Other government and private health plans

Government managed care plans

In an effort to reduce costs and increase the delivery of efficient care, Medicare and many Medicaid programs offer their members the option to join a managed care plan. These managed care plans must cover all services that would be covered under Medicare or Medicaid. The identification cards look just like those issued to people not on Medicare or Medicaid. The government-managed care plan may have a copayment for which the patient would be responsible.

Children’s Health Insurance Program (CHIP)

The Children’s Health Insurance Program (CHIP) is a state-funded program for children whose family income is above the Medicaid qualifying income limits. Although Medicaid does not typically have a premium, CHIP does. The premiums are typically 5% of the family’s monthly income. State CHIP programs cover the following services:

• Routine checkups
• Dental care and vision care
• Immunizations
• Inpatient and outpatient hospital care
• Doctor visits
• Laboratory tests and x-ray services
• Prescriptions
• Emergency services

CHIP programs are similar to managed care plans in that care is covered only through the designated network of providers. There are smaller copayments for medical services for CHIP patients.

TRICARE

TRICARE is a comprehensive healthcare program for uniformed service members and retirees and their families. Members of the National Guard/Reserve and their families can also be covered under TRICARE.

The TRICARE program is managed by the military in partnership with civilian hospitals and clinics. It is designed to achieve the following goals:

• Expand access to healthcare
• Ensure high-quality care
• Promote medical readiness
• All military hospitals and clinics are part of the TRICARE program and offer high-quality healthcare at a low cost. TRICARE offers two types of plans:
• TRICARE Prime

Civilian Health and Medical Program of the Veterans Administration (CHAMPVA)

CHAMPVA, a health benefits program similar to TRICARE, provides coverage for the families of veterans who were permanently disabled or killed in the line of duty. The Department of Veterans Affairs (VA) shares the cost of certain healthcare services and supplies with eligible beneficiaries.

Private health insurance plans

Health insurance plans that are available from commercial insurance companies are considered private plans. Most people are part of an employer group plan. Those who are not eligible for an employer plan can purchase insurance on their own. This is referred to as an individual health insurance plan. Most private plans use managed care to reduce the costs of delivering quality healthcare.

Employer group plans

Many businesses offer a group policy, a private health insurance plan purchased by an employer for a group of employees. In addition to covering the employee, these plans can cover the employee’s spouse (i.e., domestic partner) and children. Typically, an employer pays a certain percentage of the premium for full-time employees. This makes the cost of the insurance plan more affordable for the employee. Employers also determine the health insurance benefits under the group policy. Health insurance monthly premiums and benefits can vary from employer to employer. For example, the health insurance plan from Aetna for Employer A covers chiropractic care, but the health insurance plan from Aetna for Employer B does not. The premium for a group policy is usually lower than that for an individual plan because of the large pool of employees. The insurance company will receive premiums from a larger number of people, and just a few of them will need a lot of services. The employees’ share of the premium is often paid through payroll deductions.

Self-funded group health plans

Many large companies or organizations have enough employees that they can fund their own insurance programs. This is called a self-funded plan. Technically, a self-funded plan does not fit the true definition of insurance. The employer pays the employee’s healthcare costs from the funds collected from the employee’s monthly premiums. Usually, the costs of benefits and premiums for self-funded plans are similar to those for group plans. Self-funded plans tend to work best for companies that are large enough to offer good benefit coverage and reasonable premium rates and are able to pay large claims for expensive medical services. Often a third-party administrator (TPA) handles paperwork and claim payments for a self-insured group.

Self-funded healthcare is an arrangement in which an employer provides health or disability benefits to employees with its own funds. This is different from fully insured plans, in which the employer contracts with an insurance company to cover the employees and dependents. In self-funded healthcare, the employer assumes the direct risk for payment of the claims for benefits. The terms of eligibility and coverage are stated in the insurance plan document, which includes provisions similar to those found in a typical group health insurance policy.

Individual health insurance plans

An individual health insurance plan is one that is not offered by an employer or another group. An individual policy can cover just one person or a family. These policies can be purchased through a health insurance exchange or directly from an insurance company. Premiums for an individual plan are generally higher than for a group plan.

Participating provider contracts

With all government health plans and most private health plans (especially managed care plans), healthcare providers must become participating providers (PARs). These providers are contracted with the insurance plan and have agreed to accept the contracted fee schedule as payment in full. Healthcare providers can apply to become PARs through a process called credentialing. Credentialing is the process of confirming the healthcare provider’s qualifications, including the healthcare provider’s education and professional background, license to practice medicine, and affiliated organizations.

Once the healthcare provider is credentialed, the health insurance plan issues a contract to become an in-network PAR. The contract includes a fee schedule that the health insurance company will use to reimburse the provider for health services provided. By signing the contract, the provider agrees to accept the health insurance plan’s fee schedule, even if it is lower than the provider’s fee schedule.

Contracted fee schedules

Payment for services is typically made after the health services are provided. Once the service has been provided to the patient, the healthcare provider must submit a health insurance claim, which includes the diagnosis and procedure codes, in addition to the total charges. Although healthcare providers establish their own fee schedule, health insurance plans maintain their own rates for which they reimburse. When providers become participating providers, they agree to the insurance plan’s fee schedule and will not collect more than that amount.

When setting up a fee schedule, a healthcare provider considers three factors:

• Time
• Expertise
• Services

In every case, healthcare providers must place an estimate on the value of these services. Fees for medical procedures and services differ from office to office based on the type of practice. An office visit with a family practice provider may cost less than an office visit with a specialist. In the past, most providers worked on a fee-for-service basis—that is, patients were charged for the provider’s service based on each individual service performed.

In recent years, health insurance plans, particularly government plans and managed healthcare organizations, have greatly influenced what healthcare providers can be reimbursed by establishing the allowable charge. The allowable charge is the maximum dollar amount the insurance plan will pay for a procedure or service. The patient cannot be billed for the amount above the allowable charge if the provider or the healthcare facility is a PAR.

Referrals

Patients seeking specialized care must first visit their assigned PCP to obtain a referral to a specialist or for more specialized therapy or care. Patients with HMO plans can only obtain a referral to the specialist by visiting their assigned PCP. HMOs will measure how many patients are referred to specialists by individual PCPs. Approval or denial of a referral can take anywhere from a few minutes to a few days. There are three types of referrals:

• A regular referral, which usually takes 3 to 10 working days for review and approval. This type of referral is used when the provider believes that the patient must see a specialist to continue treatment.
• An urgent referral, which usually takes about 24 hours for approval. This type of referral is used when an urgent but not life-threatening situation occurs.
• A STAT referral, which can be approved online when it is submitted to the utilization review department through the provider’s web portal. A STAT referral is used in an emergency situation as indicated by the provider.

A regular referral is the most common type and can be inconvenient for the patient. With most managed care plans, preauthorization needs to be obtained for a referral. Remember this cardinal rule: never tell the patient the referral has been approved unless you have a hard copy of the authorization. A referral is authorized after the approval has been received. When a referral is approved, the PCP’s office and the patient should receive a copy of the authorization. Always review the authorization thoroughly and confirm details, such as approved diagnosis and procedure codes and the exact period of time the authorization lasts. The patient will receive a letter with an authorization number and details regarding the approved services. The patient must bring the authorization to the specialist’s office on the appointment date.

Utilization management/utilization review

Utilization management is a form of patient care review by healthcare professionals who do not provide the care but are employed by health insurance companies. It is a necessary component of managed care to control costs. A utilization review committee reviews individual cases to ensure that medical care services are medically necessary. For this committee to function properly, having the correct diagnosis code is critical. This committee also reviews all provider referrals and cases of emergency department visits and urgent care. For referrals, the committee reviews the referral and either approves or denies it, so it is important to submit accurate documentation. The medical assistant should contact the utilization review department directly; it should never be left to the patient to contact this department.