Understanding Health Insurance

Health Insurance
A contract between a policyholder and a third-party payer or government program to reimburse the policyholder for all or a portion of the cost of medically necessary treatment or preventive care provided by healthcare professionals.
Group Health Insurance
Traditional healthcare coverage subsidized by employers and other organizations (e.g., labor unions, rural and consumer health cooperatives) whereby part or all of premium costs are paid for and/or discounted group rates are offered to eligible individuals.
Personal Health Record (PHR)
A web-based application that allows individuals to maintain and manage their health information (and that of others for whom they are authorized, such as family members) in a private, secure, and confidential environment.
Total Practice Management Software (TPMS)
Used to generate the EMR, automating the following medical practice funcitons; registering patients scheduling appointments, generating insurance claims and patient statements, processing payments from patients and third-party payers, and producing administrative and clinical reports.
Electronic Medical Record (EMR)
Has a more narrow focus (as compared with the EHR). The patient record created for a single medical practice and is generated using total practice management software (TPMS).
Federal Employees’ Compensation Act (FECA)
Replaced the 1908 workers’ compensation legislation, and civilian employees of the federal government were provided medical care, survivor’s benefits, and compensation for lost wages. Administered by the Office of Worker’s Compensation Programs (OWCP).
Self-insured (or self-funded)
employer-sponsored group health plans Allows large employers to assume the financial risk for providing healthcare benefits to employees. The employer does not pay a fixed premium to a health insurance payer, but establishes a trust fund (of employer and employee contributions) out of which claims are paid.
Civilian Health and Medical Program -Uniformed Services (CHAMPUS)
Designed as a benefit for dependents of personnel serving in the armed forces and uniformed branches of the Public Health Service and the National Oceanic and Atmospheric Administration. This program is now called TRICARE.
Medicaid (Title XIX of the SSA of 1965)
is a cost-sharing program between the federal and state governments to provide healthcare services to low-income Americans. (Originally administered by the Social and Rehabilitation Service [SRS]).
Medicare (Title XVIII of the SSA of 1965)
provides healthcare services to Americans over the age of 65. (Originally administered by the Social Security Administration).
Lifetime Maximum Amount
The maximum benefits payable to a health care participant.
Deductible
The amount for which the patient is financially responsible before an insurance policy provides payment.
Major Medical Insurance
Provides coverage for catastrophic or prolonged illnesses and injuries. Most of these program incorporate large deductibles and lifetime maximum amounts.
International Classification of Diseases (ICD)
A classification system used to collect data for statistical purposes.
World Health Organization (WHO)
Developed the International Classification of Diseases (ICD), a classification system used to collect data for statistical purposes.
Third-party Administrators An indirect result of the Taft-Hartly Act of 1947.
Administers healthcare plans and process claims, thus serving as a system of checks and balances for labor and management.
Hill-Burton Act
This provided federal grants for modernizing hospitals that had become obsolete because of a lack of capital investment during the Great Depression and WWII (1929-1945). In return for federal funds, facilities were required to provide services free or at reduced rates to patients unalble to pay for care.
Occupational Safety and Health Administration Act of 1970 (OSHA)
Designed to protect all employees against injuries from occupational hazards in the workplace.
Health Care Financing Administration (HCFA)
To combine healthcare financing and quality assurance programs into a single agency the HCFA was formed within the Department of Health and Human Services (DHHS). The Medicare and Medicaid programs were also transferred to the newly created agency. (HCFA is now called the Centers for Medicare and Medicaid Services or CMS.)
Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA)
Provides healthcare benefits for dependents of veterans rated as 100 percent permanently and totally disabled as a result of service-connected conditions, veterans who died as a result of service-connected conditions, and veterans who dies on duty with less and 30 days of active service.
Medicare Contracting Reform initiative (MCR)
Established to integrate the administration of Medicare Parts A and B fee-for-services benefits with new entities called Medicare administrative contractors (MACs)
Record Linkage Allows
patient information to be created at differnet locations accourding to a unique patient identifier or identificaton number.
American Recovery and Reinvestment Act of 2009 (ARRA)
Authorized an expenditure of $1.5 illion for grants for construction, renovation, and equipment, and for the acquisition of health information technology systems.
Electronic Health Record (EHR)
A global concept that includes the collection of patient information documented by a number of providers at different facilities regarding one patient.
Health Information Technology for Economic and Clinical Health Act (HITECH)
Included in the ARRA, this act ammended the Public Health Services Act to establish an Office of National Coordinator for Health Information Technology within HHS to improve healthcare quality, safety, and efficiency.
Problem-oriented Record (POR)
A systematic method of documentation that serves as the table of contents for the patient record. It consists of four components: Database, Problem List, Initial Plan, & Progress Notes (documented using the SOAP format). It includes the chief complaint, present conditions and diagnosis, social data; past, personal, medical, and social history, review of systems, physical examination, & baseline laboratory data.
Patient record (Medical record)
documents healthcare services provided to a patient, and healthcare providers are responsible for documenting and authenticating legible, complete, and timely entries, according to federal regulations and accreditation standards. Serves as a comunication tool for physicians and other patient care professionals, and assists in planning individual patient care and documenting a patients illness and treatment.
Continuity of Care
Involves documenting patient care services so that others who treat the patient have a source of information to assist with additional care and treatment.
Health Maintenance Organization Assistance Act of 1973
Authorized federal grants and loans to private organizations that wished to develop health maintenance organizations (HMOs).
Base period
Ususally covers 12 months and is divided into 4 consecutive quarters.
Universal health insurance
The goal of providing every individual with access to health coverage, regardless of the system implemented to achieve that goal.
Disability Insurance
Reimbursement for income lost as a result of a temporary or permanent illness or injury.
Socialized medicine
A type of single-payer system in which the government owns and operates healthcare facilities and providers (e.g., physicians) receive salaries. The VA healthcare program is a form of socialized medicine.
Liability Insurance
a policy that covers losses to a third party caused by the insured, by an object owned by the insured, or on the premises owned by the insured.
Single-payer Plan Centralized healthcare system
adopted by some Western nations (e.g., Canada, Great Britain) and funded by taxed. The government pays for each resident’s health care, which is considered a basic social service.
Medical care
The identification of disease and the provision of care and treatment such as that provided by members of the health care team to persons who are sick, injured, or concerned about their health status.
Public Health Insurance
Federal and state government health programs (e.g., Medicare, Medicaid, SCHIP, TRICARE) available to eligible individuals.
Subrogation
Subrogation The contractual right of a third-party payer to recover health care expenses from a liable party.
Individual Health Insurance
Private health insurance policy purchased by individuals or families who do not have access to group health insurance coverage. Applicants can be denied coverage, they can also be required to pay higher premiums due to age, gender, and/or pre-existing conditions.
Health Maintenance Organizations (HMOs)
Responsible for providing healthcare services to subscribers in a given geographic area for a fixed free.
Employee Retirement Income Security Act of 1974 (ERISA)
Mandated reporting and disclosure requirements for group life and health plans (including managed care plans), permitting large employers to self-insure employee healthcare benefits, and exempted large employers from taxes on health insurance premiums.
Copayment (Copay)
A provision in an insurance policy that requires the policyholder or patient to pay a specified dollar amount to a healthcare provider for each visit or medical service received.
Inpatient Rehabilitation Facilities Prospective Payment System (IRF PPS)
Implemented as a result of the BBA, utilizes information from a patient assessment instrument to classify patients into distinct groups based on clinical characteristics and expected resource needs.Separate payments are calculated for each group, including the application of case- and facility-level adjustments.
Coinsurance
The percentage of costs a patient shares with the heath plan. (Example: Plan pays 80%, patient pays 20%)
Quality Improvement Organizations (QIOs)
Performs utilization and quality control review of health care furnished, or to be furnished, to Medicare beneficiaries.
Omnibus Budget Reconciliation Act of 1981 (OBRA)
Federal legislation that expanded the Medicare and Medicaid programs.
Medicare Prescription Drug, Improvement, and Modernization Act (MMA)
Adds new prescription drug and preventive benefits and provides extra assistance to people with low incomes.
Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA)
Created Medicare risk programs, which allowed federally qualified HMOs and competitive medical plans that met specified Medicare requirements to provide Medicare-covered services under a risk contract.
Automobile Insurance Policy A
contract between an individual and an insurance company whereby the individual pays a premium and, in exchange, the insurance company agrees to pay for specific car-related financial losses during the term of the policy.
Prospective Payment System (PPS)
Issues a predetermined payment for services.
Inpatient Psychiatric Facility Prospective Payment System (IPF PPS)
Includes a patient classification system that reflects differences in patient resource use and costs; the new system replaces the cost-based system with a per diem IPF PPS. (Impacted approximately 1,800 inpatient psychiatric facilities, including freestanding psychiatric hospitals and certified psychiatric units in general acute care hospitals)
Per Diem Basis
The method by which issued payments are calculated based on daily rates.
Consumer-driven health plans
Introduced as a way to encourage individuals to locate the best healthcare at the lowest possible price with the goal of holding down healthcare costs.Organized into three categories.
1) Employer-paid high-deductible insurance plans with special health spending accounts to be used by employees to cover diductibles and other medical costs when covered amounts are exceeded.
2) Defined contribution plans, which provide a selection of insurance options; employees pay the difference between what the employer pays and the actual cost of the plan they select.
3) After-tax savings accounts, which combine a traditional health insurance paln for major medical expenses with a savings account that the employee uses to pay for routine care.
Diagnosis-related Groups (DRGs)
PPS implemented in 1983 that reimburses hospitals for inpatient stays.
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA)
Requires implementation of a $400 billion prescription drug benefit, improved Medicare Advantage benefits, faster Medicare appeals decisions, and more.
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)
Allows employees to continue healthcare coverage beyond the benefit termination date.
Outpatient Prospective Payment System (OPPS)
Implemented for billing of hospital-based Medicare outpatient claims. Uses Ambulatory Payment Classifications to calculate reimbursements.
CHAMPUS Reform Initiative (CRI)
Resulted in new program..TRICARE..which includes options such as TRICARE Prime, TRICARE Extra, and TRICARE Standard.
Financial Services Modernization Act (or Gramm-Leach-Bliley Act)
Prohibits sharing of medical information among health insurers and other financial institution for use in making credit decisions.
Clinical Laboratory Improvement Act (CLIA)
Established quality standards for all laboratory testing to ensure the accuracy, reliability, and timeliness of patient test results regardless of where the test was performed.
Outcomes and Assessment Information Set (OASIS)
A group of data elements that represent core items of a comrehensive assessment for an adult home care patient and form the basis for measuring patient outcomes for purposes of outcome-based quality improvement.
Evaluation and Management (E/M)
Describes patient encounters with providers for the purpose of evaluation and management of general health status.
Home Health Prospective Payment System (HH PPS)
Implemented October 1, 2000. Reimburses home health agencies at a predetermined rate for healthcare services provided to patients.
Resource-Based Relative Value Scale (RBRVS)
A payment system that reimburses physicians’ practice expenses based on relative values for three components of each physician’s service: physician work, practice expense, and malpractice insurance expense.
Resource Utilization Groups (RUGs)
A resident classification system based on data collected from resident assessments (using data elements called the Minimum Data Set, or MDS) and relative weights developed from staff time data.
Usual and reasonable payments
Based on fees typically charged by providers by specialty within a particular region of the country.
Skilled Nursing Facility Prospective Payment System (SNF PPS)
Implemented (as a result of the BBA of 1997) to cover all costs (routine, ancillary, and capital) related to services furnished to Medicare Part A beneficiaries.
Fee schedule A
list of predetermined payments for healthcare services provided to paitents (e.g., a fee is assigned to each CPT code)
State Children’s Health Insurance Program (SCHIP)
Established to provide health assistance to uninsured, low-income children, either through separate programs or through expanded eligibility under state Medicaid programs.
National Correct Coding Initiative (NCCI)
Created to promote national correct coding methodologies and to eliminate improper coding.
Balanced Budget Act of 1997 (BBA)
Addresses healthcare fraud and abuse issues.
Health Insurance Portability and Accountability Act of 1996 (HIPPAA)
Mandates regulations that govern privacy, security, and electronic transactions standards for healthcare information. The primary intent for HIPPAA is to provide better access to health insurance, limit fraud and abuse, and reducte administrative costs.
Stages of Meaningful EHR Use
1. Capture electronic health information in a standardized format
Communicate captured information for patient care coordination processes
Initiate the reporting of clinical quality measures and public health information
Use captured information to track key clinical conditions and engage patients (and their families) in the delivery of care

2. Electronically transmit patient care summaries across multiple settings
Establish more patient-controlled data
Increase requirements for e-prescribing and incorporating lab results
Provide more rigorous health information exchange (HIE) among multiple settings

3. Facilitate patient access to self-management tools
Implement decision support for national high-priority conditions
Improve population health
Improve quality, safety, and efficiency, leading to improved health care outcomes
Provide access to comprehensive patient data through patient-centered HIEs

American recovery and reInvestment Act (ARRA)
commonly referred to as the Stimulus or The Recovery Act, was an economic stimulus package enacted by the 111th United States Congress in February 2009 and signed into law on February 17, 2009, by President Barack Obama.
To respond to the Great Recession, the primary objective for ARRA was to save and create jobs almost immediately. Secondary objectives were to provide temporary relief programs for those most impacted by the recession and invest in infrastructure, education, health, and renewable energy. The approximate cost of the economic stimulus package was estimated to be $787 billion at the time of passage, later revised to $831 billion between 2009 and 2019.[1] The Act included direct spending in infrastructure, education, health, and energy, federal tax incentives, and expansion of unemployment benefits and other social welfare provisions. It also created the President’s Economic Recovery Advisory Board.
Managed Health Care
Combines health care delivery with the financing of services provided.
Consumer-directed Health Plans (CDHP)
Provide incentives for controlling healthcare expenses and give individuals an alternative to traditional health insurance and managed care coverage. (Define employer contributions and ask employees to be more responsible for health care decisions and cost-sharing.)
Enrollees
(suscribers or policyholders) Employees and dependants who join a managed care plan; known as beneficiaries in private insurance plans.
Medicare Risk Programs
Allowed federally qualified HMOs and competitive medical plans that met specified Medicare requirements to provide Medicare covered services under a risk contract.
Risk contract
An arrangement among providers to provide capitated (fixed, prepaid basis) health care services to Medicare beneficiaries.
Competitive Medical Plan (CMP)
An HMO that meets federal eligibility requirements for a Medicare risk contract but is not licenses as a federally qualified plan.
Medical Savings Account (MSA)
Allows individuals to withdraw tax-free funds for health care expenses that are not covered by qualifying high-deductible health plan. Healthcare expenses that may be reimbursed from the MSA include the following:
Dental expenses, including uncovered orthodontia
Eye exams, contact lenses, and eyeglasses
Hearing care expenses
Health plan deductibles and copayments
Prescription drugs
The MSA was replaced in 2003 with Health savings accounts (HSAs)
Medicare+Choice
Expanded Medicare coverage options by creating managed care plans, to include HMOs, PPOs, and MSAs.
Managed Care Organization (MCO)
Is responsible for the health of a group of enrollees and can be a health plan,hospital, physician group, or health system.
Fee-for-service Plan
This reimburses providers for individual health care services rendered.
Capitation
Providers accept preestablished payments for providing health care services to enrollees over a period of time (usually one year).
Primary Care Provider (PCP)
Responsible for supervising and coordinating health care services for enrollees and approves referrals to specialists and inpatient hospital admissions (except in emergencies).
Quality Assurance Program
Includes activities that assess the quality of care provided in a health care setting.
Report Card
Contains data regarding a managed care plan’s quality, utilization, customer satisfaction, administrative effectiveness, financial stability, and cost control.
Utilization Management (Utilization Review)
A method of controlling health care costs and quality of care by reviewing the appropriateness and necessity of care provided to patients prior to the administration of care or after care has been provided.
Prospective Review
Prior to the administration of care.
Retrospective Review
After care has been provided.
Preadmission
Certification (PAC) (Preadmission Review) A review for medical necessity of inpatient care prior to the patient’s admission.
Preauthorization
A review that grants prior approval for reimbursement of a health care service (e.g., elective surgery)
Concurrent review
A review for medical necessity of tests and procedures ordered during an inpatient hospitalization.
Discharge planning
Involves arranging appropriate health care services for the discharged patient (e.g., home health care)
Utilization Review Organization (URO)
An entity that establishes a utilization management program and performs external utilization review services.
Case Management
Involves the development of patient care plans for the coordination and provision of care for complicated cases in a cost-effective manner. Case manager submits written confirmation, authorizing treatment, to the provider.
Second Surgical Opinion (SSO)
When a second physician is asked to evaluate the necessity of surgery and recommends the most economic, appropriate facility in which to perform the surgery.
Gag clauses
These prevent providers from discussing all treatment options with patients, whether or not the plan would provide reimbursement for services.
Physician incentives
Include payments made directly or indirectly to health care providers to serve as encouragement to reduce or limit services (e.g., discharge an inpatient from the hospital more quickly) so as to save money for the managed care plan.
Federal Physician incentive plan
Requires managed care plans that contract with Medicare or Medicaid to disclose information about physician incentive plans to CMS or state Medicaid agencies before a new or renewed contract receives final approval.
Exclusive Provider Organization (EPO)
A managed care plan that provides benefits to subscribers who are required to receive services from network providers.
Network provider
A physician or health care facility under contract to the managed care plan. Usually sign exclusive contracts with with the EPO which means they cannot contract with other managed care plans.
Integrted Delivery System (IDS)
An organization of affiliated providers’ sites (e.g., hospitals, ambulatory surgical centers, or physician groups) that offer joint health care services to subscribers.
Physician-hospital Organization (PHO)
(IDS) Owned by hospital(s) and physician groups that obtain managed care plan contracts; physicians maintain their own practices and provide health care services to plan members.
Management Service Organization (MSO)
(IDS) Usually owned by physicians or a hospital and provides practice management (administrative and support) services to individual physician practices.
Group practice without walls (GPWW)
(IDS) Estabslishes a contract that allows physicians to maintain their own offices and share services (e.g., appointment scheduling and billing)
Integrated provider organization (IPO)
(IDS) Manages the delivery of health care services offered by hospitals, physicians (who are employees of the IPO), and other health care organizations (e.g., an ambulatory surgery clinic and a nursing facility)
Medical foundation (IDS)
A nonprofit organization that contracts with and acquires the clinical and business assets of physician practices.
Health Maintenance Organization (HMO)
An alternative to traditional group health insurance coverage and provides comprehensive health care services to voluntarily enrolled members on a prepaid basis.
Point-of-service plan (POS)
Implemeted by some HMOs and PPOs. Provides patients the freedom to use the HMO panel of providers or to self-refer to non-HMO providers.
Self-referral
When a insurance enrollee sees a non-HMO panel specialist without a referral from the primary care physician. Results in a greater out-of-pocket expense, as he must pay both a larger deductible and a larger coinsurance charge.
Preferred Provider Organization (PPO)
A network of physicians and hospitals that have joined together to contract with insurance companies, employers, or other organizations to provide health care to subscribers for a discounted fee.
Triple Option Plan
Usually offered either by a single insurance plan or as a joint venture among two or more insurance carriers, provides subscribers or employees with a choice of HMO, PPO, or traditional health insurance plans. Also called a cafeteria plan, or flexible benefit plan because of the different benefit plans and extra coverage options provided through the insurer or third party administrator. These plans are intended to prevent the problem of coveraing members who are sicker than the general population (adverse selection).
Risk Pool
This is created when a number of people are grouped for insurance purposes (e.g., employees of an organization); the cost of health care coverage is determined by employees’ health status, age, sex, and occupation.
Sub-caption payment
Each provider is paid a fixed amount per month to provide only the care that an individual needs from that provider.
Accreditation
A voluntary process that a health care facility or organization (e.g., hospital or managed care plan) undergoes to demonstrate that it has met standards beyond those required by law.
Survey
Evaluation process that is conducted both offsite (e.g., managed care plan submits an initial document for review) and onsite (at the managed care plan’s facilities).
National Committee for Quality Assurance (NCQA)
A private, not-for-profit organization that assesses the quality of managed care plans in the United States and releases the data to the public for consideration when selecting a mananaged care plan. Began accrediting managed care programs in 1991 when a need for consistent, independent information about the quality of care provided to patients was originally identified.
Preferred Provider Health Care Act of 1985
Eased restrictions on preferred provider organizaitons (PPOs) – Allowed subscribers to seek health care from providers outside of the PPO
Amendment of the HMO Act of 1973
Allowed federally qualified HMOs to permit members to occasionally use non-HMO physicians and be partially reimbursed
Healthcare Effectiveness Data and Information Set (HEDIS)
Created sstandards to assess managed-care systems in terms of membership, utilization of services, quality, access, health plan management and activities, and financial indicators
HCFA’s Office of Managed Care
Facilitated innovation and competitio among Medicare HMOs
External Quality Review Organizations (EQRO)
Mandated by legislation in many states. Reviews health care provided by managed care organizations. Types of quality reviews performed include government oversight, patient satisfaction surveys, data collected from griebance procedures, and reviews conducted by independent organizations.
Quality Improvement System for Managed Care (QISMC)
Established by Medicare to ensure the accountability of managed care plans in terms of objective, measurable standards (requirements)
Health Plan Employer Data and Information Set (HEDIS)
Performance measures used to evaluate managed care plans. Sponsered by the National Committee for Quality Assurance (NCQA)
National Committee for Quality Assurance (NCQA)
Reviews managed care plans and develops report cards to allow healthcare consumers to make informed decisions when selecting a plan.
Third-Party Administrator (TPA)
An organization that provides health benefits claims administration and other outsourced services for self-insured companies.
accept assignment
provider accepts as payment in full whatever is paid on the claim by the payer (except for any copayment and/or coinsurance amounts).
accounts receivable
the amount owed to a business for services or goods provided.
accounts receivable aging report
shows the status (by date) of outstanding claims from each payer, as well as payments due from patients.
ANSI ASC X12
an electronic format standard that uses a variable-length file format to process transactions for institutional, professional, dental, and drug claims
accounts receivable management
assists providers in the collection of appropriate reimbursement for services rendered; includes functions such as insurance verification/eligibility and preauthorization of services
bad debt
accounts receivable that cannot be collected by the provider or a collection agency.
allowed charge
the maximum amount the payer will reimburse for each procedure or service, according to the patient’s policy.
appeal
documented as a letter, signed by the provider, explaining why a claim should be reconsidered for payment
chargemaster
document that contains a computer-generated list of procedures, services, and supplies with charges for each; chargemaster data are entered in the facility’s patient accounting system, and charges are automatically posted to the patient’s bill (UB-04).
assignment of benefits
the provider receives reimbursement directly from the payer
beneficiary
the person eligible to receive health care benefits.
claims processing
sorting claims upon submission to collect and verify information about the patient and provider.
birthday rule
determines coverage by primary and secondary policies when each parent subscribes to a different health insurance plan
claims adjudication
comparing a claim to payer edits and the patient’s health plan benefits to verify that the required information is available to process the claim; the claim is not a duplicate; payer rules and procedures have been followed; and procedures performed or services provided are covered benefits.
clearinghouse
performs centralized claims processing for providers and health plans.
claims attachment
medical report substantiating a medical condition
claims submission
the transmission of claims data (electronically or manually) to payers or clearinghouses for processing.
common data file
abstract of all recent claims filed on each patient.
clean claim
a correctly completed standardized claim (e.g., CMS-1500 claim)
closed claim
claims for which all processing, including appeals, has been completed.
covered entity
private sector health plans (excluding certain small self-administered health plans), managed care organizations, ERISA-covered health benefit plans (Employee Retirement Income Security Act of 1974), and government health plans (including Medicare, Medicaid, Military Health System for active duty and civilian personnel; Veterans Health Administration, and Indian Health Service programs); all health care clearinghouses; and all health care providers that choose to submit or receive transactions electronically
coinsurance
also called coinsurance payment; the percentage the patient pays for covered services after the deductible has been met and the copayment has been paid
Consumer Credit Protection Act of 1968
was considered landmark legislation because it launched truth-in-lending disclosures that required creditors to communicate the cost of borrowing money in a common language so that consumers could figure out the charges, compare costs, and shop for the best credit dea
delinquent account
one that has not been paid within a certain time frame (e.g., 120 days)
coordination of benefits (COB
provision in group health insurance policies that prevents multiple insurers from paying benefits covered by other policies; also specifies that coverage will be provided in a specific sequence when more than one policy covers the claim
day sheet
also called manual daily accounts receivable journal; chronological summary of all transactions posted to individual patient ledgers/accounts on a specific day
electronic data interchange (EDI)
computer-to-computer exchange of data between provider and payer.
deductible
amount for which the patient is financially responsible before an insurance policy provides coverage
delinquent claim
claim usually more than 120 days past due; some practices establish time frames that are less than or more than 120 days past due
Electronic Funds Transfer Act
established the rights, liabilities, and responsibilities of participants in electronic funds transfer systems.
delinquent claim cycle
advances through various aging periods (30 days, 60 days, 90 days, and so on), with practices typically focusing internal recovery efforts on older delinquent accounts (e.g., 120 days or more).
electronic flat file format
file format series of fixed-length records (e.g., 25 spaces for patient’s name) submitted to payers to bill for health care service
downcoding
assigning lower-level codes than documented in the record.
electronic remittance advice (ERA)
remittance advice that is submitted to the provider electronically and contains the same information as a paper-based remittance advice; providers receive the ERA more quickly
electronic funds transfer (EFT)
system by which payers deposit funds to the provider’s account electronically
Electronic Healthcare Network Accreditation Commission (EHNAC)
organization that accredits clearinghouses.
Fair Credit and Charge Card Disclosure Act
amended the Truth in Lending Act, requiring credit and charge card issuers to provide certain disclosures in direct mail, telephone, and other applications and solicitations for open-end credit and charge accounts and under other circumstances; this law applies to providers that accept credit cards.
electronic media claim
media claim series of fixed-length records (e.g., 25 spaces for patient’s name) submitted to payers to bill for health care services.
encounter form
financial record source document used by providers and other personnel to record treated diagnoses and services rendered to the patient during the current encounter.
Fair Debt Collection Practices Act (FDCPA)
specifies what a collection source may and may not do when pursuing payment of past due accounts.
Equal Credit Opportunity Act
prohibits discrimination on the basis of race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good faith exercise of any rights under the Consumer Credit Protection Act.
Fair Credit Billing Act
federal law passed in 1975 that helps consumers resolve billing issues with card issuers; protects important credit rights, including rights to dispute billing errors, unauthorized use of an account, and charges for unsatisfactory goods and services; cardholders cannot be held liable for more than $50 of fraudulent charges made to a credit card
manual daily accounts receivable journal
also called the day sheet; a chronological summary of all transactions posted to individual patient ledgers/accounts on a specific day
Fair Credit Reporting Act
protects information collected by consumer reporting agencies such as credit bureaus, medical information companies, and tenant screening services; organizations that provide information to consumer reporting agencies also have specific legal obligations, including the duty to investigate disputed information.
guarantor
person responsible for paying health care fees
open claim
submitted to the payer, but processing is not complete
litigation
legal action to recover a debt; usually a last resort for a medical practice.
noncovered benefit
any procedure or service reported on a claim that is not included on the payer’s master benefit list, resulting in denial of the claim; also called noncovered procedure or uncovered benefit.
participating provider (PAR)
contracts with a health insurance plan and accepts whatever the plan pays for procedures or services performed.
nonparticipating provider (nonPAR)
does not contract with the insurance plan; patients who elect to receive care from nonPARs will incur higher out-of-pocket expenses
out-of-pocket payment
established by health insurance companies for a health insurance plan; usually has limits of $1,000 or $2,000; when the patient has reached the limit of an out-of-pocket payment (e.g., annual deductible) for the year, appropriate patient reimbursement to the provider is determined; not all health insurance plans include an out-of-pocket payment provision
patient ledger
also called patient ledger; a computerized permanent record of all financial transactions between the patient and the practice.
outsource
contract out
past-due account
one that has not been paid within a certain time frame (e.g., 120 days); also called delinquent account.
Provider Remittance Notice (PRN)
remittance advice submitted by Medicare to providers that includes payment information about a claim
patient account record
also called patient ledger; a computerized permanent record of all financial transactions between the patient and the practice
pre-existing condition
any medical condition that was diagnosed and/or treated within a specified period of time immediately preceding the enrollee’s effective date of coverage.
suspense
pending
primary insurance
associated with how an insurance plan is billed?the insurance plan responsible for paying health care insurance claims first is considered primary.
secondary insurance
billed after primary insurance has paid contracted amount.
superbill
term used for an encounter form in the physician’s office.
source document
the routing slip, charge slip, encounter form, or superbill from which the insurance claim was generated
two-party check
check made out to both patient and provider
unbundling
submitting multiple CPT codes when one code should be submitted.
Truth in Lending Act
was considered landmark legislation because it launched truth-in-lending disclosures that required creditors to communicate the cost of borrowing money in a common language so that consumers could figure out the charges, compare costs, and shop for the best credit deal
unassigned claim
generated for providers who do not accept assignment; organized by year
value-added network (VAN)
clearinghouse that involves value-added vendors, such as banks, in the processing of claims; using a VAN is more efficient and less expensive for providers than managing their own systems to send and receive transactions directly from numerous entities
unauthorized service
services that are provided to a patient without proper authorization or that are not covered by a current authorization
abuse
actions inconsistent with accepted, sound medical, business, or fiscal practices.
American Recovery and Reinvestment Act of 2009 (ARRA)
authorized an expenditure of $1.5 billion for grants for construction, renovation, and equipment, and for the acquisition of health information technology systems.
black box edits
nonpublished code edits, which were discontinued in 2000
ANSI ASC X12N 837
variable-length file format used to bill institutional, professional, dental, and drug claims.
civil law
area of law not classified as criminal
authorization
document that provides official instruction, such as the customized document that gives covered entities permission to use specified protected health information (PHI) for specified purposes or to disclose PHI to a third party specified by the individual.
breach of confidentiality
unauthorized release of patient information to a third party
confidentiality
restricting patient information access to those with proper authorization and maintaining the security of patient information
case law
also called common law; based on a court decision that establishes a precedent.
Clinical Data Abstracting Center (CDAC
requests and screens medical records for the Payment Error Prevention Program (PEPP) to survey samples for medical review, DRG validation, and medical necessity.
check digit
one-digit character, alphabetic or numeric, used to verify the validity of a unique identifier
Deficit Reduction Act of 2005
Created Medicaid Integrity Program (MIP), which increased resources available to CMS to combat abuse, fraud, and waste in the Medicaid program. Congress requires annual reporting by CMS about the use and effectiveness of funds appropriated for the MIP.
Comprehensive Error Rate Testing (CERT)
program assesses and measures improper Medicare fee-for-service payments (based on reviewing selected claims and associated medical record documentation)
criminal law
public law governed by statute or ordinance that deals with crimes and their prosecution
electronic transaction
standards also called transactions rule; a uniform language for electronic data interchange
Current Dental Terminology (CDT)
medical code set maintained and copyrighted by the American Dental Association
deposition
legal proceeding during which a party answers questions under oath (but not in open court).
decrypt
to decode an encoded computer file so that it can be viewed.
Federal Claims Collection Act (FCCA)
requires Medicare administrative contractors (previously called carriers and fiscal intermediaries), as agents of the federal government, to attempt the collection of overpayments
digital
application of a mathematical function to an electronic document to create a computer code that can be encrypted (encoded).
encrypt
to convert information to a secure language format for transmission.
fraud
intentional deception or misrepresentation that could result in an unauthorized payment
False Claims Act (FCA)
passed by the federal government during the Civil War to regulate fraud associated with military contractors selling supplies and equipment to the Union Army.
Federal Register
legal newspaper published every business day by the National Archives and Records Administration (NARA).
Hospital Payment Monitoring Program (HPMP)
measures, monitors, and reduces the incidence of Medicare fee-for-service payment errors for short-term, acute care, inpatient PPS hospitals.
First-look Analysis for Hospital Outlier Monitoring (FATHOM)
data analysis tool, which provides administrative hospital and state-specific data for specific CMS target areas
Health Plan Identifier (HPID)
unique identifier is assigned to third-party payers (previously called PAYERID and PlanID), which has 10 numeric positions, including a check digit as the tenth position.
interrogatory
document containing a list of questions that must be answered in writing
Hospital Inpatient Quality Reporting (Hospital IQR)
program developed to equip consumers with quality of care information so they can make more informed decisions about health care options; requires hospitals to submit specific quality measures data about health conditions common among Medicare beneficiaries and that typically result in hospitalization; eligible hospitals that do not participate in the Hospital IQR program will receive an annual market basket update with a 2.0 percentage point reduction. (The Hospital IQR program was previously called the Reporting Hospital Quality Data for Annual Payment Update program.)
hospital value-based purchasing (VBP)
program health care reform measure that promotes better clinical outcomes and patient experiences of care; effective October 2012, hospitals receive reimbursement for inpatient acute care services based on care quality (instead of the quantity of the services provided).
Medicare administrative contractor (MAC)
an organization (e.g., third-party payer) that contracts with CMS to process claims and perform program integrity tasks for Medicare Part A and Part B and DMEPOS; each contractor makes program coverage decisions and publishes a newsletter, which is sent to providers who receive Medicare reimbursement. Medicare is transitioning fiscal intermediaries and carriers to create Medicare administrative contractors (MACs).
Improper Payments Information Act of 2002 (IPIA)
established the Payment Error Rate Measurement (PERM) program to measure improper payments in the Medicaid program and the State Children’s Health Insurance Program (SCHIP); Comprehensive Error Rate Testing (CERT) program to calculate the paid claims error rate for submitted Medicare claims by randomly selecting a statistical sample of claims to determine whether claims were paid properly (based on reviewing selected claims and associated medical record documentation); and the Hospital Payment Monitoring Program (HPMP) to measure, monitor, and reduce the incidence of Medicare fee-for-service payment errors for short-term, acute care at inpatient PPS hospitals.
listserv
subscriber-based question-and-answer forum that is available through e-mail.
message digest
representation of text as a single string of digits, which was created using a formula; for the purpose of electronic signatures, the message digest is encrypted (encoded) and appended (attached) to an electronic document.
Medicaid Integrity Program (MIP
increased resources available to CMS to combat fraud, waste, and abuse in the Medicaid program; Congress requires annual reporting by CMS about the use and effectiveness of funds appropriated for the MIP.
Medicare Drug Integrity Contractors (MEDIC)
Program implemented in 2011 as a presidential action to assist with CMS audit, oversight, anti-fraud, and anti-abuse efforts related to the Medicare Part D benefit.
medical identify theft
occurs when someone uses another person’s name and/or insurance information to obtain medical and/or surgical treatment, prescription drugs, and medical durable equipment; it can also occur when dishonest people who work in a medical setting use another person’s information to submit false bills to health care plans.
National Provider Identifier (NPI)
unique identifier to be assigned to health care providers as an 8- or possibly 10-character alphanumeric identifier, including a check digit in the last position.
medical review (MR)
defined by CMS as a review of claims to determine whether services provided are medically reasonable and necessary, as well as to follow up on the effectiveness of previous corrective actions
Medicare Integrity Program (MIP)
authorizes CMS to enter into contracts with entities to perform cost report auditing, medical review, anti-fraud activities, and the Medicare Secondary Payer (MSP) program
National Drug Code (NDC
maintained by the Food and Drug Administration (FDA); identifies prescription drugs and some over-the-counter products
Medicare Shared Savings Program
as mandated by the Patient Protection and Portable Care Act (PPACA), CMS established Medicare shared savings programs to facilitate coordination and cooperation among providers to improve quality of care for Medicare fee-for-service beneficiaries and to reduce unnecessary costs; accountable care organizations (ACOs) were created by eligible providers, hospitals, and suppliers to coordinate care, and they are held accountable for the quality, cost, and overall care of traditional fee-for-service Medicare beneficiaries assigned to the ACO.
Part A/B Medicare administrative contractor (A/B MAC)
an organization (e.g., third-party payer) that contracts with CMS to process claims and perform program integrity tasks for Medicare Part A and Part B and DMEPOS; each contractor makes program coverage decisions and publishes a newsletter, which is sent to providers who receive Medicare reimbursement. Medicare is transitioning fiscal intermediaries and carriers to create Medicare administrative contractors (MACs).
National Individual Identifier
unique identifier to be assigned to patients.
National Standard Employer Identification Number (EIN)
unique identifier assigned to employers who, as sponsors of health insurance for their employees, need to be identified in health care transactions
National Plan and Provider Enumeration System (NPPES
developed by CMS to assign unique identifiers to health care providers (NPI) and health plans (HPID)
Payment Error Rate Measurement (PERM)
program measures improper payments in the Medicaid program and the State Children’s Health Insurance Program (SCHIP).
National Practitioner Data Bank (NPDB)
implemented by Health Care Quality Improvement Act (HCQIA) of 1986 to improve quality of health care by encouraging state licensing boards, hospitals, and other health care entities and professional societies to identify and discipline those who engage in unprofessional behavior; restricts ability of incompetent physicians, dentists, and other health care practitioners to move from state to state without disclosure or discovery of previous medical malpractice payment and adverse action history; impacts licensure, clinical privileges, and professional society memberships as a result of adverse actions; includes Health Integrity and Protection Data Base (HIPDB), originally established by HIPAA, to further combat fraud and abuse in health insurance and health care delivery by serving as a national data collection program for reporting and disclosing certain final adverse actions taken against health care practitioners, providers, and suppliers.
National Standard Format (NSF)
flat-file format used to bill provider and noninstitutional services, such as services reported by a general practitioner on a CMS-1500 claim
Patient Safety and Quality Improvement Act
amends Title IX of the Public Health Service Act to provide for improved patient safety by encouraging voluntary and confidential reporting of events that adversely affect patients; creates patient safety organizations (PSOs) to collect, aggregate, and analyze confidential information reported by health care providers; and designates information reported to PSOs as privileged and not subject to disclosure (except when a court determines that the information contains evidence of a criminal act or each provider identified in the information authorizes disclosure)
overpayment
funds that a provider or beneficiary has received in excess of amounts due and payable under Medicare and Medicaid statutes and regulations.
precedent
standard.
Payment Error Prevention Program (PEPP)
required facilities to identify and reduce improper Medicare payments and, specifically, the Medicare payment error rate. The hospital payment monitoring program (HPMP) replaced PEPP in 2002.
Physician Quality Reporting System
the Tax Relief and Health Care Act of 2006 (TRHCA) that established financial incentives for eligible professionals who participate in a voluntary quality reporting program; previously called Physician Quality Initiative (PQRI) system.
payment error rate
number of dollars paid in error out of total dollars paid for inpatient prospective payment system services
Physicians at Teaching Hospitals (PATH)
HHS implemented audits in 1995 to examine the billing practices of physicians at teaching hospitals; the focus was on two issues: (1) compliance with the Medicare rule affecting payment for physician services provided by residents (e.g., whether a teaching physician was present for Part B services billed to Medicare between 1990 and 1996), and (2) whether the level of the physician service was coded and billed properly.
physician self-referral law
responded to concerns about physicians’ conflicts of interest when referring Medicare patients for a variety of services; prohibits physicians from referring Medicare patients to clinical laboratory services in which the physician or a member of the physician’s family has a financial ownership/investment interest and/or compensation arrangement; also called physician self-referral law.
Privacy Act of 1974
forbids the Medicare regional payer from disclosing the status of any unassigned claim beyond the following: date the claim was received by the payer; date the claim was paid, denied, or suspended; or general reason the claim was suspended.
program transmittal
document published by Medicare containing new and changed policies and/or procedures that are to be incorporated into a specific CMS program manual (e.g., Medicare Claims Processing Manual); cover page (or transmittal page) summarizes new and changed material, and subsequent pages provide details; transmittals are sent to each Medicare administrative contractor
privacy
right of individuals to keep their information from being disclosed to others.
privacy rule
HIPAA provision that creates national standards to protect individuals’ medical records and other personal health information.
record retention
storage of documentation for an established period of time, usually mandated by federal and/or state law; its purpose is to ensure the availability of records for use by government agencies and other third parties.
privileged communication
private information shared between a patient and health care provider; disclosure must be in accordance with HIPAA and/or individual state provisions regarding the privacy and security of protected health information (PHI).
protected health information (PHI)
Information that is identifiable to an individual (or individual identifiers) such as name, address, telephone numbers, date of birth, Medicaid ID number, medical record number, social security number (SSN), and name of employer.
Program for Evaluating Payment Patterns Electronic Report (PEPPER)
contains hospital-specific administrative claims data for a number of CMS-identified problem areas (e.g., specific DRGs, types of discharges); a hospital uses PEPPER data to compare its performance with that of other hospitals
release of information (ROI)
ROI by a covered entity (e.g., provider’s office) about protected health information (PHI) requires the patient (or representative) to sign an authorization to release information, which is reviewed for authenticity (e.g., comparing signature on authorization form to documents signed in the patient record) and processed within a HIPAA-mandated 60-day time limit; requests for ROI include those from patients, physicians, and other health care providers; third-party payers; Social Security Disability attorneys; and so on
qui tam
abbreviation for the Latin phrase qui tam pro domino rege quam pro sic ipso in hoc parte sequitur, which means ?who as well for the king as for himself sues I this matter.? It is a provision of the False Claims Act that allows a private citizen to file a lawsuit in the name of the U.S. government, charging fraud by government contractors and other entities.
Recovery Audit Contractor (RAC)
program mandated by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) to find and correct improper Medicare payments paid to health care providers participating in fee-for-service Medicare.
security rule
HIPAA standards and safeguards that protect health information collected, maintained, used, or transmitted electronically; covered entities affected by this rule include health plans, health care clearinghouses, and certain health care providers.
regulations
guidelines written by administrative agencies (e.g., CMS
release of information
log used to document patient information released to authorized requestors; data is entered manually (e.g., three-ring binder) or using ROI tracking software.
subpoena
an order of the court that requires a witness to appear at a particular time and place to testify.
security
involves the safekeeping of patient information by controlling access to hard copy and computerized records; protecting patient information from alteration, destruction, tampering, or loss; providing employee training in confidentiality of patient information; and requiring employees to sign a confidentiality statement that details the consequences of not maintaining patient confidentiality
Stark I
responded to concerns about physicians’ conflicts of interest when referring Medicare patients for a variety of services; prohibits physicians from referring Medicare patients to clinical laboratory services in which the physician or a member of the physician’s family has a financial ownership/investment interest and/or compensation arrangement; also called physician self-referral law.
UB-04
insurance claim or flat file used to bill institutional services, such as services performed in hospitals.
statutes
also called statutory law; laws passed by legislative bodies (e.g., federal Congress and state legislatures)
subpoena duces tecum
requires documents (e.g., patient record) to be produced
whistle blower
individual who makes specified disclosures relating to the use of public funds, such as Medicare payments. ARRA legislation prohibits retaliation (e.g., termination) against such employees who disclose information that they believe is evidence of gross mismanagement of an agency contract or grant relating to covered funds, and so on.
Tax Relief and Health Care Act of 2006 (TRHCA)
created physician quality reporting initiative (PQRI) system that establishes a financial incentive for eligible professionals who participate in a voluntary quality reporting program
unique bit string
computer code that creates an electronic signature message digest that is encrypted (encoded) and appended (attached) to an electronic document (e.g., CMS-1500 claim)
Zone Program Integrity Contractor (ZPIC)
program implemented in 2009 by CMS to review billing trends and patterns, focusing on providers whose billings for Medicare services are higher than the majority of providers in the community. ZPICs are assigned to the Medicare administrative contractor (MAC) juris-dictions, replacing Program Safeguard Contracts PSCs)
upcoding
assignment of an ICD-10-CM diagnosis code that does not match patient record documentation for the purpose of illegally increasing reimbursement (e.g., assigning the ICD-10-CM code for heart attack when angina was actually documented in the record).
billing entity
the legal business name of the provider’s practice
diagnosis pointer letters
item letters A through L preprinted in Block 21 of the CMS-1500 claim.
supplemental plan
covers the deductible and copay or coinsurance of a primary health insurance policy.
National Plan and Provider Enumeration System (NPPES)
developed by CMS to assign unique identifiers to health care providers (NPI) and health plans (HPID).
supervising physician
a licensed physician in good standing who, according to state regulations, engages in the direct supervision of nurse practitioners and/or physician assistants whose duties are encompassed by the supervising physician’s scope of practice.
optical character reader (OCR)
device used for optical character recognition
optical scanning
uses a device (e.g., scanner) to convert printed or handwritten characters into text that can be viewed by an optical character reader.
assessment
contains the diagnostic statement and may include the provider’s rationale for the diagnosis.
auditing process
review of patient records and CMS-1500 (or UB-04) claims to assess coding accuracy and whether documentation is complete.
medically managed
a particular diagnosis (e.g., hypertension) may not receive direct treatment during an office visit, but the provider had to consider that diagnosis when considering treatment for other conditions.
narrative clinic note
using paragraph format to document health care
local coverage determination (LCD)
formerly called local medical review policy (LMRP); Medicare administrative contractors create edits for national coverage determination rules that are called LCDs.
Medicare coverage database (MCD
used by Medicare administrative contractors, providers, and other health care industry professionals to determine whether a procedure or service is reasonable and necessary for the diagnosis or treatment of an illness or injury; contains national coverage determinations (NCDs), including draft policies and proposed decisions; local coverage determinations (LCDs), including policy articles; and national coverage analyses (NCAs), coding analyses for labs (CALs), Medicare Evidence Development & Coverage Advisory Committee (MedCAC) proceedings, and Medicare coverage guidance documents.
operative report
varies from a short narrative description of a minor procedure that is performed in the physician’s office to a more formal report dictated by the surgeon in a format required by the hospitals and ambulatory surgical centers (ASCs).
objective
documentation of measurable or objective observations made during physical examination and diagnostic testing.
subjective
part of the note that contains the chief complaint and the patient’s description of the presenting problem
national coverage determination (NCD)
rules developed by CMS that specify under what clinical circumstances a service or procedure is covered (including clinical circumstances considered reasonable and necessary) and correctly coded; Medicare administrative contractors create edits for NCD rules, called local coverage determinations (LCDs).
objective documentation of measurable or objective observations made during physical examin
outpatient code editor (OCE)
software that edits out-patient claims submitted by hospitals, community mental health centers, comprehensive outpatient rehabilitation facilities, and home health agencies; the software reviews submissions for coding validity (e.g., missing fifth digits) and coverage (e.g., medical necessity); OCE edits result in one of the following dispositions: rejection, denial, return to provider (RTP), or suspension
SOAP note
outline format for documenting health care; ?SOAP? is an acronym derived from the first letter of the headings used in the note: Subjective, Objective, Assessment, and Plan.
plan
statement of the physician’s future plans for the work-up and medical management of the case.
All-Patient diagnosis-related group (AP-DRG)
DRG system adapted for use by third-party payers to reimburse hospitals for inpatient care provided to non-Medicare beneficiaries (e.g., BlueCross BlueShield, commercial health plans, TRICARE); DRG assignment is based on intensity of resources
All-Patient Refined diagnosis-related group (APR-DRG)
adopted by Medicare in 2008 to reimburse hospitals for inpatient care provided to Medicare beneficiaries; expanded original DRG system (based on intensity of resources) to add two subclasses to each DRG that adjusts Medicare inpatient hospital reimbursement rates for severity of illness (SOI) (extent of physiological decompensation or organ system loss of function) and risk of mortality (ROM) (likelihood of dying); each subclass, in turn, is subdivided into four areas: (1) minor, (2) moderate, (3) major, and (4) extreme.
allowable charge
maximum fee a provider may charge.
clinical laboratory fee schedule
data set based on local fee schedules (for outpatient clinical diagnostic laboratory services)
ambulance fee schedule
payment system for ambulance services provided to Medicare beneficiaries.
conversion factor
dollar multiplier that converts relative value units (RVUs) into payments
ambulatory surgical center (ASC)
state-licensed, Medicare-certified supplier (not provider) of surgical health care services that must accept assignment on Medicare claims.
clinical nurse specialist (CNS)
a registered nurse licensed by the state in which services are provided, has a master’s degree in a defined clinical area of nursing from an accredited educational institution, and is certified as a CNS by the American Nurses Credentialing Center.
ambulatory surgical center payment rate
predetermined amount for which ASC services are reimbursed, at 80 percent after adjustment for regional wage variations
employer group health plan (EGHP
contributed to by an employer or employee pay-all plan; provides coverage to employees and dependents without regard to the enrollee’s employment status (i.e., full-time, part-time, or retired
balance billing
billing beneficiaries for amounts not reimbursed by payers (not including copayments and coinsurance amounts); this practice is prohibited by Medicare regulations
CMS program transmittal
communicate new or changed policies, and/or procedures that are being incorporated into a specific CMS Internet-only program manual
case mix
the types and categories of patients treated by a health care facility or provider.
data analytics
tools and systems that are used to analyze clinical and financial data, conduct research, and evaluate the effectiveness of disease treatments.
charge description master (CDM)
document that contains a computer-generated list of procedures, services, and supplies with charges for each; chargemaster data are entered in the facility’s patient accounting system, and charges are automatically posted to the patient’s bill (UB-04).
CMS Quarterly Provider Update (QPU)
an online CMS publication that contains information about regulations and major policies currently under development, regulations and major policies completed or cancelled, and new or revised manual instructions.
chargemaster
document that contains a computer-generated list of procedures, services, and supplies with charges for each; chargemaster data are entered in the facility’s patient accounting system, and charges are automatically posted to the patient’s bill (UB-04)
Home Assessment Validation and Entry
data entry software used to collect OASIS assessment data for transmission to state databases
chargemaster maintenance
process of updating and revising key elements of the chargemaster (or charge description master [CDM]) to ensure accurate reimbursement
Diagnostic and Statistical Manual (DSM)
classifies mental health disorders and is based on ICD; published by the American Psychiatric Association.
chargemaster team
jointly shares the responsibility of updating and revising the chargemaster to ensure its accuracy and consists of representatives of a variety of departments, such as coding compliance financial services, health information management, information services, other departments, and physicians.
End-Stage Renal Disease (ESRD)
composite payment rate system bundles end-stage renal disease (ESRD) drugs and related laboratory tests with the composite rate payments, resulting in one reimbursement amount paid for ESRD services provided to patients; the rate is case-mix adjusted to provide a mechanism to account for differences in patients’ utilization of health care resources (e.g., patient’s age).
disproportionate share hospital (DSH)
adjustment policy in which hospitals that treat a high percentage of low-income patients receive increased Medicare payments.
Inpatient Rehabilitation Validation and Entry (IRVEN)
software used as the computerized data entry system by inpatient rehabilitation facilities to create a file in a standard format that can be electronically transmitted to a national database; data collected is used to assess the clinical characteristics of patients in rehabilitation hospitals and rehabilitation units in acute care hospitals, and provide agencies and facilities with a means to objectively measure and compare facility performance and quality; data also provides researchers with information to support the development of improved standards.
durable medical equipment, prosthetics/orthotics, and supplies (DMEPOS) fee schedule
Medicare reimburses DMEPOS dealers according to either the actual charge or the amount calculated according to formulas that use average reasonable charges for items during a base period from 1986 to 1987, whichever is lower.
grouper software
determines appropriate group (e.g., diagnosis-related group, home health resource group, and so on) to classify a patient after data about the patient is input.
health insurance prospective payment system (HIPPS)
code set Five-digit alphanumeric codes that represent case-mix groups about which payment determinations are made for the HH PPS.
home health resource group (HHRG
classifies patients into one of 80 groups, which range in severity level according to three domains: clinical, functional, and service utilization.
large group health plan (LGHP)
provided by an employer that has 100 or more employees or a multiemployer plan in which at least one employer has 100 or more full- or part-time employees
incident to
Medicare regulation which permitted billing Medicare under the physician’s billing number for ancillary personnel services when those services were ?incident to? a service performed by a physician
intensity of resources
relative volume and types of diagnostic, therapeutic, and inpatient bed services used to manage an inpatient disease
indirect medical education (IME) adjustment
approved teaching hospitals receive increased Medicare payments, which are adjusted depending on the ratio of residents-to-beds (to calculate operating costs) and residents-to-average daily census (to calculate capital costs).
Medicare physician fee schedule (MPFS)
payment system that reimburses providers for services and procedures by classifying services according to relative value units (RVUs); also called resource-based relative value scale (RBRVS) system
inpatient prospective payment system (IPPS)
system in which Medicare reimburses hospitals for inpatient hospital services according to a predetermined rate for each discharge
IPPS 3-day payment window
requires that outpatient preadmission services provided by a hospital for a period of up to three days prior to a patient’s inpatient admission be covered by the IPPS DRG payment for diagnostic services (e.g., lab testing) and therapeutic (or nondiagnostic) services when the inpatient principal diagnosis code (ICD-10-CM) exactly matches that for preadmission services
limiting charge
maximum fee a provider may charge.
IPPS 72-hour rule
requires that outpatient preadmission services provided by a hospital for a period of up to three days prior to a patient’s inpatient admission be covered by the IPPS DRG payment for diagnostic services (e.g., lab testing) and therapeutic (or nondiagnostic) services when the inpatient principal diagnosis code (ICD-10-CM) exactly matches that for preadmission services
nurse practitioner (NP)
has two or more years of advanced training, has passed a special exam, and often works as a primary care provider along with a physician
IPPS transfer rule
any patient with a diagnosis from one of ten CMS-determined DRGs, who is discharged to a post acute provider, is treated as a transfer case; this means hospitals are paid a graduated per diem rate for each day of the patient’s stay, not to exceed the prospective payment DRG rate.
long-term (acute) care hospital prospective payment system (LTCH PPS)
classifies patients according to long-term (acute) care DRGs, which are based on patients’ clinical characteristics and expected resource needs; replaced the reasonable cost-based payment system.
Medicare Secondary Payer (MSP)
situations in which the Medicare program does not have primary responsibility for paying a beneficiary’s medical expenses.
major diagnostic category (MDC)
organizes diagnosis-related groups (DRGs) into mutually exclusive categories, which are loosely based on body systems (e.g., nervous system)
outpatient encounter
includes all outpatient procedures and services (e.g., same-day surgery, x-rays, laboratory tests, and so on) provided during one day to the same patient.
Medicare severity diagnosis-related groups (MS-DRGs)
adopted by Medicare in 2008 to improve recognition of severity of illness and resource consumption and reduce cost variation among DRGs; bases DRG relative weights on hospital costs and greatly expanded the number of DRGs; reevaluated complications/comorbidities (CC) list to assign all ICD-10-CM codes as non-CC status (conditions that should not be treated as CCs for specific clinical conditions), CC status, or major CC status; handles diagnoses closely associated with patient mortality differently depending on whether the patient lived or expired.
Outcomes and Assessment Information Set (OASIS)
group of data elements that represent core items of a comprehensive assessment for an adult home care patient and form the basis for measuring patient outcomes for purposes of outcome-based quality improvement.
Medicare Summary Notice (MSN
previously called an Explanation of Medicare Benefits or EOMB; notifies Medicare beneficiaries of actions taken on claims
physician assistant (PA)
has two or more years of advanced training, has passed a special exam, works with a physician, and can do some of the same tasks as the doctor.
metrics
standards of measurement, such as those used to evaluate an organization’s revenue cycle to ensure financial viability
outlier
hospitals that treat unusually costly cases receive increased Medicare payments; the additional payment is designed to protect hospitals from large financial losses due to unusually expensive cases
outpatient visit
Includes all outpatient procedures and services (e.g., same-day surgery, x-rays, laboratory tests, and so on) provided during one day to the same patient
resource allocation
distribution of financial resources among competing groups (e.g., hospital departments, state health care organizations)
payment system
reimbursement method the federal government uses to compensate providers for patient care
prospective cost-based rates
rates established in advance, but based on reported health care costs (charges) from which a prospective per diem rate is determined
revenue cycle process
facilities and providers use to ensure financial viability.
prospective price-based rates
rates associated with a particular category of patient (e.g., inpatients) and established by the payer (e.g., Medicare) prior to the provision of health care services.
resource allocation monitoring
uses data analytics to measure whether a health care provider or organization achieves operational goals and objectives within the confines of the distribution of financial resources, such as appropriately expending budgeted amounts as well as conserving resources and protecting assets while providing quality patient care.
relative value units (RVUs
payment components consisting of physician work, practice expense, and malpractice expense.
wage index
adjusts payments to account for geographic variations in hospitals’ labor costs.
Resident Assessment Validation and Entry (RAVEN
data entry system used to enter MDS data about SNF patients and transmit those assessments in CMS-standard format to individual state databases
retrospective reasonable cost system
reimbursement system in which hospitals report actual charges for inpatient care to payers after discharge of the patient from the hospital.
revenue cycle monitoring
involves assessing the revenue cycle to ensure financial viability and stability using metrics (standards of measurement)
revenue code
a four-digit code that indicates location or type of service provided to an institutional patient; reported in FL 42 of UB-04.
revenue cycle auditing
assessment process that is conducted as a follow-up to revenue cycle monitoring so that areas of poor performance can be identified and corrected.
site of service differential
reduction of payment when office-based services are performed in a facility, such as a hospital or outpatient setting, because the doctor did not provide supplies, utilities, or the costs of running the facility
risk of mortality (ROM)
likelihood of dying.
severity of illness (SOI)
extent of physiological decompensation or organ system loss of function
Benefit Period
Begins with the first day of hospitalization and ends when the patient has been out of the hospital for 60 consecutive days.
CMS
Responsible for the operation of the Medicare program and for selecting Medicare administrative contractors (MACs) to process Medicare fee-for-service Part A, Part B, and durable medicine equipment (DME) claims.
The goal of PACE
To help people stay independent and live in their community as long as possible.
Demontration/pilot program
Special project that tests improvements in Medicare coverage, payment, and quality of care.
Lifetime Reserve Days
(60 days) may be used nly once during a patient’s lifetime and are usually reserved for use during the patient’s final, terminal hospital stay.
Hospice
Autonomous, centrally administered program of coordinated inpatient and outpatient palliative (relief of symptoms) services for terminally ill patient and their families.
Medicare limits hospice care to four benefit periods, which include;
– Two period of 90 days each
– One 30-day period
– A final “lifetime” extension of unlimited duration
Hospice Program
Is for patients for whom the provider can do nothing further to stop the progression of disease; the patient is treated only to relieve pain or other discomfort.
Medicare Advantage Plans (Medicare Part C, formerly called Medicare+Choice as established by the Balanced Budget Act of 1997)
Health Plan options that are approved by Medicare but managed by private companies.
In a Medicare Cost plan
If the individual receives health care from a non-network provider, the Original Medicare Plan covers the services.
Medicare Prescription Drug Plans (Medicare Part B)
Add prescription drug coverage to the Original Medicare Plan, some Medicare Cost Plans, some Medicare Private Fee-for-Service Plans and Medicare Medical Savings Account Plans.
Initial Enrollment Period
7-month ; begins that provides and opportunity for the individual to enroll in Medicare Part A and/or Part B.
Medicare Eligibility Requires:
1. Individuals or their spouses to have worked at least 10 years in Medicare-covered employment.
2. Individuals to be the minimum of 65 years old.
3. Individuals to be citizens or permanent residents of the U.S
Medicare Medical Savings Account (MSA)
Used by an enrolle to pay healthcare bills, while Medicare pays the cost of a special healthcare policy that has a high deductible (not to exceed $6,000).
Medicare enrollment is handled in two ways:
Either individuals are enrolled automatically, or they apply for coverage.
MSA NOTE*
Managed by a Medicare-approved insurance company or other qualified company.
Medicare Hospital Insurance (Medicare Part A)
Pays for inpatient hospital critical care access; skilled nursing facility stays; hospice care; and some home health care
Medicare Part A
Institutional providers for inpatient, hospice, and some home health services.
Medicare Prescription Drug Plans (Medicare Part D)
Offer prescription drug coverage to all Medicare beneficiaries that may help lower prescription drug costs and help protect against higher costs in the future.
Medicare Part B (Medicare Medical Insurance)
Helps cover physician services, outpatient hospital care, and other services not covered by medicare Part A, including physical and occupational therapy and some home health care for patients who do not have Medicare Part A.
NOTE*
Medicare pays only a portion of a patient’s acute care and critical access hospital (CAH) inpatient hospitalization expenses, and the patient’s out-of-pocket expenses are calculated on a benefit-period bases.
Medicare Part D
Optional, and individuals who join a Medicare drug plan pay a monthly premium. This plan requires subcribers to pay a monthly premium and an annual deductible.
Medicare Select
Type of Medigap insurance that requires enrollees to use a network of providers (doctors and hospitals) in order to receive full benefits.
NOTE*
Medicare has established a participating provider (PAR) agreement in which the provider contracts to accept assignment on all claims submitted to Medicare.
Medigap (or Medicare Supplementary Insurance, MSI)
is designed to supplement Medicare benefits by paying for services that Medicare does not cover.
NOTE*
When a patient chooses Medicare hospice benefits, all other Medicare benefits stop.
NOTE*
Individuals age 65 and over do not pay a monthy premium.
NOTE*
By 2000, more than 85 percent of all physicians, practitioners, and suppliers in the United States were PARs.
NOTE*
Those who wait until they actually turn 65 to apply for Medicare will cause a delay in the start of Part B coverage, because they will have to wait until the next General Enrollment Period (GEP), which is held January 1 through March 31.
Spell of illness
formerly called “spell of sickness”
NOTE*
Persons confined to a psychiatric hospital are allowed 190 lifetime reserve days instead of the 60 days allotted for a stay in an acute care hospital.
NOTE*
Since 1992, Medicare has reimbursed provider services according tp a physician fee schedule (also called the Recourse-Based Relative Value Scale, RBRVS), which also limits amounts nonparticipating providers (nonPARs) can charge beneficiaries.
NOTE*
All terminally ill patients qualify for hospice care.
Respite Care
Temporary hospitalization of a terminally ill, dependent hospice patient for the purpose of providing relief for the nonpaid person who has the mahor day-to-day responsibility for care of that patient.
NOTE*
A patient who is receiving hospice benefits is not eligible for Medicarte Part B services except for those services that are totally unrelated to the terminal illness.
PAR agreements with Medicare including:
– Direct payment of all claims.
– A 5 percent higher fee schedule than for nonpaticipating providers.
– Bonuses provided to Medicare administrative contractors
-Publication of an annual, regional PAR directory
– Special message printed on all unassigned Medicare Summary Notice
– Hospital referrals for outpatient carethat provide the patient
– Faster processing of assigned claims.
Reimbursement under the fee schedule
is base on relative value units (RVUs) that consider resources used in providing a service (physician work, practice expense, and malpractice expenses).
Programs of All-inclusive Care for the Elderly (PACE)
Combine medical, social, and long-term care services for frail people who live and receive health care in the community.
Accept Assignment
Must be selected on the CMS-1500 claim, or reimbursement (depeding on state policy) may be denied.
FMAP
Federal Medical Assistance Percentage. Portion of the Medicaid program paid by the federal government.
Dual Eligibles
Individuals entitled to Medicare and eligible for some type of Medicaid benefit (abbreviated as Medi-Medi)
Medicaid Remittance Advice
Sent to the provider which contains the current status of all claims (including adjusted and voided claims).
Eligibility
Will depend on the patient’s monthly income.
In 1965
Congress passed Title 19 of the Social Security Act
EPSDT
Early and Periodic Screening, Diagnostic, and Treatment Services. Consist of routine pediatric checkups provided to all children enrolled in Medicaid.
NOTE*
States can require nominal deductibles, coinsurance, or copayments for certain services performed for some Medicaid recipients.
MCCA
Medicare Catastrophic Coverage Act of 1988. Implemented Spousal Impoverishment Protection Legislation in 1989 to prevent married couples from being required to spend down income and other liquid assets (cash and property
Medical Necessity
Recognized as the prevailing standard and consistent with generally accepted professional medical standards of the provider’s peer group.
Medicaid
Provides medical and health-related services to certain individuals and families with low incomes and limited resources (the “medically indigent” )
NOTE*
The BBA allows states to provide 12 months of continuous Medicaid coverage (without reevaluation) for eligible children under the age of 19.
Medicaid eligibility verification system (MEVS
Sometimes called recipient eligibility verification system, or REVS) allows providers to electronically access the state’s eligibility.
Mother/baby claim
Submitted for services provided to a baby under the mother’s Medicaid identification number.
NOTE*
To be eligible for federal funds, states are required to provide Medicaid coverage for certain individuals who receive federally assisted income-maintenance payments.
NOTE*
Emergency services and family planning services are exempt from copayments.
PACE
Use a capitated payment system to provide a comprehensive package of community-based services as an alternative to institutional care for persons age 55 or older who require a nursing facility level of care.
NOTE*
Each state selects a payer that administers its SCHIP program, and the payer develops its own CMS-1500 claims instructions.
NOTE*
Providers receive reimbursement from Medicaid on a lump-sum basis, which means they will receive payment for several claims at once.
NOTE*
States that establish a medically needy Medicaid program expand eligibility to additional qualified persons who may have too much income to qualify under the categorically needy group.
NOTE*
Services covered by both programs are paid first by Medicare and the difference by Medicaid, up to the state’s payment limit.
Voided claims
One that Medicaid should not have originally paid, and results in a deduction from the lump-sum payment made to the provider.
NOTE*
When Medicaid makes payment directly to providers, those participating in Medicaid must accept the reimbursement as payment in full.
NOTE*
States are required to extend Medicaid eligibility to all children born after Sept. 30, 1983, who reside in families with incomes at or below the federal poverty level, until they reach age 19
NOTE*
The state uses the income eligibility standard for one person rather than two, and the standard income eligibility process for Medicaid is used.
Preauthorization guidelines include:
– Elective Inpatient Admission
– Emergency Inpatient
– More than one preoperative day
NOTE*
The community spouse’s income is not available to the spouse who resides in the facility, and the two individuals are not considered a couple for income eligibility purposes.
NOTE*
Each state administers its own Medicaid program, and CMS monitors the programs and establishes requirements for the delivery, funding, and quality of services as well as eligibility criteria.
Three eligibility groups;
– Categorically needy
– Medically needy
– Special groups
PACE
Programs of All-inclusive Care for the Elderly.
Retroactive eligibility
Sometimes granted to patients whose income has fallen below the state-set eligibility level an who had high medical expenses prior to filing for Medicaid.
Temporary Assistance for Needy Families (TANF)
Makes cash assistance available, for a limited time, for children deprived of support.
SCHIP
State Children’s Health Insurance Program.
SURS
Surveillance and utilization review subsystem. Safeguards againts unnecessary or inappropriate use of Medicaid services or excess payments.
Services for Categorically Needy Eligibility Groups;
– Inpatient hospital
– Outpatient
– Other laboratory
– Certified Pediatric
– Nursing Facility
State Medicaid programs must be available to the following mandatory;
– Families who meet states TANF
– Pregnant women
– Caretakers
– Supplemental Security
– Individuals and couples
champva
civilian health and medical program of the department of Veteran affairs
extra option
-choice of any physican in the network
-less costly than tricare standard
-maybe more expensive than tricare prime
-lower priority for care provided at the military treatment facilities
how much Active Miltary member expected to pay out of pocket each year under tricare extra
$1000.00
how does accepting assignment work for nonpars
-on a claim by claim basis
-make sure to put providers choice in block 27 of the claim form
how do they confirm tricare eligibility
through the defense enrollment eligibility reporting system (DEERS)
how does the Health Administration Center administer the CHAMPVA program
-by processing applications
-by determining eligibility
-by authorizing benefits
-by processing claims
what are the 5 ways for special handling tricare patients
1. always make a copy of the patients common access card
2. make sure the nows there date of next transfer, if it is within 6 months you sould accept assignment to avoid interstate collection problems
3. make sure the patient has the nonavailability statement for all nonemergency civilian inpatient care.
4. make sure they have preauthorization & a nonavailability statement for nonemergency inpatient mental healthcare
5. make sure you submit mental health reports every 30 days for inpatient and on the 48th outpatient visit and every 24th visit after.
how many tricare options there
three
prime, extra & standard
how much is a retiree expected to pay out of pocket each year under tricare extra
$3000.00
how many tricare regions are there
four
what is the filing deadline for tricare claims
-claims filed more than one year after the date of outpatient care
-claims filed more than one year from the date of discharge for inpatient care.
how should you obtain the current address of the contractor assigned to your area
-contact the nearest military facility
-access the tricare website
www.tricare.osd.mil
what are tricare supplemental plans designed for
to reimburse patients for civilian medical expensis that must be paid after tricare reimburses the goverments share of healthcare costs
is balance billing allowed
only for nonpars & they can only charge 15% over the par providers fee schedule
when was tricare implemented
1967
prime option
-access to timely medical care
-priority care at military treatment facilities
-assignment of a primary care manager
-lowest cost of all three options
-retired military pay an annual enrollment fee
-requires enrollment for one year
-care sought outside of tricare prime network is costly
-may be unavailable in some tricare regions
What does Program Integrity Office Do?
-Any criminal conviction or civil judgment involving fraud
-Fraud and Abuse under Tricare
-Participation in a conflict-of-interest situation
-Exclusion or suspension by another federal, state, or local government agency
-When it is in the best interest of the Tricare programs or it beneficiaries
standard option
-flexibility in selecting healthcare providers
-most convient when traveling away from home
-most expensive of all
-enrollment not required
-tricare extra can be used
-low priority care in the military treatment facilities is assigned to tricare standard enrolees
what kind of claim forms are submitted to tricare
cms-1500
what is catastrophic cap benefits
protects tricare beneficiaries from devastating financial loss due to serious illness or long term treatment by establishing limits in which payment is not required
who is eligible for champva
-spouse or child of a vetern who has been totally disabled
-spouse or child of a vetern who died from a VA related service connected disability
-spouse or child of a vetern who at the time of death was rated totally disabled
-spouse or child of a military member who did in the line of duty
what is champva
a comprehensive healthcare program for which the department of va shares costs of covered healthcare services and supplies with eligible beneficiaries
what principles do tricare follow
the principles of RBRVS
where is tricare based at
colorado
what should the tricare mental health treatment reports cover
-date of treatment
-age, sex & material status
-diagnosis and dsm axis info
-presenting symptom, historical data
-prior treatment episodes
-type and frequency of therapy
-explanation for different treatment for the diagnosis
-mental status and psychological testing
-progress of patient
-P.E and/or Lab reports
-future plans and treatment goals
why was tricare created
-to expand healthcare acess
-to ensure quality of care
-control health care costs
-improve medical readiness
what was tricare formually known as
champus
who are tricare supplemental plans offered by
by most military associations and some private firms
who is eligible for dual medicare and tricare
-beneficiaries who qualify for medicare because of age and also purchase medicare part B continue to be eligible tricare which is secondary to medicare
-famliy members of active duty members who qualify for medicare will also qualify for tricare
-beneficiaries under 65 who qualify for medicare because of a disability are also qualified for all 3 tricare options
Who handles fraud or abuse?
Program Integrity Office
who is tricare health care program for
-active duty military and members of thier families
-eligibile retirees & qualified member of thier families
-eligible survivors of members of the uniformed services
who is eligible for tricare
-active duty members of the uniformed services & thier families
-retirees and thier families
-survivors of all uniformed services who are not eligible for medicare
TRICARE limiting charges
all nonPAR providers are subject to a limiting charge of 15% above TRICARE fee schedule for PAR providers. Patients cannot be billed the difference between the providers normal fee and the TRICARE limiting charge
List two requirements to be eligible for CHAMPVA
1. spouse or child of a veteran who has been rated permanently and totally disabled for a service-connected disability by a VA regional office
2. surviving spouse or child of a veteran who died from a VA rated service connected disability
What is DEERS
A computer system that contains accurate Defense Department workforce personnel information
timely filing deadline for tricare
one year from the date of service for outpatient or one year from the date of discharge for inpatient
TRICARE Prime
a managed healthcare option similar to a civilian health maintenance organization
Tricare Extra
Allows tricare standard users to save 5% of their Tricare standard cost-shares by using healthcare providers in the TRICARE network
What is a MTF
healthcare facility operated by the military that provides inpatient and/or outpatient care to eligible TRICARE beneficiaries.
Tricare is a health program for
1. Active duty military and their qualified family members
2. Champus eligible retirees and their qualifed family members.
3. Eligible survivors of member of the uniformed services
Tricare Standard
The original health benefit program that allows more choice of healthcare providers but with higher out-of-pocket expenses than tricare prime and tricare extra plans (CHAMPUS)
what does the PI office branch of TRICARE do?
the Program Integrity Office is a branch of the TRICARE Management Activity that analyes and reviews cases of potential fraud activity world wide
Tricare supplemental plans
reimburse patients for the civilian medical are expenses that must be paid after TRICARE reimburses the government’s share of the healthcare costs
What does CHAMPVA do
Shares costs of covered healthcare services and supplies with eligible beneficiaries.
veteran
individual who has served in the US Armed Forces, is no longer in the service, and who has had an honorable discharge
Federal Employee Health Benefits Program (FEP)
Also known as Federal Employee Program. An employer sponsored health benefits program established by an Act of Congress in 1959, which now provides to more than 9 million federal employee enrollees and dependants, with 300 3rd party contracts.
Managed Care Insurance
A healthcare delivery system that provides health care and controls costs through a network of physicians, hospitals, and other healthcare providers.
Includes:
Coordinated home health and hospice care program
Exclusive provider organizations
Health maintenance organizations
Outpatient pre-treatment authorization plans,
Point-of-service plans,
Preferred provider organizations
Second surgical opinions.
Outpatient Pretreatment Authorization Plan (OPAP)
Requires preauthorization of outpatient physical, occupational & speech therapy services.
Special Accidental Injury Rider
Covers 100% of nonsurgical care sought and rendered within 24 to 72 hours of the accidental injury.
Origin of the Blue Cross Association
In 1948, the need for additonal national coordination among plans arose, so this approving agency was created.
Commercial Secondary Coverage
Provides coverage similar to primary insurance, usually only covers the deductible, co-payment and co-insurance expense
Rider
Special contract clause stipulating additional coverage above the standard contract.
Blue Shield originally only covered Fees
for physician services only.
Indemnity Coverage
Offers choice and flexibility to subscribers who want to receive a full range of benefits along with the freedom to use any licensed healthcare provider.
First known Blue Shield Plan
Formed in Palo Alto, California in 1939. The California Physicians Service Plan. It stipulated that doctor’s fees would be paid in full if the subscriber earned less than $3000 per year.
Managed Care Plans
Healthcare delivery system that provides healthcare and controls costs through a network of physicians, hospitals and other healthcare providers.
High Risk Pools
Last resort insurance for individuals who cannot get coverage due to serious medical condition, certain eligibility requirements apply; such as refusal by at least one or two insurance companies.
Distinctive features of Blue Cross Blue Shield
– Make prompt, direct payment of claims.
– Maintain regional professional representatives to assist participating providers with claim problems.
– Provide educational seminars, workshops, billing manuals, and newsletters to keep participating providers up-to-date on BCBS insurance procedures.
Disability Insurance
Defined as reimbursement for lost income as a result of a temporary or permanent illness or injury.
Blue Cross plans originally only covered
Only hospital coverage.
The Blue Cross name and symbol rights were deeded to who and what year?
1973. The American Hospital Association (AMA) deeded these rights to the Blue Cross Association.
BCBS Basic Coverage
Hospitalization
Diagnostic Lab services
X-rays
Surgical fees
Assistant surgeon fees
Intensive Care
Chemotherapy for Cancer
Usual, customary and reasonable (UCR)
The amount commonly charged for a particular medical service by providers within a particular geographic region for establishing their allowable rates. PARs 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 copay described in the policy, as well as full charges for uncovered services. (NonPARs may collect the full fee from the patient. BCBS payments are then sent directly to the patient)
When Blue Cross and Blue Shield combined personnel under one president
1977. The national associations for each entity voted to combine personnel under a single president, responsible to both boards of directors.
Original Blue Cross plan in 1929.
Baylor University Hospital in Dallas, Texas approached teachers in the Dallas school district with a plan that would guarantee up to 21 days of hospitalization per year for subscriber and each of their dependents, in exchange for $6 per year.
The origin of Blue Shield In 1938
the House of Delegates of the American Medical Association (AMA), passed a resolution to support the concept of voluntary health insurance, that encouraged physicians to cooperate with prepaid plans.
Assignment of Benefits Payment
is made directly to the healthcare provider from BCBS.
Medical Emergency Care Rider
Covers immediate treatment sought and received for sudden, severe and unexpected conditions that if not treated would place the patient’s health in jeopardy.
Non-profit corporations
Are charitable, education, civic, or humanitarian organizations whose profits are returned to the program of the corporation rather than distributed to shareholders and officers of the corporation.
The origin of the Blue Shield trademark 1939,
The Blue Shield trademark was first used by the Buffalo, New York Plan. The Associated Medical Care Plans formally adopted the symbol in 1948.
Providers must
adhere to managed care provisions
Preferred Provider Network (PPN)
The requirements of a participating provider
A. Submit insurance claims for all BCBS subscribers.
B. Provide access to the Provider Relations Department, which assists the participating provider in resolving claims or payment problems.
C. Write off (make a fee adjustment for) the difference or balance between the amount charged by the provider and the approved fee established by BCBS.
D. Bill patients for ONLY the deductible and copay/coinsurance amounts that are based on BCBS-allowed fees and the full charged fee for any uncovered service.
Prepaid health plan
Contract between employer and healthcare facility (or physician) where specified medical services were performed for a predetermined fee that was paid on either a monthly or yearly basis.
Preferred Provider
A provider who has signed a Preferred Provider Network contract and agrees to accept the PPN allowed rate, which is generally 10 percent lower than the participating provider rate.
Nonparticipating providers (NONpars)
expect to obtain payment for the full fee charged.
Preferred Provider Network (PPN)
A program that requires providers to adhere to managed care provisions. The preferred provider agrees to abide by all cost-containment, utilization, and quality assurance provisions of the PPN program. IN RETURN FOR THE AGREEMENT BCBS agrees to notify the PPN providers in writing of new employer groups and hospitals that have entered into PPN contracts and to maintain a PPN directory.
For-profit cancellation policy
Plans have the right to cancel a policy at renewal time if the patient moves into a region of the country in which the company is not licensed to sell insurance or if the person is a high user of benefits and has purchased a plan that does not include a non-cancellation clause.
Nonparticipating Providers
Healthcare providers who have not signed participating provider contracts with BCBS, and they expect to be paid the full fee charged for services rendered from the patient.
A minimum benefit under BCBS basic
Hospitalizations — but not the physician.
Coordinated Home Health and Hospice care
Program that allows patients with this option to elect an alternative to the acute care setting. The patient’s physician must file a treatment plan with the case manager assigned to review and coordinate the case. All authorized services must be rendered by personnel from a licensed home health agency or approved hospice facility.
BCBS Major Medical (MM)
Coverage Office visits
Outpatient nonsurgical treatment
Physical and occupational therapy
Purchase of durable medical equipment (DME)
Mental health visits
Allergy testing and injections
Prescription drugs
Private duty nursing (when medically necessary)
Dental care required as a result of a covered accidental injury
American Hospital Association National
organization that represents and serves all types of hospitals, healthcare networks, and their patients and communities. The AHA began as the accreditation agency for new prepaid hospitalization plans in 1939.
Managed Care Plans
is a healthcare delivery system that provides health care and controls costs through a network of physicians, hospitals, and other healthcare providers.
A special clause in an insurance contract that stipulates additional coverage over and above the standard contract
Rider
American Hospital Association (AMA)
National organization that represents and serves all types of hospitals, health care networks, and their patients and communities; began in 1929 as an accreditation association.
Medicare Supplemental Plans (also known as Medigap)
designed to augment the Medicare program by paying for Medicare deductibles and copayments.
What phrase is located on a Federal Employee Program plan ID card?
Government-Wide Service Benefit Plan
Healthcare Anywhere Coverage
allows members of the independently owned and operated BCBS plans to have access to healthcare benefits throughout the United States and around the world, depending on their home plan benefits.
The first time the Blue Cross symbol was used
in 1933 by the St. Paul, Minnesota plan.
Away From Home Care Program
Allows the plan members who are temporarily residing outside of their home HMO service area for at least 90 days to temporarily enroll with local HMOs. Such members usually include dependent students attending school out-of-state, family members who reside in different HMO service areas, long term travelers whose work assignment is in another state, and retirees with dual residences.
The LOGO for the plan ID card for Healthcare Anywhere PPO
Suitcase.
BlueWorldwide Expat
Provides global medical coverage for active employees and their dependents who spend more than six months outside of the United States.
Commercial Supplemental Policy
Supplemental plans usually cover only the deductible, copayment, and coinsurance expenses.
The form for filing BCBS
claims CMS-1500 claim
For-profit corporations
Pay taxes on profits generated by the corporation’s enterprises and pay dividentd to shareholders on after-tax-profits.
Prepaid Health Plan
Contract between the employer and health care facility (or physician) services for fee per month or year. Blue Cross Blue Shield is a prepaid program.
Participating Provider (PAR) Is a healthcare provider who enters into a contract with a BCBS corporation and agrees to:
– 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.
– Write off (make a fee adjustment for) the difference or balance between the amount charged by the provider and the approved fee established by the insurer.
– Bill patients for only the deductible and copay/coinsurance amounts that are based on BCBS-allowed fees and the full charged fee for any uncovered service.
Prospective Authorization Rider
Preauthorization. Also called, Outpatient Prospective Authorization Plan.
Determining Primary Insurance
If each parent subscribes to a different health insurance plan, the Primary and Secondary policies are determined by applying the birthday rule. The policyholder whose birth month and day occurs earlier in the calendar year holds the primary policy for dependent children.
BCBS Basic Care services
Hospitalizations,
Diagnostice laboratory services
X-rays
Surgery fees
Assistant Surgeon Fees
Obstetric care
Intensive care
Newborn care
Chemotherapy for cancer
Balance Billing
Billing beneficiaries for amounts not reimbursed by payers (not including copayments and coinsurance amounts); this practice is prohibited by Medicare regulations.
Primary Insurance
Associated with how an insurance plan is billed. The insurance plan responsible for paying healthcare insurance claims first is considered the primary insurance.
Chronic ( as it relates to Medical Emergency Care Rider)
These conditions do not qualify for treatment under the medical emergency rider unless the symptoms suddenly become acute and require immediate medical attention.
Second Surgical Option
When a second physician is asked to evaluate the necessity of surgery and recommend the most economical, appropriate facility in which to perform the surgery.
Medigap
Supplemental plans designed by the federal government but sold by private commercial insurance companies to cover the costs of Medicare deductibles, copayments, and coinsurance, which are considered “gaps” in Medicate coverage.
Fee-for-Service Insurance
Traditional health insurance that covers a portion of services, such as inpatient hospitalizations or physician office visits, with the patient paying the remaining costs.
When did Blue Cross merge with Blue Shield?
The Blue Cross Blue Shield Association was created in 1986 when the separate Blue Cross association merged with the Blue Shield association.
Point-of-service Plan
Delivers healthcare services using both managed care network and traditional indemnity coverage so patients can seek care outside the managed care network.
Outpatient Pretreatment Authorization
Also called Prospective Authorization or Precertification; requires preauthorization of outpatient physical, occupaptional, and speech therapy services.
Non-profit cancellation clause
In exchange for tax relief for their nonprofit status–non-profit insurance organizations are FORBIDDEN by state law from cancelling coverage for an individual because he/she is in poor heath or because BCBS payment to providers have far exceeded the average.
HOWEVER:
Policies issued by the nonprofit entity can be canceled, or an individual un-enrolled, only when:
–Premiums are not paid
–If the plan can prove that fraudulent statements were made on the application for coverage.
Acute (as it relates to Medical Emergency Care Rider)
When symptoms suddenly become acute and require immediate medical attention.
Birthday Rule
The policy holder whose birth month and day occurs earlier in the calendar year hold the primary policy for dependent children.
Primary Insurance
Is the insurance plan responsible for paying healthcare insurance claims first. Once the primary insurance is billed and pays the contracted amount (80-percent of billed amount) then the secondary plan is billed for the remainder.
Name the 6 BCBS Programs?
Fee-For-Service (traditional coverage)
Indemnity
Managed care plans
Federal Employee Program (FEP)
Medicare supplemental plans
Healthcare Anywhere
Determining Primary Insurance of a Child of Divorced Parents:
The custodial parent’s plan is the primary insurance.
PARENTS ARE REMARRIED: the custodial stepparent’s plan is the secondary and the NONCUSTODIAL PARENT is tertiary (3rd)
EXCEPTIONS are made if a court order specifies a parent.
Worker’s Compensation Insurance
Is always primary to the employee’s group healthcare plan if the employee is injured on the job..
BCBS Basic Services
Hospitalizations (not physician)
Diagnostic Laboratory services
X-rays
Surgical fees
Assistant surgeon fees
Obstetric care
Intensive care
Newborn care
Chemotherapy for cancer
How often must a full-time student’s status be reported to a healthplan.
Every semester
What riders can be included on the Major Medical Plan?
Special Accidental Injury Rider
Medical Emergency Care Rider
American Hospital Association (AHA)
National organization that represents and serves all types of hospitals, healthcare networks, and their patients and communities; the AHA began as the accreditation agency for new prepaid hospitalization plans in 1939.
BCBS Major Medical (MM) services
Office visits
Outpatient nonsurgical treatment
Physical and occupational therapy
Purchase of durable medical equipment
Mental health visits
Allergy testing and injections
Prescription Drugs
Private duty nursing (when medically necessary)
Dental care required as a result of a covered accidental injury
Types of private health insurance Coverage
1.Fee for service (ideminity) plans :reimburses indv. for part/all of the expenses they incur from health care providers; indv. are free to decide whether to seek care from primary care physician or specialist
2.Managed Health Care Plans: health insurance policy under whre indv. recieve services from specific doctors or hospitals that are part of the plan
3. Health Maintenance Organization: Covers health care services approved by doctors; a primary care physician provides general health services and refers patients to a specialist as necessary. (348)
4. preferred provider organization(PPO)
5.Discount on charge arrangment
6. Per diem rate arrangement *last 3 on pg 349
flexible spending account
-an account established by the employer for the employee to use pretax income to pay for medical expenses.
-the amt that you set aside each pay period for your flexible spending account is not subject to federal,state and local income taxes or FICA taxes
*using this account, you are not taxed on the income that you used to pay these health care expenses
Pros & Cons of HMO(Health Maintenance Organization)
Pro: offer health care services @ a low cost. Since They emphasize the early detection and treatment of illness, they can keep the premiums relatively low.
Con: indv. must choose among the primary care physicians and specialist who participate in the plan-they cannot select a physician who is not approved by HMO.
Patient Protection and Affordable Care Act (PPACA) also called affordable care act (ACA)
-require that US citizens obrain health insurance and use the insurance so that they maintain their health, in an effort to prevent serious health problems.
-allows people covered by medicare part B and some other plans to recieve preventitive medical services such as annual health exams, mammograms, and screenings for high cholesterol, diabetes and ome types of cancer @ no cost
(355)
preferred provider organization(PPO)
allows indv. to select a health care provider and covers most of the fees for services; a referral from a doctor is not required to visit a specialist
Con of flexible spending account
Con: funds allocated to the account cannot roll over into the nxt year. Thus you need yo use all the funds that are allocated to the account within the same year.
discount on charge arrangment
arrangement in which preferred provider organization pays a specific % of the health care providers charges
Financial problems Stop-loss provision: As health insurance policy specifies that he should pay 30% of expenses associated w/ a long-term ilness, and he has a stop-loss provision of 35,000 in his policy. If pete incures expenses of $70,000, how much would he owe?
A would owe: $21,000
% A pays = 30%
long-term health care expenses 70,000
0.30 x 70,000= 21,000
per diem rate arrangment
arragnment in which they prefer provider organization pays the provider a specific sum for each day a patient is hospitalized
medigap
insurance insurance provided by private insurance companies to cover medical expeneses that are not covered by medicare. (353)
Contents of health care insurance policies
1. identification of insured persion-who is covered? indv. or family
2. Preexisting conditions-conditions existed before policy was granted (see page 351)
3. Cancellation and renewability options-can you cancel the contract @ any time? or does it guarantee contionous coverage as long as the policyholders pay the premiums on time? Renew up to a specific age level?
4. Other Coverage-can cover wider range of health care needs.
long-term care insurance insurance
that covers expenses associated w/ long-term health conditions that cause indv. to heed help w/ everyday tasks
Other coverages from Health insurance
1.rehabilitation-physical therapy sessions/counseling
2. Mental health-to a limited degree. May provide partial reimbursement for expenses associated with the treatment of mental disorders. They may also specify a maximum period or lifetime amt in which such treatments are covered
3. pregnancy-may pay for sick leave during the last wks of pregnancy
4.Dental insurance-covers part or all of the fees including: annual checkups/orthodontics oral surgery
5. Vision insurance-all or part of the fees imposed for optician and optometerist services including annual checkups; glasses;contacts surgery
medicare
*provides health insurance to individuals who are 65 years of age or older and qualify for SS benefits or who are disabled.
*Also provides payments to health care providers in the case of illness.. Composed of various parts
part A. consists of hospital insurance and is used to cover expenses assoc. w/ inpatient care (including surgeries) in hospitals or nursing facilities, and a limited amt of home health care.
(353)
Determinants of unreimbursed medical expenses
1. deductible-insured bear the cost of the health care up to a level tht is specified in the policy
2. coinsurance-proportion of health care expsesn will be paid by the insurance company
3.stop-loss prevention-sets a maximum amt that you must pay for one or more health care services
4. coverage limits-theres a limit on converage for outpatient physical occupational and speech therapy for example
5. coordination of benefits-benefits are dependent on what benefits would be paid by other policies that you have (see page 352)
Financial problems Disablity insurance: Christine’s total mo. expenses typically amt to $1,800. About $50 of these expenses are work related. Christine’s employer provides disablity insurance coverage of $500 per month. How much indv. disablity insurance should Christine purchase?
Christine should purchase $1250 in indvidual disablity insurance.
typical mo. expenses = $1,800
less: Work-related expenses = $50
Less: Employer disablitiy insurance=$500
Amt of indv. disablity insurance = 1250
*1800-50-500= 1,250*
Expenses not covered by private insurance plans
-regardless of private health insurance plan used. there will likely be some health care expenses that are not covered.
-you should budget for the possibility of some health care expenses that may not be included in your coverage
Medicare prescription Act
-Covers some prescription drugs that were not covered before, the act allows seniors to purchase various forms of coverage for prescription drugs.
-The coverage is provided through private firms, either by itself or as a part of managed care plans. The premimum and deductible will change over time to reflect costs. (354)
*Act also allows people to establish a health savings account.
Long-term care insurance provision
1. Eligibility to recieve benefits
2. Types of services
3. Amount of Coverage
4. Elimination period to recieve benefits
5. Maximum period to recieve benefits
6. Continued coverage
7. Inflation Adjustment
8. Stop-loss provision
Health savings account
an account that shelters income form taxs and that can be used to pay health care expenses
FINANCIAL problems PPO
a. A PPO uses a discount on a charge arrangment. Marie incurred a total charges by a hospital of $20,000, and the percentage paid to the provider is 70%. Marie contract with the PPO specifies her co-pay as 20%. How much does Marie have to pay?
*total amt PPO agrees to pay (70 x 20,000) = 14,000
Percentage marie has to pay 20%
Amt owed: $2,800
Medicaid
A federal program that provides health care to the aged, blind, disabled, and needy families with dependent children.
Factors that affect long-term care insurance
1. provisions of the policy
2. Age – indv. who are older are charged for higher prmiums.
3. Health condition – indv who have an existing long-term ilness are more likely to need to file a claim, so they are charged higher premiums
COBRA -consolidated omnibus budget reconiliation act
-you can continue you health insurance provided thru an employers plan for 18 months after you stop working for the employer.
-The act applies to private firms and state government agencies, but not to federal government agenies.
-If you retire COBRA allows you to continue your health insurance (within 18 mo. maximum period) up to the point @ which you qualify for govt health care
Ethical dilema
Discuss ethics of HMOs rewarding physicians for keeping utilization costs down….. (page 364)
Some may take the position that a
doctor’s first goal is patient satisfaction regardless
of the cost. Others may argue that in order to provide medical care to the largest number of people, some rationing of health care is necessary.
b. If Vera has the financial resources, she can go
outside the HMO and obtain whatever health care
she desires. She can also file an appeal with
the HMO, which may result in an approval for the
treatment.
HIPAA
-ensures that workers can continue their health insurance coverage even if they have switched jobs
-the act prohibits insurance companies from denying health insurance coverage based on an applicants health status, medical condition or history, previous health insurance claims, or disablility.
-this is important for workers who have preexisting medical problems
*to remain eligible for protection under HIPAA, a person must maintain continous enrollment in a health care plan-this provision is intended to prevent indv. from participating in health insurance plan only when they have a medical condition or illness for which they want treatment.
-Established a set of national standards fort the protection of health information. The use of computers and automation has resulted in more health insurance fraud and threatens the privacy of info. about health care recipients.
Reducing cost of Longterm care insurance
select a policy that is only flexible on the provisions that are most important to you .
ex) if you can tolerate a longer elimination period before the policy goes into effect, you can reduce your premium.
ex) if you think the continued coverage or the inflation-adjustment provisions are not very beneficial to you, select a policy that does not contain these provision
PHI-Protected Health informaion
protects all individually identifiable health information held or transmitted by a covered entity.
Key deicions about health and disablity insurance that should be included within financial plan
-do you have adequate insurance to protect your wealth
– how much insurance should you plan to have in the future
disablilty income insurance
insurance that provides income to policyholders in the event that they become disabled (358)
Disability insurance provisions
1. Amt of coverage-specifies the amt of income that will be provided if you become disabled- the amt may be specified as a maximum dollar amount or as a % of the income that you were earning before being disabled.
2. probationary period-you may be subject to this, which extends from the time your application is approved until your coverage goes into effect. A common probationary period = one month
3. waiting period
4. Lenght of time for disablity benefits
5. Non-cancelable provision
6.Renewable provision
(361)
Sources of Disablity income insurance
1. indv. disablility insurance
2. employer disablity insurance
3. insurance from SS
4. Insurance from workers comp.
(359)