The Blue Plans, Private Insurance and Managed Care Plans

Outline The Blue Plans, Private Insurance and Managed Care Plans

1. Private Insurance a) Blue Cross and Blue Shield Plans -Are pioneers in private insurance -have had nonprofit status for many years. -is the largest insurance company in the United States -each plan independently owned and operated in each state but work together in a network like a spider web -originally Blue Cross plans were developed to cover hospital expenses and blue shield to cover physician services -there are many different types of blue plans across the county -refer to the patient’s card to see if the plan is a PPO, POS, HMO, etc. -plans also may have different names but still be Blue Plans

2. Managed Care a) Until the early 70’s, most health insurance was delivered through traditional fee- for-service plans b) In prepaid group plans, patients join the plan and pay monthly medical insurance premiums individually or through their employer. c) The physician renders service to the patient, and the patient usually pays a small co-payment and occasionally a deductible. d) Providers that join the plan are paid using the capitation method. e) Capitation is a system of payment used by managed care plans in which physicians and hospitals are paid a fixed per capita amount for each patient enrolled over a stated period of time, regardless of the type and number of services provided. f) Prepaid Group Practice Health Plans - Kaiser Permanente Medical Care Program g) Early insurance contracts were indemnity plans. They paid a flat fee for covered services and the patient paid the full balance. There were no participating agreements with physicians or hospitals. h) Major restructuring was needed in the 1990’s for the following reasons: -Many Americans were not covered by private or government insurance -Employers were paying escalating charges and did not want to cut wages to cover these costs -Government needed to reduce the deficit. -Physicians and hospitals costs soared with no end -Patients spent more and more money for less and less care and coped with a system riddled with inefficiency and fraud -Patients were overusing services. i) Oldest prepaid health plans is the health maintenance organization (HMO)

1 3. Management of Plans -Some managed care plans require prior authorization for certain services or referral of a patient to see a specialist. There are several types of referrals that a plan may use. a) Formal referral- an authorization request is required by the MCO contract to determine medical necessity. This may be obtained via telephone or a completed authorization form mailed or transmitted via fax or email b) Direct referral- an authorization request form is completed and signed by the physician and handed to the patient. Certain services may not require completion of a form and may be directly referred (obstetric care, dermatology etc.) c) Verbal referral- Primary care physician informs the patient and telephones the referring physician that the patient is being referred for an appointment. d) Self-referral- The patient refers himself or herself to a specialist. The patient may be required to inform the primary care physician.

-Patients may be unaware of preapproval requirements. A good precaution is to ask the patient about insurance coverage at the time the appointment is made. If the patient is a member of a managed care plan, carefully review the patient’s preauthorization requirements. If approval is necessary for certain situations, inform the patient of this before he or she sees the physician. If a patient has obtained the written authorization or approval, remind him or her to bring the form at the time of the scheduled visit. Even if preapproved the treatment must be medically necessary or payment may be denied after submission of a claim.

-If a specialist recommends referral to another specialist (tertiary care) to be sure the recommendation is in writing. The managed care plan may refuse payment if the proper form is not completed.

-Many managed care plans require that patients have laboratory and radiology tests performed at plan-specified facilities. These are referred to as network facilities.

3. Plan Administration -Patient Information Letter Inform managed care subscribers in writing what is expected from them and what they can expect in turn. The letter should outline possible restrictions, noncovered items, expectations for co-payment, and names of the managed care plans in which the physician is currently participating.

-Scheduling Appointments Screen patients when they call for appointments to determine whether they belong to the same prepaid health plan as the physician. Ask the patient to read from the insurance card to determine whether the physician’s name is listed as the patient’s primary care physician.

-Encounter Form

2 Many managed care plans use an internal document on which the services rendered to the patient are checked off (charge ticket, encounter form, routing slip)

4. Financial Management

Deductible- usually there is no deductible for managed care. Be sure to ask the patient.

Co-payments- predetermined fee paid by the patient to the provider at the time service is rendered. Also known as share of cost or copay. Always collect the copay. Billing for small amounts is not cost effective.

Stop-Loss Limit-If the patient’s services are more than a certain amount; the physician can begin asking the patient to pay (fee for service)

Contract Payment Time Limits-Usually state laws dictate the time limit within which a managed care plan must pay. Prompt payment laws require payment within 30, 45, 55, or 60 days.

Monitoring Payment-Monitor payment from all managed care plans and note whether the payment received is less than agreed amount as stated in the contract. If payment has been reduced, send a letter to the plan citing, “As per contract, see page xx about the fee for the consultation.”

Statement of Remittance- Managed care plans pay by either a capitation system (monthly check for the number of patients in the plan) or based on the services given to the patient (monthly check with a statement of remittance or explanation of benefits, EOB)

The Medical Biller should be aware that no matter what type of plan coverage is either purchased by an individual or paid by an employer.