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



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

I. Traditional Fee-for-Service

a. 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

b. 4 basic types of plans

i. Traditional FFS/indemnity plans

ii. Preferred provider organizations (PPOs)

iii. Point of Service (POS)

iv. Health Maintenance Organizations (HMOs)

c. Fees

i. Premium: monthly (or quarterly) fee

ii. Deductible: yearly out of pocket payment before the health insurance carrier begins to contribute

iii. Coinsurance: percentage of healthcare expenses

d. Levels of coverage

i. 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

ii. Major medical insurance: treatment for long, high cost illnesses or injuries; inpatient and outpatient expenses

iii. Comprehensive insurance: combination of the two

II. How Does it Work?

a. 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

b. Lifetime maximum cap: amount after which the insurance company would not pay anymore of the charges incurred

c. Reasonable and customary fee: the commonly charged or prevailing fees for health services within a geographic area

III. Commercial or Private Health Insurance

a. Who pays for commercial insurance?: an employer, a union, an employee and an employer sharing the cost, or an individual

b. Self-insurance: the employer is responsible for the cost of medical services

IV. Participating vs Non-participating Providers

a. 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

b. 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

a. See Figure 6-3 for step-by-step guidelines

b. Submitting commercial claims

i. Timely filing: within 365 days for BCBS; cannot collect payment from patient if claim is denied

ii. Filing commercial paper and electronic claims: contact insurance company if guidelines aren’t clear

VI. Commerical Claims Involving Secondary Coverage

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

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