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Submit a paper analyzing the managed care use of pharmaceuticals in Saudi Arabia. Be sure to include the following items:
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8-1
CHAPTER
8
PRIVATE PAYERS / ACA
PLANS
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distribution without the prior written consent of McGraw-Hill Education.
.
8-2
Chapter 8: Private Payers/ACA Plans
Observe the illustration of the ten-step Revenue Cycle at
the beginning of the chapter.
This chapter focuses on the following step:
1. Preregister patients.
2. Establish financial responsibility.
3. Check in patients.
4. Review coding compliance.
5. Review billing compliance.
6. Check out patients.
7. Prepare and transmit claims.
8. Monitor payer adjudication.
9. Generate patient statements.
10. Follow up payments and collections.
Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.
.
8-3
Learning Outcomes (1)
When you finish this chapter, you should be able
to:
8.1
8.2
8.3
8.4
Describe the major features of group health plans
regarding eligibility, portability, and required
coverage.
Discuss provider payment under the various private
payer plans.
Contrast health reimbursement accounts, health
savings accounts, and flexible savings (spending)
accounts.
Discuss the major private payers.
Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.
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8-4
Learning Outcomes (2)
When you finish this chapter, you should be able
to:
8.5
8.6
8.7
8.8
8.9
8.10
Compare the four ACA metal plans.
Analyze the purpose of the five main parts of
participation contracts.
Describe the information needed to collect
copayments and bill for surgical procedures under
contracted plans.
Discuss the use of plan summary grids.
Prepare accurate private payer claims.
Explain how to manage billing for capitated services.
Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.
.
8-5
Key Terms (1)
• administrative services
only (ASO)
• BlueCard
• BlueCross BlueShield
Association (BCBS)
• carve out
• Consolidated Omnibus
Budget Reconciliation Act
(COBRA)
• credentialing
• discounted fee-forservice
• elective surgery
• Employee Retirement
Income Security Act
(ERISA) of 1974
• episode-of-care (EOC)
option
• essential health benefits
(EHB)
• family deductible
• Federal Employees
Health Benefits (FEHB)
program
Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.
.
8-6
Key Terms (2)
• Flexible Blue
• flexible savings
(spending) account (FSA)
• formulary
• group health plan (GHP)
• health insurance
exchange (HIE)
• health reimbursement
account (HRA)
• health savings account
(HSA)
• high-deductible health
plan (HDHP)
• home plan
• host plan
• independent (or
individual) practice
association (IPA)
• individual deductible
• individual health plan
(IHP)
• late enrollee
• medical home model
• metal plans
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distribution without the prior written consent of McGraw-Hill Education.
.
8-7
Key Terms (3)
•
•
•
•
•
•
•
•
•
•
monthly enrollment list
narrow network
open enrollment period
parity
pay-for-performance
(P4P)
plan summary grid
precertification
repricer
rider
Section 125 cafeteria
plan
•
•
•
•
•
•
•
•
•
silent PPO
stop-loss provision
subcapitation
Summary Plan
Description (SPD)
third-party claims
administrator (TPA)
tiered network
utilization review
utilization review
organization (URO)
waiting period
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distribution without the prior written consent of McGraw-Hill Education.
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8-8
8.1 Group Health Plans (1)
People not covered by entitlement programs are
often covered by private insurance.
Employer-sponsored medical insurance:
• Group health plan (GHP)—plan of an employer or
employee organization to provide healthcare to
employees, former employees, or their families.
• Rider—document modifying an insurance contract:
• These are also called “options” and can be purchased for
additional benefits such as vision, dental, acupuncture, etc.
• Carve out—part of a standard health plan changed
under an employer-sponsored plan.
• Open enrollment period—time when a policyholder
selects from offered benefits.
Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.
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8-9
8.1 Group Health Plans (2)
Federal Employees Health Benefits (FEHB)
program—covers employees and retirees (and
their families) of the federal government.
Self-funded health plans:
• Employee Retirement Income Security Act of 1974
(ERISA)—law providing incentives and protection for
companies with employee health and pension plans.
• Summary Plan Description (SPD)—required
document for self-funded plans stating beneficiaries’
benefits and legal rights.
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distribution without the prior written consent of McGraw-Hill Education.
.
8-10
8.1 Group Health Plans (3)
Self-funded health plans (continued):
• Third-party claims administrator (TPA)—business
associate of health plan.
• Administrative services only (ASO)—contract
under which a third-party administrator or insurer
provides administrative services to an employer for a
fixed fee per employee.
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distribution without the prior written consent of McGraw-Hill Education.
.
8-11
8.1 Group Health Plans (4)
Features of Group Health Plans:
• Section 125 cafeteria plan—employers’ health
plans structured to permit funding of premiums
with pretax payroll deductions.
• Eligibility for benefits:
• GHP specifies the rules for eligibility and the process
of enrolling and disenrolling members.
• Waiting period—amount of time that must pass
before an employee/dependent may enroll in a health
plan.
• Late enrollee—category of enrollment that may have
different eligibility requirements.
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distribution without the prior written consent of McGraw-Hill Education.
.
8-12
8.1 Group Health Plans (5)
Features of Group Health Plans (continued):
• Eligibility for benefits (continued):
• Individual deductible—fixed amount that must be
met periodically by each individual of an
insured/dependent group before benefits begin.
• Family deductible—fixed, periodic amount that must
be met by the combined payments of an
insured/dependent group before benefits begin.
• Tiered network—network system that reimburses
more for quality, cost-effective providers.
• Formulary—list of a plan’s approved drugs and
their proper dosages.
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distribution without the prior written consent of McGraw-Hill Education.
.
8-13
8.1 Group Health Plans (6)
Features of Group Health Plans (continued):
• Portability and required coverage:
• Consolidated Omnibus Budget Reconciliation Act
(COBRA)—law requiring employers with more than
twenty employees to allow terminated employees to
pay for coverage for eighteen months.
• Parity—equality with medical/surgical benefits (for
coverage of other treatments or services such as
mental health benefits).
• Narrow network—payer network of physicians
and hospitals with limited choices for patients.
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distribution without the prior written consent of McGraw-Hill Education.
.
8-14
8.2 Types of Private Payers (1)
• Under preferred provider organizations (PPOs),
providers are paid under a discounted fee-forservice structure, a payment schedule for
services based on a reduced percentage of
usual charges.
• In health maintenance organizations (HMOs)
and point-of-service (POS) plans, payment may
be a salary or capitated rate.
• Indemnity plans basically pay from the
physician’s fee schedule.
• Subcapitation—arrangement by which a
capitated provider prepays an ancillary provider.
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distribution without the prior written consent of McGraw-Hill Education.
.
8-15
8.2 Types of Private Payers (2)
Episode-of-care (EOC) option—flat payment by a
health plan to a provider for a defined set of services.
Independent (or individual) practice association
(IPA)—HMO in which physicians are self-employed
and provide services to members and nonmembers.
Medical home model—care plans that emphasize
primary care with coordinated care involving
communications among the patient’s physicians:
• These plans intend to improve patient care by rewarding
primary care physicians for coordinating treatments.
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distribution without the prior written consent of McGraw-Hill Education.
.
8-16
8.3 Consumer-Driven Health Plans (1)
CDHPs combine two components:
1. A high-deductible health plan (HDHP)—health
plan that combines high-deductible insurance and a
funding option to pay for patients’ out-of-pocket
expenses up to the deductible.
2. One or more tax-preferred savings accounts that the
patient directs.
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distribution without the prior written consent of McGraw-Hill Education.
.
8-17
8.3 Consumer-Driven Health Plans (2)
One of three types of CDHP funding options may
be combined with HDHPs:
1. Health reimbursement account (HRA)—
consumer-driven health plan funding option that
requires an employer to set aside an annual amount
for healthcare costs.
2. Health savings account (HSA)—consumer-driven
health plan funding option under which funds are set
aside to pay for certain healthcare costs.
3. Flexible savings (spending) account (FSA)—
consumer-driven health plan funding option that has
employer and employee contributions.
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distribution without the prior written consent of McGraw-Hill Education.
.
8.4 Major Private Payers and the
BlueCross BlueShield Association (1)
8-18
The major national payers (in addition to BCBS):
• Anthem.
• UnitedHealth Group.
• Aetna.
• CIGNA Health Care.
• Kaiser Permanente.
• Humana, Inc.
Credentialing—periodic verification that a provider
or facility meets professional standards and is
qualified to be reimbursed.
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distribution without the prior written consent of McGraw-Hill Education.
.
8.4 Major Private Payers and the
BlueCross BlueShield Association (2)
8-19
BlueCross BlueShield Association (BCBS) is a
national healthcare licensing association.
• Organization of independent companies founded in the
1930s to provide low-cost medical insurance.
• Pay-for-performance (P4P)—health plan financial
incentives program based on provider performance.
• BlueCard—program that provides benefits for
subscribers who are away from their local areas and
payments for their treating providers.
• Host plan—participating provider’s local BCBS plan.
• Home plan—BCBS plan in the subscriber’s community.
• Flexible Blue—BCBS consumer-driven health plan.
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distribution without the prior written consent of McGraw-Hill Education.
.
8-20
8.5 Affordable Care Act (ACA) Plans (1)
A key goal of the ACA is to reduce the number of
uninsured citizens and legal residents by providing
affordable individual health plans (IHP).
Individual health plan (IHP)—medical insurance
plan purchased by an individual.
Health insurance exchange (HIX)—governmentregulated marketplace offering insurance plans to
individuals.
• Private health insurance exchanges can offer IHPs.
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distribution without the prior written consent of McGraw-Hill Education.
.
8-21
8.5 Affordable Care Act (ACA) Plans (2)
Metal plans—health plans created by the ACA
named after different types of metals (Bronze,
Silver, Gold and Platinum) according to the
services they cover.
• Essential health benefits (EHB)—required benefits
that must be offered by metal plans as well as some
other insurance plans (examples include maternity
care, laboratory tests, and emergency services).
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distribution without the prior written consent of McGraw-Hill Education.
.
8-22
8.6 Participation Contracts (1)
• Participation contracts have five main parts:
1. Introductory section—names of parties to the
agreement, contract definitions, and the payer.
2. Contract purpose and covered medical services—type
and purpose of the plan and medical services it covers
for enrollees.
3. Physician’s responsibilities as a participating provider.
4. The plan’s responsibilities toward the participating
provider.
5. Compensation and billing guidelines—fees, billing
rules, filing deadlines, patients’ financial
responsibilities, and coordination of benefits.
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distribution without the prior written consent of McGraw-Hill Education.
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8-23
8.6 Participation Contracts (2)
• Utilization review—payer’s process for
determining medical necessity.
• Stop-loss provision—protection against large
losses or severely adverse claims experience.
Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.
.
8.7 Interpreting Compensation and
Billing Guidelines (1)
8-24
Most plans require copayments to be subtracted
from the usual fees that are billed to those plans.
Billing for elective surgery requires
precertification from the plan.
• Precertification—preauthorization for hospital
admission or outpatient procedures.
Providers must notify plans about emergency
surgery within the specified timeline after the
procedure.
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distribution without the prior written consent of McGraw-Hill Education.
.
8.7 Interpreting Compensation and
Billing Guidelines (2)
8-25
• Silent PPO—an agreement that an MCO can
purchase a list of participating providers and pay
their enrollees’ claims according to the contract’s
fee schedule despite the lack of a contract.
• Elective surgery—nonemergency surgical
procedure.
• Utilization review organization (URO)—
organization hired by a payer to evaluate
medical necessity.
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distribution without the prior written consent of McGraw-Hill Education.
.
8.8 Private Payer Billing Management:
Plan Summary Grids
8-26
Plan summary grid—quick-reference table for
health plans:
• Summarizes key items from the contract.
• Provides a shortcut reference for the billing and
reimbursement process (including global follow-up
times to procedures, preauthorization requirements,
etc.).
• Includes information about collecting payments at the
time of service and completing claims.
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distribution without the prior written consent of McGraw-Hill Education.
.
8-27
8.9 Preparing Correct Claims (1)
The first seven steps of the revenue cycle:
1. Preregister patients:
• General guidelines apply to the preregistration process
for private health plan patients—collect and enter basic
demographic and insurance information.
2. Establish financial responsibility for visits:
• Verify insurance eligibility and coverage with the payer
for the plan, coordinate benefits, meet preauthorization
requirements, and verify any out-of-network plans.
• Repricer—vendor that sets up fee schedules and
discounts, and processes a payer’s out-of-network
claims.
3. Check in patients:
• Collect copayments before the encounter.
Copyright © 2020 McGraw-Hill Education. All rights reserved. No reproduction or
distribution without the prior written consent of McGraw-Hill Education.
.
8-28
8.9 Preparing Correct Claims (2)
The first seven steps of the revenue cycle (continued):
4. Review coding compliance:
•
Check that coding documents medical necessity and
verify that codes are current as of the date of service.
5. Check billing compliance:
•
Check the compliance of billing with the plan’s rules.
6. Check out patients:
•
Collect those payments due after an encounter, such as
a deductible, charges for noncovered services, and
balances due.
7. Prepare and transmit claims:
•
Complete, check, and transmit claims in accordance
with the payer’s billing and claims guidelines.
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distribution without the prior written consent of McGraw-Hill Education.
.
8-29
8.10 Capitation Management
• Under capitated contracts, medical insurance
specialists must verify patient eligibility with the
plan because enrollment data are not always upto-date.
• Encounter information, whether it contains
complete coding or just diagnostic coding, must
accurately reflect the necessity for the provider’s
services.
• Monthly enrollment list—document of eligible
members of a capitated plan for a monthly
period.
*end of presentation*
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distribution without the prior written consent of McGraw-Hill Education.
.
Managed Care in Saudi Arabia (105 points)
Managed care does exist in Saudi Arabia, but is not as prevalent as in other countries. Review Alomi, Y.
A., Alghamdi, S. J., & Alattyh, R. A. (2017). Saudi Managed Care Pharmacy (SMCP): New initiative
system of MOH prescriptions dispensed through community pharmacies. Journal of Pharmacy Practice
and Community Medicine, 3(3), 145-53. Retrieved from
http://www.jppcm.org/sites/default/files/10.5530jppcm.2017.3.31.pdf
Submit a paper analyzing the managed care use of pharmaceuticals in Saudi Arabia. Be sure to include
the following items:
• The goals of the program;
• Benefits & disadvantages of managed care pharmacy;
• How this program compares to other managed care programs;
• Impact of managed healthcare pharmacy on patients, physicians, pharmacists and facilities; and
• Improvements that are needed for this program to accomplish its goals.
Your paper should meet the following structural requirements:
• The paper should be 6 pages in length, not including the cover sheet and reference page.
• Formatted according to APA and Saudi Electronic University writing standards.
• Provide support for your statements with in-text citations from a minimum of five scholarly articles.
Two of these sources may be from the class readings, textbook, or lectures, but two must be
external. The Saudi Digital Library is a good place to find these references.
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