80% of the Usual and Customary costs and the patient pays the other 20 percent, which is known as coinsurance. if the provider charges more than the Usual and Customary rates, the patient will have to pay both the coinsurance and the difference. The plan will pay for charges for medical tests and prescriptions as well as from doctors and hospitals. 16|P age GHS/WI/TRAR/O1 Y @ nitro” professionalGéBBS GEBBS Healthcare Solutions Private Lid All Rights Reserved. Get reimbused for 180% of your bil Pay bill and mail form to apply towards deductible XA. Have you met your deductible? t wv Ww Need a Doctor? Fee for service plan (©7006 Howton: 2.3.1 Classification of Traditional Plans Traditional plans can be classified on the basis of their coverage. Basic Coverage: It would cover a beneficiary in case of a serious illness. It covers expenses incurred on account: © Hospitalization; Surgery; Anesthesia © General Nursing care; Lab tests, X-rays © Opera © Emergency room services & very few outpatient charges & recovery rooms 17 [Pace GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS GE Healthcare Solutions Private Lid All Rights Reserved. Major Medical Plan: This is supplementary plan to Basic coverage. © It covers all the Outpatient treatments and Physician charges © The Insurance plan will reimburse 80% of the bill and the patient will pay the other 20% Com i is a policy that combines the coverage offered in Basic and Major Medical Plans in addition with the Prescription charges © The premiums of these plans are high comparatively & they have lower co-insurance © Thesubscriber is required to pay a co-insurance of 20% on the medical expense incurred. © Theconcept of Stop-Loss Clause is predominant in Commercial Plans than other Traditional Plans © There are some Plans that cover other services such as Pharmacy Benefits / Drug Plans, Dental Plans etc. 2.4 Managed Care Plans Managed Care Organization as the name suggests is “management of patient care and provider's reimbursement.” It is a contract between the insurance and providers where the insurance carrier agrees to pay for the services rendered until & unless the provider provides cost-effective and efficient services to the patients. While some managed care plans can bear a close resemblance to an FFS plan, the focus of managed care is on preventive health care. The idea is that by allowing coverage for Check Ups and other preventive services, doctors can identify potentially serious illness early. MCPs use networks of selected doctors, hospitals or clinics and other health care providers that have contracted with the plan to provide comprehensive health services to a member at reduced group rate. Because of this managed care plans are more affordable than FFS plans of similar coverage. In addition, by centrali ing billing and administrative functions, networks can also lower their overhead costs with a larger group of audience to cater services to in benefit of faster processing of claims from 18|P age GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS GE Healthcare Solutions Private Lid All Rights Reserved. the payers. Thisis other word referred to a 3P program where in the Provider, Patient and the third Party administrator plays an important role. Features of Managed Care: © The liability of the insured is always a prefixed amount |TOS Payment). © Insured is provided with a network of Providers © Referral Authorization Number plays an important role © Focus on preventive medicine is high ‘Types of Managed Care Plans There are methods through which the insurances involve them in administering the Healthcare service reimbursed to the insured. Depending upon the methods the classification can be made into the following categories: © HMO -Health Maintenance Organization © POS~Point of Service ‘© PPO Preferred Provider Organization © EPO Exclusive Provider Organization Let us now discuss these in detail one by one. 19 [Pace GHS/WI/TRAR/O1 Y @ nitro” professional\GeBBS GEBBS Healthcare Solutions Private Lid All Rights Reserved. 2.4.1 HMO SPECIALIST HMOs are the oldest form of managed care plan for individuals. HMO’s coverage includes access to Primary care Physician, Emergency Care, Specialists and Hospitalization when needed. These plans are usually cheaper than the other MCPs but yet they give least amount of control over choosing any health care provider. There are usually no deductibles, but small co-pay for each office visit ($10- $25}. The subscriber is supposed to select his PCP as one of the only doctors present in the network of the HMO organization. This PCP will only be the in charge of coordinating this subscriber's medical care. In case the patient needs to visit a specialist, the PCP has to be the first point of contact and once a referral is obtained from the PCP then only the patient can meet the specialist. The Specialist seen must also be working within the HMO network, otherwise the whole cost for the cnarialict weld tien 20 | Page GHS/WI/TRAR/O1 \ @ nitro” professionalGeBBS GE Healthcare Solutions Private Lid All Rights Reserved. out to patient’s responsibility. The referral number given by a PCP to the patient to visit the specialist is called as RAN (Referral Authorization Number); this number shall be mentioned on the claim that a submits to the HMO for reimbursement. HMOs will always give patients a list of doctors from which they have to choose a primary care. doctor for themselves. This PCP coordinates the patient's first level of care, which means that generally the patient must contact the PCP for all his first/initial health related concerns and then if need be referred toa specialist. Because of this the PCPs are also referred to as ‘Gatekeepers’ in HMO. The referrals may be in network or out of network however the i network referrals are shared by the insurance in contrary to out of network where the patient bears the cost. The PCPs are compensated in HMOs through a method called as Capitation. It is also called as ‘Per Member per Month’, method wherein the PCP is paid monthly a bulk amount for the number of members visiting him. He will have to render the services to all the members despite of number of visits made by them. In case of no member visit; PCP still gets his capitated share from th jurance. There is also a small copayment and no deductible in HMO plan. In an HMO, members are covered only for services obtained from in- network providers, unless an emergency forces the member to seek out-of-network treatment but in case of emergency insurance company should be informed within 24 hours. The policy members are charged with fixed and predictable monthly pre- payments and modest copayments. Advantages of HMOs Low out-of-pocket costs as deductible gets omitted Focus on wellness and preventive care Typically no lifetime maximum/payout (meaning the HMO will continue to cover the patient as long as he isa member). Disadvantages of HMOs Fewer Choices for Specialized Care Difficult to get specialized care without first meeting the PCP Care from non-HMO providers generally not covered 21 [Page GHS/WI/TRAR/O1 Y @ nitro” professionalGéBBS GEBBS Healthcare Solutions Private Lid All Rights Reserved. 2.4.2 POS SPECIALIST, With the restrictions that cams buying an HMO plan, the individuals were given another plan to select: Point of Service. A Pi -of-service health plan allows the cavered person to decide receive the service from network provider or a ON provider i.e. at the point of service the patient decides to visit either a HMO network provider or a out of network provider; depending on the medical treatment he is looking forward to. There are different levels of benefit associated with the use of Participating Providers. This is the most flexible & expensive plan. POS can be obtzined in the following ways: 2|Page GHS/WI/TRAR/O1 \ @ nitro” professionalGeBBS GE Healthcare Solutions Private Lid All Rights Reserved. ‘An HMO may allow members to obtain limited services from non-participating providers. ‘An HMO may provide non-participating benefits through a supplemental major medical policy. A preferred provider by the patient may be seen to provide both participating and non-parti levels of coverage and access. So in other words, ifa person sees anyone in network physici it works like an HMO plan, there will be small co pay & no deductible & if a person sees any out of network physician then this plan acts like a Preferred Provider plan for ividual with a higher copayment and deductible hence increased OOP. ‘Advantages of POS plans Flexi in choosing the provider and the plan at the time of service Minimum out-of-pocket as compared to other plans No "PCP" for out-of-network care Disadvantages of POS plans: Substantial out-of-pocket for out-of-network providers 23 [Page GHS/WI/TRAR/O1 Y @ nitro”™ professionalGéBBS GEBBS Healthcare Solutions Private Lid All Rights Reserved. 2.4.3 PPO Preferred Provider Organization (PPO): A PPO is a form of managed care for group plans. A PPO has arrangements with doctors, hospitals, and other providers of care who have agreed to accept lower fees from the insurer for their services. As a result, the patient's cost sharing should be lower than if the patient goes outside the network. In addition to the PPO doctors making referrals, plan members can refer themselves to other doctors, including ones outside the plan. Rather than prepaying for medical care, PPO members pay for services as they are rendered. The PPO sponsor (employer or insurance company) generally reimburses the member for the cost of the 2 | Page GHS/WI/TRAR/O1 \ @ nitro” professional\GeBBS GEBBS Healthcare Solutions Private Lid All Rights Reserved. treatment, less any co-payment percentage. In some cases, the physician may submit the bill directly to the insurance company for payment and get paid for it while the member pays his copayment. PPO plans usually have a deductible and a copayment. If one chooses to go outside of the network he has to pay for the difference ‘Advantages of PPOs Disadvantages of PPOs Choice of healthcare provider Increased paperwork and expenses than HMOs Limited out-of-pocket costs Higher cost sharing for using out-of-network providers 2.44 EPO [An Exclusive Provider Organization (EPO) is a variation of a PPO. EPOs contract with providers on a discounted basis, but enrollees must receive care within the network. EPOs, like PPOs, provide no penalty to providers if the patient opts to obtain care outside the network. Instead, the enrollee assumes responsibility for out-of-network costs. 2 | Page GHS/WI/TRAR/O1 \ @ nitro” professionalGeBBS GE Healthcare Solutions Private Lid All Rights Reserved. Exercise 2 > Compare the differences between a traditional Indemnity and managed care plans > Discuss the salient features of each of the MCO plans that you have studied > speculate on the benefits of each MCO plan in terms of patient, provider and payer Physician Groups & Types of Insurances: Objectives At the end of this session you will be able to understand v Nature and types of physician groups Classification of insurance in terms of Federal and Private institutions Types of federal insurances Medicare and it’s components Eligibility criteria for Medicare vvvyvy Terminology associated with Medicare 2.5 Types of Physician Groups Certain private physician practices and hospitals come together to form groups to aid in the management and administration healthcare. 2.5.1 Physician Hospital Organization (PHO) ‘hospital and a physician organization, or 2 physician group creates a Physician Hospital Organization. ‘A PHO is created to assist the Managed Care Organization contracting on behalf of the parties. The best PHO's: ude a physi In organization that has its own structure, providing a means for reviewing pertinent issues both internal and external, such as contracts, payer disputes, or physi monitoring. 26 [Page GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS GE Healthcare Solutions Private Lid All Rights Reserved. 2.5.2 Independent Practice Association (IPA) ‘An Independent Practice Association consists of physicians who have not combined their assets and liabilities and are not practicing in a truly integrated fashion. They maintain their separate practices and participate in the IPA as a means to contract with HMOs or other health plans. Providers may also see patients who are not enrolled in HMO plans. Where IPAs primarily contract with the HMO to provide services to the HMO members, the HMO model typically is called the IPA model HMO. IPA’s are developed in two ways.- Providers may market themselves as an IPA group and perform their own administrative functions, or payers (Insurance co.) may develop an IPA from a panel of contracted providers. Depending on the types available today, Insurances can be classified as:- 1. Public or Federal insurance These Insurance plans are also called Federal Plans or State run programs. The Government of the US runs these insurance plans. These are plans promoted either by the Federal or by the State government. They are always rolled out for specifically i lentified sections of the society 2. Private or Commercial Insurance Commercial Carriers are those that are admi fered by private bodies hence they are also called private insurances. There are thousands of commercial insurance companies in US. BCBS, Aetna, Cigna, Humana, United Health Care are some of the major US commercial carriers. 27 [Page GHS/WI/TRAR/O1 Y @ nitro” professionalGéBBS 2.6 Federal Insurance GEBBS Healthcare Solutions Private Lid All Rights Reserved. Federal Plans (Indemnity plans) also called Public plans are promoted cither by the Federal or the State government. They are always rolled out for specifically identified section of the society. Vorgonizational Chart of Major Players Congress =a NY Secretary of the Department of | Health and Human Services = Office of the Inspector General Social Securty [Heath Care Financing Railroad Administration Administration Retirement Board [ssa] Regional Offices GHS/WI/TRAR/O1 2@ [Page v @ nitro” professionalGeBBS GEBBS Healthcare Solutions Private Lid All Rights Reserved. Some of the plans that are under this category are: © Medicare © Railroad Medicare Medicaid © CHAMPUS © CHAMPVA o FEHBP © SCHIP Medicare is a federal insurance, which primarily takes care of the healthcare needs of people who are aged 65 years and above. It came into existence from the year 1965. It is managed by CMS (formerly known as HCFA). Guidelines of Medicare are uniform in all the 50 states. Medicare Eligibility Guidelines a) Individuals who are 65 years and above and have paid FICA (Federal Insurance Contributions Act) taxes or Railroad Retirement taxes and gained 40 credits (10 years of work) b) Adults who are permanently disabled ¢) Individuals suffering from End-Stage Renal Disease (ESRD) 29 [Page GHS/WI/TRAR/O1 Y @ nitro” professionalGéBBS GEBBS Healthcare Solutions Private Lid All Rights Reserved. REDCARe i) HEALTH RESURANCE InrOPMeDIeAPe (atest tty in 0 t HICN KE “vic 9-000: Do NOT SEND CLAIMS FOR PAYMENT OF aibIbanE EENERTG "ORM (6) ADOTEES Medicare ID — Medicare ID consists of $ numeric digits (individual's SSN) followed by an alpha suffix. Types of Medicare Insurance There are 4 types of Medicare plans. Medicare Part A Medicare Part 8 Medicare Part C Iv. Medicare Part D Medicare Part A (Hospital Insurance -HI) Medicare Part A coverage is for Hospitals Insurance (Hl) and other related types of care. Medicare Part A coverage extends to the following costs: (© Inpatient hospital care 30 [Pace GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS GE Healthcare Solutions Private Lid All Rights Reserved. © Medicare certified hospitals © Inpatient care in Skilled nursing facility © Hospice © Home healthcare The only type of "nursing home" care Medicare helps pay for is Skilled Nursing Facility (SNF) care. Home healthcare Ifa patient is confined to their home and requires skilled care for an illness or injury, Medicare can pay for care provided by a home health agency. Hos; care ‘An organization, which is primarily designed to provide pain relief, symptom management and supportive services for the terminally ill last stages of their life) and their femilies can also be covered under Medicare Note: Medicare Part A can be brought by a person less than 65 years of age after paying the premium. Medicare Part B: Supplemental Medical Insurance (SM) M re Part B coverage is for Physi nn services and other related types of care. © Physician services : (Meaning: the professionel services of physicians, including surgery, Consultation, home, office s.) © Outpatient hospital services and institutional servi © Diagnostic tests © Clinical lab. Services © Outpatient physical therapy © Speech therapy services 31 [Page GHS/WI/TRAR/O1 Y @ nitro”™ professionalGeBBS GE Healthcare Solutions Private Lid All Rights Reserved. © Ambulance transportation © Rural health clinic services Medicare does not pay for most services like prescription drugs, examinations for prescribing or fitting eyeglasses or hearing aids, hearing aids, or routine eye exams. In most cases, Medicare covers mammograms once every two years. Pap smears are covered once every three years. Enrollment for Medicare Enrollment for Medicare is during Jan, Feb and March each year but the policy comes into effect only in the month of July. This enrolment period is called General Enrollment period. If a person is already getting Social Security or Railroad Retirement benefit payments when you turn 65, he/she will automatically get a Medicare card in the mail about three months before your 65th birthday as part of an enrollment information package. If he does not receive such benefits, he is to imate the SSA before the 65th birthday to facilitate timely coverage. Medicare Premiums and Deductibles for 2009 Part A Premium: $421 (not paid by 99 percent of beneficiaries) Part A deductible: $1024 Part B premium: $98.60 Part B deductible: $135 The Centers for Medicare & Medicaid Services updates the premiums, deductibles and co-payments made by Medicare benefici ies each year. These adjustments are made according ta faremulac cot hwy 32| Page GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS GE Healthcare Solutions Private Lid All Rights Reserved. statute. By law, the monthly premium for Medicare Part B must be sufficient to cover 25 percent of the program’s costs, including the costs of maintaining a reserve against unexpected spending increases. The federal government pays the remaining 75 percent. Conditions for Part A & B * Part A coverage (in the case of full contribution) is for a lifetime. + Part B coverage will apply to persons who enroll for it and would end ifthe premium is discontinued. + Inthe case of a "Wage Earner" the Medicare Id Number is always his or her SSN number followed by " he IDs and the SSN would also match in case suffix + In case someone has procured Medicare coverage on the basis of the "Wage earner”, the SSN would not match with the ID numbers. + Inthe case of Railroad Medicare, the Ids have a prefix. + Every person is the owner of his own policy. Relationship to subscriber is always self. + UPIN is mandatory for bi ig referral services in Medicare. + In disabled category the coverage ends when the disability of the subscriber ends. Medicare Part ¢ (Medicare Advantage/ Medicare managed care) Medicare part Cis Medicare + choice. It is a managed Choice Plan. This plan is extended only to existing policy holders of Medicare part A &B. It also called as Medicare Replacement Policy. Here, @ beneficiary chooses a managed care plan which has benefits of both Part A and Part B for medical coverage as well as HMO benefits. This is generally referred to as ‘enrollment in an HMO’ wherein Meeicare stops paying once the patient opts for this plan although the patient may continue to show M re as his primary insurance Advantages of Medicare plus Choice 33 [Pace GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS GEBBS Healthcare Solutions Private Lid All Rights Reserved. More services including preventive care (like eye care, hearing aids and routine examinations) are covered than with just Medicare Lesser out of pocket than with traditional HMO. Medicare Part D M re Part D is for Drug Prescriptions and Durable Medical Equipment. a. Medicare Cross Over re will automatically forward claims to the secondary carrier for payment for its parti ing Providers. This is called as Automatic Cross over. Generally itis the providers who have to file the claims to the secondary insurance for payment but Medicare does this for all its par- providers. b. Limiting Charge The limiting charge applies to non-participating providers in the Medicare Part B program when they do not accept Medicare assignment. It is 115 percent of the physician fee schedule amount. The beneficiary is not responsible for billed amounts in excess of the limiting charge for a covered | Fee Schedule Amount = $95.00 Fee Schedule Amount | Limiting Charge Calculation | 115% x $95 = $109.25 None | Maximum Each Can Collect | a4 |Pace GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS meen GEBBS Healthcare Solutions Private Lid All Rights Reserved. $109.25 $100 c. Medigap Medigap is the health insurance that private insurance companies sell to help fill gaps in the Original Medicare Plan. Medigap policies are also known as “Medicare Supplement Insurance ‘“(MSI). Medigap policies pay most -if not all - of the costs for coinsurance under the Original Medicare Plan. These policies may also cover the Original Me re Plan Deductibles. Some policies include extra benefits to help pay more of those things that Medicare doesn't cover, like prescription drugs. To determine if Medicare is the primary payer, providers must ask the beneficiary about any additional health surance coverage that he or she may have. To obtain the most updated information, providers should ask about any other health insurance coverage at each patient visit. Medigap Plans: Examples AARP. 0 American Pioneer © Empire Health Choice © Premera Blue Cross © Bankers © Group Health Incorporated d. MSP RULES: Medicare Secondary Payer Rules Medicare Secondary Payer’ is the term used by Medicare when Medicare is not responsible for paying a claim first. When Medicare began on July 1, 1966, it was the primary payer for all beneficiaries, except for those who received benefits from the Federal Black Lung Program and Workers’ Compensation (WC) and for those who receive all covered health ¢~ 35|Page GHS/WI/TRAR/O1 Y @ nitro” professionalGeBBS GEBBS Healtheare Solutions Private Lid Al Rights Reserved Veterans Health Administration (VHA) programs. Beginningin 1980, changes to Medicare laws increased the number of coverage and benefit programs that are primary to Medicare. Table 1 lists some common situations when Medicare may be the primary or secondary payer for a patient's claims: Table 1: MSP rules 36 [Pace GHS/WI/TRAR/O1 Y @ nitro” professional—— GeBBS bbage65 or ulder. ond covered by 2 Group +caith lan Tarouga 9 curren em- lever ct Heian empoyer etrerment anand « 26.65 0 older scancnecectsman Guns teaieare Sontion Private usa “ [AURghts Reserved x 7 is ‘Then thi ram Nhe patient. And this condition exists. ae The employe hes ess than employes. Medicare {croup Fealth lan theemoleyer has 20 or mare employees, or at leastoneerplycrisameltienphyercrcup | Group Heelh Plan Medicare ‘that employs 200° more individual THe patient is tle te Mediere. Medicare Renee covereye large Cacup | le2hPlan readable ancage 5 or Isdsabled and covercd by | theempkyerhestess than 100 employees Medicare acre ‘ne COBRA coverage... Ie coated snlor Worbere’ Scmpenseon because cf Jebresatee ness or MIL. trom wars orf covered DY | Tae om poy has 10) oF more cmp: aye«s, OFzt ‘anil ret be wi is liesonecripejersamutsenpbyercroup, | Lave Gtoup Health Medicare sa Thaler p Stor meted oi Has enchstage renal diease | £INterst30merthscfallablitvcrente | Group Health Plan Medicare ard Geeup Healt Pan y Toerage Biter Dron Medicare | Group Peal Plan = inthe at 30 north cf alibiy or carte 5 Varendstage renal dsease ment eae coe cote ‘Ater Ow onths... Medicare COBRA Workere' om pense Wins erheatews ‘The patient s entitled to Medicare. teams ovsernces, related tojob-elated fiivessor ky) Medicare hed ecre and COB Ha blutk lang dissec end fede Sack une yg Dick lang dice and) | The patient's eligible tor tie federal Black Lung | Program tor heal —_ ai Programm. Caresenices elated = Woibbocklung diene) nt Ro-taut o- Habit n= rn iy “The patient enntlad to ihedlcae us Medicare Tage 6s or ok feclantw covered by the pollens ented Wo Med vere meslicane coma y o ay ‘Core-coveredse'~ ‘anon TA fly. a7 [Pace / * 7 GHS/WI/TRAR/O1 Y @ nitro” pro) Medicare may pay Skee and greree covered by the VIIA