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Chapter 13 Blue Cross Blue Shield . Introduction. Blue Cross and Blue Shield Perhaps the best known plans of medical insurance in the United States. Origin of Blue Cross Blue Shield. Blue Cross,1929 Baylor University hospital in Dallas, Texas

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chapter 13 blue cross blue shield
Chapter 13

Blue Cross Blue Shield

  • Blue Cross and Blue Shield
    • Perhaps the best known plans of medical insurance in the United States
origin of blue cross blue shield
Origin of Blue Cross Blue Shield
  • Blue Cross,1929
    • Baylor University hospital in Dallas, Texas
    • Offered teachers in the Dallas school district a plan of 21 days of hospitalization every year for the holder and their dependents in exchange for $6 annual premium (prepaid health plan)
origin of blue shield
Origin of Blue Shield
  • Began as a resolution passed by the House of Delegates at an American Medical Association meeting in 1938
  • Resolution supported the concept of voluntary health insurance that would encourage physicians to cooperate with prepaid health care plans.
origin of blue shield1
Origin of Blue Shield
  • First known plan was formed in Palo Alto, California, in 1939.
  • Stipulated that physicians’ fees for covered medical services would be paid in full by the plan if subscriber earned less than $3,000 a year
origin of blue shield2
Origin of Blue Shield
  • When subscriber earned more than $3,000 a year, a small percentage of physicians’ fee would be paid by the patient.
  • Forerunner of today’s industry-wide required patient coinsurance or co-pay.
joint ventures
Joint Ventures
  • Blue Cross originally covered only hospital bills.
  • Blue Shield only covered fees for physician services.
    • Over the years Blue Cross and Blue Shield have increased their coverage to include almost all health care services.
bcbs association
BCBS Association
  • Located in Chicago, Illinois, and performs the following functions:
    • Establishes standards for new plans and programs.
    • Assists local plans with enrollment activities, national advertising, public education, professional relations, and statistical and research activities.
bcbs association1
BCBS Association
  • Serves as the primary contractor for processing Medicare hospital, hospice, and home health care claims.
  • Coordinates nationwide BCBS plans
changing business structure
Changing Business Structure
  • Mergers occurred among BCBS regional corporations (within a state or with neighboring states) and names no longer had regional designations.
  • BlueCross BlueShield Association no longer required plans to be nonprofit (as of 1994).
changing business structure1
Changing Business Structure
  • Regional corporations needed additional capital to compete with commercial for-profit insurance carriers and petitioned their respective state legislatures to allow conversion from their nonprofit status to for-profit corporations.
changing business structure2
Changing Business Structure
  • Nonprofit corporations
    • Charitable, educational, civic, or humanitarian organizations whose profits are returned to the program of corporation rather than distributed to shareholders and officers of the corporation
changing business structure3
Changing Business Structure
  • For-profit corporations
    • Pay taxes on profits generated by corporations’ for-profit enterprises and pay dividends to shareholders on after-tax profits.
bcbs distinctive features
BCBS Distinctive Features
  • Maintain negotiated contracts with providers of care.
bcbs distinctive features1
BCBS Distinctive Features
  • In exchange, BCBS agrees to perform the following services:
    • Make prompt, direct payment of claims.
    • Maintain regional professional representatives to assist participating providers with claim problems.
bcbs distinctive features2
BCBS Distinctive Features
  • Provide educational seminars, workshops, billing manuals, and newsletters to keep participating providers up-to-date on BCBS insurance procedures.
bcbs distinctive features3
BCBS Distinctive Features

BCBS plans, in exchange for tax relief for their nonprofit status, are forbidden by state law from canceling coverage for an individual because he or she is in poor health or BCBS payments to providers have far exceeded the average.

bcbs distinctive features4
BCBS Distinctive Features
  • Individuals can only be dis-enrolled for the following reasons:
    • When premiums are not paid.
    • If the plan can prove that fraudulent statements were made on the application for coverage
bcbs distinctive features5
BCBS Distinctive Features
  • BCBS plans must obtain approval from their respective state insurance commissioners for any rate increases and/or benefit changes that affect BCBS members within the state.
bcbs distinctive features6
BCBS Distinctive Features
  • BCBS plans must allow conversion from group to individual coverage and guarantee the transferability of membership from one local plan to another when a change in residency moves a policyholder into an area served by a different BCBS corporation.
bcbs participating providers
BCBS Participating Providers
  • Submit insurance claims for all BCBS subscribers.
  • Provide access to the Provider Relations Department, which assists the PAR provider in resolving claims or payment problems
bcbs corporation
BCBS Corporation
  • Write off the difference or balance between the amount charged by the provider and approved fee established by the insurer.
  • Bill patients for only the deductible and co-pay/coinsurance amounts that are based on BCBS-allowed fees.
bcbs corporation1
BCBS Corporation
  • In return, BCBS corporations agree to
    • Make direct payments to PARs.
    • Conduct regular training sessions for PAR billing staff.
    • Provide free billing manuals and PAR newsletters.
bcbs corporation2
BCBS Corporation
  • Maintain a provider representative department to assist with billing/payment problems.
  • Publish the name, address, and specialty of all PARs in a directory distributed to BCBS subscribers and PARs.
preferred providers
Preferred Providers
  • Required to adhere to managed care provisions
  • Agrees to accept the PPN allowed rate, which is generally 10 percent lower than the PAR allowed rate
  • Further agrees to abide by all cost-containment, utilization, and quality assurance provisions of the program
preferred providers1
Preferred Providers
  • The “Blues” agree to notify PPN providers in writing of new employer groups and hospitals that have entered into PPN contracts and to maintain a PPN directory.
non participating providers
Non Participating Providers
  • Have not signed participating provider contracts, and they expect to be paid the full fee charged for services rendered
non participating providers1
Non Participating Providers
  • Patient may be asked to pay the provider in full and then be reimbursed by BCBS the allowed fee for each service minus the patient’s deductible and co-payment obligations.
non participating providers2
Non Participating Providers
  • Even when the provider agrees to file the claim for the patient, insurance company sends payment for claim directly to the patient and not to provider.
  • Cross Blue Shield coverage includes the following programs:
    • Fee-for-service
    • Indemnity
  • Managed care plans
    • Coordinated home health and hospice care
    • Exclusive provider organization
    • Health maintenance organization
    • Outpatient pretreatment authorization plan
    • Point-of-services plan
    • Preferred provider opinion
    • Second surgical opinion
  • Federal Employee Program
  • Medicare supplemental plans
  • Healthcare Anywhere
fee for service
  • Fee-for-service is selected by two different kinds of people:
    • Individuals who do not have access to a group plan
    • Small business employers
fee for service1
  • Those two contracts have two types of different coverage within one policy:
    • Basic coverage
    • Major medical benefits
fee for service2

– Assistant surgeon fees

– Obstetric care

– Intensive care

– Newborn care

– Chemotherapy for cancer

fee for service3
  • BCBS major medical coverage includes the following in addition to the basic:
    • Office visits
    • Outpatient nonsurgical treatment
    • Physical and occupational therapy
fee for service4

– Purchase of durable medical equipment

– Mental health visits

– Allergy testing and injections

– Prescription drugs

– Private duty nursing

– Dental care required as a result of a covered accidental injury

special accidental injury rider
Special Accidental Injury Rider
  • Covers 100 percent of nonsurgical care sought and rendered within 24 to 72 hours of the accidental injury
medical emergency care rider
Medical Emergency Care Rider
  • Covers immediate treatment sought and received for sudden, severe, and unexpected conditions that if not treated would place patient’s health in permanent jeopardy or cause permanent impairment or dysfunction of an organ or body part
medical emergency care rider1
Medical Emergency Care Rider
  • Chronic or subacute conditions do not qualify for treatment under the medical emergency rider unless the symptoms suddenly become acute and require immediate medical attention.
indemnity coverage
Indemnity Coverage
  • Choice and flexibility to receive full range of benefits
  • Freedom to use any licensed provider
  • Coverage includes hospital-only or comprehensive hospital and medical coverage.
indemnity coverage1
Indemnity Coverage
  • Outpatient code editor (OCE) software is used in conjunction with the APC grouper to identify Medicare claims edits and assign APC groups to reported codes
managed care plans
Managed Care Plans
  • Health care delivery system that provides health care and controls costs through a network of physicians, hospitals, and other health care providers
managed care plans1
Managed Care Plans
  • Coordinated home health and hospice care program allow patients with this option to elect an alternative to the acute care setting.
    • Patients’ physician must file a treatment plan with the case manager assigned to review and coordinate the case.
managed care plans2
Managed Care Plans
  • All authorized services must be rendered by personnel from a licensed home health agency or approved hospice facility.
managed care plans3
Managed Care Plans
  • An EPO (exclusive provider organization) organization that provides health care services through a network of doctors, hospitals, and other health care providers
    • Members are not required to select a primary care provider (PCP).
managed care plans4
Managed Care Plans
  • Members do not need a referral to see a specialist.
  • All services must be obtained from EPO providers only.
  • If care received from providers not part of the EPO, patient must pay charges in full
managed care plans5
Managed Care Plans
  • Health maintenance organization (HMO)
    • Plan that assumes or shares the financial and health care delivery risks associated with providing comprehensive medical services to subscribers in return for a fixed, prepaid fee.
managed care plans6
Managed Care Plans
  • Outpatient pretreatment authorization plan (OPAP)
    • Requires preauthorization of outpatient physical, occupational, and speech therapy services
    • Requires periodic treatment/progress plans to be filed
managed care plans7
Managed Care Plans
  • Requirement for the delivery of certain health care services and is issued prior to the provision of services
managed care plans8
Managed Care Plans
  • Point-of-service plan (POS)
    • Allows subscribers to choose, at the time medical services are needed, whether they will go to a provider within the plan’s network or outside the network
    • When subscribers go outside the network to seek care, out-of-pocket expenses and co-payments generally increase.
managed care plans9
Managed Care Plans
  • Provide a full range of inpatient and outpatient services, and subscribers choose a primary care provider (PCP) from the payer’s PCP list
managed care plans10
Managed Care Plans
  • Preferred Provider Organization (PPO)
    • Offers discounted health care services to subscribers who use designated health care providers (who contract with the PPO)
    • Also provides coverage for services rendered by health care providers who are not part of the PPO network
managed care plans11
Managed Care Plans
  • Subscriber (member) is responsible for remaining within the network of PPO providers and must request referrals to PPO specialists whenever possible.
  • Subscriber must also adhere to the managed care requirements of the PPO policy.
managed care plans12
Managed Care Plans
  • Failure to adhere to requirements will result in denial of the surgical claim or reduced payment to the provider.
  • Patient is responsible for the difference or balance between the reduced payment and the normal PPO allowed rate.
managed care plans13
Managed Care Plans
  • Second Surgical Opinion
    • Necessary when a patient is considering elective, nonemergency surgical care
    • Initial surgical recommendation must be made by a physician qualified to perform the anticipated surgery.
    • If a second surgical opinion is not obtained prior to surgery, patients’ out-of-pocket expenses may be greatly increased.
federal employee program
Federal Employee Program
  • An employer-sponsored health benefits program established by an Act of Congress in 1959
  • FEP is underwritten and administered by participating insurance plans (e.g., Blue Cross and Blue Shield plans) that are called local plans.
federal employee program1
Federal Employee Program
  • FEP cards contain the phrase Government-Wide Service Benefit Plan under the BCBS trademark.
federal employee program2
Federal Employee Program
  • Four enrollment options
    • 101—Individual, High Option Plan
    • 102—Family, High Option Plan
    • 104—Individual Standard (Low) Option Plan
    • 105—Family Standard (Low) Option Plan
federal employee program3
Federal Employee Program
  • Considered a managed fee-for-service program and has generally operated as a PPO plan
medicare supplemental plans
Medicare Supplemental Plans
  • Enhance the Medicare program by paying for Medicare deductibles and co-payments.
  • Also known as Medigap plans
health care anywhere
Health Care Anywhere
  • BlueCard® Program enables such members obtaining health care services while traveling or living in another BCBS plan’s service area to receive the benefits of their home plan contract and access local provider networks.
health care anywhere1
Health Care Anywhere

The insurance claim is submitted to the BC/BS plan in the state where services were rendered. That local plan forwards the claim to the home plan for adjudication.

health care anywhere2
Health Care Anywhere
  • Away From Home Care® Program allows the participating BCBS plan members who are temporarily residing outside of their home HMO service area for at least 90 days to temporarily enroll with a local HMO.
health care anywhere3
Health Care Anywhere
  • BlueWorldwideExpat provides global medical coverage for active employees and their dependents who spend more than six months outside the United States.
billing notes
Billing Notes
  • Claims processing
    • BCBS plans process their own claims.
  • Deadline for filing claims
    • Customarily one year from the date of service, unless specified in subscriber’s or provider’s contract
  • Forms used
    • Most BCBS currently accept CMS-1500 claim.
billing notes1
Billing Notes
  • Inpatient and outpatient coverage
    • Many plans require second surgical opinions and prior authorization for elective hospitalizations.
billing notes2
Billing Notes
  • Deductible
    • Look up in the billing manual or call the computerized phone bank for eligibility for that patient.
billing notes3
Billing Notes
  • Co-payment/Coinsurance
    • Most common coinsurance amounts are 20 percent and 25 percent.
    • Some may go as high as 50 percent for mental health services.
billing notes4
Billing Notes
  • Allowable fee determination
    • Many use the physician fee schedule to determine the allowed fees for each procedure.
    • Others use a usual, customary, and reasonable (UCR) basis.
      • Amount commonly charged for a particular medical service by providers within a particular geographic region
billing notes5
Billing Notes
  • Participating providers must accept the allowable rate on all covered services and write off or adjust the difference or balance between the plan determined allowed amount and the amount billed.
  • Patients are responsible for any deductible and co-pay/coinsurance as well as for full charges for uncovered services.
billing notes6
Billing Notes
  • Assignment of benefits
    • Payment is made directly to the provider by BCBS.
special handing
Special Handing
  • Make a habit and priority to have a current copy of the front and back of all patient ID cards in the patient’s file.
  • Patients with Blue Cross who have more than one insurance policy
    • Must be billed directly to the plan from which the program originated
special handing1
Special Handing
  • Non-PARs must bill the patient’s plan for all non-national account patients with BlueCards.
  • Rebill claims not paid within 30 days.
  • Some mental health claims are forwarded to a third-party administrator.
primary claim status is determined when
Primary Claim Status is determined when:
  • Covered by only one BCBS policy.
  • Covered by both a government-sponsored plan and employer-sponsored BCBS plan.
  • Covered by a non-BCBS plan that is not employer-sponsored.
primary claim status is determined when1
Primary Claim Status Is Determined When
  • Designated as the policyholder of one employer-sponsored plan and also listed as a dependent on another employer-sponsored plan.
secondary coverage
Secondary Coverage
  • Modifications are made to the CMS-1500 claim when patients are covered by primary and secondary or supplemental health plans.
  • When the same BCBS payer issues the primary and secondary or supplemental policies, submit just one CMS-1500 claim.
secondary coverage1
Secondary Coverage
  • If BCBS payers for the primary and secondary or supplemental policies are different
    • Submit a CMS-1500 claim to the primary payer.
secondary coverage2
Secondary Coverage
  • After the primary payer processes the claim, generate a second CMS-1500 claim to send to the secondary or supplemental payer and include a copy of the primary payer’s remittance advice.