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Health insurance is a contract between a ________, one who purchases the contract

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policyholder

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one who provides the benefits plan or a goverment program developed to reimburse the policyholder of all or most medical expenses

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insurance carrier

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Group Insurance, Personal Insurance, and Pre-paid health Plan

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There are 3 ways an individual can obtain health insurance

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when a group of employees and their dependents are insured under one group policy issued to the employer. Generally, the employer pays the premium or a portion of the premium and the employee pays the difference.

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Group Insurance

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an insurance plan issued to an individual. Premium rates are usually higher than group rates and service availbility is lessened with this type of coverage.

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Personal Insurance

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pre-determined set of benefits covered under one set annual fee

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Pre-paid Health Plan

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also known as fee-for service. Under this plan, the services that are paid for are listed in the policy and payments are based on the fees physicians charge for the service. There are no restrictions as to the physician or hospital the beneficiaries may use and pre-approval of medical visits is not required. Each year, the beneficiary must meet a deductible, after which, the benefit may cover fall all or part of the charge. Usually, a coinsurance for each service applies ( a 80-20 coverage means that the insurance carrier pays 80% and the policyholder pays 20% of each dollar of medical care provided.)

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Indemnity Insurance

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is a managed care benefits plan that provides a wide range of medical services to individuals that have been enrolled into the program. It is generally the least costly but at the same time also the most restrictive. This plan uses a gatekeeper physician (primary care physician) whom the beneficiary is required to visit initially for any case. If the beneficiary goes to another physician without the prior approval of the primary care physician, the beneficiary will be responsible for all costs for the case. Physician-hospital organization is when physicians, hospitals and other health care providers contract with one of more HMO's or directly with employers to provide care.

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Health Maintenance Organization (HMO)

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is basically the same as HMO in the sense that the health care provider enters into contract withthe MCOs to render services to the beneficiaries. There is no gatekeeper-physician and beneficiaries choose the provider from whom to seek services so long as the provider is within the network. If the beneficiary chooses to seek care from a provider not within the network, that beneficiary will shoulder all cost of the services.

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Preferred Provider Organization (PPO)

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is a managed care plan that gives beneficiaries the option whom to see for services. If the beneficiary goes to see s physician within the network,s/he will receive benefits similar to an HMO. Bit if the beneficiary chooses to see a physician from out of network, the POS will still pay for the services but at a rate significantly lower than that of in network physician and the difference between the POS payment and the billed charges shall be shouldered by the beneficiary.

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Point-of-Service plan (POS)

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is the type of plan a patient may have where they can see providers outside their plan. The patient is responsible to pay the higher portion of the fee.

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Preferred Provider plan

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The Usual, Customary, and Reasonable

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Fee Schedule

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method is used mostly in reference to fee-for-service reimbursement. To arrive at a payment amount for a claim

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Usual, Customary, and Reasonable (UCR)

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The physician's most frequent charge for a given service

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1. Usual

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The average charge of all providers of similar training and experience is a given geographical area

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2. Customary

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The actual charge submitted on a claim (must be reasonable to the provider)

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3. Reasonable

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The lowest amount is used as the basis for payment (part of UCR steps)

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The allowable charge

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This involves the use of relative value scales which assign a relative weight to individual services according to the basis for the scale. Services that are more difficult, time consuming, or resource intensive to perform typically have higher relative values than other services.

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Relative Value Payment Schedules Method

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Under this schedule, a procedure's relative value is the sum total of three elements: Work, Overhead, and Malpractice.

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Medicare's Resource Based Relative Value Scale (RBRVS) Payment Schedule

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represents the amount of time, intensity of effort, and medical skill required of the physician.

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Work RBRVS

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practice costs related to the performing of the service

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Overhead RBRVS

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cost of medical malpractice insurance

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Malpractice RBRVS

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80% of covered services

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Medicare pays

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-deductible -premiums -20% coinsurance -non-covered services

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Beneficiary pays

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Unlike the RBRVS, the RVP has no geographic adjustment factor or individual RVU component to calculate. However, for each category of procedures, a separate conversion factor must be developed.

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The St. Anthony Relative Value for Physicians (RVP)

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Physicians agree to provide services at a discount of their usual fee in return for a pool of existing patients.

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Contracted Rates with MCOs

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Under capitation, the physician provides a full range of contracted services to covered patients for a fixed amount on a periodic basis. While guaranteed a fixed amount, the physician assumes the risk that the cost of providing the care to the patients may exceed the payment amount. The only additional charge maybe a co-payment and a deductible coninsurance.

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Capitated Rates

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is the federal government's health insurance program created by the Social Security Act of 1965 titled "Health Insurance for the Aged and Disabled". It is administered by the Centers for Medicare and Medicaid Services (CMS), formerly known as Health Care Financing Administration (HCFA)

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Medicare

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-person 65 years or older, retired on Social Security benefits -spouse of a person paying into the Social Security system -those who received Social Security disability benefits for 24 months -those diagnosed with end-stage renal disease (ESRD) -kidney donors to ESRD patients (all expenses related to the kidney transplantation are covered) -retired federal employee of the Civil Service Retirement System (CSRS)

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CMS is available to people who

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issued by CMS, are usually Social Security numbers with letter (alpha) or letter/number (alpha/numeric) suffixes. The following some of the common suffixes used by Medicare carriers

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Medicare Health Insurance Claims Numbers (HCINs)

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Wage earner (upon retirement)

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A Suffix

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Spouse of wage earner

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B Suffix

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Disabled Child

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C Suffix

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Widow

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D Suffix

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Disabled adult

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HAD Suffix

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Part B benefits only

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M Suffix

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Uninsured and entitled only to health insurance benefits

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T Suffix

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also called the Hospital Insurance for the Aged and Disabled. It covers institutional providers for inpatient, hospice, and home health services

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Part A

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is referred to as Supplementary Medical Insurance (SMI). This coverage is a supplement to Part A, which covers medical expenses, clinical laboratory services, home health care, outpatient hospital treatment, blood, and ambulatory surgical services. Premiums for Part B are usually dedected from the montly Social Security check.

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Part B

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Medicare Managed Care Plans (Formerly Medicare (+) Choice Plan) was created to offer a number of healthcare services in additiion to those available under Part A and Part B. The CMS contracts wth managed care plans or provider service organization to provide Medicare benefits. A premium similar to Part B may be required for coverage to take effect.

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Part C

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Prescription Drugs: The Medicare Prescription Drugs, Improvement, and Modernization Act enacted in December 2003 and began implementation in January 2006 where Medicare beneficiaries can enroll in the Medicare prescription drug plan. The beneficiaries have a choice among several plans that offer drug coverage for which they pay a monthly premium.

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Part D

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Various terms are used to describe the state of submitted forms. The following are of the terms that are typically used by insurance carriers. -Clean claim -Dirty claim -Invalid claim -Rejected claim

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Medicare Claim Status

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has all required fields accurately filled out, contains no deficiencies and passes all edits. The carrier does not require investigation outside of the carrier's operation before paying the claim.

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Clean claim

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contains errors or omissions. Usually, thses claims do not pass front end edits. They are either processed manually for resolving problems, or rejected for payment.

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Dirty claim

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contains complete, necessary information, but is incorrect or illogical in some way.

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Invalid claim

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requires investigation and needs further clarification.

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Rejected claim

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is a document provided to a Medicare beneficiary by a provider prior to service being renderd letting the beneficiary know of his/her responsibility to pay if Medicare denies the claim.

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Advance Beneficiary Notice

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To pay for medical services and items that Medicare does not cover and Medicare's coinsurance and deductibles, beneficiaries may purchase a supplemental insurance. Medigap is a private insurance designed to help pay for those amounts that are typically the patient's responsibility under Medicare. There are several standard Medigap policies established by the federal government with the insurance industry.

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Medigap (Medicare Supplemental Insurance)

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is a federal program administered by state governments to provide medical assistance to the needy. Each state sets its own guidelines for eligibility and services, therefore benefits and coverage may very widely from state to state.

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Medicaid

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1. Families, pregnant women, and children 2. Aged and disabled persons 3. Persons receiving institutional or other long-term care in nursing facilities (NFs) and intermediate care facilities (ICFs)

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Categorically needy

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is a state-required insurance plan, the coverage of which provides benefits to employees and their dependents for work related injury, illness or death. Each state has an established minimum number of employees required before this law comes into effect. Further, not all states offer WC plans.

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Workers Compensation

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1. Medical treatment 2. Temporary disability 3. Permanent disability 4. Vocational rehabilitation 5. Death benefits for survivors

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There are five types of benefits offered:

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is defined as reimbursement for income lost as a result of a temporary or permanent illness or injury.

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Disability insurance

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is a policy that covers losses to a third party caused by the insured, by an object owned by the insured, or on premises owned by the insured.

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Liability insurance

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is a regionally managed healthcare program for active duty and retired members of the armed forces, their families, and survivors. It is a service benefits program and contain no premium.

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TRICARE

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1.Standard 2.Extra 3.Prime

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3 types of plans covered by TRICARE

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fee-for-service, cost-sharing plan

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Standard TRICARE

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preferred provider organization

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Extra TRICARE

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health maintenance organization plan with a point-of-service option

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Prime TRICARE

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Civilian Health and Medical Program of the Veterans Affairs

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CHAMPVA

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was created to provide medical benefits to spouses and children of veterans with total, permanent service related disabilities or for surviving spouses and children of a veteran who died as a result of service-related disability.

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CHAMPVA (Civilian Health and Medical Program of the Veterans Affairs)

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The are for profit organization that operate inthe private sector selling different health insurance benefits palns to groups or individuals.

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Commercial Carriers

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male of household is primary payer

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Gender rule

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the plan of the parent whose birthday falls earlier in the year (month and day, not year) is primary to that whose birthday falls later in the year.

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Birthday rule

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the plan of the parent with custody of the children is the primary payer unless the divorce settlement states otherwise.

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In case of divorce

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are a group of independently licensed local companies, usually nonprofit that contracts with physicians and other health entities to provide services to their insured companies and individuals.

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Blue Cross/Blue Shield Plans

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covers hospital services, outpatient care, some institutional services, and home care.

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Blue Cross

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covers physician services, and in some cases, dental, outpatient services and vision care.

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Blue Shield

Blue Cross Blue Shield -BSBS – Chapter 13 – Flashcards

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