Reimbursement 101

Question 1

What’s indemnity insurance?

Answer 1

Patients pay a monthly premium, and must meet a deductible, or dollar amount that must be paid out of pocket per year before the insurance company begins coverage. After the patient meets the deductible, they submit bills and a portion is paid by the insurance company. The remaining amount is the patient’s responsibility. The percentage of covered was traditionally 80%, and these plans have also been called “80/20.”

Question 2

What are the 3 types of indemnity insurance?

Answer 2

1) Basic
2) Major medical
3) Comprehensive

Question 3

What is the “Basic” type indemnity insurance?

Answer 3

Basic covers hospital care and some physician services connected with hospitalization.

Question 4

What is the “Major” type of indemnity insurance?

Answer 4

Major medical covers inpatient and outpatient physician services and often prescriptions

Question 5

What is the “Comprehensive” type indemnity insurance?

Answer 5

Comprehensive is a plan that includes both basic and major medical coverage

Question 6

With Indemnity Ins., patients have an _______ choice of health care providers in such plans, but ________ services such as annual checkups, pap smears and immunizations are usually ________.

Answer 6

• Unlimited
• Preventative
• NOT covered

Question 7

What’s capitation?

Answer 7

Where a fixed amount is paid per patient (now also called a health plan member) for care during a period of time, regardless of the actual services the patient uses. Payment is “per person” or “per capita.” The customary period of time is “per month,” often called “per member per month.”

Question 8

Who carries the risk in capitation vs. indemnity insurance policies?

Answer 8

• Capitation - Risk shifts to provider b/c provider gets a monthly fee and this covers ALL necessary service.
• Indemnity - Risk is on the Ins. Co. b/c they get a monthly premium and that’s all, no matter what the patient needs (surgery, imaging, etc)

Question 9

What’s managed care?

Answer 9

Evolved from the HMO (Health Maintenance Organizations) Act of 1973 in a quest of the purchaser for lower health care costs.
-Purchaser: Employer who pays premiums for employee health insurance, and the government.

Question 10

What are four types of managed care and what are the most and least managed of the 4 options?

Answer 10

1) Staff model HMO (most managed)
2) Group model HMO
3) “Point of service”
4) Preferred Provider Organization PPO) (least)

Question 11

What is the Staff Model HMO?

Answer 11

In this model, the insurance company directly employs the health care providers (physicians, PAs, nurse practitioners). Referrals outside the staff model HMO are carefully monitored, and payment is not covered without an HMO clinician’s approval, so the HMO is said to function as a “gatekeeper.” Preventive services are covered and are an important part of members’ care.

Question 12

What is the Group model HMO?

Answer 12

In this model, a group of physicians and other providers contract with a number of insurance companies to provide care to patients. Typically, primary care and various specialties are represented within the group practice. Reimbursement for patients is provided “per member per month.” Referrals are monitored by primary care clinicians (“gatekeeping”), though often less rigidly than in a staff model HMO. As in the staff model, prevention is emphasized.

Question 13

What is the Point of Service model HMO?

Answer 13

This plan is a hybrid of HMO and fee for service models. The patient (health plan member) pays the lowest copay within the HMO, and a higher copay outside the HMO but within a list of preferred providers. The “point of service” is either the HMO or the preferred network. Services outside the preferred network are not covered.

Question 14

What is the Preferred provider organization (PPO) model HMO?

Answer 14

This is a loosely structured network of approved providers, paid on a discounted fee for service basis. The only “gatekeeping” is the list of PPO providers.

Question 15

In 1965, the U.S. Congress enacted legislation creating the ________ program as part of the Social ______ Act (Medicaid was also created the same year, see later slide).

Answer 15

• Medicare

- Security

Question 16

Medicare is ________ funded and controlled/overseen by the ______ for _______ & ______ Services (CMS). Medicare covers persons over ____ years, _______, end-stage _____ disease, and is Not based on an individual’s ________.

Answer 16

• Federally
• Center for Medicare & Medicaid Services
• 65YO
• Disabled
• Renal
• Income

Question 17

What are the divisions/parts of Medicare?

Answer 17

A, B, C, & D

Question 18

What does part A of Medicare cover?

Answer 18

Hospital services

Question 19

What does part B of Medicare cover?

Answer 19

Professional and outpatient services, as well as Physician & PA fees covered here

Question 20

What does part C of Medicare cover?

Answer 20

Relatively new, it’s Medicare managed care plans.

Question 21

What does part D of Medicare cover?

Answer 21

Rx drug benefit coverage

Question 22

What does DRGs stand for?

Answer 22

This system, enacted in 1982, is based on diagnosis-related groups (DRGs), and is a system of classifying patient hospital care by relating common characteristics such as diagnosis, treatment and age, with an expected cost for care and length of stay. In this way, Medicare could establish a payment for hospitalization for pneumonia, myocardial infarction, or other common conditions.

Question 23

Because one-size doesn’t fit all in the DRG system of Medicare reimbursement, what does the term “DRG Creep” mean?

Answer 23

“DRG creep” led to higher-level diagnoses with higher levels of reimbursement

Question 24

Another complaint about Medicare was inequity of reimbursement for primary care services compared to those provided by specialists, which led to institution of RBRVS, what is this?

Answer 24

Resource-based relative value scale, or RBRVS, in 1992. This system was designed to base reimbursement on the resources needed to provide a service, and attempted to more appropriately recognize the resources needed to provide primary care services.

Question 25

Medicaid was also enacted in 1965. It pays for health care for ___-_______ people, meaning it is “means-tested.” Medicaid is jointly funded by the ______ government and the ______, and is administered by ______ governments. States ________ their own eligibility, covered services and reimbursement standards within broad guidelines provided by the federal government.

Answer 25

• Low-income
• Federal
• States
• State
• Determine

Question 26

Medicare covers those eligible by income in what categories?

Answer 26

• Pregnant women & Children (Largest groups covered)
• Adults in families with dependent children
• Individuals with disabilities & elderly (Most Expense)

Question 27

The largest part of Medicaid expenditures goes to ______ _______ care. Because Medicare doesn’t pay for this service.

Answer 27

Nursing Home

Question 28

Physician services provided by PAs were first covered in rural health clinics as a result of the Rural Health Clinics Act in _____. This coverage was significantly expanded in 1986 as a result of advocacy by the ________ ________ of _______ ________ In 1986, services provided by PAs were covered at 65% for surgical first assisting, 75% for hospital care, and 85% in nursing homes. _________ services were only covered under the “incident to” provision.

Answer 28

• 1977
• American Academy of Physician Assistants
• Outpatient

Question 29

Normally PAs bring in 85% of Physician reimbursement. What is Medicare’s “incident to” provision?

Answer 29

Provision to allow reimbursement for services provided by PAs in the outpatient setting - 100% of what a Physician would be paid if they provided the same service.

Question 30

“Incident to” only applies to the outpatient setting, not _______, _______ ________ or ________ settings.

Answer 30

-Hospital, Nursing Homes, or Surgical

Question 31

What are the stipulations for “incident to” that must be met?

Answer 31

1) Services must be w/in the PAs scope of practice
2) The supervising physician must be physically on site within the suite of offices when the PA provides care
3) The physician must personally treat all new Medicare patients
4) The physician must personally treat all established Medicare patients with new medical problems

Question 32

In 1997, due to advocacy by the American Academy of Physician Assistants, legislation was included in the Balanced Budget Act (that year’s budget resolution) providing for the following changes to Medicare:

Answer 32

1) Physician services provided by PAs were covered in all settings, including outpatient
2) The reimbursement amount for all settings is uniformly 85% of the physician fee schedule

Question 33

PAs can be ____ employees or _________ contractors (not to be confused with independent _______!)

Answer 33

• W-2
• Independent
• Practice

Question 34

Each practice is assigned a _______ _______ ________. A PA can be employed, or work for, several practices, each with a _______ PIN.

Answer 34

• Provider Identification Number (PIN)

- Different

Question 35

A PA is assigned a _______ ________ __________ ________number for _________ billing. This number _____ with the PA when working in _____ practice, for billing purposes related to ancillary services such as lab and X-ray.

Answer 35

• Unique Provider Identification Number (UPIN)
• Medicare
• Stays
• Any

Question 36

This form is used to bill Medicare for services provided to patients.

Answer 36

1500

Question 37

The form used by a PA to apply for a provider identification number (PIN) is called?

Answer 37

855

Question 38

The regional insurance company that administers the Medicare program is called a?

Answer 38

Carrier

Question 39

The ________ ________ ________ is a unique 10-digit identification number for covered health care providers mandated by the Health Insurance Portability and Accountability Act of 1996 (HIPPA).
It replaced the Medicare PIN, the Medicare UPIN and many private insurance company provider identifiers. It is required for billing Medicare; many private payers require its usage too.

Answer 39

-National Provider Identifier (NPI)

Question 40

Example 1: The physician assistant sees Mrs. Jones, an established patient in the practice, in follow up for hypertension. The supervising physician is in the clinic….How should the visit be billed?

Answer 40

The PA bills the visit as “incident to,” and the visit is reimbursed at 100% of the physician fee schedule.

Question 41

Example 2: The physician assistant sees Mr. Doe, an established patient in the practice, in a follow up visit for hypertension. Mr. Doe also has an infected toe, which the PA treats also. His supervising physician is in the clinic, but does not see the patient….How should visit be billed?

Answer 41

The visit is billed under the PA’s PIN, and the visit is reimbursed at 85% of the physician fee schedule.

Question 42

Example 3: The physician assistant sees Mr. Doe, an established patient in the practice, in a follow up visit for hypertension. Mr. Doe also has an infected toe, which the PA also treats. The supervising physician is in the clinic, and examines Mr. Doe and oversees the PA’s initiation of treatment….How should visit be billed?

Answer 42

The visit is billed “incident to,” and reimbursed at 100% of the physician fee schedule.

Question 43

The physician assistant sees Mrs. Brown, an established patient in the practice, in a follow up visit for hypertension. The supervising physician is not in the clinic.

Answer 43

The visit is billed under the PA’s PIN, and reimbursed at 85% of the physician fee schedule.

Question 44

Concerning Medicaid and PA’s: Covers physician services provided by PAs. Rate of reimbursement the ______ or slightly lower & ___% in MS, but first assist by PAs ___ covered.

Answer 44

• Same
• 90%
• Not

Question 45

It is perfectly ________ for the practice to bill _______ insurers for services provided by the PA using the physician’s name. Many _______ insurance carriers do not issue provider numbers for PAs and in this case billing is done as if done by the _______.

Answer 45

• Acceptable
• Private
• Private
• Physician

Question 46

Who should be contacted if a PA has a issue or question in regards to billing insurances or Medicare?

Answer 46

AAPA or MAPA