Medical Biller Knowledge Base
Understanding Types Of Health Insurance
Let's explore basic managed care organizations. Each plan has its own level of benefits and characteristics. To accurately bill insurance carriers, medical billers need to know some basic fundamentals of insurance before submitting a claim. Eligibility and level of benefits plays a big role and affects reimbursements for providers. Pre-certification, pre-authorization, and pre-determination are keys words to consider.
Plan Type |
Advantages for Members |
Disadvantages for Members |
HMO (Health Maintenance Organization)
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Restricted access to providers, tests, hospitals, and treatments except in emergencies or pay a penalty
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Group model
(open or closed panel) Staff model |
Providers on staff of HMO
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Network model
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Direct contract model
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EPO (Exclusive Provider Organization)
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IPA (Independent Practice Association)
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POS (Point-of-Service Plan)
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PPO (Preferred Provider Organization)
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Definitions to Consider
Pre-certification - is seeking if healthcare services will be covered
Pre-authorization - is seeking if healthcare plan will pay based on medically necessary procedures (sometimes diagnosis driven). Pre-determination - is seeking the allowed amount the insurance plan will pay. This is also referred to as a Fee Schedule. Capitation - a system of payment. Providers/ hospitals get a paid a fixed amount regardless of type and number of services provided. Payer ID - used for billing NOTE: Capitation also refers to a fixed amount paid per claim. Coordination of Benefits(COB) Included in most policies and contracts with providers. The combination of payments from the primary and secondary carrier cannot be more than the amount of the provider's charges. These rules were established by the National Association of Insurance Commissioners and approved by every State insurance Commissioner. Carve Outs Medical services not included in the contracts benefits (not included with the capitation rate with MCOs), and may be contracted for separately. |
COB Example
Joe has Insurance A and Insurance B. The claim is for $100. The claim is sent to Insurance A. Insurance allows $80 and pays $80. The claim that was sent to Insurance B was not for $100, but for $20. Some carriers try to play by their own rules by stating that because Insurance A paid $80 and the $80 equals the amount Insurance B pays, then insurance B will pay no more the claim. Payer ID locators
OfficeAlly - Payer List E-Claims.com - Payer List Payer Medical Policies United Healthcare |