Insurance Handbook for the Medical
Office
13th edition
Chapter 11
The Blue Plans, Private Insurance, and
Managed Care Plans
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
1
Lesson 11.1
Insurance Plans
1.
2.
3.
4.
5.
State the difference between a traditional indemnity
insurance plan and a managed care plan.
State the provisions of the Health Maintenance
Organization Act of 1973.
Explain health maintenance organization benefits
and eligibility requirements.
List features of an exclusive provider organization.
List two types and two different functions of
foundations.
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
2
Lesson 11.1
Insurance Plans (cont’d)
6.
7.
8.
9.
Define independent practice associations.
Name the features of preferred provider
organizations.
Explain the features of a point-of-service plan.
Explain how the Employee Retirement Income
Security Act affects managed care insurance.
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
3
Private Insurance

Blue Cross/Blue Shield


Pioneers in private insurance
Largest insurance company in the U.S.
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
4
Prepaid Group Practice Health Plans

Pioneers




Ross-Loos Medical Group became CIGNA
Kaiser Permanente
Direct contact
Individual practice model
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
5
Health Maintenance Organization Act
of 1973

Created authority for federal government to
assist HMO development by:


Providing grants, loans, and loan guarantees to
offset initial operating deficits of new HMOs that
meet federal standards
Requiring most employers to offer an HMO to
employees as an alternative to traditional
insurance plans
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
6
Health Maintenance Organizations




Prepaid group practice model
Staff model
Network HMO
Direct contract model
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
7
Exclusive Provider Organizations

Features similar with HMO



Members must choose care from network
providers (emergency exceptions)
Generally, no reimbursement for out-of-network
care
Regulated under insurance statutes
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
8
Exclusive Provider Organizations

Features similar to PPO






Enrolled population
Limited provider panel
Gatekeepers
Utilization management
Capitated provider reimbursement
Authorization system
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
9
Exclusive Provider Organizations

Features


Negotiated fees
Fee-for-service payments
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
10
Foundations for Medical Care


Foundations for Medical Care (FMC) First
established in 1954, in Stockton, CA
FMC operations


Comprehensive type of foundation
Claims-review type of foundation
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
11
Independent Practice Organizations


Physicians are not employees, and do not
receive salaries
Capitation or fee-for-service program
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
12
Preferred Provider Organizations



Freedom to use any physician or hospital
Members receive highest level of benefits
when using preferred providers
Coinsurance and deductibles
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
13
Silent Preferred Provider
Organizations



Also called blind or phantom PPOs,
discounted indemnity plans, nondirected
PPOs, or wraparound PPOs
Provider income reduced
Complicates the appeal process
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
14
Physician Provider Groups



Physician owned (unlike IPA)
Joint ventures with hospitals, labs, etc.
Can combine services for member
physicians, cutting business costs
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
15
Point-of-Service Plans



HMO cost management
PPO freedom of choice
Members choose services from participating
and nonparticipating providers, with different
benefit levels
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
16
Triple Option Health Plans



Members choose from HMOs, PPOs, or
“traditional” indemnity insurance
Members can change plans
Cost-containment measures
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
17
Employee Retirement Income
Security Act

Regulates all managed care insurance paid
by the employer or supplemented by the
employee



85% of claims that are nonMedicare/Medicaid/workers’ compensation
Regulated by Department of Labor
Any case relating to employee benefit plans
(EBP) falls under federal jurisdiction
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
18
Lesson 11.2
Medical Review and Management of Plans
10.
11.
12.
13.
14.
State reasons for a Quality Improvement
Organization program.
Define a carve out.
Identify four types of referrals for medical services,
tests, and procedures.
State the purpose of creating a managed care plan
reference guide.
Describe types of payment mechanisms used for
managed care plans.
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
19
Quality Improvement Organization


Peer review
Utilization review



Churning
Turfing
Buffing
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
20
Management of Plans


Contracts
Carve outs


Medical services not included in the contract
benefits
Paid on a fee-for-service basis
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
21
Plan Administration




Patient information letter
Medical records
Scheduling appointments
Encounter form
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
22
Preauthorization or Prior Approval




Formal referral
Direct referral
Verbal referral
Self-referral
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
23
Managed Care Guide
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
24
Financial Management

Payment





Deductibles
Copayments
Payment mechanisms
Contract payment time limits
Monitoring payment
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
25
Financial Management



Statement of remittance
Accounting
Fee-for-service
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
26
Financial Management

Year-end evaluation


Withhold
Capitation versus fee-for-service
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
27
Questions?
Copyright ©2014 by Saunders, an imprint of Elsevier Inc. All rights reserved
28