Transcript Group health plan

CHAPTER
9
Private Payers/Blue
Cross and Blue
Shield
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9-2
Learning Outcomes
When you finish this chapter, you will be able to:
9.1
9.2
9.3
9.4
Compare employer-sponsored and self-funded
health plans.
Describe the major features of group health plans
regarding eligibility, portability, and required
coverage.
Discuss provider payment under preferred provider
organizations, health maintenance organizations,
point-of-service plans, and indemnity plans.
Compare and contrast health reimbursement
accounts, health savings accounts, and flexible
savings (spending) accounts.
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9-3
Learning Outcomes (Continued)
When you finish this chapter, you will be able to:
9.5
9.6
9.7
9.8
9.9
9.10
List and discuss the major private payers.
List the five main parts of participation contracts and
describe their purpose.
Describe the information needed to collect
copayments and bill for surgical procedures under
contracted plans.
Discuss the use of plan summary grids.
Describe the steps in the medical billing cycle that
ensure correct preparation of private payer claims.
Discuss the key points in managing billing for
capitated services.
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9-4
Key Terms
• administrative services
only (ASO)
• BlueCard
• Blue Cross and Blue
Shield Association
(BCBS)
• carve out
• Consolidated Omnibus
Budget Reconciliation
Act (COBRA)
• credentialing
• creditable coverage
• discounted fee-forservice
• elective surgery
• Employee Retirement
Income Security Act
(ERISA) of 1974
• episode of care (EOC)
option
• family deductible
• Federal Employees
Health Benefits (FEHB)
program
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9-5
Key Terms (Continued)
• Flexible Blue
• flexible savings
(spending) account
(FSA)
• formulary
• group health plan (GHP)
• health reimbursement
account (HRA)
• health savings account
(HSA)
• high-deductible health
plan (HDHP)
• home plan
• host plan
• independent (or
individual) practice
association (IPA)
• individual deductible
• individual health plan
(IHP)
• late enrollee
• maximum benefit limit
• medical home model
• monthly enrollment list
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9-6
Key Terms (Continued)
• open enrollment period
• parity
• pay-for-performance
(P4P)
• plan summary grid
• precertification
• repricer
• rider
• Section 125 cafeteria
plan
• silent PPOs
• stop-loss provision
• subcapitation
• Summary Plan
Description (SPD)
• third-party claims
administrator (TPAs)
• tiered network
• utilization review
• utilization review
organization (URO)
• waiting period
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9-7
9.1 Private Insurance
• People not covered by entitlement programs are
usually covered by private insurance
• Employer-sponsored medical insurance
– Group health plan (GHP)—plan of an employer or
employee organization to provide health care to
employees, former employees, or their families
– Rider—document modifying an insurance contract
– Carve out—part of a standard health plan changed
under an employer-sponsored plan
– Open enrollment period—time when a policyholder
selects from offered benefits
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9.1 Private Insurance (Continued)
9-8
• Federal Employees Health Benefits (FEHBP)
Program—covers employees of the federal
program
• Self-funded health plans
– Employee Retirement Income Security Act of 1974
(ERISA)—law providing incentives and protection for
companies with employee health and pension plans
– Summary Plan Description (SPD)—required
document for self-funded plans stating beneficiaries’
benefits and legal rights
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9.1 Private Insurance (Continued)
9-9
• Self-funded health plans (continued)
– Third-party claims administrator (TPAs)—business
associates of health plans
– Administrative services only (ASO)—contract
where a third-party administrator or insurer provides
administrative services to an employer for a fixed fee
per employee
• Individual health plan (IHP)—medical
insurance plan purchased by an individual
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9.2 Features of Group Health Plans
9-10
• Section 125 cafeteria plan—employers’ health
plans structured to permit funding of premiums
with pretax payroll deductions
• Eligibility for benefits:
– GHP specifies the rules for eligibility and the process
of enrolling and disenrolling members
– Waiting period—amount of time that must pass
before an employee/dependent may enroll in a health
plan
– Late enrollee—category of enrollment that may have
different eligibility requirements
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9.2 Features of Group Health Plans
(Continued)
9-11
• Eligibility for benefits (continued):
– Individual deductible—fixed amount that must be
met periodically by each individual of an
insured/dependent group
– Family deductible—fixed, periodic amount that must
be met by the combined payments of an
insured/dependent group before benefits begin
– Maximum benefit limit—amount an insurer agrees
to pay for lifetime covered expenses
– Tiered network—network system that reimburses
more for quality, cost-effective providers
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9.2 Features of Group Health Plans
(Continued)
9-12
• Portability and required coverage:
– Consolidated Omnibus Budget Reconciliation Act
(COBRA)—law requiring employers with over twenty
employees to allow terminated employees to pay for
coverage for eighteen months
– Creditable coverage—history of coverage for
calculation of COBRA benefits
– Parity—equality with medical/surgical benefits
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9-13
9.3 Types of Private Payers
• Under preferred provider organizations (PPOs),
providers are paid under a discounted fee-forservice structure
– Discounted fee-for-service—payment schedule for
services based on a reduced percentage of usual
charges
• In health maintenance organizations (HMOs)
and point-of-service (POS) plans, payment may
be a salary or capitated rate
• Indemnity plans basically pay from the
physician’s fee schedule
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9.3 Types of Private Payers (Continued)
9-14
• Subcapitation—arrangement where a capitated
provider prepays an ancillary provider
• Episode-of-care (EOC) option—flat payment
by a health plan to a provider for a defined set of
services
• Independent practice association (IPA)—
HMO in which physicians are self-employed and
provide services to members and nonmembers
• Medical home model—plan that seeks to
improve patient care by rewarding primary care
physicians for coordinating patients’ treatments
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9.4 Consumer-Driven Health Plans
9-15
• CDHPs combine two components:
1. A high-deductible health plan (HDHP)—health
plan that combines high-deductible insurance and a
funding option to pay for patients’ out-of-pocket
expenses up to the deductible
2. One or more tax-preferred savings accounts that the
patient directs
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9.4 Consumer-Driven Health Plans
(Continued)
9-16
• Three types of CDHP funding options may be
combined with HDHPs:
1. Health reimbursement account (HRA)—
consumer-driven health plan funding option where
an employer sets aside an annual amount for health
care costs
2. Health savings account (HSA)—consumer-driven
health plan funding option under which funds are set
aside to pay for certain health care costs
3. Flexible savings account (FSA)—consumer-driven
health plan funding option that has employer and
employee contributions
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9.5 Major Private Payers and the Blue
Cross and Blue Shield Association
9-17
• The major national payers:
–
–
–
–
–
–
–
–
WellPoint, Inc.
UnitedHealth Group
Aetna
CIGNA Health Care
Kaiser Permanente
Health Net
Humana, Inc.
Coventry
• Credentialing—periodic verification that a
provider or facility meets professional standards
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9.5 Major Private Payers and the Blue
9-18
Cross and Blue Shield Association (Cont.)
• The Blue Cross and Blue Shield Association
(BCBS)—national organization of independent
companies founded in 1930 to provide low-cost
medical insurance
– Pay-for-performance (P4P)—health plan financial
incentives program based on provider performance
– BlueCard—program that provides benefits for
subscribers who are away from their local areas
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9.5 Major Private Payers and the Blue
9-19
Cross and Blue Shield Association (Cont.)
• The Blue Cross and Blue Shield Association
(BCBS) (continued)
– Host plan—participating provider’s local Blue Cross
and Blue Shield plan
– Home plan—Blue Cross and Blue Shield plan in the
subscriber’s community
– Flexible Blue—Blue Cross and Blue Shield
consumer-driven health plan
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9-20
9.6 Participation Contracts
• Participation contracts have five main parts:
1. The introductory section provides the names of the
parties to the agreement, contract definitions, and
the payer
2. The contract purpose and covered medical services
section lists the type and purpose of the plan and
the medical services it covers for its enrollees
3. The third section covers the physician’s
responsibilities as a participating provider
4. The fourth section covers the plan’s responsibilities
toward the participating provider
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9.6 Participation Contracts (Continued)
9-21
• Participation contracts have five main parts
(continued):
5. The fifth section lists the compensation and billing
guidelines, such as fees, billing rules, filing
deadlines, patients’ financial responsibilities, and
coordination of benefits
• Utilization review—payer’s process for
determining medical necessity
• Stop-loss provision—protection against large
losses or severely adverse claims experience
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9.7 Interpreting Compensation and
Billing Guidelines
9-22
• Under participation contracts, most plans require
copayments to be subtracted from the usual fees
that are billed to the plans
• Billing for elective surgery requires
precertification from the plan
– Precertification—preauthorization for hospital
admission or outpatient procedures
• Providers must notify plans about emergency
surgery within the specified timeline after the
procedure
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9.7 Interpreting Compensation and
Billing Guidelines (Continued)
9-23
• Silent PPOs—MCO that purchases a list of
participating providers and pays their enrollees’
claims according to the contract’s fee schedule
despite the lack of a contract
• Elective surgery—nonemergency surgical
procedure
• Utilization review organization (URO)—
organization hired by a payer to evaluate
medical necessity
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9.8 Private Payer Billing Management:
Plan Summary Grids
9-24
• Plan summary grids—quick-reference tables
for health plans
– Summarize key items from the contract
– List key information about each contracted plan and
provide a shortcut reference for the billing and
reimbursement process
– Include information about collecting payments at the
time of service and completing claims
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9-25
9.9 Medical Billing Cycle
• The steps of the medical billing cycle:
– Step 1 – Preregister patients: Guidelines apply to the
preregistration process for private health plan
patients, when basic demographic and insurance
information are collected
– Step 2 – Establish financial responsibility for visit:
Financial responsibility for the visit is established by
verifying insurance eligibility and coverage with the
payer for the plan, coordinating benefits, and meeting
preauthorization requirements
– Step 3 – Check in patients: Copayments are collected
before the encounter
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9.9 Medical Billing Cycle (Continued)
9-26
• Steps of the medical billing cycle (continued):
– Step 4 – Check out patients: Payments after an
encounter, such as a deductible, charges for
noncovered services, and balances due, are collected
– Step 5 – Review coding compliance: Coding is
checked, verifying the use of correct codes as of the
date of service that show medical necessity
– Step 6 – Check billing compliance: Billing compliance
with the plan’s rules is checked
– Step 7 – Prepare and transmit claims: Claims are
completed, checked, and transmitted in accordance
with the payer’s billing and claims guidelines
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9.9 Medical Billing Cycle (Continued)
9-27
• Repricer—vendor that processes a payer’s outof-network claims
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
9.10 Capitation Management
9-28
• Under capitated contracts, medical insurance
specialists verify patient eligibility with the plan
because enrollment data are not always up-todate
• Encounter information, whether it contains
complete coding or just diagnostic coding, must
accurately reflect the necessity for the provider’s
services
• Monthly enrollment list—document of eligible
members of a capitated plan for a monthly
period
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.