CHAPTER 8 - INSURANCE
Among HMO, PPO, POS and CDHPs which do and do not require referral for out-of-pocket providers?
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Who are the Private Insurance Payers?
1. Employer-sponsored medical insurance. 2. The Federal Employees Health Benefits Program 3. Self-insured health plans 4. Individual health plans 5. The Blue Cross and Blue Shield Association
What are the parts of the CDHPs?
1. First Part: The High-Deductible Health Plan - the annual deductible is over $1000. Many of the plan's covered preventive care services as well as coverage for accidents, disability, dental, vision and long-term care are not subject to this deductible. 2. Second Part: Funding Options - Health reimbursement accounts, health savings accounts and flexible savings accounts.
What are the CDHPs Funding Options?
1. Health Reimbursement Accounts - HRS 2. Health Savings Accounts - HSAs 3. Flexible Savings Accounts - FSAs
Explain Medicare Part A?
1. Medicare Part A - Hospital Insurance (HI) pays inpatient hospital care, skilled nursing facility care, home health, and hospice. Eligible at age 65. Do not pay premiums. Those who are not eligible may enroll but must pay premiums.
What business models are HMOs organized around?
1. Staff Model: Physicians are employed by the organization. All premiums/revenues go to the HMOs which in turn pays the physician's salaries. Patients go the clinics and health centers owned by the HMO. 2. Group Network Model: A group contracts with more than one physician group creating a network of physicians. Medical practices under contract are paid a per member per month (PMPM) capitated rate for each subscriber assigned to them for primary care svcs. 3. Independent Practice Association Model: An IPA type of HMO is an association formed by physician with separately owned practices who contract togt to provide care for HMO members. An HMO paysfees for medical svcs to the IPA and in turn pays its physicians members either a capitated rate or a fee. Providers may join more than one IPA and usually also sees nonmember patients.
What is a POS plan?
A POS is a Point of Service plan. It is a hybrid plan between an HMO and a PPO. Members may choose from a primary or secondary network. Primary is HMO-like and the Secondary network is often a PPO network. POS plans charge annual premiums and copayments for office visits. Monthly premiums are slightly higher than for HMOs but POS plans offer some coverage for visits to non-network physicians. POS may be a tiered plan where different rates for specialty designated providers, regular providers and out-of-network providers.
What is meant by relative value scale?
Based on nationwide research, the relative value scale assigns numerical values to medical services. Reflect the amount of skill and time the procedures require of physicians.
What is CHAMPVA?
Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) health care plan for families of veterans with 100 percent service-related disabilities and the surviving spouses and children of veterans who die from service-related disabilities.
What is meant by balance billing?
Collecting the difference between a provider's usual fee and a payer's lower allowed charge. Payer's rules may prohibit participating providers from balance-billing the patient.
What is meant by CDHP?
Consumer-driven (directed) health plan. A form of medical insurance that combines a high deductible health plan with one or more tax-preferred savings accounts that the patient directs.
Explain Disability Compensation Programs?
Disability Compensation Programs pay benefits for lost income when an illness or injury prevents someone from working. Unlike Worker's Compensation, the illness or injury does not have to be work-related
What is a fee schedule?
Document that specifies the amount the provider bills for services. Payers also set the fees they pay providers. Most payers use one of three methods to set the fees that the health plan will pay physicians 1. usual, customary and reasonable (UCR) 2. relative value scale (RSV) 3. resource-based relative value scale.
Who are the major payers of medical insurance?
Either private payers or govt-sponsored programs.
What is the FEHB program?
FEHB - Federal Employees Health Benefits Program is the largest employer-sponsored health program in the US - covers 8 million federal employees, retirees and their families through 250 health plans. Administered by the federal govt's Office of Personnel Management (OPM)
Explain FSAs Funding Option from CDHP?
FSAs are Flexible Spending Accounts that augments employees other health insurance coverage. Can put pre-tax dollars from their salaries in the FSA and use the fund to pay for medical and dependent care expenses. The disadvantages of FSAs compared to HSAs is that at the end of the year unused dollars go back to the employer under the "use it or lose it" rule.
What is Medicare?
Federal Ins program est. 1965 Title XVIII of the Soc Sec Act. Managed by CMS and the Dept of HHS. Has four parts: Medicare Part A (Hospital Insurance - HI) B (Supplementary Medicarl Insurance - SMI), C (Medicare Advantage Plans), and D (Medicare Part D). Those who are eligible: 1. Individuals age 65 or older. 2. Disabled adults. 3. Individuals disabled before age eighteen. 4. Spouses of entitled individuals 5. Retired federal employees enrolled in Civil Service Retirement System (CSRS) 6. Individuals with end-state renal disease (ESRD)
Explain Employer-Sponsored Medical Insurance or GHP?
GHPs are Group Health Plans that their employers sponsor. Basic plans and rider that employees may buy and add to their policies. Riders are options often offered for vision and dental services. Some riders are for complementary care covering chiropractic, manual manipulation, acupuncture, vitamins and minerals, etc. They must follow federal and state guidelines and if the state law is more restrictive then the state law will prevail.
What is an HMO?
HMO - Health Maintenance Organization are licensed by the state. They have the most stringent guidelines and the narrowest choice of providers. Members are assigned to primary care physicians (PCP) and must use the network except in emergencies.
Among HMO, PPO, POS and CDHP's which has the most stringent guidelines?
HMOs have the most stringent guidelines and the narrowest choice of providers.
Among HMO, PPO, POS and CDHPs which assigns a PCP?
HMSs assign a Primary Care Provider.
Explain HRSs Funding Option from the CDHP?
HRSs are Health Reimbursement Accounts set up and funded by an employer. Usually offered with high deductibles. Employees submit claims to HRA to be reimbursed for out-of-pocket medical expenses. In some HRA plans the employers allow funds that remain in the account at the end of the benefit period to roll over to the next year's HRA.
Explain HSAs Funding Option from the CDHP?
HSAs are Health Savings Accounts created by an individual. Employers offer high-deductible health plans to go with them. Both employee and employer can contribute to HSAs. The maximum amount is set by the IRS and the IRS also sets the max out-of-pocket spending under HSAs. HSA money is held by a "custodian" such as a bank, an employer or a health plan. The fed govt limits the amt of contribution that is tax-sheltered, just as it does for individual retirement accounts (IRAs). HSAs do not have to be used up at the end of the benefit period. They can roll over year to year and job to job or retirement. HSAs earn TAX-FREE INTEREST and can be used for non-medical purposes after age 65.
What is meant by Group (Network) Model?
One of the business models that HMOs are organized around. A Group Network Model: A group contracts with more than one physician group creating a network of physicians. Medical practices under contract are paid a per member per month (PMPM) capitated rate for each subscriber assigned to them for primary care svcs.
What are Individual Health Plans?
IHPs are purchased by almost 10% of the people with private health insurance. Coverage is expensive in order to continue their health insurance between jobs. Include self-employed, students, early retirees, etc. Individual insurance plans have basic benefits without riders or additional features.
How can CDHPs reduce cash flow for a practice?
If the CDHP has a high deductible it may not be collected until after the claim is paid and the patient is sent a bill to pay. Physician's reimbursement up to the amt of the deductible will come from the patient's funding option and, if there is not enough money out of the patient's pocket.
What is an Indemnity Plan?
Indemnity is a fee-for-service plans require premium, deductible, and coinsurance payments. They typically cover 70-80% of the costs of covered benefits after deductible such as $5000-$10,000 in order to offer lower premiums Many have some managed care features.
What is TRICARE?
Insurance plan for military personnel and their families. Includes managed care options, REPLACED CHAMPUS, the Civilian Health and Medical Program of the uniformed services. All military treatment facilities, including hospitals and clinics are part of TRICARE system. Will also contract with civilian facilities to increase benefits.
Employee Retirement Income Security Act of 1974 (ERISA) is important because?
It is the law providing incentives and protection for companies with employee health and pension plans.
Explain what is meant by Medicare Part C?
Managed care health plans under the Medicare Program. A program that permits private insurance carriers to contract with CMS to offer Medicare benefits under a managed care option.A MAO- Medicare Advantage Organization is responsible for providing all Medicare - covered services other than hospice in return for a predetermined capitated payment include fee-for-service and other types of plans.
What is meant by allowed charge?
Maximum charge a plan pays for a service or procedure. The most a payer will pay any provider for that CPT code. Depends on three things: Providers usual charge; Providers status in the plan or program; The Payers billing rules.
Explain Medicare Part B?
Medicare Part B - Supplementary Medical Insurance (SMI) helps pay for physician services, outpatient services, med equip and other supplies.If entitled to Part A automatically entitled to Part B. US citizens over age 65 also eligible. People receiving Soc Sec Benefits are automatically signed up unless they opt out. If they miss enrollment there is a permanent 10% premium increase every year. Beneficiaries pay monthly premiums for Part B subject to deductibles and coinsurance.
Explain what is meant by Medicare Part D?
Medicare Prescription Drug reimbursement plans. Open to people who are eligible for Medicare. All prescription drug plans are private insurance plans that are approved by Medicare and most pay monthly premium. to access discounted prices. Two types of plans: Prescription Drug Plan with a Medicare supplement plan. With the Prescription Drug Plan covers only drugs and can be used with an Org Medicare Plan and the Medicare Supplement Plan combines a prescription drug plan with a Medicare Advantage plan structured in payment tiers for covered drugs.
What are the four major govt sponsored insurance programs?
Medicare, Medicaid, TRICARE, and CHAMPVA Worker's Compensation and Disability Plans
Why is setting fees important?
Most practices set their fees slightly above those paid by the highest reimbursing plan. Medicare rules state that the amount billed Medicare must not be higher than the lowest fee billed any payer for the same service.
What is meant by Independent Practice Association Model?
One of the business models that HMOs are organized around. An Independent Practice Association Model: An IPA type of HMO is an association formed by physician with separately owned practices who contract togt to provide care for HMO members. An HMO pays fees for medical svcs to the IPA and in turn pays its physicians members either a capitated rate or a fee. Providers may join more than one IPA and usually also sees nonmember patients.
What is meant by Staff Model?
One of the business models that HMOs are organized around. Staff Model: Physicians are employed by the organization. All premiums/revenues go to the HMOs which in turn pays the physician's salaries. Patients go the clinics and health centers owned by the HMO.
Explain what is meant by "Original Medicare Insurance"?
Original Medicare Plan - The Medicare fee-for-service referred to as the Original Medicare Plan allows beneficiary to choose any licenses physician certified by Medicare. Each time receives services a fee is billable. Generally paid for by Medicare and sometimes by a secondary policy. Responsible for annual deductible and 20% of allowed charges.
Among HMO, PPO, POS and CDHPs which is the most popular?
PPOs are the most popular. The policyholder pays an annual premium and a yearly deductible to pay out-of-pocket. Insured typically pays a co-payment at the time of each service. Advantages of a PPO includes the flexibility of seeking care with an out-of-network provider even though more expensive. PPOs include more covered medical services than other types of plans and PPOs have large networks of medical providers.
What is meant by discounted fee-for-service arrangement?
Payment schedule for services based on a reduced percentage of usual charges. Providers can bill for charges for procedures and services not covered by the plan.
What is meant by capitation rate or cap rate?
Periodic prepayment to a provider for specified services to each plan member.
Explain Medi-Medi?
Person who is eligible for both Medicare and Medicaid. When someone has Medi-Medi coverage, such payments are sometimes paid by Medicaid.
What is a Consumer-Driven Health Plan?
Recent type of managed care plan. The Consumer-driven (directed) Health Plan is popular. Combines a high-deductible health plan with one or more tax-preferred savings accounts that the patient (the "consumer") directs The two plans work togt; the high deductible health plan covers catastrophic losses, while the savings account pays out-of-pocket expenses.
What is Worker's Compensation insurance?
State or Federal plan that covers medical care and other benefits for employees who suffer accidental injury or become ill as a result of employment. For medical treatment, lost wages, permanent disability payments, compensation for dependents of employees who are fatally injured and vocational rehabilitation. Civilian employees are covered by FECA (Federal Employees Compensation Act). Injured employees can choose a physician from among those who are authorized.
Explain Medicaid?
The Medicaid program covers more than 50 million low-income people, pays for more than one-third of births and finances care fot two-thirds of nursing home residents. Est under Title XIX of the Soc Sec Act of 1965 to pay for medical needs of low-income peoples. Jointly funded by federal and state govts. Fed govt makes payments to states under Medicaid Assistance Percentage (FMAP). Payment is based on the state's avg per capita income in relation to the national income avg.
What are other names for "allowed charge"?
The allowed charge is also called a maximum allowable fee, maximum charge, allowed amount, allowed fee and allowable charge.
What is meant by resource-based relative value scale (RBRVS).
The payment system used by Medicare. Establishes relative value units for services -- what each service really costs to provide: There are three parts: 1. Nationally Uniform Relative Value Unit (based on physician's work, the practice cost (overhead) and the cost of malpractice insurance) 2. A geographic adjustment factor (the geographic adjustment factor (GPCI)) 3. A nationally uniform conversion factor (used by Medicare to make adjustments according to changes in the cost of living index).
How many health care plans does TRICARE offer?
They offer three: 1. TRICARE Standard - a fee-for-service program that replaces the CHAMPUS program. When the individual cannot receive care from a military facility they can see a civilian facility. 2. TRICARE Prime - managed care plan similar to an HMO. After enrolling in the plan they are assigned a Primary Care Manager (PCM) who coordinates and manages their medical care. Mostly receive care from military facilities. 3. TRICARE Extra - alternative managed care plan for those who want to receive services primarily from civilian facilities. TRICARE Extra is more expensive than Prime, but less than TRICARE Standard.
What is meant by "write off"?
To deduct an amount from a patient's account. The patient is responsible for 20% of the allowed charge NOT of the provider's usual charge
What are Self-Insured Health Plans?
To save money some large employers cover the costs of employee medical benefits themselves. They do not pay premiums to insurance carriers or managed care organizations. The employer establishes the benefit level. Self-insured health plans are regulated by the federal Employee Retirement Income Security Act of 1974 (ERISA) instead of state laws.
What is meant by usual, customary, and reasonable (UCR).
UCR fees, for the most part, accurately reflect the charges of most physicians.
What are usual fees?
Usual fees are normal fees charged by a provider.
Medicare Physician Fee Schedule
allowed fees based on the resource-based relative value scale that are the basis for Medicare reimbursements>
