Introduction
Healthcare is an integral part of a nation’s well-being. Despite its importance, there has been an increasing trend in the costs of health care. With the current high national debt, health care reimbursement should be part of the equation ("Healthcare Reimbursement | Knowledge Hub | athenahealth", 2016). The policy makers, physicians, and patients are well aware of the steps they need to take to reduce the costs of health care by considering health insurance plans.
The insurance policies enable the doctors and other health practitioners to provide quality and efficient health care to the people. Health insurance payers are provided with many different medical plans to choose from depending on the terms that suit them most. The challenge is that the health care reimbursement system is indeed a complex system and in the recent past it has developed a problem where the rules governing it keep changing and to some extent, the rules change even on a daily basis ("Healthcare Reimbursement | Knowledge Hub | athenahealth", 2016). Consequently, it is vital for every individual to understand the various plans offered to citizens, the components, principles, restriction, and reimbursement processes of each of these schemes.
Insurance Plan Components and Restrictions
1. Fee for Service (Indemnity) Plans
The indemnity plan or else known as fee-for-service allows an individual to visit any hospital or any doctor. The health insurance policy covers a certain percentage of the health care cost while the patient covers the other portion. Basic coverage includes consultation, hospitalization, surgery and other expenses. An individual is accorded the freedom to select the physician of their choice. In this insurance plan the individual and the insurance company share the health cost; for instance, the person can pay 20 percent of the cost and the policy covers the remaining 80 percent ("Fee for Service", 2016). In essence, there are no limitations to the kind of health provider since the bill will automatically be sent to the insurance company. Payment differs from one hospital to another since in some cases, one my pay for the service and apply for a claim to get reimbursed by the insurance company.
2. Managed Care Plans
This is an insurance program designed to provide healthcare at the lowest possible cost. It has three types: Health Maintenance Organizations (HMO), Preferred Provider Organization (PPO) and Point Of service ("Managed Care Plans", 2016). In HMOs, provide health care on a prepaid basis, where an individual makes a fixed payment monthly, and the HMOs provide a series of medical services in return. In this plan, one provides a primary physician within the HMO network who will be consulted in case of anything. This plan is restricted only to health providers within the HMO network. For the PPO plan, individuals pay for the services that they require but at discounted prices. This method is also limited to health care providers within the PPO network. In this case, the PPO network is sponsored by an insurance company which bears the expenses. In other situations, the PPO member is reimbursed by the insurance company minus out of pocket costs. POS has features of both HMO and PPO. The member does not choose a particular plan until when they are using the services offered ("Managed Care Plans", 2016). Depending on the services required, the program may switch from HMO to PPO hence it is gaining more popularity due to its flexibility.
3. Government-Sponsored Health Plans
• Medicare
This is a federally financed plan for who are above 65 years of age, those with disabilities and individuals who suffer from end-stage renal disease (Corrigan, Eden, & Smith, 2002, p.29). They are provided with drugs prescription, inpatient services like hospital care and outpatient services like doctor consultation.
• Medicaid
Medicaid plan covers poor or rather low-income families, children and people who have developmental and physical disabilities (Corrigan, Eden, & Smith, 2002, p.32). In the recent past, this plan was also extended to cover people who are childless and considered to be under the federal poverty level. Under this program, individuals are provided with both inpatient and outpatient services. They are also given prescription drugs as well as on term care for instance nursing home services.
• State Children's Health Insurance Program (SCHIP)
The SCHIP plan is restricted to children from low-income families with incomes that are above eligibility for Medicaid but are still considered to be under the federal poverty level (Corrigan, Eden, & Smith, 2002, p.34). In this plan, they are eligible for basic services such as doctor consultations, check-ups, and immunizations.
• Military/TRICARE
TRICARE program covers military personnel who are on active duty and their dependents; it also covers survivors and retirees under 65 years and their spouses (Corrigan, Eden, & Smith, 2002, p.35). In the recent past, an addition was made to this plan which provides supplemental cover to retirees over 65 years. This method provides access to military health facilities and in case they are not available or as efficient, contracts to civilian health providers are made to serve the individuals under this plan.
• Indian Health Service
HIS is a program under the Department of Health and Human Services that is meant to help people who are federally recognized to be from Alaska Native tribes or American Indians (Corrigan, Eden, & Smith, 2002, p.36). In this case, they are provided by inpatient, outpatient, pediatric, ambulatory and dental services among many other health services.
4. High-Deductible Health Plans/Healthcare Savings Accounts
This plan involves an individual incurring a higher deductible but enjoys lower insurance premiums. This plan is combined with the healthcare savings account which enables individuals to pay for their health services with the untaxed dollar ("High Deductible Health Plan (HDHP) - HealthCare.gov Glossary", 2016). Consequently, this plan serves its purpose of lowering the cost of health care. This plan has a lower premium compared to the others that have lower deductibles.
B. Inpatient and Outpatient Reimbursement Processes
1. Fee for Service (Indemnity) Plans
2. Managed Care Plans
In this case, reimbursement is made according to the contract. Here, patients are considered as a whole rather than individuals like in an indemnity plan. .Every month a supplement payment (enhancement) is made to the concerned network ("Managed Care Claim Management Back", 2016). An annual reconciliation is done to determine how much should be reimbursed. There is a fixed reimbursement no matter the services offered hence many people have turned to this method. The amount is then divided into the services provided. Consequently, if the services rendered were many, then the providers receive a less amount per service and if the services provided were many, then the health providers receive a more amount per service ("Managed Care Claim Management Back", 2016). This ensures that people only receive medically necessary services.
3. Government-Sponsored Health Plans
• Medicare
An Inpatient Prospective Payment System is used as a method of reimbursement where payment is made under a constant charge on a per case basis or per discharge basis. To qualify Medicare part A payments, inpatient admissions must last a minimum of two midnights ("Understanding Medicaid reimbursement", 2015). Outpatient Prospective Payment System is another method used depending on ambulatory classifications.
• Medicaid
Claims should be filed, and eligibility is verified before anything else is done. In this plan, there are reimbursement methods used include Fee for Service model which adopts the indemnity compensation as explained earlier. There is also the managed care model which takes the managed care reimbursement also described earlier ("Understanding Medicaid reimbursement," 2015). Therefore, the reimbursement for both inpatient and outpatient under Medicaid depends on the model used.
• State Children's Health Insurance Program (SCHIP)
The first thing is making a compensation claim, and the relevant individuals will get involved in a verification process to ensure no double claim is made. Despite the fact that the eligibility requirement is different, this has a similar process to Medicaid for both inpatient and outpatient. Therefore, the process in Medicaid as explained earlier will be applied in this case.
• Military/TRICARE
In this case, reimbursement is processed after one has filed an insurance claim form. The amount paid is known as an allowable charge which is tied to the Medicare rules on the amount to be charged ("Information for Providers - What TRICARE Pays to Providers | TRICARE," 2016). The total amount does not reflect the patient’s deductibles or out of pocket shares. In this case, claims must be filed within one year of service.
• Indian Health Service
Claim forms are also relevant in this instance. For inpatients and outpatients, claims are submitted using revenue codes and appropriate charges format for health providers. In the case of physicians, appropriate codes should be availed and modifiers that are applicable ("MHCP Provider Manual - Tribal and Federal Indian Health Services", 2016). The services should also be clearly stated to enhance the billing process.
4. High-Deductible Health Plans/Healthcare Savings
In this case, appropriate identification is provided, the claim is then filled and submitted. The claim is later processed to determine the allowable charges. The claim is then sent to the health provider and the client for reference purposes. The provider then bills the received claim according to the set allowable charges. The verification process commences determining whether the deductible expenses are eligible and whether the funds are available ("High Deductible Health Plan (HDHP) - HealthCare.gov Glossary," 2016). Usually, payment is made to the provider from the Health Equity. Should the funds get depleted, then, the patient will make an out of pocket payment. This process is applicable both to inpatients and outpatients; the only difference will arise from the allowable charge that is not the same.
In conclusion, the information on health care reimbursement and the various plans that exist is vital to every individual. This is to enable people choose the most suitable plan and to also understand the reimbursement process behind each plan.
References
Corrigan, J., Eden, J., & Smith, B. (2002). Leadership by example. Washington, D.C.: National Academies Press. Retrieved 14 July 2016, from http://www.nap.edu/read/10537/chapter/4
Fee for Service. (2016). Ama-assn.org. Retrieved 14 July 2016, from http://www.ama-assn.org/ama/pub/advocacy/state-advocacy-arc/state-advocacy-campaigns/private-payer-reform/state-based-payment-reform/evaluating-payment-options/fee-for-service.page
Healthcare Reimbursement | Knowledge Hub | athenahealth. (2016). Athena Health. Retrieved 14 July 2016, from http://www.athenahealth.com/knowledge-hub/practice-management/healthcare-reimbursement
High Deductible Health Plan (HDHP) - HealthCare.gov Glossary. (2016). HealthCare.gov. Retrieved 15 July 2016, from https://www.healthcare.gov/glossary/high-deductible-health-plan/
Indemnity Plan - Indemnity Health Insurance Plans. (2016). Ehealthinsurance.com. Retrieved 14 July 2016, from https://www.ehealthinsurance.com/health-plans/indemnity
Information for Providers - What TRICARE Pays to Providers | TRICARE. (2016). Tricare.mil. Retrieved 15 July 2016, from http://www.tricare.mil/Providers/WhatTRICAREPays
Managed Care Claim Management Back. (2016). AdMedika. Retrieved 15 July 2016, from http://www.admedika.co.id/index.php/en/services/managed-care-claim-management
Managed Care Plans. (2016). Advantages.aarp.org. Retrieved 15 July 2016, from http://advantages.aarp.org/en/healthcare-insurance/healthcare-tools-resources/understanding-health-insurance/managed-care-plans.html
MHCP Provider Manual - Tribal and Federal Indian Health Services. (2016). Dhs.state.mn.us. Retrieved 15 July 2016, from http://www.dhs.state.mn.us/main/idcplg?IdcService=GET_DYNAMIC_CONVERSION&RevisionSelectionMethod=LatestReleased&dDocName=id_009000
Understanding Medicaid reimbursement. (2015). McKnight's. Retrieved 15 July 2016, from http://www.mcknights.com/guest-columns/understanding-medicaid-reimbursement/article/441886/
