Why Medical Billing Is Important

Because health insurance premiums are based on a group's health profile, such as its employees, some employers carefully—and quietly—hire employees who are likely to have a low medical risk. These are typically younger, healthier individuals.

As a result, one-third of Americans are priced out of healthcare insurance, forcing them to go without medical coverage. Those with medical coverage can also expect higher out-of-pocket expenses in the form of deductibles and other fees.

Because of the high cost of healthcare, many uninsured people avoid seeking medical attention until their health condition becomes intolerable, at which point they visit an emergency room. Their condition has deteriorated to the point where only costly medical procedures can restore their health. The healthcare facility absorbs this cost and then passes it on to those who are insured as higher medical fees.

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Major medical coverage typically reimburses the insured at 80% of the total amount paid, as specified in the policy. It also includes services that are not typically included in basic coverage. These include the rental or purchase of medical equipment, special nursing care, and prosthetic devices.

Comprehensive major medical insurance is a more comprehensive major medical policy that provides coverage similar to basic and major medical coverage.

This policy covers almost all medical conditions.

Blue Cross and Blue Shield of Michigan

As you may recall from Chapter 1, Blue Cross and Blue Shield is a non-profit organisation that offers traditional medical coverage for a fixed premium regardless of how frequently a patient seeks medical attention.

Blue Shield is a type of insurance that reimburses patients for healthcare provider services such as doctor visits. Blue Cross pays for hospitalisation.

A patient can sign up for one or both plans.

Blue Cross and Blue Shield has expanded its offerings beyond traditional coverage to include health maintenance organisation (HMO) plans.

CONTROLLED CARE

Managed care differs from traditional coverage in that it is intended to keep patients healthy by providing preventive care. Managed care is a developing area of healthcare that differs from traditional coverage in structure. Some managed care plans completely cover a patient's medical expenses if the patient uses a preferred healthcare provider.

Health maintenance organisations, exclusive provider organisations, preferred provider organisations, integrated delivery systems, point-of-service plans, and the triple option plan are the most common managed care plans.

[Faculty of Nursing, Chiangmai University 5.62.156.86] downloaded on [07/18/16]. McGraw-Hill Global Education Holdings, LLC, all rights reserved. Without permission, this work may not be redistributed or modified in any way.

136 Medical Coding and Billing Health Maintenance Organizations Explained

A health maintenance organisation (HMO) provides healthcare provider services and hospital care to patients at little or no cost, with the exception of a monthly or annual payment. Each patient chooses a primary physician, who is paid a fixed monthly fee regardless of the care the patient receives. This doctor is financially motivated to provide preventive care. A healthy patient frees up the physician's time to see other patients while still receiving the monthly fee for the healthy patient.

Some HMOs run clinics staffed by salaried doctors. Patients are free to use these services at any time. Other HMOs have a contract with a group of physicians who care for HMO patients collectively.

If patients use HMO-owned or HMO-contracted physicians and healthcare facilities, their medical expenses are fully covered. Emergency care provided by any healthcare provider is typically covered by HMOs.

Some HMOs require patients to pay a $5 to $25 copayment each time they use the HMO's facilities. This includes prescription drugs.

HMOs have a financial incentive to provide patients with preventive care in order to avoid costly emergency and hospital care. Furthermore, HMOs reduce the need for redundant and unnecessary laboratory procedures. It also removes the incentive for some healthcare providers to perform unnecessary procedures to boost their reimbursement.

Some patients refuse to use HMOs for fear that healthcare providers will skip medical tests to save money.

Organization of Exclusive Providers

Another type of managed care plan coverage is an exclusive provider organisation (EPO). Patients are required to use only healthcare providers and facilities in the EPO's network. The patient may use services outside the network, but those costs will not be reimbursed.

An EPO enters into contracts with healthcare providers and facilities to provide services at a fixed rate. For coverage, patients are charged a set monthly fee.

Organization of Preferred Providers

A preferred provider organisation (PPO) provides medical coverage to a group of people, such as union members or company employees. The group must agree to use PPO-affiliated physicians and healthcare facilities.

The PPO negotiates low healthcare fees by promising to refer a large number of patients to affiliated doctors and hospitals. The PPO does not own anything.

[Faculty of Nursing, Chiangmai University 5.62.156.86] downloaded on [07/18/16]. McGraw-Hill Global Education Holdings, LLC, all rights reserved. Without permission, this work may not be redistributed or modified in any way. Managing the billing process accurately is not easy as providers might face hurdles in revenue cycle management. Moreover, Net Collection Rate below 95% shows that your practice is facing troubles in the billing process. To eliminate all these hurdles and maintain your NCR up to 96%, MedsIT Nexus Medical coding Services are around the corner for you so that your practice does not have to face a loss.

CHAPITRE 8 The Insurance Claim Cycle 137 does not have any healthcare facilities or physicians on staff. Instead, associates work on a traditional fee-for-service basis, with PPO patients paying less than non-PPO patients. Patients are fully covered and must pay a copayment and a PPO premium.