All About Healthcare Insurance - Part 2
There are many different types of medical insurance coverage available. Some providers carry more than one type of insurance plan while others specialize in a certain one.
2 main groups of health insurance types exist: managed care plans and indemnity plans.
Managed Care Plans
All managed care plans include contracts between insurance companies and a network of physicians, specialists, hospitals, etc. Special incentives get policy holders to stay within the insurance company's network of healthcare professionals.
There are 3 types of Managed Care Plans:
Preferred Provider Organizations (PPOs)
Preferred Provider Organizations contract business to certain physicians and hospitals in turn for cheaper services. Although the policy holder's out-of-pocket cost is fairly low, the charge to see a medical provider outside of the policy's network can be pricey. PPOs are somewhat flexible and will pay part of the cost if a policy holder makes arrangements to adventure outside of the preferred provider network.
Health Maintenance Organization (HMO)
Health Maintenance Organization Plans provide managed care in return for a payment made prior to the encounter, also known as a premium. As long as the premium is paid, a wide range of healthcare coverage is offered.
HMOs have a network of providers to choose from. They are not as flexible as other plans and require medical treatment to be completely within the network of healthcare providers. There are very few exceptions to the rule and in order to seek treatment from a specialist outside the policy's network, a referral from a primary care physician must be received.
Point of Service (POS) Plans
Point of Service plans also offer a wide range of coverage. PPOs include a network of healthcare providers but are a little more flexible about seeking outside treatment. The policy holder's primary physician handles their medical care and may refer them to a specialist.
There is no deductible and low cost co-pays if the network providers are utilized; however, the option to go to any provider seen fit by the policy holder is an option.
It may be beneficial to the policy holder pay a larger out-of-pocket fee so they may be treated by the physician of their choice. Otherwise, the insurance provider will not pay as much toward the medical costs and there is a substantial increase in out-of-pocket expenses.
Indemnity Plans
Indemnity plans (also known as fee-for-service plans), reimburse policy holders for a set portion of the medical encounters, regardless of which provider they seek treatment from.
In choosing an indemnity plan, policy holders may decide which physicians to see with no referrals required. The plan only offers reimbursement for a certain amount and may require services to be paid for up front. In most cases there is an annual deductible to be met before the insurance provider will pay anything toward medical costs.
An indemnity plan determines reimbursement either by paying for actual charges regardless of the cost or by paying a percentage (usually 80%) of the actual charges.
Co-payments may apply.
Medicare
Medicare is a national program consisting of four parts:
- Part A: hospital benefits
- Part B: edical and preventive care benefits
- Part C: Medicare Plus Choice Program
- Part D: Prescription Drug Program
In most cases individuals to be covered by Medicare must be at least 65 years in age; however it is extended to people with certain disabilities.
Individuals who meet the requirements of Medicare are eligible for hospital coverage (Part A) for no cost and can elect to receive supplementary medical coverage (Part B) for an annual fee. Those who are not eligible for Part A at the age of 65 may still pay for Part B.
Plans available under the Medicare Plus Choice Program (Part C) can include: HMO's, POS's, PSO's, PPO's, PFFS's, etc.
Medicare Part D, prescription drug program, provides seniors and disabled individuals with a prescription drug plan that covers prescription drugs used for conditions not already covered by parts A and B.
Medicaid
Medicaid, known as Medi-Cal in California, is a program set forth by the states to assist certain low-income individuals and families.
Medicaid operated programs include: a Maternal and Child Health Program, Medicaid Qualified Medicare Beneficiary Program, Specified Low-Income Medicare Beneficiary Program, and Qualifying Individuals Program.
The Maternal and Child Health Program insures children from low-income families who fall below 20% of the federal poverty level.
Medicaid Qualified Medicare Beneficiary Program (MQMB) assists individuals who are aged and disabled, receive Medicare, and have annual incomes lower than the federal poverty level. States provide premiums for Medicare Part B as well as any deductibles and coinsurance amounts.
Specified Low-Income Medicare Beneficiary Programs were established for elderly people who have an income 20% above the federal poverty level. The premium for Medicare Part B is completely covered; however, the patient must pay any deductible and copayments for non-covered items.
The Qualifying Individuals (QI) program covers individuals whose income is at least 135% but less than 175% of the federal poverty level. Medicare part B premiums are paid for under this program.
Combined Insurance Plans
Combined insurance plans are designed to fill in the gaps of chief insurance policies.
For example, Aflac pays the policy holder directly instead of paying the physician. It enables them to pay bills, deductibles, co-payments, buy groceries, etc.
There are many different types of insurance plans to combine with a primary plan; including, but not limited to: dental, vision, disability, and long term care. Each type covers different situations. Some are costly while others are more cost efficient.
Healthcare Plan Example
The following plan is for a 30 year old man (single) who is a non-smoker.
Wellmark Blue Cross Blue Shield of Iowa - Alliance Select 1250 enhanced.
Inpatient Services Coverage: accidental injury care, anesthetics and their administration, blood administration, chemotherapy, pregnancy complications, corneal grafts, dietary services, dressing and casts, emergency room care, general nursing care, hemodialysis, inhalation therapy, IV's and solutions, medical and surgical supplies, occupational therapy for the upper extremities, physical therapy, rehabilitative speech therapy, room and meals, and special care units.
Outpatient Services Coverage: accidental injury care, anesthetics and their administration, chemotherapy, pregnancy complications, corneal grafts, dressing and casts, emergency room care, hemodialysis, inhalation therapy, IV's and solutions, medical and surgical supplies, occupational therapy for the upper extremities, physical therapy, rehabilitative speech therapy, room and meals, and special care units.
Monthly Premium: $196.50/month
Deductible: $1250
Copay:
Alliance Select Providers: 20%
Non-Alliance Select Providers: 40%
Office services - you pay:
Alliance Select Providers: 20% copay; deductible waived
Non- Alliance Select Providers: Deductible; followed by 40% coinsurance
Emergency Room copay: $150 unless admitted as inpatient then all is waived
Preventive care:
Alliance Select Providers: covered -all deductibles, coinsurance, and copayments waived
Non-Alliance Select Providers: Covered all deductibles, coinsurance, & copayments apply
Prescription drugs
Tier 1) (generics) greater of $8 or 25%
Tier 2) (preferred brand names) greater of $30 or 25%
Tier 3) (non-preferred brand names) greater of $45 or 25%
Contraceptives - covered; all copays and deductibles waived on tier 1 and 2 contraceptives
Chiropractic care - covered
Mental health and chemical dependency treatment - not covered
Blue Card (out of state) Coverage - yes
Dental coverage (optional) - available
$500 Supplemental Accident coverage (optional) - available
Health insurance claims
The minimum information required for a claim submission is the patient information as well as the 5 W's: who, what, where, when, and why.
Who: provider name and identifying number who performed the services
When: date of service (DOS)
Where: place of service (POS)
What: services and procedures using procedure codes and appropriate modifiers
Why: diagnoses using diagnostic codes
Most of this information needed for a claim can be located on the encounter form attached to the patient's health record during the visit. However, some additional information may be needed to complete the insurance claim. It is the billing specialist's responsibility to complete the required information.
An example of a claim
John Doe fell off his motorcycle when turning too sharply and hit his head on the sidewalk. He was wearing a helmet. Upon examination and x-rays, Dr. Larry Smith discovered there to be a fracture of the C1 and C2 vertebrae.
The patient's head was prepped and draped in the usual manner. The halo apparatus was applied with screws and four-pins. Then the vest was applied. John Doe was then discharged to recovery where more x-rays are scheduled to be taken. He will be released later in the evening.
Patient information:
Name: John Doe
SS#: 555-55-5555
DOB: 12/12/1982
Address: 5432 N. McDowell Blvd. Petaluma, NY 12345
Insurance Information: Blue Cross Blue Shield. Policy Number: 45621A
Who: Dr. Larry Smith
When: 9/17/2012 @ 11:00 a.m.
Where: Outpatient, Petaluma Hospital - 456 W. Brady St. Petaluma, NY 12345
What: 20661 (procedures - CPT codes)
Why: V71.4, 805.01, 805.02, E816.2 (diagnoses - ICD-9-CM codes)
Outpatient claims are submitted with the CMS 1500 form.
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