Class # 2: "Introduction to Health Insurance Plans"
The medical billing process is not undertaken by a single individual. Medical coding involves front office administrators, such as receptionists, as well as back office staff, including the Medical Billing and Coding Specialist. It is important to understand every step of this process if you intend to pursue a career in medical billing and coding. For the purposes of this lesson, we will cover the end-to-end process of medical billing as a whole, and not just the responsibilities of the Medical Billing and Coding Specialist.
The primary job of medical billing specialists is to:
Understand each individual’s responsibility for payment, as they may differ from patient to patient
Evaluate and analyze insurance coverage and medical charges, and prepare accurate billing forms
Collect accurate payments from insurance plans and/or individual patients
These three primary tasks require many specific responsibilities within the medical billing process. In this course we will break down these responsibilities into a series of steps that begins when a patient schedules an appointment and ends when reimbursement is collected from the insurance company and/or patient.
Health insurance is a type of insurance coverage that covers the cost of an insured individual's medical and surgical expenses. Depending on the type of health insurance coverage, either the insured pays costs out-of-pocket and is then reimbursed, or the insurer makes payments directly to the provider. In health insurance terminology, the "provider" is a clinic, hospital, doctor, laboratory, health care practitioner, or pharmacy. The "insured" is the owner of the health insurance policy; the person with the health insurance coverage. In countries without universal health care coverage, such as the USA, health insurance is commonly included in employer benefit packages and seen as an employment perk.
Broadly speaking there are two types of health insurance (private and public):
Private health insurance - the CDC (Centers for Disease Control and Prevention) says that the US health care system is heavily reliant on private health insurance. 58% of Americans have some kind of private health insurance coverage.
Public (government) health insurance - for this type to be called insurance, premiums need to be collected, even though the coverage is provided by the state. Therefore, the National Health Service (NHS) in the United Kingdom is not a type of health insurance - even though it provides free medical services for its citizens, it does not collect premiums - it is a type of universal health coverage. Examples of public health insurance in the USA is Medicare, which is a national federal social insurance program for people aged 65+ years as well as disabled people, and Medicaid which is funded jointly by the federal government and individual states (and run by individual states), SCHIP which is aimed at children and families who cannot afford private insurance, but to not qualify for Medicaid. Other public health insurance programs in the USA include TRICARE, the Veterans Health Administration, and the Indian Health Service.
What are managed care plans?
Managed care plans are health insurance plans that have a contract with health care providers and medical facilities to provide medical care at special prices (lower costs). These providers form the plan's network. The network will have rules, which stipulate how much of the care the plan will pay for. Restrictive plans usually cost the "insured" less, while flexible ones are more expensive. HMOs will typically only pay for care if you use one of the providers in their network. A primary care doctor (general practitioner) coordinates most of the patient's care. PPOs will cover more of the costs if the insured selects a provider within their network, but will also pay up some of the money for providers outside the network. POS plans allow the insured to choose between an HMO or a PPO each time care is required.
What are HMOs? Health Maintenance Organizations (HMOs) deliver care directly to the insured. The insured goes directly to an HMO's medical provider to see health care professionals. The insured does not pay for each individual service that is received. A set premium is paid to the HMO, which in return offers a range of services, including preventive care. A primary care physician (general practitioner, GP, or family doctor), who is affiliated with the insured's plan usually coordinates the care. In the majority of cases, the HMO will only provide coverage to specialists within the provider network that are referred by the primary care physician. The HMO will nearly always insist that the insured receive care from health care professionals, laboratories and medical centers which are within its network of providers. The HMO will have negotiated a list of fees for each medical service with them. This is done to keep costs at a minimum.According to the majority of health insurance advisers, HMOs are usually the cheapest kind of health insurance plan. Copayment - in most cases, the insured will also have to make a copayment for some services. Some HMOs may not require copayments for hospital stays.
What are PPOs (Preferred Provider Organization)?
A PPO is in many ways similar to an indemnity plan - the insured can see any doctor whenever they like. The Preferred Provider Organization gets together with health care providers, health professionals and laboratories and negotiates preferential prices. The providers that come to agreed deals with the PPO then become part of its network.
What are POS Plans (Point-of-Service Plans)?
A POS Plan is like a hybrid of an HMO and a PPO. The insured can chose to either have a general practitioner coordinate their care, or opt to go directly to the "point-of-service". When the insured requires medical care, there are usually two or three different choices, and they depend on what type of POS Plan is in place.
Please view the videos below:
Optional reading assignment:
(Understanding Health Insurance, by Green and Rowell. 10th Edition)
"What is Health Insurance", page 20
"Medical Documentation", pages 26-27.