Health Care Project Overview from H2kInfosys LLC

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H2K INFOSYS PROVIDES WORLD CLASS SERVICES INH2K INFOSYS PROVIDES WORLD CLASS SERVICES IN

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1. Healthcare Overview

2. Key Terminology

3. Major Players of Healthcare

4. Day in the life of a Claim

5. An enrolled Member seeks Medical service

6.Brief discussion on ICD-10 codes

Table of Contents

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Healthcare Overview

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According to the Health Insurance Portability and Accountability Act or ‘HIPAA’ healthcare is broadly defined and includes any care, service, or supply related to the mental or physical health of an individual. It is also defined as the treatment, management and prevention of illness and the preservation of the physical and mental well being of a person with the help of medical and allied health professionals.

An individual can become a Member and pay regular premiums to get the healthcare services covered by a health insurance company.

Members enrolled in health Insurance Company’s healthcare programs visit healthcare service providers such as a Primary Care Provider(PCP), secondary care provider, specialist, hospital or pharmacy to receive healthcare services. Each visit that a member makes to a provider is called an encounter. Encounter(s) filed together for the reimbursement of the medical expenses for the services rendered by the provider is called Claim.

Claims are either filed on paper or sent electronically via fax or email. The claim is received by the insurance company, validated for necessary information and then loaded into a database. The claim is then adjudicated (or tested for authenticity) as per the company’s business rules and policies through the claims adjudication system.

Medical Service

A medical service is

provided to a Member

Healthcare Overview

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provided to a member

Mail

A claim for payment is submitted

Healthcare Overview

Medical

Service

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Mail


Scan

claim is submitted to Health insurance companies

Healthcare Overview

Medical

Service

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Mail


Scan Enter

Claim data is entered

into the system

Healthcare Overview

Medical

Service

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claim is submitted to Health insurance companies



Mail


Scan Enter Correct

Claim data errors are resolved

Healthcare Overview

Medical

Service

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claim is submitted

to Healthcare insurance companies


into the system



Mail


Scan Enter Correct

Claim data errors are resolved

Discuss

Customer Service engages

the subscriber or provider if needed

Healthcare Overview

Medical

Service

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claim is submitted

to Healthcare insurance companies


into the system

Key Terminology

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Deductible: The amount you’re(member) responsible for paying for covered medical expenses before your health plan begins to pay each year.

Coinsurance: Shared costs between you and the health plan. For example, you pay 20% of costs and your plan pays 80%. (Some plans do not have coinsurance.)

Co-pay/Copayment: A specified dollar amount that a member must pay out-of-pocket for a specified service at the time the service is rendered.

Out-of-pocket maximum: The most you’re responsible to pay for covered medical expenses in a year.

Cost-sharing: A term used to describe the part of a provider or facility charge that is the financial responsibility of an insured person and/or his or her dependents. The term includes copayments (co-pays), coinsurance, and deductibles.

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Example: Mr. Jeet meets with an accident. The total costs incurred for the healthcare services rendered is $60,000.•Mr Jeet Pays: $10,000•His out of pocket maximum:$11000•Mr. Jeet health insurance company pays: $49,000

1.In this example, Mr. Jeet is responsible for the first $10,000 (deductible).

2. Then, until he reaches the out-of-pocket maximum, he is responsible for 20% coinsurance. Since the expenses are high, he’ll reach $11,000.

3. His health plan pays the rest of the covered expenses.

4. For the rest of the year, Mr. Jeet doesn't need to pay anything for covered medical expenses.

Key Terminology

Major Players of Healthcare

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The major players in this flow, or, what can be said to be the ‘five pillars of healthcare’ are –

•Member

•Provider

•Benefits

•Claims

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A member is a person who purchases insurance from (or enrolls with) an insurance company. He can purchase the insurance coverage for himself and his family (also called his dependents). This is known as Individual Insurance. In most cases, his employer will pay for his insurance coverage. In such a case the employer becomes his plan sponsor and the insurance is known as Group Insurance.

The main advantage with group insurance is the freedom of choice for a member. He is free to choose any of the services offered by the insurance company. However, he has to pay for those services. Reduction in this cost to the member is a great advantage with group insurance. A group has much more bargaining power due to the simple fact that group insurance is less risky for the insurer.

In case of some large corporations the company itself provides insurance to its employees. Such groups are known as self-insured groups. They offer a great flexibility to the company in providing insurance of choice to the employees. However, these companies do not have the infrastructure to perform as an insurance company. So, they outsource the administrative part to the insurance companies while retaining the money reimbursement part with themselves. This way, they are able to achieve a balance between providing desirable healthcare coverage to their employees without causing administrative overheads.

Member

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A Provider is that entity which offers actual medical services to the members. A doctor, a pharmacy or hospitals are all referred to as providers. The providers enter into an agreement (contract) with the insurance company. Under this agreement they provide medical care at reduced rates to the members, in return they are offered monetary benefits by the insurance company. These monetary benefits are offered in various forms. One of the most popular of these forms is a fixed monthly fee (capitation fee). The providers get this fee irrespective of the number of encounters (a visit by a member to a provider is known as an encounter) they had in that month. While on one hand capitation ensures a fixed monthly income for the provider, it also restricts his earnings. So, from the provider’s point of view it’s a choice between a fixed income and a varying income (which may be more, or less, depending on his popularity with the patients). For insurance company, capitation helps them to forecast their spending, as the total expenditure remains constant irrespective of the number of members having to seek medical services. Sometimes, individual providers form a group, which contracts with the insurance company. Such a group is called an IPA or an individual practice association. Formation of an IPA gives the providers more bargaining powers with the insurance company and assures them of an increased patient volume. In turn the insurance company is able to offer a range of providers to the members at a single source, i.e. the IPA. In general, a group of providers in a designated area are contracted by the insurance company to form a network (a group of contracted providers within a designated area is said to constitute a network) of providers. The insurance company offers a better deal to its members for using a provider within this network. The providers themselves have an increased patient volume and hence offer services at reduced rates. This is one of the most stable models of managed healthcare.

Provider

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Benefits can be described in two ways - •The right of a member to receive services from the insurance company as per their mutual agreement, or, •The major line of coverage provided by the insurance company. The insurance company may provide medical/dental/vision coverage. Then depending on the choice of coverage the member is said to have medical benefits or dental benefits or vision benefits. The general agreement between the Insurance Company and the member that details the benefits that can be provided to the plan holders i.e. the member is called a Plan. While the actual legal document issued by the insurance company to the member, whom sets forth the terms and conditions of this agreement is called a Policy. Thus, we can say that a plan is the general range of benefits offered by the insurance company. These when customized as per the member’s requirements and put down on paper as a legal document forms a policy. In case of Indemnity plans, the members visit a provider and pay him for his services. After that, they file a claim (a request to refund the expenses incurred) with the insurance company. If the claim is found to be valid, the insurance company pays a part (usually 80%) of the expenses. Though they offer great flexibility to members in their choice of providers, they are very expensive. In case of managed care, the insurance company contracts with providers and form a network of such providers. The members pay a fixed monthly fee and need to choose a provider within the network as their primary care physician or a PCP. The PCP manages their complete healthcare, right from providing services to filing claims. Due to the control over the choice of provider, the insurance company is able to offer healthcare at reduced rates. The reduced cost of a managed care plan is the main reason for members preferring them to indemnity plans. The model of managed care as described above is known as a HMO or a health maintenance organization. It has a major disadvantage that it limits the choice of providers to a network. Members cannot avail services from a provider not contracted with the insurance company. Members who wish to have a greater flexibility in the choice of providers have the option of going for other managed care plans POS or point of service plans and PPO or preferred provider organization plans. POS provides the member with the option of having HMO type coverage at a lower fee, while having the option of Indemnity type coverage at a higher fee. PPO is also similar to POS with the added advantage that in the HMO type coverage the member is not needed to have a PCP.EPO or exclusive provider organization, a hybrid of HMO and POS plans, is a recent addition to the stable of managed care plans. The recent trend has been to go for PPO plans, as it offers the best of both Indemnity and Managed care plans.

Benefits

What is a Claim?A claim is filed by an insurer. It contains the details of the policy, a filled-out claim form and treatment bills, including those from tests and rehabilitation prescribed by the doctor, the nature of the treatment with diagnosis information and/or other documentation of medical expenses. A claim has an extensive life process, starting with a provider or subscriber.

This session discusses the basic lifecycle of a claim:

Claim Batching

Claims Processing

Claim Adjudication

Claim

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Claims are mainly categorized as:-

Medical claims

Dental claims

Pharmacy claims

Vision claims

All claims are date stamped and sorted into batches by line of business:

Single page claims

Multi-page claims

In-state

Out-of-state

Single page facility/institutional

Multi-page facility/institutional

Single page miscellaneous

Day in the Life of a Claim

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Before leaving, batches are put through a final process:

Each claim is assigned a document number

The document number will allow retrieval of copy at a later date

The batches are delivered to the claims processing unit


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Batches are received in health insurance companies and assigned to claims processors by Supervisor.

The processor accesses the batch entry screen and enters all the claims within the batch

After claims within the batch are entered, it is released to the claims Processing System

Some claims are received electronically or are optical scanned directly into claims processing system


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Electronic Error Correction (EEC) suspense processing accesses suspended claims and corrects errors.

system edits claims for eligibility, benefit availability, and so on

When this is complete, the claim will either pay or reject

An explanation of benefits is sent to the subscriber

If provider is participating, a voucher and check is sent

On completion of claims adjudication, member receives a check for payment of the expenses. The member is also sent a letter called the explanation of benefits (EOB). EOB gives the details of the services rendered to him by the providers and the amount of expenses to be borne by the member for the services he has used. It also gives the amounts applicable to him.


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If the member is enrolled in an Indemnity plan, then things are very simple. He can go to any provider of his choice. He pays the provider then and there and files a claim with the insurance company. However, it is necessary that he should have satisfied his deductible for that particular year. In case of managed care plans, the flow is a bit more complicated. The member first has to visit his PCP. The PCP will try to provide as many services as he can. But, if a medical condition arises which requires treatment from a specialist, the PCP will provide a referral to the member. This referral authorizes the member to seek medical services of a specialist provider. The PCP will also file a claim on behalf of the member. The member only has to pay fixed copay to both the PCP and the specialist. This is the flow in case of HMO and EPO plans. In case of POS and PPO plans, the member can seek services from out of network providers. However, they will have to meet a deductible before they can avail this facility. Also the concept of coinsurance will come into picture. In case of PPO plans the member has the added advantage that he does need to have a PCP for In-network care.

An Enrolled Member seeks Medical Service

Brief discussion on ICD-10 codes

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ICD is defined as International classification of disease. Physicians and other health care providers classify and code all diagnoses, symptoms and procedures record in conjunction with hospital care in the United States.

ICD-10 codes differ in length and structure from their predecessors. The increased length and modified structure will provide more thorough detail about conditions, injuries, or illnesses. In contrast to ICD-9 codes, the new code set will include specific detail about how an injury occurred, what parts of the body are affected, and the severity of a condition. This level of specificity means a drastic increase in the number of codes.

Characteristic Diagnosis Codes Procedure CodesCode Set Name ICD-9-CM ICD-10-CM ICD-9-PCS ICD-10-PCSNumber of Codes 15,000 80,000 4,000 73,000Number of Characters 3 to 5 3 to 7 3 to 4 7

Type of Characters NumericAlpha-numeric

NumericAlpha-numeric

Format XXX.XX AXX.XXX X XXX.XX AXX.XXX X

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Brief discussion on ICD-10 codes

Before the ICD-10 codes can be used however, physicians and others in the health care community had to transition to use of the new version of HIPAA transaction standards known as 5010.

Why ICD-9 to ICD-10ICD-9 codes are old format. ICD-10 reflects the 10th revision of codes. The ICD-10 code set reflects advances in medicine and uses current medical terminology. The code format is expanded, which means that it has the ability to include greater detail within the code. The greater detail means that the code can provide more specific information about the diagnosis. The ICD-10 code set is also more flexible for expansion and including new technologies and diagnoses. Codes are:1. Procedure codes

• HCPC codes (Healthcare Common Procedure Coding System)• CPT codes (Current Procedural Terminology)

2. Diagnosis codes

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Health Care Project Overview from H2kInfosys LLC

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Transcript of Health Care Project Overview from H2kInfosys LLC