HEALTHCARE

DOMAIN - 1
Session 1 : 06/20/2018
Agenda
■ Quick Introduction
■ Terminologies
■ Health Insurance Plans
■ Claims Processing Workflow
■ EOBs
■ Appeals & Grievances
■ Eligibility
■ Pre-Auths
■ Questions
 Main Entities

Healthcare Health insurance

Provider/ Provider/
Doctor/ Carrier
Hospital/
Facility

Member/Subscriber Group Federal and State

governments

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Basic terminology
■ Health Insurance - A contract that requires your health insurer to pay some or all of your
health care costs in exchange for a Premium
■ Health insurance provider - the health insurance company whose plan pays to help cover
the cost of your care. Also called Payer or Carrier
■ Healthcare provider - Any person (doctor or nurse) or institution (hospital, clinic, or
laboratory) that provides medical care
■ Preferred Provider - A provider who has a contract with your health insurer or plan to
provide services to you at a discount
■ Facility - hospital setting
■ Member - A person who is enrolled in a health plan (also called an enrolee or subscriber)
■ Group - Employer, group insurance

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Basic terminology
■ Insurance plan - plan selected by the member or group for coverage, based on the
premium and benefits
■ Premium - the amount a plan member or employer pays each month in exchange for
insurance coverage
■ Effective date - the date on which a policyholder's coverage begins
■ Benefits - specific areas of cover that offer protection against financial loss or
damage
■ Claim - a request by a plan member's health care provider, for the insurance
company to pay for medical services

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Basic terminology

■ Coinsurance: An arrangement under which the member pays a fixed percentage of the cost of
medical care after the deductible has been paid. For example, an insurance company might pay 80
percent of the allowable charge, with the member responsible for the remaining 20 percent; the 20
percent amount is then referred to as the coinsurance amount
■ Copayment: One of the ways the member shares medical costs. For example, a flat fee for certain
medical expenses (e.g., $10 for every visit to the doctor), while your insurance company pays the
rest
■ Deductible: The amount of eligible expenses a member must pay each calendar year (or contract
year) before the insurance company will make a payment for eligible benefits. Usually applies to the
out-of-network services, but may apply to in-network services for certain products
■ Allowed amount: Maximum amount on which payment is based for covered health care services.
This may be called “eligible expense,” “payment allowance" or "negotiated rate." If the provider
charges more than the allowed amount, the member may have to pay the difference

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Types of health insurance

■ Indemnity plans – These major medical plans typically have a deductible (the amount you pay before the insurance
company begins paying benefits). After your covered expenses exceed the deductible amount, benefits usually are paid
as a percentage of actual expenses, often 80 percent. These plans usually provide the most flexibility in choosing where
to receive care.
■ Preferred Provider Organization (PPO) plans – In these major medical plans, the insurance company enters into
contracts with selected hospitals and doctors to furnish services at a discounted rate. As a member of a PPO, you may be
able to seek care from a doctor or hospital that is not a preferred provider, but you will probably have to pay a higher
deductible or co-payment.
■ Health Maintenance Organization (HMO) plans – These major medical plans usually make you choose a primary care
physician (PCP) from a list of network providers. Your PCP is responsible for managing all of your healthcare. If you need
care from any network provider other than your PCP, you may have to get a referral from your PCP to see that provider.
You must receive care from a network provider in order to have your claim paid through the HMO. Treatment received
outside the network is usually not covered, or covered at a significantly reduced level.
■ Point of Service (POS) plans – These major medical plans are a hybrid of the PPO and HMO models. They are more
flexible than HMOs, but do require you to select a primary care physician (PCP). Like a PPO, you can go to an out-of-
network provider and pay more of the cost. However, if the PCP refers you to an out-of-network doctor, the health plan will
pay the cost.

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Claims processing – steps
■ A member with valid health insurance visits an in-network healthcare provider for a
doctor service
■ The healthcare provider renders a service
■ The healthcare provider submits a claim to health insurance provider
■ The health insurance provider processes the claim
■ If the member has a financial responsibility (other than an office visit co-pay), the
member will receive and Explanation of Benefits (EOBs) detailing what the health
insurance provider has paid. The member may sign up to receive your EOB
electronically
■ The healthcare provider will send a bill to the member if a balance needs to be paid

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Claims processing flowchart

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 Explanation of benefits (EOBs)
■ An explanation of benefits (commonly referred to as an EOB form) is a statement sent by a health insurance company to covered individuals
explaining what medical treatments and/or services were paid for on their behalf

■ An EOB typically describes:

– the payee, the payer and the patient
– the service performed
■ the date of the service,
■ the description and/or insurer's code for the service,
■ the name of the person or place that provided the service, and
■ the name of the patient
– the doctor's fee, and what the insurer allows—the amount initially claimed by the doctor or hospital, minus any reductions applied by the
insurer
– the amount the patient is responsible for
– adjustment reasons, adjustment codes

■ EOB documents are protected health information. Electronic EOB documents are called edi 835 5010 files

■ There normally also will be at least a brief explanation of any claims that were denied, along with a point to start an appeal

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Final statuses attached to a claim

■ Finalized
– Paid
– Denied
– Revised – adjudication information has been changed

■ Pending – claims put on hold for more information or claims in the process of
adjudication in the system

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Appeals

■ If your health insurer refuses to pay a claim or ends your coverage, you have the right to appeal the
decision and have it reviewed either internally or by a third party
■ You can ask that your insurance company reconsider its decision. Insurers have to tell you why
they’ve denied your claim or ended your coverage. And they have to let you know how you can
dispute their decisions
■ There are two ways to appeal a health plan decision:
– Internal appeal: If your claim is denied or your health insurance coverage cancelled, you have
the right to an internal appeal. You may ask your insurance company to conduct a full and
fair review of its decision. If the case is urgent, your insurance company must speed up this
process

– External review: You have the right to take your appeal to an independent third party for
review. This is called external review. External review means that the insurance company no
longer gets the final say over whether to pay a claim

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Eligibility & Benefits
■ Patient eligibility and benefits should be verified prior to every scheduled appointment
■ Eligibility and benefit quotes include membership verification, coverage status and other important
information, such as applicable copayment, coinsurance and deductible amounts
■ It’s strongly recommended that providers ask to see the member’s ID card for current information
and photo ID in order to guard against medical identity theft. When services may not be covered,
members should be notified that they may be billed directly
■ Generally members and Providers have access to the following info, online or through telephone:
– Patient/Subscriber information
– Group Number
– Group Name
– Plan/Product
– Current Effective Dates
– Copayment*
– Deductible (original and remaining amounts)
– Out-of-pocket (original and remaining amounts)
– Coinsurance
– Limitations/Maximums*
– Preauthorization indicators and contacts
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(Prior/Pre) Authorization process

■ A prior authorization is an extra step that some insurance companies require before they decide if
they want to pay for the doctor services.
■ Some medical procedures and drugs need prior authorization from the Insurance providers
■ During this process, the insurance provider may request and review medical records, test results
and other information so that they understand what services are being performed, and are able to
make an informed decision
■ It’ll be determined if the requested service(s) are medically necessary and identified as covered
services under the terms of your health insurance plan based on the information available
■ Typically notified either in writing, or via telephone within two business days of receiving all
necessary documentation. In addition, the member portal of our website gives the status of your
authorization online
■ Emergencies do not need prior authorization

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