HS220WANDA FEASTER, MBA, CCS-P, CPCE-MAIL: WFEASTER@KAPLAN.EDU

PHONE: 678-406-0880

Medical Coding & Insurance! Unit 2

During this week’s seminar, we will be discussing the

importance of Managed Care Systems. Many physicians

misinterpret the term "managed care" as meaning

simply a system for providing health care at discounted

fees. The definition of managed care is a system of

health care delivery that influences utilization of

services, cost of services and measures performance.

The goal is a system that delivers value by giving

people access to quality, cost-effective health care.

This week Seminar

Causes of Managed Care• Technological advances

• Rising healthcare costs

• Aging population

• Increase in malpractice suits

• Defensive medicine

Causes of Managed Care• Rapid increase of healthcare costs

• Health insurance no longer affordable

• Government intervention

• Control healthcare costs

Fraudulent Behavior• The medical office specialist can

be held liable for fraudulent billing.

• The provider and medical office specialist can both be prosecuted for fraudulent behavior.

Insurance FraudA Columbus chiropractor has been sentenced for insurance fraud.

Dr. James Donovan, 63, the Donovan Chiropractic Clinic in Columbus has been sentenced to three years, one suspended, two to serve on house arrest in a plea agreement.

Lowndes County Circuit Judge Jim Kitchens also ordered Donovan to pay $500 to the crime victim compensation fund and to pay restitution of $3,555.55 to Blue Cross and Blue Shield of Mississippi insurance company.

Donovan was arrested last May by investigators with the Insurance Fraud Unit of the Attorney General's office. An investigation revealed that Donovan made false or fraudulent claims on the insurance policies of four patients between Jan. 1, 2007 and March 23, 2008, according to state Attorney General Jim Hood.

Types of Managed Care Plans• HMO: Health maintenance

organization

• PPO: Preferred provider organization

• POS: Point-of-service plan

Health Maintenance Organization• The subscriber chooses a primary care physician

(gatekeeper) who directs all care.

• The HMO has a contractual agreement with providers and hospitals to form a network.

• Members may only use providers within the network.

• Members may only see a specialist if referred from the gatekeeper.

• HMOs are the most restrictive, but have a greater range of health benefits and low (or no) out-of-pocket expense.

Preferred Provider Organization• Similar to an HMO, it forms a network

of providers.

• Members do not have a gatekeeper.

• Members do not need a referral.

• It is less restrictive than an HMO, but may have higher out-of-pocket cost.

Point-of-Service Options• Members choose which type of option

(HMO or PPO) they will use each time the member seeks health care.

• The POS plan has a provider network.

• POS plans encourage, but do not require, a gatekeeper.

• Referrals may have higher out-of-pocket expense.

Criticisms of Managed Care Plans• In emergent care, the enrollee must use

in-network hospital for service to be covered.

• Denying care and treatment: There is no patient recourse to appeal the decision of denial of care or treatment.

• Preauthorization: This adds an extra layer of time while trying to access health care.

Types of Insurance Coverage• Group: Purchased by employer, and

covers employee and all dependents. Premium costs are lower.

• Individual: Purchased by individual, and covers purchaser and dependents. Premiums are very expensive.

Medical Insurance• Covers benefits for outpatient services

• Covers physician fees for hospital visits and nonsurgical procedures

• Major medical offers protection for large medical expenses.

• Special risk

• Catastrophic health insurance

• Short-term health insurance

• COBRA-insured patients may continue healthcare coverage for 18 months after leaving job, but must pay the full premium.

Major Insurance Providers• Blue Cross Blue Shield: Private and

state regulated

• Medicare: Federally funded

• Medicaid: Federally and state funded–state managed

• CHAMPVA: Veteran’s Administration

Compensation and Billing Guidelines• All arrangements with regard to coordination

of benefits and late payments should be clearly spelled out.

• Be aware of any “rebundle,” which means to cover services in a single bundled fee.

• The contract should clearly state how and when provider is to be paid.

• The forms used for claims submission should be clearly stated.

Managed Care Contracts Should List the Following:

• Schedule of benefits: A list of medical services covered under the contract

• Preventative medical services and types of office visits

• Capitated procedures: Which office procedures are, and are not, covered

• CPT codes: Procedure codes and rates for each service

• Time limit for submitting claims

• Which form to use for submitting claim

• Time limit for receiving payment and what reimbursement charges for late payment

Ethics of Medical Office Specialist• Ethics are rules or standards governing

the conduct of a person or members of a profession.

• The medical office specialist is the liaison between patient and provider, and provider and carrier.

• The specialist must know the Patient’s Bill of Rights and the MCO’s contractual guidelines.

Terms Used in MCO Contracts• Benefit plan: Contract issued by a payer, the plan document,

or any other legally enforceable instrument under which a covered person may be entitled to covered services and which is in force with respect to such covered person.

• Contracted services: Covered services provided by the physician that are consistent with the physician’s training, licensure, and scope of practice

• Coordination of benefits (COB): Determination as to which of two or more health benefit plans will provide health benefits for a covered person as primary or secondary payers

• Copayment: Charge the covered person is required to pay at the time of service

• Covered person: An individual who is an insured, enrolled participant or enrolled dependent under a benefit plan.

Terms Used in MCO Contracts• Emergency Services:

• Services provided after a sudden onset of a medical condition

• The absence of service would result in:• Placing the person’s health in serious jeopardy• Serious impairment to bodily functions• Serious dysfunction of any bodily organ or part

Terms Used in MCO Contracts• Medically Necessary: Refers to the use of services or

supplies (or both) that:• Are not solely for the convenience of covered person or

healthcare provider• Do not involve greater resources than required for

adequate care

• Medically Necessary: Refers to the use of services or supplies (or both) that:• Are accepted as appropriate and effective treatment for

condition• Are based on recognized standards of healthcare specialty

involved• Are not investigative, experimental, or unproven

Terms Used in MCO Contracts• Participating hospital: State-licensed hospital designated

as a participating provider

• Participating provider: A licensed healthcare provider, including a physician or a facility

• Payer: An insurance company, third-party administrator, or self-insured benefit plan that is contractually obligated to pay for services

Patient’s Bill of Rights• Information Disclosure: Right to accurate and easily

understood information

• Choice of Providers and Plans: Right to choose healthcare provider

• Access to Emergency Services: If you are convinced your health is in jeopardy due to sudden onset of pain, accident, or illness, you may be treated without prior authorization and with financial penalty

• Participation in Treatment Decisions: The right to know your treatment options

• Respect and Nondiscrimination: The right to receive respectful, considerate, and nondiscriminatory care

Patient’s Bill of Rights• Confidentiality of Health Information: The right to talk

in confidence with your physician, and to have your healthcare information protected

• Complaints and Appeals: The right to a fair, fast, objective review of your complaint

Question and Answer Period

Wanda Feaster, MBA, CCS-P, CPCE-mail: Wfeaster@kaplan.eduPhone: 678-406-0880

ReferenceComprehensive Health Insurance Billing, Coding and

Reimbursement.

Deborah Vines, Elizabeth Rollins, Ann Braceland, Nancy Wright and Judith

Haynes. 2009 BY Pearson Education, Inc.