Understanding Health Insurance: A Guide to Billing and Reimbursement

AAPC

is a professional association, previously known as the American Academy of Professional Coders, established to provide a national certification and credentialing process, to support the national and local membership by providing educational products and opportunites to networks, and to increase and promote national recognition and awareness of professional coding

American Association of Medical Assistants (AAMA)

enables medical assisting professionals to enhance and demonstrate the knowledge, skills, and professionalism required by employers and patients; as well as protect medical assistants’ right to practice

American Health Information Management Association (AHIMA)

founded in 1928 to improve the quality of medical records, and currently advances the health information management (HIM) profession toward an electronic and global environment, including implementation of ICD-10-CM and ICD-10-PCS in 2013

bonding insurance

an insurance agreement that guarentees repayment for financial losses resulting from the act of failure to act of an employee; protects the financial operations of the employer

business liability insurance

protects business assets and covers the cost of lawsuits resulting from bodily injury, personal injury, and false advertising

Centers for Medicare and Medicaid Services (CMS)

formerly known as the Health Care Financing Administration (HCFA); an administrative agency within the federal Department of Health and Human Services (DHHS)

claims examiner

employed by third-party payers to review health-related claims to determine whether the charges are reasonable and medically necessary based on the patient’s diagnosis

coder

applies working knowledge of coding systems, coding conventions and guidelines, government regulations, and third-party payer requirements to accurately assign ICD-10CM/PCS and CPT/HCPCS Level II codes to diagnoses and procedures/services documented in patient records

coding

process of reporting diagnoses, procedures, services, and supplies as numeric and alpanumeric characters (called codes) on the insurance claim

embezzle

the illegal transfer of money or property as a fraudulent action; to steal money from an employer

errors and omissions insurance

is similiar to professional liability insurance that protects from liability as a result of mistakes when performing their professional services

ethics

principle of right or good conduct; rules that govern the conduct of members of a profession

health care provider

physician or other health care practitioner

health information technicians

professionals who manage patient health information and medical records, administer computer information systems, and code diagnoses and procedures for health care services provided to patients

health insurance claim

a document that is electronically or manually submitted to an insurance plan requesting reimbursement for health care procedures and services provided

health insurance specialist

a person who reviews medical necessity to procedures or services performed before payment is made to the provider

hold harmless clause

a policy that the patient is not responsible for paying what the insurance plan denies

independent contractor

defined by the ‘Lectric Law Library’s Lexicon as “a person who performs services for another under an express or implied agreement and who is not subject to the other’s control, or right to control, of the manner and means of performing the services. The orginization that hires an independent contractor is not liable for the acts or omissions of the independent contractor”

internship

a nonpaid professional practice experience that benefits students and facilities that accept students for placement; students receive on-the-job experience prior to graduation, and the internship assists them in obtaining permanent employment

medical assistant

employed by a provider to perform administrative and clinical tasks that keep the office or clinic running smoothly

medical malpractice insurance

a type of liability insurance that covers physicians and other health care professionals for liability claims arising from patient treatment

medical necessity

involves linking every procedure or service code reported on an insurance claim to a condition code that justifies the need to perform that procedure or service

professional liability insurance

provides protection from liability as a result of errors and omissions when performing their professional services; also called errors and omissions insurance

professionalism

conduct or qualities that characterize a professional person

property insurance

protects business contents against fire, theft, and other risks

reimbursement specialists

is a type of health insurance specialist who reviews health-related claims to match medical necessity to procedures to services performed before payment is made to the provider

respondeat superior

latin for “let the master answer”; legal doctrine holding that the employer is liable for the actions and omissions of employees performed and committed within the scope of their employment

scope of practice

health care services, determined by the state, that an NP and PA can perform

workers’ compensation insurance

is an insurance program, mandated by federal and state governments that requires employers to cover medical expenses and loss of wages for workers who are injured on the job or who have developed job-related disorders

no balance billing

is a clause that protects patients from being billed for amounts not reimursed by payers

managed care contract

combines health care delivery with the financing of services to provide more affordable quality care

diagnoses

are documented conditions or diseases process

procedures

are performed for diagnostic and therapeutic purposes

services

are provided to evaluate and manage patient care

medical devices, eqiupment, and supplies

are used for curative, medical maintenance, and prosthetic purposes, and are often prescribed by a physician

International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM)

is a coding system used by all providers to report diagnoses and conditions, such as diseases and injuries, along with other reasons for inpatient and outpatient encounters

International Classification of Diseases, 10th Revision, Procedural Coding System (ICD-10-PCS)

is a coding system used to report procedures and services on inpatient hospital claims only

Healthcare common Procedure Coding System (HCPCS)

is pronounced “hicks picks”, is a coding system that consists of two levels: Current Procedural Terminology (CPT), and HCPCS Level II codes (or national codes)

Current Procedural Terminology (CPT)

is a coding system published by the American Medical Association (AMA) that is used to report procedures and services for outpatient and physician office encounters, professional services provided to hospital inpatients, and procedures and professional services provided by physicians and other qualified health care professionials to hospital and other inpatients

HCPCS Level II codes

also known as national codes, is a coding system published by CMS that is used to report procedures, services, and supplies not classified in CPT; CMS phased out the use of this, however, some third-party payers continue to use the codes

explanation of benefits (EOB)

is from a third-party payer, is a report detailing the results of processing a claim

remittance advice

also called a remit, is a notice received by the provider from the insurance company that contains payment information about a claim

Managed health care (managed care)

also called containment, manages health care costs, quality, and utilization by delivering health plan benefits and additional services through contracted arrangements between individuals or health care programs and managed care organizations, which accept a predetermined per member per month payment for services

capitation

per member, per month

medical care

includes the identification of diseases and the provision of care and treatment to persons who are sick, injured, or concerned about their health status

health care

expands the definition of medical care to include preventive services

preventive services

are designed to help individuals avoid health and injury problems and promote overall wellness.

express contract

includes provisions that are stated in the health insurance contract, such as performing an annual physical examination

implied contract

results from actions taken by the health care facility or provider, such as agreeing to provide treatment to a patient

step-loss insurance

also called excess insurance, provides protection against catastrophic or unpredictable losses and include aggregate stop-loss plans, and specific stop-loss plans

aggregate stop-loss plans

provide a maximum dollar amount eligible expenses during a contract period

specific stop-loss plans

provide protection against a high claim on an individual

health insurance

is a contract between a policyholder and a thrid-party payer or government health program to reimburse the policyholder for all or a portion of the cost of medically necessary treatment or preventive care procided by health care professionals

premium

is the amout paid for a health insurance policy

schedule of benefits

also called cavered services, includes services covered by a health insurance plan

carve-out plan

is an arrangemnt that a health insurance company provides to offer a specific health benefit that is managed separately from the health insurance plan

fee-for-service

a traditional model of health care reimbursement for which providers receive payment according to a fee schedule after covered procedures and services are procided to patients

fee schedule

is a list of predetermined payments for health care services provided to patients

indemnity plan

also referred to as fee-for-service plans, allows patients to seek health care from any provider, and the health plan reimburses the provider according to this

prepaid health plan

establishes a capitation contract between a managed health care plan and network providers who provide specified medical services for a predetermined amount paid on a monthly or yearly basis

policyholder

signs a contract with a health insurance company and owns the health insurance policy

enrollee

also called subscriber, joins a managed care plan

third-party payer

is a health insurance company that provides coverage

CMS-1500 claim

is submitted to thrid-party payers for reimbursement of outpatient and phycisian office procedures/services and inpatient professional services

ANSI ASC X12N 837P

the abbreviated, electronic version of the CMS-1500 claim

UB

refers to Uniform Bill, and is also called the CMS-1450

UB-04

refers to Uniform Bill, and is also called the CMS-1450; is autopopulated with data from an electronic health record or abstracted data collected by the health information management department

payer mix

comprises the provider’s different types of health insurance payments

revenue management

helps ensure the financial viability of a health care facility or medical practice

guaranteed renewal provision

when a health insurance contract contains this, the health insurance company must offer to renew the policy as long as premiums continue to be paid

deductible

is the amount for which the patient is financially responsible before an insurance policy provides payment

lifetime maximum amount

is the maximum benefits payable to a health plan participant

riders

increase, limit, delete, or clarify the scope of insurance coverage such as dependent continuation and special accidental injury riders

dependent continuation

provides continued health insurance coverage for children who meet certain conditions, such as full-time college attendance and under age 26

special accidental injury riders

cover 100 percent of nonsurgical care sought and rendered within 24 to 72 hours of an accidental inujury

copayment (copay)

is a provision in a health or managed care plan that requires the policyholder or patient to pay a specified dollar amount to a health care provider for each encounter or medical service received

coinsurance

is the percentage of costs a patient shares with the health or managed care plan

state insurance regulators

are responsible for registering insurance companies, overseeing compliance and penatly provisions of the state insurance code, supervising company formation within the state, and monitoring the reinsurance market

percentage covered by private health insurance:

66%

percentage covered by employment-based plans:

54.3%

percentage covered by direct-purchase health insurance plans:

10.2%

percentage covered by Medicaid:

18.9%

percentage covered by Medicare:

18.4%

percentage covered by military health care:

3.5%

group health insurance

private health insurance model that provides coverage, which is subsidized by employers and other organizations; these plans distribute the cost of health insurance among group members to lessen the cost and provide broader coverage

individual health insurance

a type of private health insurance policy purchased by individuals or familes who do not have access to group health insurance coverage

public health insurance

federal and state government health programs available to eligible individuals

single-payer health system

national health service model adopted by some Western nations and funded by taxes; the government pays for each resident’s health care; which is considered a basic social service

socialized medicine

a type of single-payer health system in which the goverment owns and operates health care facilites and providers receive salaries

universal health insurance

social insurance model that has the goal of providing every individual with access to health coverage, regardless of the system implemented to achieve that goal, such as a combination of private and public health insurance

legislation

includes laws, which are rules of conduct enforced by threat of punishment if violated

Federal Employer’s Liability Act (FELA)

was implemented to protect and compensate railroad workers who are injured on the job

Federal Employee’s Compensation Act (FECA)

was implemented to provide civilian employees of the federal government with medical care, survivors’ benefits, and compensation for lost wages

Hill-Burton Act

provided federal grants to modernize hospitals that had become obsolete due to the lack of capital investment during the Great Depression and World War II, and in return for federal funds, facilites were required to provde services for free or at reduced rates to patients unable to pay for care

Taft-Hartly Act

balanced relationships between labor and management and indirectly resulted in the creation of third-party administrators (TPAs)

third-party administrators (TPAs)

administered health care plans, processed claims, and served as a system of checks and balances for labor and management

major medical insurance

provided coverage for catastrophic or prolonged illnesses and injuries

Federal Employee Health Benefit Plan (FEHBP)

was enacted by Congress to allow federal employees, retirees, and their survivors to select appropriate health plans that meet their needs

War on Poverty

resulted in 1965 legislation that implemented Medicare, Medicaid, and Civilian Health and Medical Program-Uniformed Services

Medicare

(Title XVIII of the Social Security Amendments of 1965); health care services to Americans over the age of 65