Unit 1 test

Reimbursement:

compensation or repayment for healthcare services already delivered

Revenue cycle:

regular set of tasks and activities that produces reimbursement (revenue) 

Revenue cycle management:

the supervision of all the administrative and clinical functions that contribute to the capture, management, and collection of patient service reimbursement

Social Insurance Model

A.k.a. Bismarck models. Universal healthcare coverage for a set of benefits defined by the national government Amount of contributions are proportional to workers’ and employers’ incomes.

National Health Insurance Model

A.k.a. Beveridge model Government owns the clinics and hospitals and pays the doctors and health personnel who work in these public facilities. Single payer system financed by country’s general revenues (taxes)

Private Health Insurance Model

 United States Many private health insurance companies exist in addition to federally run programs. Private insurance companies determine premium, but it is not based on incomes, rather past health/risk assessment 

Healthcare Delivery in the United States

US healthcare sector accounted for $3.6 trillion, or 17.7%, of the nation’s gross domestic product in 2018. Consistent trend for more than a decade Expenditures continue to increase. However, the rate of increase is on a downward trend

U S Healthcare Business Model: vs Grocery Store Business Model

Health insurance

Reducing a person’s exposure to risk of loss by having another party assume the risk. Distribution of risk across poll to account for varying health statuses (estimate of average costs).

Risk

probability of incurring loss

Risk pool

group of people who will be covered by a health insurance plan

Policyholder

 Individual or entity that purchase health insurance coverage

Beneficiary

 Individual who is eligible for benefits from a health plan

Health Insurance Premiums

Dollar amount that policy holder or certificate holder must periodically pay a health insurance plan in return for healthcare coverage. Insurance companies assume insureds’ exposure to risk of loss in return for premium. Actuarial data used to calculate the amount of premium needed to cover all group’s potential health costs. Insurance companies pool premiums to ensure that the pool is large enough to pay losses for the entire group. 

Historical Perspectives

In the early 1900s, individuals purchased sickness funds instead of health insurance Sickness funds are like today’s disability insurance. Many European countries had adopted forms of nationalized health insurance by the 1920s. In the U S, efforts for the compulsory, nationalized health insurance were opposed by physicians, pharmaceutical firms, and insurance companies. U S development and evolution: 1929: first insurance offered by B C B S to schoolteachers in Texas, 1940s and WWII lead to Executive and judicial acts to address labor shortage, Became the basic structure of U S insurance, why insurance is linked to employment in U S 

Health Insurance and Employment:

For larger employers, health insurance is part of an employment benefit package. When people lose their jobs, they often lose their health insurance: COBRA Extend health insurance and A C A Enroll in the federal marketplace.

Revenue Cycle Management, Multidisciplinary model:

Promotes collaboration, Emphasis on education, Proactive stance for reimbursement issues 

Revenue Integrity

Principles are performing revenue cycle duties to obtain: 1. Operational efficiency 2. Compliance adherence 3. Legitimate reimbursement. Goal is to produce a claim that is: 1. Clean Free of errors 2. Complete All services and supplies reflected 3. Compliant Adhering to contract requirements, regulation, and laws 

When hospitals or systems purchase other facilities or provider practices, they integrate the revenue cycles:

 Benefits are Reduced cost to collect, Performance consistency, coordinated strategic goals Difficulties are Different payment systems and Physician resistance 

Components of the revenue cycle:

Front-End Processes Patient Engagement, Middle Processes Resource Tracking, Back-End Processes Claims Production and Revenue Collection

Benefits:

(a.k.a. covered services) Healthcare services for which the insurance company will pay as outlined in the policy (contract)

Policyholder:

 Individual or entity that purchased the health insurance plan Alternative terminology includes insured, certificate holder, member, subscriber and beneficiary. 

Premiums

 Payments that the policyholder must make to an insurer in return for healthcare coverage

Cost sharing provisions

Out-of-pocket expenses that the insured must pay. Deductible is an annual amount of money that the policyholder must pay before the insurance will assume its share of liability

Policy

formal contract between insurance company and individual or group for whom the company is assuming risk, Aka. certificate of insurance 

Stipulate covered conditions

Health conditions, illnesses, diseases or symptoms for which the health insurance company will reimburse for treatment that attempt to maintain, control, or cure said conditions

Summary of Benefits and Coverage (SBC)

Document that, in plain language, concisely details information about the benefits and its coverage of health services. Presented in simple, consistent, and uniform format 

Sections of Health Insurance Policy: Definitions

 vary from everyday definitions Example: Emergency -Prudent layperson standard

Sections of Health Insurance Policy: Eligibility

Eligible dependents -Guaranteed Issue

Sections of Health Insurance Policy: Benefits

Specify types of services -types of providers, types of medical equipment *Essential health benefits: 10 categories required by A C A -Maximum out-of-pocket -Catastrophic expense limit

Sections of Health Insurance Policy: Limitations

limit the extent of the benefit

Sections of Health Insurance Policy: Coinsurance

 Preestablished percentage of eligible expenses after the deductible has been made. Ex:20% of durable medical equipment

Sections of Health Insurance Policy: Copayment

Fixed dollar amount that may vary by type of service. Ex: $25 per clinic visit

Sections of Health Insurance Policy: Tiered Benefits Level of Coverage

 Insured will have a different cost sharing amount per level of service Ex: In-network vs. out-of-network 

Sections of Health Insurance Policy: Exclusions

Noncovered services like: Experimental or investigational Medically unnecessary Cosmetic procedure Non-F D A approved medications

Sections of Health Insurance Policy: Prior Approval (prior authorization, precertification)

Certain services require prior approval in order for the service to be covered. Failure to obtain prior approval will result in the service being denied. Ex: physical therapy, organ transplants, private nurses

Sections of Health Insurance Policy: Other Party Liability (OPL)

Utilized when multiple insurers, health and unhealthy, are involved. Ensure that health insurance is not paying for services that are the responsibility of non-health insurance Ex: health insurance and automobile insurance, health insurance and workers’ compensation 

Sections of Health Insurance Policy: Enrollment

Waiting period Qualifying life events (QLE) Loss of coverage, marriage, divorce, birth, adoption. 

Coordination of Benefits (COB)

Utilized when multiple payers are involved. Services are coordinated so payments to not exceed 100% Ex: primary insurance and secondary insurance (Medicare and Medigap), divorce agreement is followed

Managed Care:

Manage access, cost, quality of healthcare, Goal: provide affordable, high-quality healthcare

Characteristics of Managed Care: High Quality Care

Selection of Providers–Quality; senior clinical staff, Credentialing and periodic re credentialing, Health of Populations–Healthcare services across the continuum of care, Preventive care; health and wellness management Care Management-Coordination of care by primary care provider, Disease management Quality- Accreditation Performance improvement

Characteristics of Managed Care: Cost-effective Care

Medical necessity and utilization management Gatekeeper; prior approval; opinions Case management; prescription management, Prospective Reimbursement Methodologies • Capitation • Bundled payment, global payment, episode payment Providers meet fiscal targets • Members must use in-network providers

Care Management Tools: Primary Care Physician

Gatekeeper & Referrals to specialists PCP determines whether referrals are warranted 1. Medical specialists 2. Sites for diagnostic or therapeutic procedures 3. Hospitals or other healthcare facilities 

Care Management Tools: Disease Management:

Prevent exacerbations of chronic diseases CHF, CAD, asthma Improve health and quality of life Reduce hospitals admissions

Care Management Tools: Evidence-based Clinical Guidelines

Guide clinical decision making Standardize optimal care for all patients and to deliver comprehensive, coordinated care across multiple providers 

Service Management Tools: Medical Necessity

Healthcare services and supplies that are proved or acknowledged to be effective in the diagnosis, treatment, cure, or relief of a health condition, illness, injury, disease or its symptoms and to be consistent with the community’s accepted standard of care. Only services, procedures, and patient care that are warranted by the patient’s condition are provided

Service Management Tools: Utilization Management

Program that evaluates the healthcare facility’s efficiency in providing necessary care to patients in the most effective manner. Utilization review • Should this healthcare service occur? • If so, then what setting is the most efficient in terms of delivery and cost? Prevent overutilization, or the unnecessary consumption of healthcare services or the consumption of unnecessarily expensive service

Clinical review:

 Licensed health professional Reviews against established criteria: Intensity of Service, Severity of Illness and Discharge Screens (ISD), Appropriateness Evaluation Protocol (AEP), Making Care Appropriate to Patients (MCAP) 

Peer clinical review:

Peer clinician qualified to provide clinical opinion

Appeals consideration:

Qualified, expert clinician in same specialty, Not involved in initial decision

Prior Authorization:

Preauthorization, precertification • Healthcare policy delineates which healthcare services require prior approval

Opinions

• Second and third opinions • Prevent unnecessary tests, treatments, medical devices, or surgical procedures • Obtained from experts within the healthcare plan 

Case Management

Coordinates complex and high-cost cases • Coordinates multiple providers at multiple sites over time • Workers’ compensation • Severe head injury

Prescription Management

Formulary • Pharmacy benefit managers (PBMs) administer a health plans prescription drug benefit

Prospective Reimbursement

Plans share the risks of the costs of beneficiaries’ care with providers • One predetermined amount for all the care received • Does not increase payment for the complexity or extent of services

Financial Incentives for Providers

Referrals Inpatient days Productivity (# visits per day) Positive – receive bonuses for meeting targets Negative – percentage reduction of salary when target is not me

Financial Incentives for Members:

Cost sharing Higher coinsurance or copayment when members use out-of-network providers Higher copayment for ED visit then urgent care

Types of MCOs: HMO Health Maintenance Organization

Variation of freedom: closed and open panels 4 models: Staff, group practice, network, independent practice

Types of MCOs: PPO Preferred Provider Organization

Tend to be virtual and decentralized • Influence members to use in-network by higher cost sharing provisions for out-of-network • Use discounted fee schedule instead of capitation 

POS Point of Service

Members choose how to receive services at the time they need them • A.k.a. open-ended HMOs

Medicare

Title XVIII of the Social Security Act 1965 (implemented 1966) • Beneficiaries • Age 65 or older • Eligible for Social Security or Railroad Retirement Benefits • Persons with permanent disability • End-stage renal disease

Parts of Medicare:

Part A Hospitalization Insurance, Part B Voluntary supplemental medical insurance, Part C Managed care option Combines Parts A & B, Part D Outpatient prescription drug coverage

Medicare Part A:

Hospitalization insurance, provided with no premiums, cost sharing includes deductible, copayments, and coinsurance. Services include Acute-care inpatient, Long-term care, Skilled nursing facility, Hospice 

Medicare Part B:

Voluntary supplemental insurance, requires a premium to purchase (that’s why it is called voluntary), Cost sharing includes deductible, copayments and coinsurance Services include: Physician services Outpatient hospital services (like E D) Medical supplies 

Medicare Part C

Medicare Advantage Managed care that combines Parts A & B Many Part C plans also provide Part D. Plan requires a premium and may have cost sharing provisions depending on the plan selected by the beneficiary. Expanded scope of services included in Part C including custodial care, dental services, vision services, health and wellness services, and hearing aids.

Medicare Part D:

Outpatient prescription drug benefit, administered by prescription drug plans and Medicare Advantage plans, Premium, deductible and copayments are applicable, Coverage gap also referred to as the “donut hole” 

Medicare Supplemental Insurance

 Supplementary insurance to cover items and services not covered by Medicare, offered by various insurance providers, must meet federal guidelines, also known as Medigap 

Medicaid:

Title XIX of Social Security Act (1965), Individuals and families with low incomes and limited financial resources, Joint program between federal government and states, administered by individual states, determine eligibility, type, amount, durations, scope of covered services, May offer a managed care option

Medicaid Requirements

Must provide coverage for: Poverty-related infants, children and pregnant women, and deemed newborns Low-income families, Families receiving transitional medical assistance, Children with Title IV E adoption assistance, foster care, or guardianship care, and children aging out of foster care, Elderly and disabled individuals receiving Social Security incomes and aged, blind, and disabled individuals who live in 209(b) states • Certain working individuals with disabilities, Certain low-income Medicare enrollees such as Specified Low-Income Medicare Beneficiary (SLMB) 

Programs of All-Inclusive Care for the Elderly (PACE)

Joint Medicare-Medicaid venture, offers states the option of creating and administering a managed care option for the frail elderly population in the community, Enhance the quality of life for the frail elderly population, Live in their own homes and communities, Have service facilities in various geographical service areas, Increased accessibility to frail elderly population

Children’s Health Insurance Program (CHIP)

 Title XXI of Social Security Act, CHIP is a state–federal partnership that targets the growing number of children not covered by health insurance, Like Medicaid CHIP varies from state to state, Requirements for services that must be provided, Requirements limiting cost sharing provisions, Almost 10 million children are enrolled currently in CHIP 

TRICARE:

Active-duty members of the military and qualified family members, Activated guard or reserve members, Comprehensive coverage, Outpatient visits, Hospitalization, Preventive care, Maternity, Immunizations, Mental/behavioral health. TRICARE Prime and Prime Remote: ASDM or ADFM, TRICARE Select and Select Overseas • ADFM TRICARE Young Adult • ADFM aged 21–25 • TRICARE Reserve and Retired Reserve • Qualified National Guard and Reserve members • TRICARE for Life • Secondary coverage for those eligible for Medicare

ASDM = active-duty service member ADFM = active-duty family member 

Veterans’ Health Administration (VA):

Nation’s largest integrated healthcare system, 1,200 care sites, 9+ million veterans served each year, Little or no cost to its members, Coverage is based on Priority Groups (see figure 3.3), Private insurance can be used to supplement V A benefits. For example, private insurance to cover V A copayments.

Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA)

 dependents and survivors of permanently and totally disabled veterans, Survivors of veterans who died of service-related conditions, Survivors of military personnel who died in the line of duty (not due to misconduct), If family member qualifies for TRICARE, then they cannot enroll in CHAMPVA, Enrollees are treated at participating VA healthcare facilities, Outpatient deductible and some cost sharing provisions

Indian Health Service (IHS)

Native Americans/American Indian, Alaska Natives Covers: Preventive health services Primary medical services (hospital and ambulatory care) Community health services Rehabilitative services

Workers’ compensation:

Work-related injuries or illness Covers: Healthcare costs, Lost income. Legislated by individual states Set coverage: Burial, death, income, and medical Federal Employees Compensation Act Federal government employees Established in 1916 and administered by the Office of Workers’ Compensation Programs