1.3 Health Care Plans (Continued)

1. 1-14 1.3 Health Care Plans (Continued) • Managed care offers a more restricted choice of providers and treatments in exchange for lower premiums, deductibles, and other charges • Managed care organizations (MCOs) establish links between provider, patient, and payer • How many MCOs may a doctor choose to participate in? • Thinking it Through, page 10

2. 1-15 1.4 Health Maintenance Organizations • A health maintenance organization (HMO) combines coverage of medical costs and delivery of health care for a prepaid premium • Participation means that a provider has contracted with a health plan to provide services to the plan’s beneficiaries • Capitation is a fixed prepayment to a provider for all necessary contracted services provided to each plan member • Per member per month (PMPM) is the capitated rate • Figure 1.3, page 11

3. 1-16 1.4 Health Maintenance Organizations(Continued) • A network is a group of providers having participation agreements with a health plan • Visits to out of-network providers are not covered • HMOs… • Health Maintenance Organization… • often require preauthorization before the patient receives many types of services • When HMO members see a provider, they pay a specified charge called a copayment • HMO members choose a primary care physician (PCP), who directs all aspects of their care

4. 1-17 1.4 Health Maintenance Organizations(Continued) • Open-access plans are those HMOs… • Health Maintenance Organization… • that allow visits to specialists in the plan’s network without a referral • A point-of-service (POS) plan permits patients to receive medical services from non-network providers for a greater charge • Thinking it Through, page 14

5. 1-18 1.5 Preferred Provider Organizations • A preferred provider organization (PPO) is an MCO… • Managed Care Organization… • where a network of providers supply discounted treatment for plan members • Most popular type of health plan • Creates a network of physicians, hospitals, and other providers with negotiated discounts • Requires payment of a premium and often of a copayment for visits • Does NOT require referrals or PCPs… • Primary Care Physicians • Thinking it Through, page 16

6. 1-19 1.6 Consumer-Driven Health Plans • A consumer-driven health plan (CDHP) combines a high-deductible health plan with a medical savings plan • The health plan is usually a PPO… • Preferred Provider Organization… • with a high deductible and low premiums • The savings account is used to pay medical bills before the deductible has been met

7. 1-20 1.7 Medical Insurance Payers • Three major types of medical insurance payers: • Private payers—dominated by large insurance companies • Self-funded (self-insured) health plans—organizations that pay for health insurance directly and set up a fund from which to pay • Government-sponsored health care programs—includes Medicare, Medicaid, TRICARE, and CHAMPVA • The Patient Protection and Affordable Care Act (PPACA) is health system reform legislation that introduced significant benefits for patients

8. 1-21 1.8 The Medical Billing Cycle • A medical insurance specialist is a staff member who handles billing, checks insurance, and processes payments • To complete their duties, medical insurance specialists follow a 10-step medical billing cycle • This cycle is a series of steps that leads to maximum, appropriate, timely payment

9. 1-22 1.8 The Medical Billing Cycle (Continued) • Step 1 – Preregister patients • Step 2 – Establish financial responsibility for visits • Who is primary payer? • Step 3 – Check in patients • Step 4 – Check out patients • A medical coder is a staff member with specialized training who handles diagnostic and procedural coding • The patient’s primary illness is assigned a diagnosis code

10. 1-23 1.8 The Medical Billing Cycle (Continued) • Step 4 – Check out patients (continued) • Each procedure the physician performs is assigned a procedure code • Transactions are entered in a patient ledger—a record of a patient’s financial transactions • Step 5 – Review coding compliance • Compliance means actions that satisfy official requirements • Step 6 – Check billing compliance • Step 7 – Prepare and transmit claims

11. 1-24 1.8 The Medical Billing Cycle (Continued) • Step 8 – Monitor payer adjudication • Accounts receivable (A/R) is the monies owed to a medical practice • Adjudication is the process of examining claims and determining benefits • Step 9 – Generate patient statements • Step 10 – Follow up patient payments and handle collections • A practice management program (PMP) is business software that organizes and stores a medical practice’s financial information

12. 1-25 1.9 Working Successfully • Professionalism isacting for the good of the public and the medical practice • Medical ethics are standards of behavior requiring truthfulness, honesty, and integrity • Thinking it Through, page 29 • Etiquette is comprised of the standards of professional behavior

13. 1-26 1.10 Moving Ahead • Certification is therecognition of a superior level of skill by an official organization • Provides evidence to prospective employers that the applicant has demonstrated a superior level of skill on a national test