HMAP 163 Health Insurance

What is the overall goal of health insurance?

Offset high medical costs

What is health insurance?

A contract between the insured (policyholder) and third party or government programs (insurance providers)

Give examples of who can be insured or a beneficiary other than the policyholder

Dependent children, spouse, domestic partner

Insurer

Insurance company; the organization offering coverage

Premium

Amount the policyholder pays to the insurance company to keep their policy in effect

Policyholder/Subscriber

The person who owns the policy and manages the insurance policy

Insured/Beneficiaries

The person(s) covered under the insurance policy and are entitled to benefits of the policy

Guarantor

Person who is responsible for paying the out-of-pocket expenses

Participating provider

Provider contracted with an insurance company that accepts the allowed amount as full payment

Non-Participating provider

Provider not under contract with an insurer and not held to reimbursement guidelines of the plan

Allowed amount

Maximum amount an insurer will pay for any given service

Balance Bill

Patient is billed for the balance between the cost of service and what insurance will pay

Deductible

Amount the insured must pay before insurance will pay

Coinsurance

Percentage of money that the patient pays for each service after deductible is met

What is the most common coinsurance plan?

80/20 plan

Copayment

Fixed amount of money the insured pays towards eligible services

By law, what fees cannot be waived and must be paid by the insured?

Copays, coinsurance, deductibles

Pre-existing condition

Medical condition that existed before the policy was issued

Exclusions

Items that may or may not be covered by insurance

Precertification

Process to seak approval for treatment under patient’s insurance contract and seeing if it will be covered

Preauthorization

Getting approval for services that are deemed medically necessary and will be covered by the insurerh

What is important to have on the preauthorization form for billing purposes?

Authorization number

Predetermination

Process to determine the maximum amount of money the insurance may pay

Is predetermination done before or after services are rendered?

Before

Does predetermination guarantee payment?

No

What does CAD stand for?

Covered, Authorized, Dollar

Coordination of Benefits

Establishing the order in which health insurance plans pay claims when the insured has more than one insurance plan

What is the job of the primary insurance company for people with dual coverage?

Pays the first claim

What is the job of the secondary insurance company for people with dual coverage?

Supplemental insurance who picks up out-of-pocket expenses after primary pays

Birthday Rule

Rule that determines which insurance is primary and secondary for a dependent(s) based on the parent’s birthday month and date that falls first within the calendar year

Third-party payer

Payment for coverage coming from someone other than the patient

Most common third-party payers

Federal agencies, state agencies, insurance companies, workers’ compensation

Third-party liability (TPL)

Legal obligation for third-party payers to pay for part or all of the expenditures for medical assistance furnished under a state plan

Fee Schedule

List of predetermined payment amounts for services provided to patients

What is a fee schedule when it is created by providers?

List of predetermined payment amounts set by the provider for services provided to patients

What is a fee schedule when it is created by providers?

List of agreed amounts set by the insurance company and accepted by a contracted provider

Fee-for-service

Payment for each service that is provided

Capitation

Insurance company pays a physician a set fee per month for each patient, regardless of how often the patient is seen

When might using capitation be bad for providers?

New doctors that don’t know how to manage money properly or doctors that take on high-risk populations