Ashworth College Understanding Managed Care Insurance Plans Exam
UNDERSTANDING MANAGED CARE INSURANCE PLANSUnderstanding managed care insurance plans is an extremely important process in your role as a medical office specialist or billing and claims specialist. As a healthcare professional, you’ll work with or be affected by managed care every day at work.To understand the specifics of insurance plans, you first have to understand the evolution of health care and how managed care came about. In this lesson, we’ll discuss how managed care came into play and its role in controlling the costs of health care for members enrolled in different programs. The goals of managed care were to create a healthcare system where patients were provided the highest levels of care at the most cost-effective prices. The costs of a managed care insurance plan will depend upon the type of program that a member, or patient, enrolls in. You may even be familiar with some of the programs—HMOs, PPOs, and POS plans.In addition to understanding managed care insurance plans, we’ll also discuss the importance of your role in collecting information on patients visiting your healthcare facility. You can have a direct role in correct patient information and whether the facility is adequately and accurately reimbursed. If it sounds like a big responsibility, that’s because it is! Don’t worry, though, we’ll walk you through understanding more about your role in this lesson and throughout the course.History of U.S. Health CareThe history of health care is complicated, and it has taken a great deal of time to get where we are today. Over many years, the United States has worked to find an adequate healthcare payment system and appropriate reimbursement for providers. As you can imagine, it’s difficult to find something that provides exactly what everyone needs.In 1977, the U.S. government gave power to an agency called the Health Care Financing Administration (HCFA, pronounced “HIC-fuh”), created under the U.S. Department of Health and Human Services. On July 1, 2001, the name HCFA was changed to the Centers for Medicare and Medicaid Services (CMS) to reinforce the agency’s mission to serve Medicare and Medicaid beneficiaries.This agency has come to be very powerful in healthcare operations in the United States due to the growing number of Americans, especially children, who are uninsured. Subsequently, the government passed numerous laws and policies that have affected healthcare billing and reimbursement. Many of the new requirements and guidelines have made the profession of medical billing quite challenging.Another recent requirement within the healthcare industry concerns the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule. This part of HIPAA deals with patient authorization, consent, and the release of a patient’s protected (confidential) health information. As a medical billing specialist, you must familiarize yourself with this regulation.The HIPAA Security Rule became effective in April 2005. It mandates the security of protected health information being stored in electronic format. To verify compliance, medical providers and facilities handling protected health information are subject to inspection by the U.S. government.(Don’t worry if HIPAA seems confusing at this point. We’re going to cover it in greater detail later in this course. The information presented on HIPAA in this section is meant as an introduction.)Medical Reform with Managed CareAs your textbook discusses, healthcare reform has been taking place for a very long time. Some of the changes that have taken place have required healthcare providers and facilities to take a closer look at how they do business and provide services to receive appropriate reimbursement for services. The goal of a system that delivers quality, cost-effective health care through monitoring and recommending utilization and cost of services is called managed care. This means that resources and services are closely monitored to ensure that the costs of the services are being held within the amount that the insurance company will reimburse. This is a big change for healthcare providers, because in the past hospitals and physicians used whatever resources they wanted and then charged the insurance company or patient the costs related to use of these resources. Because there were no checks and balances in place, resources were often overutilized and costs were higher than needed. One of the main goals of managed care is to provide the highest quality of care in the most cost-effective way.Be sure to review Table 2.1 in your textbook to see how different aspects of managed care have come into play throughout history.Examples of managed care plans that you may be familiar with are HMOs and PPOs. In the past, the term managed care was synonymous with health maintenance organization (HMO). However, today managed care is a much more generic term referring to a wider range of services, and HMOs represent just one type of managed care program.The Patient Protection and Affordable Care ActThe Patient Protection and Affordable Care Act was signed into law by President Barack Obama on March 10, 2010. The law is often referred to as the Affordable Care Act, Healthcare Reform, and also as Obamacare. Here we’ll refer to it as the Affordable Care Act.The Affordable Care Act seeks to reform the current American healthcare system byAllowing all Americans access to affordable health careImproving the quality of health careRegulating the health insurance industryReducing spending in health careOne of the provisions of the act was the development of a “healthcare insurance marketplace” where Americans can choose and purchase insurance that’s subsidized and federally regulated. A subsidized plan is a plan in which another entity, such as an employer, pays for a portion of the insurance costs.Before the Affordable Care Act, approximately 44 million Americans didn’t have access to health insurance.As of October 1, 2013, Americans whose income is less than 400% of the federal poverty level can use the health insurance marketplace, also referred to as an exchange, to obtain insurance coverage that’s subsidized by the federal government. Americans who don’t have insurance and make above the income cutoff can also purchase insurance on the exchange, but their premiums aren’t subsidized. Like any new system, the exchange was met with some challenges when people couldn’t access the website for the program due to the overwhelming number of people trying to access the site. The government has committed publicly to correcting these issues as quickly as possible.As you’re probably aware, the Affordable Care Act has generated great controversy. Some people are seeing large increases in the cost of their health insurance, whereas others are able to get health insurance coverage when they couldn’t before. When President Donald Trump entered office, he focused on dismantling the Affordable Care Act. However, the Affordable Care Act hasn’t been repealed. Instead, there has currently been a push to enact changes within the ACA. No matter what side of the issue you may be on, this is definitely a monumental change for our country, and it will be interesting to watch as these changes continue to unfold.About Managed Care OrganizationsManaged care organizations (MCOs) are responsible for the health of a group of enrollees. Health plans, hospitals, physician groups, and health systems can all be MCOs. MCOs have the following characteristics and features:Primary care providers. Primary care providers are responsible for supervising and coordinating healthcare services for enrollees and preauthorizing referrals to specialists, diagnostic testing facilities, inpatient hospital admissions (except emergencies), and access to outpatient/ ambulatory services.Quality assurance. This means that the MCO is “federally qualified” and must comply with state-mandated quality assurance programs. Medicare established the Quality Improvement System for Managed Care to ensure the accountability of managed care plans in terms of objective, measurable standards.Utilization management. Utilization management is a method of controlling healthcare costs and quality of care by reviewing appropriateness and necessity of care provided to patients prior to care.Case management. Case management is the development of patient care plans for complicated cases.Second surgical opinions. A second surgical opinion is required for all surgeries.Prohibition of gag clauses. Providers must be able to discuss all options with patients.Physician incentives. These include payments made directly or indirectly to healthcare providers to serve as encouragement to reduce or limit services.Types of MCOsThe three major types of MCOs are health maintenance organizations, preferred provider organizations, and point-of-service plans. Each type meets different needs.Health Maintenance OrganizationsA health maintenance organization (HMO) is a prepaid medical service plan that provides services to plan members. HMOs are generally the most restrictive type of managed care plan because they operate according to a “gatekeeper” concept, whereby a primary care physician (PCP) or other healthcare worker acts as the case manager for the patient. All health care for each patient is directed through that case manager. An HMO has the following characteristics:All care is directed through the primary care physician (PCP) or other single healthcare worker.Reimbursement is made by a fixed payment per patient per month, called capitation.The emphasis is on keeping patients healthy to reduce healthcare costs, which is known as preventive care.Patient must use specialty physicians within the HMO network.Patients who go outside of the HMO network must pay the costs out of their own pockets.Like any other healthcare plan, HMOs have both advantages and disadvantages. The advantages include predictable costs, broader and more routine coverage, and no claim forms for reimbursement. Disadvantages include choosing one primary care physician for all healthcare services and getting approval before hospitalization or specialty care.Preferred Provider OrganizationsPreferred provider organizations (PPOs) represent an organization of “preferred” hospitals and physicians who provide services to insurance company clients for a set fee. In a PPO, the covered individuals select the hospitals and physicians they wish to use within the preferred provider network. With PPOs, coverage in-network is 80 to 100 percent, with a small copayment for each office visit or hospital stay.PPOs offer freedom of choice for the patient and fixed costs. The biggest disadvantage of PPOs is that the success of a plan depends on its ability to offer a wide range of providers. If a large selection of providers can’t be recruited, then it makes the plan less appealing to enrollees because the choices are limited.Point-of-Service PlansPoint-of-service (POS) plans, often called “open-ended HMOs,” are one of the more flexible options because they combine the best offerings from HMOs and PPOs. Individuals in a POS plan must choose a primary care physician (just as in HMO plans), but there’s an option available for receiving care from hospitals or physicians that aren’t in the plan without the need for referrals. If the insured chooses a physician or hospital outside the plan, the insured must pay a portion of the cost.You may be wondering how POS plans differ from HMO and PPO plans. In an HMO plan, the insured must choose a primary care physician and then obtain a referral to seek care from a specialty physician. In a POS plan, the insured chooses a primary care physician, but still has the option of receiving care from another physician without the need for a referral. In a PPO plan, the enrollee’s incentive for receiving care through the plan’s primary care physician is that the cost is lower than going to a physician outside the plan. The POS plan combines HMO features with those of the PPO.Review Table 2.2 on pages 38–39 of your textbook to understand the advantages and disadvantages of MCOs. Review Table 2.3 on page 41 of your textbook for an overview of the different types of MCOs and their characteristics.Alternative Healthcare PlansOf course, the MCOs discussed here aren’t the only offerings for patients. Alternative healthcare plans are also available, giving patients even more choices of coverage. Alternative healthcare plans includeExclusive provider organizations (EPOs)Independent physician associations (IPAs)Physician–hospital organizations (PHOs)Self-insuranceDon’t confuse PPOs and PHOs. A physician–hospital organization (PHO) is a network of physicians and hospitals that join together and, as a combined entity, will negotiate with insurance companies, employers, or other organizations to provide health care to subscribers for discounted, negotiated fees. As you can see from your textbook reading, the abbreviations for PPO and PHO are very similar, but their definitions are quite different.Your Role with Managed Care Insurance PlansWe touched on it at the beginning of this lesson, but it bears repeating here: you’ll have an important role as a medical office specialist in the managed care insurance plan process. It may be your job to collect the information from the patient and ensure that it’s all complete and accurate. The collection and verification process may include the following tasks:Viewing the patient’s health insurance ID cardVerifying the patient’s informationPhotocopying the card for the patient’s recordUnderstanding deductibles and copays for the patientUnderstanding the Assignment of BenefitsCollecting insurance paymentsIn this lesson, we discussed how managed care was developed to control the cost of healthcare services for members enrolled in healthcare plans. The focus wasn’t quick and easy medical care, but instead to control the costs while also maintaining a high level of healthcare quality. This means that all medical care provided to the patient was medically necessary and appropriate. To do this, managed care uses a network of different providers in plans such as HMOs, PPOs, and POS plans. Each of these are MCOs that have different physician offerings and services based on the plan.In healthcare organizations, it’s important for medical office specialists to gain a complete understanding of MCOs and how they work. Depending on your job, you may need to verify insurance and explain benefits and reimbursement to the patients. In some cases, you may even need to negotiate with the insurance carrier when reimbursements for services are denied or not completely reimbursed.16 mins agoREQUIREMENTS