Here’s a description of the many different health insurance providers and health insurance plans available. There are several health insurance providers that the medical billing specialist can submit claims for: government, commercial, and Blue Cross.
A health insurance policy is basically a contract between an insurance company and an individual or their employer. This contract can be renewable at defined periods ranging from monthly to annually. The type and amount of health care costs that will be covered by the health insurance company are specified in advance, in the member contract or coverage booklet.
Government Insurance Providers
The federal government administers several health insurance programs:
- Medicare – Provides health care to Americans over the age of 65.
- Medicaid – Provides health care to low income Americans. Cost is shared between state and federal governments.
- TRICARE (formerly CHAMPUS) – Health care for active duty military personnel and their families, eligible retirees and family members, and eligible survivors of military personnel.
- CHAMPVA – Civilian Health and Medical Program of the Department of Veterans Affairs. Provides health care benefits for dependents of veterans who are considered permanently 100% disabled due to service related conditions or events, veterans who died during service, and veterans who died with less than 30 days of service.
- Workers Compensation – Mandated by federal and state governments. This was originally created in 1908 for federal employees working very hazardous occupations. Requires employers to pay medical expenses and loss of wages for job related injuries or disorders.
Commercial Health Insurance
Commercial health insurance plans are typically fee for service coverage by an employer and may cover the employee themselves or their dependents. Commercial carriers are companies like Aetna, Cigna, United Health Care, Prudential, etc. Commercial plans typically offer several coverage and premium options to suite the benefit offerings of the employer.
Blue Cross Blue Shield
Blue Cross Blue Shield was started as a non profit health care provider with negotiated provider contracts. In exchange for this contract, the provider receives prompt payment of claims, has access to regional professional representatives, and provides educational seminars and workshops to keep providers up to date on BCBS procedures and medical billing information.
BCBS plans are forbidden by state laws from canceling coverage for an individual because of poor health. They are regulated by state insurance commissioners and have to get approval for rate increases or benefit changes affecting members in the state. BCBS plans also allow conversion from group to individual plans and allows individuals to transfer coverage when moving to another region.
Types of Health Insurance Coverage
Traditional indemnity or fee for service health insurance providers pay a fixed amount for each procedure or diagnosis or pay a percentage of the physicians charges. The insurance company would then reimburse based on the provisions of the policy. With this type of coverage, reimbursement increases as the fees, number of procedures, or types of service increase. There’s not as much of an incentive to control costs.
Health Maintenance Organization – HMO
HMO’s provide health benefits through a network of approved providers. These providers could work for the HMO itself, be providers for a practice that is contracted with the HMO, or belong to an independent organization. HMO’s typically promote wellness care programs to emphasize preventive care such as annual exams. HMO health insurance coverage is typically places a lot of emphasis on cost containment. Co-pays are typically required for services under HMO plans.
The Health Maintenance Organization Act of 1973 encouraged HMO’s and established the requirements for them. There are 5 different models of HMO’; Group, Staff, Direct Contract, Individual Practice Association, and Network.
Preferred Provider Organization – PPO
This is a network of providers and facilities who contract with insurance providers or employers to provide services at a discount. Many PPO’s are open ended which allow patients to use the services of providers outside the network, but the patient is responsible for the higher costs of doing this. PPO premium, copays, and deductibles are generally higher that for HMO’s but less than traditional indemnity plans.
Point Of Service – POS
This type of plan allows patients to use providers outside the HMO provided the primary care physician authorizes the specialty care.
If the patient uses the services of non-HMO specialist without an authorized referral, (self-referral), they are responsible for higher deductibles and coinsurance than for HMO providers.
Supplemental Health Insurance Providers
Supplemental insurance coverage is designed to assist with expenses not otherwise covered by the primary health insurance policy. These are available for both group and individual plans. Supplemental coverage is typically sought for Medicare, hospital, dental, and vision. These cover co-pays, deductibles, or coinsurance not covered by the primary health insurance providers policy.