Understanding Medical Insurance: Coverage and Terminology Explained

1. Chapter 17 Medical Insurance

2. Understanding the Role of Medical Insurance • Medical care consists of: • Diagnosis of diseases/disorders • Care and treatment provided by health care team • Health care • Preventive services

3. Understanding the Role of Medical Insurance • Health care insurance • Contract between an individual policyholder and a third party that reimburses the medical provider or policyholder • Changes in health insurance

4. Medical Insurance Terminology • Terminology specific to insurance policies • Beneficiary • Deductible • Coinsurance • Co-payment • Pre-existing condition

5. Medical Insurance Terminology • Terminology specific to insurance policies • Exclusions • Coordination of benefits • Birthday rule • Explanation of benefits (EOB) • Remittance advice

6. Medical Insurance Terminology • Terminology specific to billing insurance carriers • Preauthorization • Claim • CMS-1500 (05-08) • Assignment of benefits • Direct payment

7. Types of Medical Insurance Coverage • Traditional insurance policies • Fee-for-service basis • Types of coverage • Basic insurance • Major medical insurance • Primary care provider (PCP)

8. Types of Medical Insurance Coverage • Blue Cross and Blue Shield • Organized as not-for-profit corporations or as for-profit companies • Network of participating providers

9. Types of Medical Insurance Coverage • Managed care organizations (MCOs) • Case managers • Six primary models listed • Exclusive provider organizations (EPOs) • Integrated deliver systems (IDSs) • Health maintenance organizations (HMOs) • Point-of-service (POS) plans • Preferred provider organization (PPO) • Triple option plan • Capitation

10. Types of Medical Insurance Coverage • Medicare • Largest medical insurance program in the U.S. • Continuing medical coverage to senior citizens • Parts A, B, C, D • Annual deductible • Resource-Based Relative Value Scale • PARs and non-PARs • Medicare supplemental insurance

11. Types of Medical Insurance Coverage • Other types of coverage • Medicaid • Funding for medical care for qualifying persons • Eligibility • Medicaid is always secondary to any supplemental insurance

12. Types of Medical Insurance Coverage • Other types of coverage • TRICARE • Military personnel coverage • Three options available • Qualified subscribers must be listed with DEERS

13. Types of Medical Insurance Coverage • Other types of coverage • CHAMPVA (Civilian Health and Medical Program of the Veterans’ Administration) • Covers spouse and unmarried dependent children of veterans with permanent total disability from a service-related injury • Covers surviving spouse and children of veterans who died of service-related disability

14. Types of Medical Insurance Coverage • Other types of coverage • Workers’ compensation or state industrial insurance • On-the-job accident or illness • Workers’ compensation insurance

15. Types of Medical Insurance Coverage • Other types of coverage • Self-insurance • Larger companies, nonprofit organizations, state and county governments • Contact plan administrator before scheduling appointments

16. Screening for Insurance • Screen all new patients for insurance • New patients arrive 15–20 minutes early to complete patient registration form • Photocopy patient’s driver’s license and insurance card(s) and file in chart

17. Screening for Insurance • Verify insurance information on all patients

18. Screening for Insurance Click Here to play the video

19. Referrals and Authorizations • Referral categories • Preauthorization and precertification • Authorization/referral number entered in Box 23 of CMS-1500 (05/08) form

20. Determining Fee Schedules • Common elements used to determine fee schedules • Overhead or practice expenses • Cost of medical malpractice insurance • Hourly rate for the services provided by the provider

21. Determining Fee Schedules • Usual, Customary, and Reasonable (UCR) fees • Fee system that defines allowable charges • Usual fee is the physician’s average fee for a service or procedure • Customary fee is the average or range of fees within the geographic area that an insurance carrier will accept • Reasonable fee is the generally accepted fee for services or procedures that are extraordinarily difficult or complicated

22. Determining Fee Schedules • Resource-Based Relative Value System (RBRVS) • Used by Medicare • Provider’s services are reimbursed based on RVUs

23. Determining Fee Schedules • Resource-Based Relative Value System (RBRVS) • Each service, procedure, or medication is assigned a code from the CPT or ICD-9-CM manuals • GPCI related to geographic area where physician is located is issued for each RVU category

24. Determining Fee Schedules • Hospital Inpatient Prospective Payment System (IPPS) • Based on DRGs • DRGs are based on an average cost for treatment of a patient’s condition

25. Determining Fee Schedules • Hospital Outpatient Prospective Payment System (OPPS) • Reimbursement system based on Ambulatory Payment Classifications (APCs) • APCs group services according to clinical characteristics

26. Determining Fee Schedules • Capitation • Payment system used primarily by MCOs

27. Legal and Ethical Issues • Medical personnel are bound by law to maintain confidentiality of all medical information • Must be able to recognize information that is protected by privacy rules

28. HIPAA Implications • Provide patient with a “notice of privacy practices” and obtain acknowledgment of receiving the notice • Obtain patient’s specific authorization to use or disclose personal information

29. HIPAA Implications • Provide patient, upon request, with an accounting of disclosures of PHI • Give patient access to his/her PHI and provide opportunity to amend

30. Insurance Fraud and Abuse • Definition of fraud and examples • Insurance abuse and examples • Protect the practice from committing insurance fraud and abuse

31. Insurance Fraud and Abuse Click Here to play the video

32. Insurance Fraud and Abuse • HIPAA regulations that apply to PHI