Introduction to the Medical Billing Cycle Chapter One lecture 2 OT 232

1. 1 Introduction to the Medical Billing Cycle Chapter One lecture 2 OT 232

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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