As insurance companies and employers searched for ways to budget for health care costs, several managed care programs evolved:
a. Health Maintenance Organizations (HMOs)
- HMO is a prepaid health plan in which individuals receive medical services from participating physicians.
- Patients cannot just see any physicians. Instead they must see a physician with in the HMO.
- HMOs have their own specialist by a general practitioners. Generally, a patient must be referred to a specialist by a general practitioner.
- HMO participant pay a set fee (it maybe monthly or annually). However, all HMO participants are restricted in their choice of doctors.
- If primary physician doesn't authorize a procedure or a specialist, the HMO patient may not received that procedure or see the specialist.
Four (4) HMO Models:
Prepaid group practice model - A group of physicians at one or more locations who contract with HMO to provide care or through it own physicians who are employees of the HMO. E.g. Kaiser Permanente is a prepaid group practice model, physicians form an independent group (Permanente) and sign a contract with Kaiser (the Health Plan). Physicians work in a salary basis which is paid by their own independent group (Permanente), not by administrators of a health plan. This helps permit provider to concentrate more on their medicine practice.
Staff Model - the health plan hires physician directly and pays them a salary instead of contracting in a medical group.
Network HMO - A network HMO contracts with 2 or more group practices to provide healthcare services. Physician can see both HMO and non-HMO patients in their own offices. Network physicians are typically paid in a capitation amount in caring each HMO patient, regardless of whether the patient is seen by the physician in a given month.
Direct Contract Model - It is an open-panel HMOs. A managed health care plan that contracts directly with pricate physicians in the community rather than through intermediate like IPA or medical group. Contracted health care services are delivered to subscribers by individual physicians in the community.
Silent PPOs are considered legitimate in most states. Whenever you see “network discount applied” on an explanation of benefits document, investigate further into the claim to determine whether a silent PPO is operating.
d. Visitation Limits - is the number of visits to specialists a patient may make or the number of the special treatments, such as a physical therapy, a patient may have.
b. Preferred Provider Organizations (PPOs)
- PPOs patient can choose their own doctors and treatment facilities, unlike HMOs they cannot choose their own doctor and treatment facilities. If you noticed the difference HMOs patients needs an authorization first before seeing a doctor for their treatment.
- PPOs operate much like fee-for-service plans when it comes to co-payments. The payment is between 15% and 25% of each bill until threshold is reached. the thresfold limit is the amount which the co-payment is dropped.
Silent Preferred Provider
Organizations
Sometimes,
preferred provider payers and plan administrators purchase existing preferred
provider networks without talking to those providers who signed contracts.
These may be referred to as silent, blind, or phantom PPOs, discounted
indemnity plans, nondirected PPOs, or wraparound PPOs.
They gain
the ability to limit reimbursement (lower or discounted payments) without the provider’s
knowledge or consent. Providers that are taken in by silent PPOs are unable to
get paid out of network, which reduces their income.
Silent
PPOs complicate the appeal process because it may be difficult to contract
another payer directly, and claims may be lost because of timely filing laws.
Silent PPOs are considered legitimate in most states. Whenever you see “network discount applied” on an explanation of benefits document, investigate further into the claim to determine whether a silent PPO is operating.
To
discover silent PPOs, always pre-certify procedures, and look at patient’s
insurance cards even if the patient is established.
c. Point of Service (POS)
- POS plans strive to combine the best elements of HMOs and PPOs.
- POS plans consist of participating physicians and hospitals. These participating health care providers give POS plan members discounted health care for plan participants.
- POS plans also allows covered persons to receive health care from non-participating hospitals and doctors.
- The cost management of the HMO is combined with the freedom of choice afforded by PPOs and integrated into POS plans, making them a nice compromise in managed care
d. Physician Provider Groups (PPGs)
- PPGs are owned by the physicians in a group. These groups negotiate individual contracts with employers, insurance companies and other entities in order to provide health care coverage
- PPG can imitate, or act like HMOs, PPOs, POS plans and othre managed group because it is owned and operated by its member physicians.
- PPG does all the billing and collection for the member doctors. This enables the physicians to cut cost while still providing a high level of health care.
- HSAs were put into effect by signing of the Medicare bill of 2003.
- To enroll in HSAs the participant is required to be insured in High Deductible Health Plan (HDHP).
- The participant cannot be enrolled in any other primary health insurance program including Medicare.
- Enrollement in dental, optical, disability and long-term is acceptable.
- The participant cannot be dependent on someone else's tax return.
Managed Care Concepts
As a medical biller there are some concepts in managed care that we will run into. These concepts includes:
a. Preauthorization - is the approval of the managed care provider to certain procedures.
- Usually, the patient's insurance ID card or membership card will list preauthorization requirements, telephone number to call for preauthorization. Before the carrier will issue preauthorization certificate (a.k.a. precertification or prior authorization), it will review the patient's case, the procedure and then determine if circumstances warrant the procedure.
e.g. of situations are magnetic resonance imaging, CAT scan, surgery and other expensive diagnostic test.
b. Peer Review Organizations or Professional Review Organization
- PRO examine and ensure quality health care in managed care situations.
- PRO consists of physicians who evaluate the situations to make sure their patients are receiving proper care.
- Hospitals, insurance companies and even government health insurance programs use PRO.
- PRO are intended to eliminate any questions of impropriety in managed care
- Another way to ensure proper treatment is the Utilization Review Program.
c. Capitation - means that a participating physician's reimbursement is based on how many patients the physician sees rather than which services the physicians performs.
d. Visitation Limits - is the number of visits to specialists a patient may make or the number of the special treatments, such as a physical therapy, a patient may have.
- The term visitation limits doesn't refer to how many visitors the patient can have. It refers to visits to specialists.
