Chapter 6: Traditional Fee-for-Service/Private Plans

I.  Traditional Fee-for-Service

  1. FFS (fee-for-service): traditional type of healthcare policy where the insurance company pays fees for services provided to the individuals covered by the policy
  2. 4 basic types of plans
  3. Traditional FFS/indemnity plans
  4. Preferred provider organizations (PPOs)
  5. Point of Service (POS)
  6. Health Maintenance Organizations (HMOs)
  1. Fees
  2. Premium: monthly (or quarterly) fee
  3. Deductible: yearly out of pocket payment before the health insurance carrier begins to contribute
  4. Coinsurance: percentage of healthcare expenses
  1. Levels of coverage
  2. Basic health insurance: hospital room and board and inpatient hospital care; some hospital services and supplies, such as x-rays and medicine; surgery, whether performed in or out of the hospital; some physician visits
  3. Major medical insurance: treatment for long, high cost illnesses or injuries; inpatient and outpatient expenses
  4. Comprehensive insurance: combination of the two

II.  How Does it Work?

  1. Insurance cap: limits the amount of money the policy holder has to pay out-of-pocket for any one incident or in any one year
  2. Lifetime maximum cap: amount after which the insurance company would not pay anymore of the charges incurred
  3. Reasonable and customary fee: the commonly charged or prevailing fees for health services within a geographic area

III.  Commercial or Private Health Insurance

  1. Who pays for commercial insurance?: an employer, a union, an employee and an employer sharing the cost, or an individual
  2. Self-insurance: the employer is responsible for the cost of medical services

IV.  Participating vs Non-participating Providers

  1. PAR providers: enters into a contractual agreement with a carrier and agrees to follow certain rules involving claims and payment in turn for advantages granted by the carrier
  2. nonPAR providers: do not have to file patient claims; can balance the difference between their charges and BCBSs allowed charges

V.  Completing the CMS-1500 Form for a Commercial Plan

  1. See Figure 6-3 for step-by-step guidelines
  2. Submitting commercial claims
  3. Timely filing: within 365 days for BCBS; cannot collect payment from patient if claim is denied
  4. Filing commercial paper and electronic claims: contact insurance company if guidelines aren’t clear

VI.  Commerical Claims Involving Secondary Coverage

  1. Submit: to primary first, then send a new claim to secondary carrier with the EOB from primary attached