Chapter 1: Medical Insurance A Revenue Cycle Process Approach

Accounts Receivable (AR)

monies owed to a medical practice by a patient

Accounts Payable (AP)

practice's operating expenses - monies owed by the practice

cash flow

movement of monies into or out of a practice

operating expenses

rent, salaries, supplies, and insurance

revenue cycle

all administrative and clinical functions that help capture and collect patient payment

HIT

Health Information Technology - computer information sytems that record, store and manage patient information.

medical insurance

written policy stating the terms of an agreement between a policy holders and a health plan

policy holder

person who buys an insurance plan

health plan

individual or group plan that provides or pays for medical care

adjudication (db)

process followed by a health plan to examine claims and determine benefits

benefits

amount of money a health plan pays for services covered in an insurance policy

capitation (pm)

payment method in which a fixed prepayment covers the providers services to a plan member for a specified period time

certification

recognition of a person demonstrating a superior level of skill on a national test by an official organization

Coinsurance (poc)

portion of charges an insured person must pay after the deductible

Schedule of benefits

list of medical expenses covered by a health plan

payer

health plan or program

third-party payer

private or government organization that insures or pays for healthcare on behalf of beneficiaries

schedule of benefits

list of medical expenses covered by a health plan

medical necessity

payment criterion that requires medical treatments to be appropriate and provided in accordance with generally accepted standards

non covered services

medical procedures that are not included in a plan's benefits

excluded services

services not covered in a medical insurance contract

provider

person or entity that supplies medical or health services and bills for, or is paid for, the services in the normal course of business

covered services

medical procedures and treatments that are included as benefits in a health plan

indemnity plan

health plan that offers protection from loss

healthcare claim

electronic transaction or a paper document filed to receive benefits

premium

money the insured pays to a health plan for a policy

deductible

amount the insured must pay for healthcare services before a health plan's payment begins

coinsurance

portion of charges an insured person must pay for covered healthcare services after the deductible

out-of-pocket

expenses the insured must pay prior to benefits

fee-for-service

payment method based on provider charges

managed care

system combing the financing and delivery of healthcare services

managed care organization (MCO)

organization offering a managed healthcare plan

participation

contractual agreement to provide medical services to a payer's policy holders

health maintenance organization (HMO)

managed healthcare system in which provider's offer healthcare to members for fixed periodic payments

capitation

fixed prepayment covering provider's services for a plan member for a specified period

per member per month (PMPM)

periodic capitated prospective payment to a provider that covers only services listed on the schedule of benefits

network

group of healthcare providers, including physicians and hospitals, who sign a contract with a health plan to provide services to plan members

out-of-network

provider that does not have a participation agreement with a plan

preauthorization

prior authorization from a payer for services to be provided

copayment

specified amount a beneficiary must pay at the time of a healthcare encounter

primary care physician (PCP)

physician in a health maintenance organization who directs all aspects of a patient's cares

Point of service plan (POS)

open HMO, reduces restrictions, and allows members to choose providers who are not in the HMO network

exclusive provider organization (EPO)

generally does not cover much outside of plan's provider netokrk

preferred provider organization (PPO)

managed care organization which a network of providers supplies discounted treatment for plan members

consumer driven health plan (cdhp)

medical insurance that combines a high-deductible health plan with a medial savings account

self funded (self insured) health plan

organization pays for health insurance directly and sets up a fund form from within

government sponsored healthcare programs

Medicare, Medicaid, Tricare, Champus

medical insurance specialists

staff member who handles billing, checks insurance, and processes payments

medical coder

staff member with specialized training who handles diagnostic and procedural coding

diagnosis code

number assigned to a diagnosis

procedure code

code that identifies medical treatment or diagnostic services

compliance

actions that satisfy official requirements

professionalism

acting for the good of the public and the medical practice

ethics

standards of conduct based on moral principles

etiquette

standards of professional behavior

practice management program (PMP)

account software used for scheduling appointments, billing, and financial record keeping

patient ledger

record of all charges, payments, and adjustments made for a patient's accounts

electronic health record (EHR)

computerized lifelong healthcare record for an individual that incorporates data from all sources that provide treatment for the individual

GAAP

Generally accepted accounting principles

Electronic medical record (EMR)

digital version of a patient's paper chart, containing their medical history, diagnoses, medications, and treatment plans within a single provider's office or hospital

Excluded Services

Services not covered in a medical insurance contract

Referral

transfer of patient care from one physician to another

Adjudication

Health plan process of examining claims and determining benefits

Step 1

Preregister Patients

Step 2

Establish Financial Responsibility

Step 3

Check In Patients

Step 4

Review Coding Compliance

Step 5

Review Billing Compliance

Step 6

Check Out Patients

Step 7

Prepare and Transmit claims

Step 8

monitor payer Adjudication

Step 9

generate patient statements

Step 10

follow up payments and collections