demystifiedU.S. Healthcare

~ Pratik Shrestha

Introduction to U.S. Healthcare

ProvidersPeople/Institutions providing

healthcare products and services

PatientsPeople who receive healthcare

products and services

A trillion dollar industry (3.24T in 2015) with almost 18% of GDP expenditure.

Includes thousands of hospitals, nursing homes, specialized care facilities, independent practices and partnerships, web-based and IT supported service companies, managed care organizations, and major manufacturing corporations..

Pratik Shrestha

InsurersInstitutions that pays the

claim amounts for patients

Pratik Shrestha

Providers

U.S. Government

Eco-System

Employer

Payers

Patients

Providers

Insurance Leaders

Governing Bodies

Migrant/ Seasonal Workers

Homeless Persons

Public Housing Residents

School-aged Children

Minority Low Income Uninsured Enrolled in Medicaid

Bureau of Primary Health Care (BPHC) Health Resources Services Administration (HRSA) The Department of Health and Human Services (DHHS)

History of U.S. Healthcare

Pratik Shrestha

1901American Medical

Association

1930The Great Depression

1935Social Security Act

1965Medicare and Medicaid

1980Privatization

&Corporatization

Pratik Shrestha

10%

65%

25%

Under 65 years

Uninsured Private Insurance Public Insurance

http://www.cdc.gov/nchs/fastats/health-insurance.htm

Health Insurance Coverage

Components of Health Insurance

Pratik Shrestha

•The must have: Maternity Coverage, disability coverage etc.•Cost of the basic coverage•Provider Network•Prescription drugs coverage•Deductibles or Copay•Annual Limits

Jargons of Health Insurance Industry

Pratik Shrestha

• Premium

• Deductible

• CoPay

• CoInsurance

• Exclusion

• Out of Pocket

• Capitation Fee

• Fee for Service

• Prior Authorization

•Medicare and Medicaid

• National Provider Identifier (NPI)

• FACETS and QNXT

• HIPAA (Health Insurance Portability

and Accountability Act)

Example

Pratik Shrestha

Let's say the following amounts apply to your plan and you need a lot of treatment for a serious condition. Allowable costs are $12,000.

•Deductible: $3,000•Coinsurance: 20%•Out-of-pocket maximum: $6,850

1) You'd pay all of the first $3,000 (your deductible).2) You'll pay 20% of the remaining $9,000, or $1,800 (your coinsurance).3) So your total out-of-pocket costs would be $4,800 — your $3,000 deductible plus your $1,800 coinsurance.4) If your total out-of-pocket costs reach $6,850, you'd pay only that amount, including your deductible and coinsurance. The insurance company would pay for all covered services for the rest of your plan year.

https://www.healthcare.gov/glossary/co-insurance/

Types of Health Insurance

Pratik Shrestha

• Individual Health Insurance

•Group Health Insurance

•Non-Employer Health Insurance

•Student Health Insurance

•Short-term Health Insurance

•Consolidated Omnibus Budget Reconciliation Act

of 1985 – COBRA

Health Insurance Plans

Pratik Shrestha

• Indemnity/Reimbursement Plans

- reimburses for medical services regardless of who provides the services.- An Indemnity plan may also require that you pay up front for services and then submit a claim to the insurance company for reimbursement.

•Managed Care Plans

- contracts with healthcare provider and medical facilities to provide care at reduced costs.- HMO/PPO/POS

Managed Care Organizations - HMO & PPO

Pratik Shrestha

• Primary Care Physician Required• Referral from PCP Required• Out of Network providers not covered• Do not need to file claims• Lower Cost due to minimum copay and NO deductibles• Periodic fixed premiums• Preventive care

Health Maintenance Organizations Preferred Provider Organizations

• Primary Care Physician NOT Required• Referral from PCP NOT Required• Out of Network providers covered• Claims must be submitted• Higher Cost• Out of pocket cost limited (deductiblesand copay)• Pay for services as they are rendered

Managed Care Organization Continued

Pratik Shrestha

• Out of Network Provider covered• Cost high for out of network • Referral from PCP not required.• No deductible or deductible for non-network

care•Minimal copayment• Tight controls to get specialized care

Point of Service

Managed Care: Integration of Functions

Insurance Delivery (providers)

Payment

Financing

Access

Utilization Management

Capitation or

discounts

Risk Under-writing

Managed Care Organizations - HMO & PPO

Pratik Shrestha

Electronic Data Interchange (EDI) Transactions

Pratik Shrestha

Name of Transaction Number Business Use

Claim/Encounter X12 837 For submitting claim to health plan, insurer or other payer

Eligibility enquiry and response

X12 270 and 271

For inquiring of health plan, the status of patients eligibility for benefits and details regarding the types of services covered, and for receiving information in response from the health plan or payer

Claim status inquiry and response

X12 276 and 277

For inquiring about and monitoring outstanding claims and for receiving receiving information in response from the health plan or payer

Referrals and prior authorizations

X12 278 For obtaining referrals and authorizations accurately and quickly, and for receiving prior authorization response from the payer or utilization management organization (UMO) used by payer

Healthcare payment and remittance advise

X12 835 For replacing paper EOB/EOP’s and explaining all adjustment data from payers. Also permits auto posting of payments to accounts receivable system

Health claims attachments

X12 275 For sending detailed clinical information in support of claims, in response to payment denials, and other similar uses

Claims Process

Pratik Shrestha

Government Healthcare Plans

Pratik Shrestha

1 MedicareFederal program that provides health insurance to people over the age of 65 or people with severe disability.

2 MedicaidState and Federal program that provides health insurance coverage if you have low income.

Example Projects

Pratik Shrestha

1 A community hospital launches a women’s healthcare service line.

2 A software company develops a smart phone application to assist diabetics with self-management.

3 The state public health department develops and launches an immunization campaign.

4 A health care consulting company develops a workforce needs assessment tool that hospitals use to optimize and plan for clinical workforce needs

Thank you