CHAPTER 8

1. Private Payers / ACA Plans CHAPTER 8

2. See the ten-step Revenue Cycle figure (at the beginning of the chapter). • This chapter focuses on the following step: • Preregister patients • Establish financial responsibility • Check in patients • Review coding compliance • Review billing compliance • Check out patients • Prepare and transmit claims • Monitor payer adjudication • Generate patient statements • Follow up payments and collections Chapter 8: Private Payers/ACA Plans

3. When you finish this chapter, you will be able to: 8.1 Describe the major features of group health plans regarding eligibility, portability, and required coverage. 8.2 Discuss provider payment under the various private payer plans. 8.3 Contrast health reimbursement accounts, health savings accounts, and flexible savings (spending) accounts. 8.4 Discuss the major private payers. Learning Outcomes (1)

4. When you finish this chapter, you will be able to: 8.5 Compare the four ACA metal plans. 8.6 Analyze the purpose of the five main parts of participation contracts. 8.7 Describe the information needed to collect copayments and bill for surgical procedures under contracted plans. 8.8 Discuss the use of plan summary grids. 8.9 Prepare accurate private payer claims. 8.10 Explain how to manage billing for capitated services. Learning Outcomes (2)

5. Key Terms (1) • administrative services only (ASO) • BlueCard • BlueCross BlueShield Association (BCBS) • carve out • Consolidated Omnibus Budget Reconciliation Act (COBRA) • credentialing • discounted fee-for-service • elective surgery • Employee Retirement Income Security Act (ERISA) of 1974 • episode-of-care (EOC) option • essential health benefits (EHB) • family deductible • Federal Employees Health Benefits (FEHB) program

6. Key Terms (2) • Flexible Blue • flexible savings (spending) account (FSA) • formulary • group health plan (GHP) • health insurance exchange (HIE) • 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 • medical home model • metal plans

7. Key Terms (3) • monthly enrollment list • narrow network • open enrollment period • parity • pay-for-performance (P4P) • plan summary grid • precertification • repricer • rider • Section 125 cafeteria plan • silent PPO • stop-loss provision • subcapitation • Summary Plan Description (SPD) • third-party claims administrator (TPA) • tiered network • utilization review • utilization review organization (URO) • waiting period

8. People not covered by entitlement programs are often covered by private insurance • Employer-sponsored medical insurance • Group health plan (GHP)—plan of an employer or employee organization to provide healthcare to employees, former employees, or their families • Rider—document modifying an insurance contract • Called “options”; can be purchased for additional benefits such as vision, dental, acupuncture, etc. • 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 8.1 Group Health Plans (1)

9. Federal Employees Health Benefits (FEHBP) Program—covers employees and retirees (and their families) of the federal government • 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 8.1 Group Health Plans (2)

10. Self-funded health plans (continued) • Third-party claims administrator (TPA)—business associate of health plan • Administrative services only (ASO)—contract under which a third-party administrator or insurer provides administrative services to an employer for a fixed fee per employee 8.1 Group Health Plans (3)

11. Features of Group Health Plans • 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 8.1 Group Health Plans (4)

12. Features of Group Health Plans • Eligibility for benefits (continued): • Individual deductible—fixed amount that must be met periodically by each individual of an insured/dependent group before benefits begin • Family deductible—fixed, periodic amount that must be met by the combined payments of an insured/dependent group before benefits begin • Tiered network—network system that reimburses more for quality, cost-effective providers • Formulary—list of a plan’s approved drugs and their proper dosages 8.1 Group Health Plans (5)

13. Features of Group Health Plans (continued) • Portability and required coverage: • Consolidated Omnibus Budget Reconciliation Act (COBRA)—law requiring employers with more than twenty employees to allow terminated employees to pay for coverage for eighteen months • Parity—equality with medical/surgical benefits (for coverage of other treatments or services such as mental health benefits) • Narrow network—payer network of physicians and hospitals with limited choices for patients 8.1 Group Health Plans (6)

14. Under preferred provider organizations (PPOs), providers are paid under a discounted fee-for-service structure—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 Subcapitation—arrangement by which a capitated provider prepays an ancillary provider 8.2 Types of Private Payers (1)

15. Episode-of-care (EOC) option—flat payment by a health plan to a provider for a defined set of services • Independent (or individual) practice association (IPA)—HMO in which physicians are self-employed and provide services to members and nonmembers • Medical home model—care plans that emphasize primary care with coordinated care involving communications among the patient’s physicians • improve patient care by rewarding primary care physicians for coordinating treatments 8.2 Types of Private Payers (2)

16. CDHPs combine two components: • 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 • One or more tax-preferred savings accounts that the patient directs 8.3 Consumer-Driven Health Plans (1)

17. One of three types of CDHP funding options may be combined with HDHPs: • Health reimbursement account (HRA)—consumer-driven health plan funding option that requires an employer to set aside an annual amount for healthcare costs • Health savings account (HSA)—consumer-driven health plan funding option under which funds are set aside to pay for certain healthcare costs • Flexible savings (spending) account (FSA)—consumer-driven health plan funding option that has employer and employee contributions 8.3 Consumer-Driven Health Plans (2)

18. The major national payers (in addition to BCBS): • Anthem • UnitedHealth Group • Aetna • CIGNA Health Care • Kaiser Permanente • Humana, Inc. • Credentialing—periodic verification that a provider or facility meets professional standards and is qualified to be reimbursed 8.4 Major Private Payers and the BlueCross BlueShield Association (1)

19. BlueCross BlueShield Association (BCBS)—national healthcare licensing association • Organization of independent companies founded in the 1930s 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 and payments for their treating providers • Host plan—participating provider’s local BCBS plan • Home plan—BCBS plan in the subscriber’s community • Flexible Blue—BCBS consumer-driven health plan 8.4 Major Private Payers and the BlueCross BlueShield Association (2)

20. Goal of the ACA—to reduce the number of uninsured citizens and legal residents by providing affordable individual health plans (IHP) • Individual health plan (IHP)—medical insurance plan purchased by an individual • Health insurance exchange (HIE)—government-regulated marketplace offering insurance plans to individuals • Private health insurance exchanges can offer IHPs 8.5 Affordable Care Act (ACA) Plans (1)

21. Metal plans—health plans created by the ACA named after different types of metals according to the services they cover (gold, etc.) • Essential health benefits (EHB)—required benefits that must be offered by metal plans as well as some other insurance plans (examples—maternity care, laboratory tests, and emergency services) • Exemptions to ACA requirements include income and hardship 8.5 Affordable Care Act (ACA) Plans (2)

22. Participation contracts have five main parts: • Introductory section—names of parties to the agreement, contract definitions, and the payer • Contract purpose and covered medical services—type and purpose of the plan and medical services it covers for enrollees • Physician’s responsibilities as a participating provider • The plan’s responsibilities toward the participating provider • Compensation and billing guidelines—fees, billing rules, filing deadlines, patients’ financial responsibilities, and coordination of benefits 8.6 Participation Contracts (1)

23. Utilization review—payer’s process for determining medical necessity Stop-loss provision—protection against large losses or severely adverse claims experience 8.6 Participation Contracts (2)

24. Most plans require copayments to be subtracted from the usual fees that are billed to those 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 8.7 Interpreting Compensation andBilling Guidelines (1)

25. Silent PPO—an agreement that an MCO can purchase a list of participating providers and pay 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 8.7 Interpreting Compensation andBilling Guidelines (2)

26. Plan summary grid—quick-reference table for health plans • Summarizes key items from the contract • Provides a shortcut reference for the billing and reimbursement process (including global procedure follow-up times, preauthorization requirements, etc.) • Includes information about collecting payments at the time of service and completing claims 8.8 Private Payer Billing Management:Plan Summary Grids

27. The first seven steps of the revenue cycle: • Step 1 – Preregister patients: • Guidelines apply to the preregistration process for private health plan patients when basic demographic and insurance information is collected • Step 2 – Establish financial responsibility for visit: • Verify insurance eligibility and coverage with the payer for the plan, coordinate benefits, meet preauthorization requirements, and verify any out-of-network plans • Repricer—vendor that sets up fee schedules and discounts, and processes a payer’s out-of-network claims • Step 3 – Check in patients: • Copayments are collected before the encounter 8.9 Preparing Correct Claims (1)

28. The first seven steps of the revenue cycle (continued): • Step 4 – Review coding compliance: Coding is checked, verifying the use of correct codes as of the date of service that show medical necessity • Step 5 – Check billing compliance: Billing compliance with the plan’s rules is checked • Step 6 – Check out patients: Payments after an encounter, such as a deductible, charges for noncovered services, and balances due, are collected • Step 7 – Prepare and transmit claims: Claims are completed, checked, and transmitted in accordance with the payer’s billing and claims guidelines 8.9 Preparing Correct Claims (2)

29. Under capitated contracts, medical insurance specialists verify patient eligibility with the plan because enrollment data are not always up-to-date 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 *end of presentation* 8.10 Capitation Management