Andre L. BraunManager, Patient

AccessSinai Health Systems

April, 2015

ObjectivesIn this presentation, you will overview the

different types of health insuranceGroup Insurance vs. Individual InsuranceManaged Care - PPOManaged Care - HMOManaged Care - Hybrids

POS EPO

Indemnity

Health InsuranceLet’s define the term “health insurance.”

Health insurance is a policy which will provide payment of benefits for covered expenses due to sickness or injury.

Health Insurance - Group

For an individual who works for a company, he/she may obtain health insurance through his/her employer.

This health insurance is known as a:“EGHP” “employer group health plan” or “group insurance plan” or “group plan.”

Health Insurance - IndividualAn individual who is self employed, or has

his/her own business, may purchase health insurance on their own.

This is called “individual health insurance policy.”

Group and Individual Health Insurance

In both types of insurance, whether the insurance is obtained through an employer or purchased individually, the plan may cover one person or the entire family.

Group and Individual Health InsuranceDefinition Comparisons

In Group Insurance, the person who obtains the coverage through his/her employer is called the “subscriber.”

In Individual insurance, the person is called the “insured.”

Group and Individual Health InsuranceDefinition Comparisons

For both types of insurance, any other family members are called the “dependents” on the plan.

Even a spouse on the plan or policy, is referred to as the “dependent.”

Group and Individual Health InsuranceDefinition Comparisons

It is imperative in your registration to identify the subscriber / insured correctly.

If you include the name of the patient as the subscriber, and the subscriber is actually his/her spouse, the claim may be rejected by the insurance company.

Group and Individual Health InsuranceDefinition Comparisons

In group insurance, you would need to identify the plan identification number (a.k.a. “plan ID” or “ID number”) as well as the “group number.”The ID number identifies the subscriberThe group number identifies the group or

employer

Note that in individual insurance, there isn’t a group number. The only number you would include is the “policy number.”

Types of Health Insurance Plans

(Managed Care Plans)

PPO Plans – one type of health insurance

PPO…what does it stand for?

PreferredProviderOrganization

PPO PlansPicture a circle (think of an “O”)…

This is a circle (or “organization” or “network”) of preferred healthcare providers (doctors, hospitals, etc).

PPO PlansWhen a patient is covered under a PPO plan,

it is encouraged that he/she goes to a “preferred provider” or a provider in his/her “network” as outlined by the insurance company.

This represents a doctor or hospital

Preferred providers are those within the circle or network…

PPO PlansThe incentive to stay within the network of

providers that the insurance plan gives to its covered members is by the way the plan pays.

MSH

This represents a non contracted provider (outside the circle)

PPO PlansSome PPO plans pay at 90% of the eligible

expenses (or even higher) if a patient goes to a preferred provider.

MSH

In this example, the patient’s PPO insurance plan will provide benefits at 90% by going to a preferred provider.

PPO PlansAn additional incentive for a patient to going

to a provider in network is that the patient/guarantor will not be responsible for any charges that are above the contracted rate.

Next slide will illustrate the above…

PPO PlansLet’s look at an example. Let’s say that

charges for outpatient services are $1000, and the insurance company determines that the charges are too high. Because the provider is contracted with the insurance company, the provider agrees to reduce the charges.

PPO PlansAn illustration of how benefits are paid when provider is

in network:$1000 charge $800 reduced rateBenefit calculation $800 x 90% = $720 benefit

payment.Patient is only responsible for $80

(the patient is not responsible for the difference between the original charge and the reduced rate).

The above is an example of when a patient goes to a contracted/preferred provider (or a provider “within the circle”).

PPO Plans – not following termsAs a penalty for not going to a preferred

provider, some PPO plans pay at 60% of the eligible expenses (or even lower).

MSH

In this example, Sinai Health is not a preferred provider, benefits will pay at 60% of eligible expenses.

PPO Plans – not following termsIn addition to a reduction in benefits, there

isn’t an agreement to take a lower rate.

MSH

In this example, Sinai Health is not a preferred provider, benefits will pay at 60% of eligible expenses.

PPO Plans – not following termsAn illustration of how benefits are paid when provider is out of network:

$1000 charge $800 reduced rateBenefit calculation $800 x 60% = $480 benefit

payment.Patient is responsible for $520

(the patient is responsible for the difference between the original charge and the reduced rate).

The above is an example of when a patient goes to a provider who is out of the preferred provider network.

HMO Plans – one type of health insurance

HMO…what does it stand for?

HealthMaintenanceOrganization

HMO PlansAgain, picture a circle (think of an “O”)…

This is a circle (or “organization” or “network”) of healthcare providers (doctors, hospitals, etc).

HMO PlansIn the center of the circle, is a provider:

a doctor. He/she is known as a “primary care physician” or “PCP.”

PCP

HMO PlansThe “PCP” maintains or is responsible for

the patient’s health. Whenever the patient needs a doctor to review his/her health needs, the patient is to visit the PCP first before any other specialist.

PCP

HMO PlansYou could also say that the PCP is the

gatekeeper for the patient’s health. If the health need is beyond the PCP’s scope,

the PCP may refer the patient to a specialist.

PCP

Specialist

HMO PlansWhen the PCP refers the patient to a

specialist, the PCP provides the patient with an authorization or referral to do so.

PCP

Specialist

Referral

HMO PlansWhen the PCP requires the patient to have a

hospital service such as a lab or an x-ray, a referral must be given as well.

PCP

X-ray @ MSH

Referral

HMO PlansWhen a proper referral is provided, in a

typical HMO plan, most benefits are paid in full, possibly after a small co-pay for some medical expenses (as outlined in the plan).

PCP

X-ray @ MSH with referral = 100 % benefit

Referral

HMO Plans – Not following termsWithout the referral, and as penalty for not

following the terms of the plan, the HMO plan may not pay any benefits on the service (in a PPO plan, benefits are paid at a reduced rate when not following terms).

X-ray @ MSH

PCP

Referral = no benefit to MSH

POS Plans – one type of health insurance

POS…what does it stand for?

PointOfService

POS Plans – Hybrid planA POS plan is a little like an HMO and a little

like a PPO. As outlined in the plan, a POS plan usually pays at a percentage (PPO), and usually requires a referral for some medical services (HMO).

PCP

Outpatient service @ MSH

Referral

POS Plans – Hybrid planA POS plan is a little like an HMO and a little

like a PPO. As outlined in the plan, a POS plan usually pays at a percentage (PPO), and usually requires a referral for some medical services (HMO).

PCP

Outpatient service @ MSH (paid @ 80%)

Referral

POS Plans – Not following termsWithout the referral, and as penalty for not

following the terms of the plan, the POS plan may pay benefits at a reduced rate (just as in a PPO plan going outside the network, benefits are paid at a reduced rate).

PCP

X-ray @ MSH

Referral = reduced benefit

EPO Plans – one type of health insurance

EPO…what does it stand for?

ExclusiveProviderOrganization

EPO Plans – Hybrid planAn EPO plan is a little like an HMO and a

little like a PPO. As outlined in the plan, an EPO plan usually pays at a percentage (PPO).

As with a PPO, a referral is not required.

X-ray @ MSH… Benefits paid at 80%.

EPO Plans – Hybrid planHow it is like an HMO, is that when the terms

of the plan are not followed. Again, EPO stands for Exclusive Provider Organization. If a patient goes to a provider outside the network or circle…the EPO plan will not pay any benefits on the service.

X-ray @ MSH

If MSH is outside the exclusive providers, the plan will not pay any benefit.

No benefits paid!

Indemnity PlansAn indemnity plan is a traditional type of

health plan. Unlike the aforementioned managed care plans, the patient does not need to stay within a certain type of preferred network.

With an indemnity plan, there is not a preferred network (thus the dotted circle).

Wherever the patient attends for a medical service, the benefits will be paid the same.

This presentation brought to you by:

Andre L. BraunManager, Patient AccessSinai Health SystemApril, 2015