Basics of Health Insurance 1
The Purpose of Health Insurance The purpose of health insurance is to help individuals and families offset the costs of medical care. Helps protect against financial losses resulting from illness or injury Provides payment of monetary benefits for covered sickness or injury depending on the insurance policy purchased 2
Types of Health Insurance Benefits There are various types of health insurance accident insurance disability income insurance hospitalization medical expense insurance accidental death and dismemberment insurance (SEE PAGE 334 TABLE 20-1 for a list of Health insurances) Health insurance typically covers services and procedures considered medically necessary Most insurances do not cover elective procedures that are not considered medically necessary. 3
Cycle of Health Insurance The insured pays a premium (payment) This premium pays for an insurance policy that covers the insured for a specific type(s) of coverage When an insured becomes ill or suffers an injury, treatment is provided 4
The MA s Tasks Related to the Cycle of Health Insurance and Processing Insurance billing and coding tasks typically completed by the medical assistant include: Obtain information from the patient and insured Verify the patient s eligibility, benefits, exclusions, special authorizations Perform diagnostic and procedural coding and review for completeness Calculate insurance deductibles and coinsurance amounts and provide these to patient Obtain preauthorization for procedures or services as needed 5
The MA s Tasks Related to the Cycle of Health Insurance and Processing Complete insurance claim form and submit to insurance company Post payments and adjustments on the patient s account and examine explanation of benefits (EOB), explanation of Medicare benefits (EOMB), or the remittance advice (RA) from the insurance company to identify what was paid, reduced, denied, or what the deductible is, or if there is a co-insurance. Make adjustments to the account as needed Bill patients for any outstanding balance, or, if applicable, complete the secondary insurance claim form and submit Follow-up on any rejected or unpaid claims 6
Types of Health Insurance Group Policies Insurance written under a group policy covers a number of people under a single master contract Individual Policies Individuals who do not qualify for inclusion in a group or government-sponsored plan Premiums are almost always higher and often the benefits are less 7
Types of Health Insurance Government Plans TRICARE dependents of military personnel receive treatment from civilian physicians at the expense of the government Medicaid A Federal and or State sponsored health insurance program for the medically indigent. (Poor or low income) Medicare A Federal health insurance program that provides healthcare coverage for individuals aged 65 years and older, the permantley disabled, the blind, or people who receive dialysis for permanent kidney failure or have undergone a kidney transplant. Workers Compensation Protects wage earners against the loss of wages and the cost of medical care resulting from occupational accident or disease 8
Medicare Medicare is regulated by laws enacted by Congress. It has two main parts: Part A and B. Part A is hospital Insurance and covers: Inpatient hospital care, Skilled nursing facilities, Home healthcare, and Hospice. Part B is medical insurance and covers: outpatient hospital care, durable medical equipment, physicians services, 9
Medicare There is also Medicare Part C and D. Medicare C is Medicare Advantage program that offers expanded benefits for a fee through private health insurance programs such as HMO s and PPO s that have contracts with Medicare. Medicare Part D is the drug and prescription benefits. Patients may choose a reduced cost plan that pays for their prescription drugs with a small co-pay. 10
What are Managed Care Plans? Plans that provide healthcare services in return for preset scheduled payments and coordinate healthcare services through a defined network of primary care providers (PCP s), hospitals, and other providers. A primary care provider (PCP) is a general practice or non-specialist provider or doctor responsible for the care of a patient for some health maintenance organizations. 11
Managed Care 2 Models of Managed Care 1. Health Maintenance Organization (HMO) An HMO is a plan that contracts with a medical center or group of physicians to provide preventive as well as acute care for the insured Always require referrals to specialists, precertification, and preauthorization for hospital admissions, outpatient procedures, and treatments 12
Managed Care Models of Managed Care 2. Preferred Provider Organizations (PPO) An insurance company representing its clients contracts with a group of providers (doctors) who agree on a predetermined list of charges for all services including those for both normal and complex procedures. Typically there are deductibles or coinsurance payments that the patient pays and the insurer pays the balance. PPOs furnish their subscribers with a list of member providers Rates are quite often lower than those charged to non-ppo patients This is the most preferred plan by most doctors. 13
Verification of Insurance Benefits To verify benefits, the following steps should be taken When a patient calls for an appointment, identify what type of insurance the patient has or what managed care organization the patient belongs to When the patient arrives for the appointment, photocopy both sides of the patient s ID card Contact the insurance carrier to verify that the patient is eligible for benefits and determine the basic benefits, exclusions or noncovered services, and if preauthorization is required for referrals to specialists or for specific types of procedures and services 14
Verification of Insurance Benefits Obtain the name, title, and phone number of the person contacted Document the information collected in the patient s medical record and on a Verification of Benefits form Give the patient a letter to read and sign outlining the plan requirements and possible restrictions or noncovered items When referrals are required, explain the procedure to the patient so it is understood that without the referral, it is the patient s responsibility to pay for the physician s services Collect any copayments or deductibles 15
Preauthorization Many insurance companies require precertification or preauthorization, usually within 24 hours, when a patient is going to be hospitalized or undergo certain procedures. Preauthorization is a process required by some insurances in which the provider obtains permission to perform certain procedures or services, or refers a patient to a specialist. Most managed care systems require preauthorization for a patient for certain laboratory tests or other procedures. Insurance claims for payment will be denied if proper authorization is not obtained so it is important for the medical assistant obtain accurate information. 16
Referral A Referral is a term used in managed care when a patient is referred from a PCP to a specialist. MA s must follow procedure and take great care to include all necessary information for the referral. A referral can take up to a few minutes to up to a few days to be reviewed and approved or denied. 17
Deductibles and Coinsurance Many types of health insurance plans require a deductible and coinsurance amount that the patient must pay out of pocket before the insurance carrier begins paying. The deductible is met yearly. typically there is an annual deductible amount the patient must pay before the plan pays anything 18
Utilization Management and Utilization Review Who is the committee that makes sure services are medically necessary? Utilization management : a form of patient care review by healthcare professionals who do not provide the care make certain that medical care services are medically necessary study how providers use medical care resources 19