Unit 1 test
Chapter 1: Healthcare Reimbursement and Revenue Cycle Management
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 BCBS 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 ACA 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
Detailed revenue cycle from Patient Perspective
Detailed revenue cycle from Provider/Facility Perspective
Chapter 2: Health Insurance
Health Insurance: Individual: purchased by individual or family from an insurance agency Employer-Based: individual or family obtains as part of an employment benefit package
Types of Health Insurance: Single Coverage –Insured, Family Coverage—Insured+Spouse+Children+Young Adult+Disabled Person
Risk Pool: Group of individual entities whose healthcare costs are combined for evaluating financial history and estimating future costs. May combine: Individuals, Employers, Associations
Risk: the probability of incurring loss
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.
Eligibility -Eligible dependents -Guaranteed Issue
Enrollment -Waiting period Qualifying life events (QLE) Loss of coverage, marriage, divorce, birth, adoption.
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
Limitations: limit the extent of the benefit
Coinsurance Preestablished percentage of eligible expenses after the deductible has been made. Ex:20% of durable medical equipment
Copayment Fixed dollar amount that may vary by type of service. Ex: $25 per clinic visit
Tiered benefits Levels of coverage. Insured will have a different cost sharing amount per level of service Ex: In-network vs. out-of-network
Exclusions: Noncovered services • Experimental or investigational • Medically unnecessary • Cosmetic procedure • Non-F D A approved medications
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
Coordination of Benefits (C O B): 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
Other Party Liability (O P L) 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
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
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
Disease Management: Prevent exacerbations of chronic diseases C H F, C A D, asthma Improve health and quality of life Reduce hospitals admissions
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
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 site over time • Workers compensation • Severe head injury
Prescription Management • Formulary • Pharmacy benefit managers (P B Ms) administer a health plans prescription drug benefits
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 E D 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
P P O 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
P O S Point of Service: Members choose how to receive services at the time they need them • A.k.a. open-ended H M Os
Chapter 3: Government-Sponsored Healthcare Programs
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 X X I 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 A D F M, TRICARE Select and Select Overseas • A D F M TRICARE Young Adult • A D F M 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