2. Evolution of Health Insurance
• Historically, health insurance provided coverage
for catastrophic illness and injury
• It has evolved into coverage for preventative care
and services
• The traditional type of insurance is fee-for-
service care
3. Managed Care Delivery Systems
• This system integrates the delivery and payment
of health care by contracting with select
providers for a reduced cost
• The goal is to provide health care with an
emphasis on prevention
4. Types of Insurance Plans
• Commercial health insurance plans
• Indemnity-type insurance
• Health maintenance organizations (HMOs)
• Preferred Provider Organization (PPO)
•
• Consumer-driven health plans (CDHPs)
• Government health plans
5. HMOs
• Provide comprehensive health care with a focus
on preventative care
▫ Annual physicals and PAP tests, well-child care
• Members choose a Primary Care Provider (PCP)
to oversee medical care
▫ PCP refers to a specialist, if needed
6. PPO, POS, IPA
▫ Preferred provider organization (PPO)
Members must select a PCP
Network of providers that provide services to members at
a discounted rate (in-network)
Members pay more out of pocket for out-of-network
providers
▫ Point-of-service (POS) plans
Members do not select a PCP and can self-refer to
specialist
▫ Independent practice associations (IPAs)
Providers who practice in their own offices with their own
staff
7. Consumer Driven Health Plans:DHPs
• Health savings account (HSA)
▫ Must be paired with a qualified health plan
• Health reimbursement account (HRA)
▫ Employers contribute to HRA (not employees)
• Flexible spending account (FSA)
▫ Employees contribute to FSA
▫ Can pay for health insurance premiums, qualified
medical expenses, dependent expenses
8. CDHP’s
• Flexible spending account (FSA)
▫ Components
Health insurance premiums
Qualified medical expenses
Dependent care expenses
▫ Funded by the employee’s pretax dollars
▫ “Use it or lose it” plan
10. Medicare
• Created by the Social Security Act in 1965
– Administered by the Centers for Medicare and
Medicaid Services (CMS)
• Who is covered?
– People over age 65 meeting eligibility
requirements and have filed for Medicare
– People who are disabled, receive Social Security
benefits, or are in end-stage renal disease
12. Medicare
• Part B
– Other medical expenses, including office visits
• X-ray and laboratory services
• Initial Preventive Physical Exam
• Part C
– Enables beneficiaries to select a managed care
plan as their primary coverage
• Part D
– Coverage for generic and brand-name drugs
13. Medicare and Claims Processing
• Always keep up-to-date with Medicare
requirements
▫ Must use CMS-1500 form
▫ Must submit Medicare claims electronically
• Reimbursement to providers
▫ Medicare pays 80% of allowed amount after the
deductible is satisfied
▫ 20% is paid by patient, or supplemental insurance
14. Medical Necessity
• Medicare only reimburses services or supplies
deemed reasonable and necessary for the
diagnosis
• Advance Beneficiary Notices (ABN)
▫ If a provider performs a service not covered by
Medicare, an ABN is completed
▫ Must be signed by patient prior to procedure
15. Medicaid
• Health insurance for limited or low-income
individuals
– Must use participating provider
• Funded by both state and federal governments
– Eligibility requirements and benefits vary by state
– Medicaid cards are issued each month
– Always verify current coverage prior to visit
16. Workers’ Compensation
• State laws which cover employees who are
injured while working or as a result of work
• Benefits
– Medical treatment in or out of a hospital
– Temporary disability: may receive weekly cash
benefits in addition to medical care
– Permanent disability: weekly or monthly benefits,
or a lump sum settlement
– Payments to dependents for fatal injuries
17. TriCare
• Beneficiaries
▫ Active service personnel and their dependents
▫ Retired active service personnel and their
dependents
▫ Dependents of service personnel who died in
active duty
18. CHAMPVA:
Civilian Health and Medical Program of the Veterans’ Administration
• Beneficiaries
▫ Spouses and children of permanently disabled
veterans
▫ Spouses and children of veterans who died as a
result of service
19. Patients with No Insurance
• Classified as self-pay patients
• These patients are expected to pay at the time of
service
20. Primary and Secondary Insurance
• Patients may have more than one insurance plan
• Charges are filed first with the primary carrier,
and then secondary
▫ Coordination of benefits
• Dependent children and the Birthday rule
21. Primary and Secondary Insurance
• Medicare and supplemental insurance
▫ Many Medicare patients have supplemental or
Medigap insurance
▫ This covers the deductible and 20% coinsurance
• Medicare as secondary insurance
▫ When a person qualifies for Medicare but is still
employed
22. Verifying Insurance Coverage
• Always ask patients for current insurance card
• Make a copy of the card, or scan into the EMR
• Verify coverage online or over the phone
24. Fee Schedules
• Providers enrolled in an insurance carrier’s
network agrees to treat subscribers for an agreed
upon (discounted) rate for services
• Accepting assignment: when providers accept
the allowed amount as the rate for services
▫ Disallowed amounts are written off as
adjustments
