Download Slide 1

Unit 8
Medical Insurance
Class Overview
Medical Insurance
Purpose of Medical Insurance
• Provides protection from risk
and financial loss
• Money is paid to the insured
• Premiums are paid for by the
insured
• Assists patients in covering costs
incurred for medical treatment
• Expenses covered by insurance
include:
–
–
–
–
Regular medical expenses
Hospitalization
Surgery
Major medical expenses
Coverage Offered Through
Hospitalization Insurance
•
•
•
•
•
Cost of hospital room
Cost of meals
Use of the operating room
X-ray and lab fees
Usually limited to a total dollar amount or a
maximum number of days
Insurance Coverage for Surgery
• Charges typically based on “reasonable and
customary” charges
• Costs vary by region
• Copays and deductibles may apply
Fixed Payment Plans
• Payment of a fixed fee provides monthly
coverage
• The fixed fee is known as the premium
• Reimbursement is available once the premium
has been paid
Types of Health Care Insurance
Health Care
Insurance
Description
Managed care Fixed, prepaid-fee plans
GroupPurchased through commercial
sponsored or insurance companies
individual
policies
Governmentsponsored
programs
Plans financed and regulated by federal
and state governments
Managed Care Organizations
• Payment of fixed fee provides monthly
coverage
• Fixed fee is known as the premium
• Reimbursement is available once the premium
has been paid
• Plans referred to as prepaid plans
Why Managed Care?
• Advantages
– Lowers expenses for patients
– Requires nominal copayments for patients
– Offers plans with no deductibles
– Contains health care costs
– Provides payment for authorized services
– Ensures established fee schedules
– Usually covers preventive care
Why Managed Care?
• Disadvantages
– Increases amount of paperwork
– Requires preauthorization
– Lowers reimbursement rates
– Limits physician choices
– Lacks guarantee of coverage
– Limits specialized care
– Limits referrals
– Limits flexibility
Health Maintenance Organization
(HMO)
• Type of managed care plan
• Original concept was to control health care
costs
• Membership limited to certain providers
• Services provided on a predetermined fee
• Patients must see physicians who participate
in the plan
• Emphasizes maintenance of health
Closed Panel Model
• The clinic is owned by
the HMO and the
providers are
employees of the HMO
Open Panel HMO
• The health care
providers are not
employees of the HMO
and do not belong to a
medical group owned
or managed by the
HMO
Preferred Provider Organization
(PPO)
•
•
•
•
•
Type of managed care plan
Purpose is to contain costs
Patient must use contracted provider
Fee-for-service program
Members not restricted to designated
physicians or hospitals
Point-of-Service Plan (POS)
• Type of managed care
plan
• Offers more flexibility
than some HMOs &
PPOs
• Out-of-network or innetwork provider may
be seen
Exclusive Provider Organization
(EPOs)
• Managed care system
• Patients select
physicians from a list
• Providers are
reimbursed on a
modified fee-for service
basis
Integrated Delivery System (IDS)
• Organization of provider sites contracted to
offer services to subscribers
• Example:
– Physician-hospital organization (PHO)
– Medical foundation
– Management service organization (MSO)
– Group practice without walls (GPWW)
– Integrated provider organization (IPO)
Commercial Insurance Carriers
• Typically for-profit organizations
• Often offer both traditional fee-for-service
plans and managed care plans
• Require subscribers to pay a premium for
membership
The Health Insurance Card
Blue Cross/Blue Shield
• Largest prepayment medical insurance system
in U.S.
• Exist in every state
• Operate locally under state laws
• Provide coverage for medical procedures and
services
• Offer various types of health care plans
Government Programs
•
•
•
•
•
•
Medicare
Medicaid
TRICARE
CHAMPVA
Worker’s compensation
Disability insurance
Coverage Provided by Basic Insurance
Policies
•
•
•
•
•
Office visits
Hospitalization
Emergency room
Surgery
Wellness exams
Major Medical Insurance
• Provides coverage for:
– Catastrophic illnesses or
injuries
– Prolonged illnesses
– Typically a supplemental
policy
– Usually increases
insurer’s premiums
Surgical and Long-Term Care
Insurance
• Surgical insurance:
– Provides coverage for surgical services
– Uncommon policies since most basic insurance
plans cover these costs
• Long-term care insurance:
– Provides coverage for the costs of nursing home
care
– Common policies since most basic insurance plans
do not cover these costs
Dental Insurance
• Typically provides coverage for:
– Dental examinations
– Cleaning
– Polishing
– Fillings
– Certain extractions
• Often requires a deductible
• 50% to 100% coverage offered by plans
Coverage Provided by Vision
Insurance
•
•
•
•
•
Eye examination
Contact lens
Prescription frames
Prescription lenses
Laser corrective eye surgery
UCR Method
• UCR = usual, customary, reasonable
• Used to determine the portion that an insurance
company is obligated to pay
• Takes into consideration:
– The usual fee a provider charges for most patients for
a certain service/procedure
– The geographic location and specialty of the practice
– Any complications or unusual services or procedures
Indemnity Schedules
• Another method used to determine insurance
carrier payment
• Based on the maximum amount charged for a
specific service
• Payment is determined on the lowest charge
submitted by physician or by the physician’s
fee schedule
• Common method used in managed care
Relative Value Studies (RVS)
• A method to determine pricing factors in
reimbursement
• Areas considered in the accounting include:
– Time of the provider
– Skill of the provider
– The provider’s overhead expenses
• Each area is then turned into unit counts that
are applied to a specific service
Medicare and RVS
• Medicare payments based on resource-based
RVS (RBRVS)
• Resource-based RVS:
– Utilizes the RVS
– Allows for increases in charges due to economic
changes and other factors
Filing Requirements
• Claims must be filed in a timely manner
• If deadline is not met than no money can be
retrieved from the insurance carrier
• Filing deadlines vary by carrier
• Correct claim form must be used for each
carrier. Most will accept the CMS-1500.
• Supporting materials with claims may be
required. These must be turned in correctly
and on time.
Preauthorization
• Also called precertification
• To obtain permission from the insurance carrier to
provide services to a patient
• Must be acquired prior to patient appointment
unless an emergency
• Patient may or may not be aware of need for
preauthorization
• Failure may delay treatment
• If service is provided without preauthorization
insurance carrier may refuse to pay
Calling the Insurance Carrier for
Precertification
• If possible obtain at
least 24 hours prior to
patient services being
provided
• Gather all pertinent
patient information
prior to calling
Pertinent Information
• Patient’s insurance information
• Precertification form
• Procedure or service request with specifics
regarding number of treatments and for how
long
• Documentation by the physician requesting
the procedure or service
• Information on the provider who will be
performing the procedure or service
Acquired Information When
Approval is Obtained
• Precertification or preauthorization information
• Preauthorization numbers are often provided
• Any precertification numbers that are obtained
must be included on the insurance claim form
• Copy of completed precertification form must be
placed in the patient’s medical record
Steps to Take When Preauthorization is
Rejected
• Physician can write a
letter to the carrier
providing rationale for
the treatment
• Subscriber of the
insurance can send a
letter of appeal
• Any letters sent to the
insurance company
should be kept in the
patient’s file
Guidelines for Verifying Insurance
• Obtain all insurance information from patient
at initial contact
• Provide the patient with a copy of the
practice’s written policies and procedures for
dealing with insurance carriers
• Discuss the patient’s insurance benefits prior
to services rendered
Cost Containment Measures for
Health Care
• Peer Review Organization (PRO)
– Occurred when Congress amended the Social
Security Act of 1972 and created the Professional
Standards Review Organization (PSRO)
• Diagnosis-related groups (DRGs)
– Developed in the late 1960s
– Used by hospitals to determine their Medicare
reimbursement rates
– Not used for to calculate outpatient payments
Federal Register
• Published daily by the National Archives and
Records Administration (NARA)
• Used by MAs to obtain information on:
– Federal rules, regulations, and notices
– Executive orders and proclamations
– Presidential documents
• Can be viewed by going on the Internet
Discussion
• Managed Care
Role Play
• Insurance Authorization
Medical Insurance Claims
Purpose of the Health Insurance
Claim Form
• Report patient procedures and services to the
insurance carrier
• Help standardize reporting
• Improve communication between the medical
facility and the insurance carrier
Main Elements to Improve
Communication Process
• Use of the correct health insurance claim form
• Accuracy of information provided in the
health insurance claim form
• Submission of the health insurance claim form
to the correct insurance carrier
Types of Health Insurance Claim
Forms
• CMS-1500
– Most common health insurance claim form
– Used to file claims for physician services
– Submitted to the insurance carrier electronically
or by standard mail
• UB-92 (also referred to as the CMS-1450)
– Used to report services related to hospitalization
Submitting a Blue Cross/Blue Shield
Claim
• May provide their own
health insurance form
• Forms can be obtained
online
• CMS-1500 may be
accepted
Submitting a Claim for a Managed Care
Organization
• Form used will depend
on managed care
organization
• Most will accept the
CMS-1500
• Use of incorrect form
may cause claim to be
rejected causing
delayed or no payment
Submitting a Medicare Claim
• Covered benefits change
• Keeping up-to-date is important for accurate
claims submission
• Critical to know:
– Coverage
– Benefit period
• CMS-1500 used for Medicare claims
• Claims to Medicare can be sent electronically
or by standard mail
Submitting a Medicaid Claim
• Claim submission varies
from state to state
• Typically patients must
qualify for benefits
monthly. Eligibility is not
automatic.
• Preauthorization is
required for some
services
• Critical to verify patient
eligibility at each visit
Submitting a TRICARE Claim
• DD Form 2642:
– Form completed and sent by patient or family member
– Payment sent to patient who is responsible to then pay the
provider
• CMS-1500:
– Form completed and sent by the physician’s office
– Payment is sent directly to the provider’s office
• UB-92:
– Form completed and sent by the hospital
– Payment is sent directly to the hospital
Submitting a Workers’
Compensation Claim
• Claim form depends on the state and
insurance carriers in that state
• Typically the CMS-1500 is accepted
• Important for MA to call and verify what form
must be used for claims submission
• Patient does not pay for procedures and
services provided by workers’ comp
• Employer is ultimately responsible
Methods to Submitting Claims
• No matter the method
the same information is
provided
• Method is dependent
on insurance carrier
• Two methods used
today:
– Faxing or mailing paper
claim
– Submitting claim
electronically
Advantages of Paper Claims
• Basic costs are minimal
• Materials needed for
paper claims:
– Claim forms
– Coding books
Disadvantages of Paper Claims
• Costs to complete the paper claim process can
be costly
• These costs include costs for:
– Time required to complete the form
– Higher chance of errors
– Storage space
– Postage
– Copies of claim forms
Advantages of Electronic Claims
• Decreases turnaround time in the processing
of claims
• Increases speed of claims processing by both
the insurance carrier and the provider
• Provides the capability for direct electronic
deposit of payments in provider account
• Saves money on postage and labor costs for
the provider
Disadvantages of Electronic Claims
• Initial start-up expenses:
– Internet service provider
– Computer
– Software
– Training of those who will be using the system
– Printer
– Backup or storage devices
• Computer down times
Three Ways Claims are
Transmitted
• Sent directly to payer via EDI (electronic data
interchange)
• Transmitted through a clearinghouse
• DDE (direct data entry)
Statuses of a Claim
• Clean claims:
– Form is completed without any errors or
omissions and submitted on time
• Dirty claims:
– Form is incorrect because of missing data or
errors, causing the claim to be rejected
Statuses of a Claim
• Invalid claims:
– Form is complete but has some type of incorrect
information
• Denied claims:
– Procedure or services are not covered by the
insurance policy or the patient has not met
his/her deductible. Ineligible procedures or
services can also cause a claim to be denied.
Information Needed to Complete the
CMS-1500
• Name of insured’s
insurance company
• Insured’s name
• Insured’s ID#
• Insured’s address
• Telephone # of insured
Reading the CMS-1500
• Boxes (Blocks) 1-13:
– Patient data
• Boxes (Blocks) 14-33:
– Provider information
– Information on services provided to patient
– Reason for services
Completion of the CMS-1500:
Boxes 1-8
Completion of the CMS-1500:
Boxes 9-13
Completion of the CMS-1500:
Boxes 14-23
Completion of the CMS-1500: Box
24 A-J
Completion of the CMS-1500:
Boxes 25-33
Prior to Submitting a Claim
• Check for accuracy on the claim form
• If a paper claim, make a copy for the patient’s
file
• Enter data on the insurance claims log
• Send the completed CMS-1500 with required
documentation to the insurance carrier
Confidentiality and the CMS-1500
• As with all patient data,
information must remain
confidential
• Release of information
must be signed by the
patient
• Signed standard release
form may be used
• Form is placed in patient
file
Signature and Payment of Benefits
• Box 12:
– Patient signature indicates permission for
releasing information on the claim form
• Box 13:
– If signed by patient, payment will go directly to
service provider
– If not signed, payment is sent to the insured
– SIGNATURE ON FILE can also be used for this box
Assignment of Benefits
• Allowed by Medicare and other carriers
• One time form signed by patient
• Provides authorization for patient information
to be released
• Once signed, usage of SIGNATURE ON FILE can
be used
• Form must be permanently kept in the
patient’s record
Participating vs. Nonparticipating
Providers
• Advantage:
– Payment sent directly to
the practice, typically in
a timely manner
• Disadvantage:
– Reimbursement might
be at a less desirable
rate leading to write-offs
Materials Needed to Complete the
CMS-1500
•
•
•
•
•
•
Patient’s medical record
Patient’s ledger card
Superbill
CMS-1500
Black ink pen
Computer with a printer
or typewriter
The Superbill
• Contains:
–
–
–
–
Patient’s name
Diagnoses
Treatments
Space for claim
information
The Birthday Rule
• Used to determine which parent’s insurance plan is
primary
• Only used for parents who are legally married
• Primary plan is the one held by the parent whose
birthday falls first in the year
• If parents have birthday on the same day, parent who
has had the coverage the longest would hold the
primary plan
• Primary plan of divorced parents is determined by
court
Prior to Submitting a Claim
•
•
•
•
Check for accuracy on the claim form
If a paper claim, make a copy for patient’s file
Enter data on the insurance claims log
Send the completed CMS-1500 with required
documentation to the insurance carrier
Maintaining Confidentiality of Patient
Information
• Responsibility of all
health care workers
• Breach of
confidentiality occurs
when information is
provided to individuals
who have not been
authorized to receive it
How to Keep Patient Information
Secure
• Ensure information is only
provided to approved
individuals
• Limit access to patient
information in work areas
• Create work areas where
confidential information
can be discussed privately
• Follow rules established
by HIPAA
Documentation of Permission
• Authorization for Release of Medical
Information
• Block 12 on CMS-1500
• Release form created by medical practice
Insurance Claims Log
•
•
•
•
Used to track claim forms
Can be done manually or electronically
Data entered when claim form is completed
Information on log:
–
–
–
–
–
Patient’s name
Date of service
Insurance carrier
Date of claim submission
Amount of the claim submitted
Most Common Reasons for
Claim Rejection
• Missing or incorrect information
• Missing or incorrect patient registration
information (name, address, insurance
number)
• Missing or incorrect name of referring
physician
• Missing or incorrect diagnosis code
• Overlapping, incorrect, or duplicate dates of
service
Most Common Reasons for
Claim Rejection
•
•
•
•
Incorrect place of service
Invalid, missing, or incorrect procedure code
Incorrect or missing number of days or units
Incorrect or missing modifier
Resubmitting Claims
• Information must be
corrected and
resubmitted
• Use of patient data and
other resources is
important for accuracy
• Accuracy on claims is
critical!
• Time limits for re-filing
must be met!
Ways to Minimize the Number of
Rejected Claims
• Review the claim for accuracy prior to submitting it
• Pay close attention to detail
• Keep current reference materials, books and
equipment readily available and use them
• Limit distractions that can occur in the medical office
• Have a specific time of the day to focus solely on
claims processing
• Have another medical office staff member review
each claim
Discussion
• CMS-1500 Form
Small Group Activity
• Critical Thinking Scenarios
Discussion
• Financial Impact of Rejected Claims
Summary
• Topics Covered