4 questions | Applied Sciences homework help

1. Timely access to appropriate health care. 2. Affordable choice of qualified health-care professionals. 3. Comprehensive health-care benefits that meet consumers’ health-care needs. 4. Receive health care that is affordable and free of financial barriers that impede access to health care. 5. High-quality health care. 6. Challenge decisions a plan makes about any practices or services that impact access to and quality of health

care. 7. Accurate, current, and understandable information about a managed-care plan. 8. Have medical information remain confidential and not be discriminated against in managed care. 9. Be represented in decision making and in the organization and regulation of managed care. 10. Vigorous enforcement of the Managed Care Consumers’ Bill of Rights. Part Six Protection of the Consumer476 network model: An HMO contracts with two or more IPAs to provide services to its members. staff model: This is the original model (used by Kaiser Per- manente), in which physicians are employed by the HMO and practice in a central office facility with administrative support. Doctors receive a salary and bonuses based on the HMO’s profits, costs of operation, physician performance, and other factors. Patients can select a primary care physi- cian who can direct them to staff specialists as needed. direCt ContraCt: An HMO contracts directly with individual physicians. Mixed-model plans use various combinations of these arrangements. Preferred Provider Organizations PPOs combine features of HMOs and fee-for-service indemnity plans. PPOs contract with networks or panels of providers who agree to a negotiated fee schedule that usually is 15% to 20% lower than their standard fees. Subscribers can obtain services from any provider they wish and can see specialists without a referral from their primary care physician. However, they must pay a higher percentage of the cost if they use a nonparticipant. An exclusive provider organization (EPO) is a less expen- sive form of PPO that does not reimburse for the services of nonparticipating providers. In 2009 there were 476 operating PPOs covering 148 million eligible persons in the United States.14 Point of Service Plans POS plans are HMO/PPO hybrids. Subscribers choose a primary physician who provides basic care and can authorize referrals to specialists. As in HMOs, sub- scribers pay only their co-payments and deductibles for services rendered from participating providers, and they do not have to file claims. Subscribers who elect to see nonparticipating providers are reimbursed, but their out-of-pocket costs are significantly higher. consumer-dIrected expense accounts Three types of accounts can be used to help employees who are not covered by an ordinary health insurance plan: (1) flexible spending accounts (FSAs), (2) health reimbursement arrangements (HRAs), and (3) health savings accounts (HSAs). These plans are often de- scribed as “consumer-driven” because routine claims are paid from a consumer-controlled account rather than with a fixed insurance benefit. All result in tax benefits.16 FSAs pay for specified expenses as they occur. Authorized under section 125 of the Internal Revenue Code, they are also referred to as “cafeteria plans” or “125 plans.” The employee contributes through a salary- reduction agreement and is reimbursed for medical and dental bills up to the total set aside. Up to $5000 can be contributed to an FSA each year. After March 15 of the following year, unspent funds are forfeited. Once the contribution amount has been designated during an an- nual open enrollment period, the employee is not allowed to change it or drop out of the plan without a change of family status. HRAs are employer-funded plans that are used to reimburse employees as expenses arise. At the end of each year, unspent funds can be rolled over for use in future years. HSAs are tax-exempt trusts or custodial accounts set up with a qualified trustee to pay or reimburse certain medical expenses. To be eligible, the employee must be covered by a high-deductible health plan. HSA contribu- tions are tax-deductible even if other deductions are not itemized on the employee’s federal income tax return. Contributions by employers (whether or not they are made through a cafeteria plan) are excluded from the employee’s gross income. The contributions remain in the individual account from year to year and can be invested until they are used. Money that remains at age 65 can be withdrawn as taxable income. HSAs are most suitable for (a) healthy people who must purchase their own insurance and (b) people who expect to have high medical expenses. However, prospective purchasers should carefully examine the fees involved in maintain- ing their trust account. “concIerge medIcIne” Concierge medicine—also called boutique medicine—is a practice model in which the physician offers exclusive primary-care service to a limited number of patients for an annual fee. The typical practice includes house calls; 24-hour physician access by phone and electronic media; preventive care; same-day appointments; longer physicals and routine appointments; free check-ups; personalized wellness programs; and electronic medical records. In some plans, the doctor will accompany the patient to specialist appointments. Concierge physicians typically limit their practice to 600 patients and charge between $1500 and $1800 per year per patient, but annual fees can be as high as $20,000 for those who see fewer patients. The factors that affect the cost include the extent of the services, the patient’s age and health, and the number of participating family members. As the number of patients decreases, the level of attention and exclusivity of services tend to increase Chapter Twenty-Three Health Insurance 477 along with the size of the annual retainer. In 2010, an estimated 5000 physicians had concierge practices.17 Critics charge that concierge practices will aggravate the problem of limited access to primary care. Propo- nents counter that by enabling physicians to have more time with patients to plan and prevent, money can be saved by reducing disease exacerbations and hospitaliza- tions, cutting physician overhead, eliminating wasteful duplication of services, and curbing insurance company profits. People contemplating enrollment in concierge prac- tice should carefully determine what is covered and what is not. Insurance will still be needed to cover hospitaliza- tions, various diagnostic procedures, and specialist costs. IndemnItY vs managed care Traditional (fee-for-service) indemnity plans tend to cost most, HMOs least, and PPOs and POS plans in be- tween. Managed-care plans also tend to result in fewer out-of-pocket costs, particularly for young adults and families with young children. However, the pattern is not consistent. Some indemnity and PPO plans are less expensive than HMOs. Surveys have found that higher- priced plans tend to be rated higher by their subscribers, but some lower-priced plans also have been rated highly. Traditional indemnity policies tend to involve more paperwork (in filing claims) but provide greater choice of providers, which may be important for people who are chronically or seriously ill. Table 23-3 provides ad- ditional comparative data. People inclined toward managed care should care- fully investigate whether a suitable primary physician is available to them in any plan they consider. Other favorable signs are affiliation with an accredited teaching hospital, access to enough specialists, and a high percent- age of board certification among its physicians. Some HMOs provide data on subscriber satisfaction with their primary care physicians. State insurance departments can tell whether complaints have been made about specific plans. Accreditation provides a useful guideline for judging the quality of a managed-care plan. The National Com- mittee on Quality Assurance (NCQA) is an independent, nonprofit organization that evaluates health plans and providers. Its standards cover access and service, pro- vider qualifications, health maintenance strategies, and quality of care. NCQA operates the Health Employer Characteristic Are consumers free to choose provid- ers? Are providers free to prescribe treatment? Does insurer bear financial risk? Do providers share financial risk with insurer? Is insurer obliged to provide health- care services? Must consumer file claim forms? Relative cost of premiums Relative out-of- pocket expense comparIson of Insurance plans Table 23-3 Fee-for-Service Yes Yes, if medically necessary and appropriate Yes No No Yes, unless provider does Tends to be highest Lower-cost policies have highest out- of-pocket expense

PPO

PPO providers can be seen at discounted fees. Out-of-plan providers can be seen but cost more Yes, if medically necessary and appropriate Yes Rarely Yes, within provider network Only for out-of-net- work services Between fee-for-ser- vice and HMO Low if out-of- network services are not used

POS

Coverage provided for provid- ers in plan. Other providers paid according to fee sched- ule; consumer must pay any additional cost Some restrictions; preapproval is sometimes needed Yes Sometimes Yes, within provider network Only for out-of-network services Between fee-for-service and HMO Low if out-of-network services are not used

HMO

Coverage provided only for providers in plan Some providers use physician assistants for screening Many services must be preapproved in order to be covered Yes Yes; penalties or incentives discourage use of “un- necessary” services Fully responsible for neces- sary and appropriate services No Tends to be lowest Tends to be lowest Part Six Protection of the Consumer478 Data Information System (HEDIS), a “report card” in- tended to enable employers and consumers to compare plans. The NCQA also publishes an accreditation status list and “report card” for individual plans. (See http:// reportcard.ncqa.org.) In August 2011, its database listed more than 700 health plans as accredited.18 Among 37,481 Consumer Reports readers who responded to a 2008 survey, 64% said they were very or completely satisfied with their plan, 18% said they had trouble seeing their plan doctor at least once during the previous year, and among users of some lower-rated plans, as many as 16% complained that it was difficult or impossible to get needed care. The survey also found that people in PPOs encountered more hassles and billing errors than those in HMOs.19 The Center for the Study of Services20 has noted that “even if you prefer one plan type in theory, you might choose another type because that specific plan is extraordinary.” loss ratIos The amount of money a company pays out in claims can be expressed as the benefit-cost ratio or loss ratio. This is calculated by dividing the amount paid in benefits by the amount received in premiums. A high loss ratio is a favorable sign. A low loss ratio indicates that a company is either inefficient or is making excess profits. America’s Health Insurance Plans (AHIP)21 reports that the national average loss ratio for commercial plans is 88%, with the largest groups averaging 93% and the smallest groups averaging 70%. The PPACA requires health plans to provide rebates to consumers if their loss ratios are lower than 80% for individual and small-group coverage, or 85% for large-group coverage. Data on individual companies are compiled by state insurance departments and are also published by A.M. Best in manuals available at many public libraries. However, loss ratios vary not only from company to company but from one type of policy to another within a company. Data on specific policies may be available from company representatives or agents. cHoosIng a plan Choosing health insurance can be complicated. There are many types of plans, and contracts can vary greatly from company to company and even within the same company. Colleges typically provide outpatient health services through a student health service, usually at a low fee that is paid along with tuition. Some also require students to purchase additional insurance to cover hospitalization or other outside services. Students covered under their family’s policy may not be required to purchase addi- tional insurance. It is usually most economical to remain covered under a family policy as long as possible rather than obtaining a separate policy. After college it is usually best to see whether group coverage is available through work or membership in an organization. If you work for a large company, several plans may be available and the human resources depart- ment should provide literature and may be able to help you choose. If no group coverage is available, contact several other insurance companies, including some that provide managed-care plans. You should also investi- gate whether a “consumer driven” health plan would be practical for you. If you find it difficult to obtain insurance because of a pre-existing health problem, find out from your state insurance department or a broker whether your state has a risk pool similar to the assigned-risk pools for automobile insurance. After considering your needs, obtain both a summary and a copy of each policy that sounds suitable, read them carefully, and be sure you understand what they say. If you want both basic and major medical coverage, they should be obtained from the same company to avoid gaps in coverage. Your aim should be to insure mainly against the most serious types of losses. In the long run, it is more economical to absorb the cost of minor medical expenses as part of your overall budget. Policies that pay a fixed daily amount or overlap your essential coverage should be avoided. Consumer Reports22 recommends (a) looking for a policy that picks up 100% of medical expenses when they hit a certain level in a year—perhaps $5000 or $10,000, and (b) choosing a higher deductible and/or higher out-of-pocket limit rather than any “fixed dollar” limit for potentially very expensive services. Table 23-4 can help you compare plans. Some state insurance departments can provide information on com- plaints made against health insurance companies. Health- care.gov has information about many insurers and has online tools to help compare features. The Georgetown University Policy Institute (www.healthinsuranceinfo. net) publishes excellent state-by-state consumer guides. The Weiss Ratings Web site (www.weissratings.com) ranks the financial stability of hundreds of plans. The “Scam Alert” Consumer Tip box on page 480 describes common signs of fraudulent promotions. Chapter Twenty-Three Health Insurance 479 Type of policy • Is the policy a group or individual one? • Is the insurance comprehensive, providing basic health insurance that includes hospital, surgical, medical, and (if needed) maternity benefits? Does it also in- clude major medical provisions, or is such insurance available? Hospital coverage • How many days are covered for each illness? What is the per diem rate? Is the allowance sufficient to cover the entire daily rate? Is there coverage for intensive care?

• What services are covered? • Is there a deductible clause? • Is the choice of hospitals limited? • Are in-hospital physicians’ services covered? • Is consultation permissible? Under what conditions? • Are the covered days limited to one period of hospi-

talization, or is there more than one period covered up to a maximum number of days?

• Are there limitations on readmission to a hospital for the same illness?

Surgical coverage • What surgical procedures are covered, and to what extent? What is the surgical fee schedule? • Are there provisions for consultant services? • Are second opinions required? If requested by the subscriber, are they covered? • Are there limits in the choice of surgeons? • How do the fees allowed compare to what local sur- geons charge? Medical coverage • Which services are covered? Excluded? Limited? • Are home and office visits covered? Are there any limitations? • Is there a deductible clause? • Does it include service for accidents? • Is the choice of physicians limited? • Are periodic well-person physical examinations, pre- ventive immunizations, Pap tests, and other preventive measures covered?

• Are prescription drugs covered? • Is treatment for mental and emotional problems and drug and alcohol abuse covered? To what extent?
• Are there provisions for concurrent services of more than one physician when medically necessary?

QuestIons to ask WHen comparIng HealtH Insurance polIcIes

Table 23-4 When choosing health insurance, become familiar with all the literature provided. It is best to obtain a copy of the policy and read it carefully. If the language appears conflicting or difficult to understand, ask the company representative for clarification. Be sure the coverage is suitable, and don’t hesitate to shop around. Coverage and costs vary greatly from plan to plan. The following questions can help you to compare plans. Maternity care • What expenses are covered? What are the limita- tions? • What complications are covered? • What is the waiting period? Major medical insurance • What services are covered? • What is the maximum coverage? The minimum recom- mended is $1 million. What is the stop-loss limit (the amount over which the company pays 100%)?

• Is there a deductible? How much? • Is co-insurance required? Limits? • Can maximum limits be restored after illness? • What percentage above the deductible is paid by the

company? Nursing home or home care • What services are covered? For how many days? At what daily rate?

• Is prior hospitalization required for coverage? • Are services of RNs, LVNs, LPNs, or other allied

health professionals covered? • Are medications and medical supplies covered? Contract provisions • Are all family members covered? To what ages? • Are there waiting periods? What is the effective policy date? • What are the conditions and limitations for pre-existing conditions? Do they apply for more than 1 year?

• Can the policy be converted to an individual plan? To a family plan if an individual marries? Is it convertible after retirement?
• What are the conditions regarding cancellation and re- newal of policy? By whom? Is renewal guaranteed?
• What are the exclusions? Are they more restrictive than the usual ones, such as dental, vision, hearing?
• Does coverage include out-of-area services, and ser- vices in foreign countries?
• Can rates be changed? What are the conditions under which rates may be changed?

Selecting an insuring organization • Is the company licensed in your state? • Is the company or agent reliable and reputable? • How is it rated by Weiss Ratings Guide? • Does the company have a reputation for paying promptly and without hassles?

• What is the loss ratio? Is it at least 80%?

Part Six Protection of the Consumer480 medIcare Medicare is a federal insurance program created by amendments to the Social Security Act. It provides ben- efits for people age 65 years or older, people under 65 with certain disabilities, and people of all ages with kid- ney failure who require dialysis or a kidney transplant. It is administered by the Centers for Medicare & Medicaid Services (CMS), an agency of the U.S. Department of Health and Human Services. Various commercial insur- ance companies are under contract with CMS to process and pay Medicare claims, and groups of doctors and other health-care professionals have contracts to monitor the quality of care given to Medicare beneficiaries. All plans that contract with Medicare must have an open enrollment period of at least 30 days per year.23 People who believe that a Medicare payment is too low have the right to appeal for reconsideration. Ad- ditional details about Medicare coverage are published in Your Medicare Benefits,24 a handbook that is updated annually and is available online at www.medicare.gov or from the Medicare hotline (800-638-6833). Original Medicare Plans “Original Medicare” has two parts. Part A helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, and hospice care. Part B helps pay for doctors’ services, outpatient hospital services, laboratory services, ambulance service, durable medical equipment, and various other medical services and supplies. Part A is financed by Social Security taxes. Employers and employees now pay 1.45%, and the self-employed pay 2.9% on all earnings. Part B subscribers pay monthly premiums that cover about 25% of the government’s cost of running the program. The premium is either billed quarterly or deducted from the insured person’s Social Security check. Most people older than 65 are eligible for Part A. There is no monthly charge, but eligible individuals must request coverage. When signing up, they are auto- matically enrolled in Part B but can opt out when their Medicare card arrives. Those who opt out can re-enroll during the first quarter of the following year at a higher premium. People planning to begin Medicare coverage at age 65 should contact their local Social Security office 3 months beforehand to obtain the enrollment forms. Medigap insurance, also called supplemental in- surance, is available in standard packages that must supplement Part A so that the beneficiary is covered for hospital co-insurance and 365 additional lifetime hospi- tal days after the Medicare hospital benefit is exhausted. The price of the policy reflects the number of additional benefits (such as skilled nursing co-insurance, prescrip- tion drugs, the Part B deductible, and certain preventive care services) that are included.26 The best time to pur- chase a Medigap policy is during the open enrollment period, which is 6 months from the date of Medicare Part B enrollment (after age 65). During this period, no applicant can be refused. After it ends, companies have the right to restrict which policy they sell and to refuse coverage entirely. State insurance commissioners can provide information on the types of policies approved for sale within their state. Medicare Advantage Plans Medicare Advantage, also called Medicare Part C, is offered and administered by private companies ap- proved by Medicare. Medicare Advantage plans must encompass parts A and B and may offer extra coverage, such as vision, hearing, dental, and/or health and well- ness programs. The monthly fee, deductibles, and co- payments vary from one plan to another. The monthly premiums for Medical Advantage plans tend to be lower than those of Medigap policies—and some charge no premium—but they limit the choice of providers and have other restrictions. Prescription Drug Plans Medicare Part D partly covers prescription drug costs. Most Medicare Advantage Plans include it, but it is also available separately. An interactive tool on the official Medicare Web site (www.medicare.gov) can help deter- mine whether a Part D plan is worthwhile. √ Consumer Tip Scam Alert Kirschheimer25 warns against insurance promotions that involve any of the following:

• Coverage that promises full benefits but costs much less than similar policies.
• “Easy sign-up” for an individual (not group) policy regardless of preexisting conditions and with no required medical exams or questionnaires.
• Offers to have an agent visit your home rather than mail you information about coverage and costs.
• Any attempt to get your Social Security number and bank account during a sales presentation.
• A pitch that mentions “coverage,” “benefits,” and “health protection”—but not insurance.

Chapter Twenty-Three Health Insurance 481 Fee Limitations The 1989 federal Physicians Payment Reform Act limits the amount that doctors who do not accept Medicare’s assigned fees are permitted to charge patients older than 65. The current limit is 15% above what Medicare pays. The law requires physicians to file claims for all reim- bursable services. The law also states that if Medicare denies payment for services (as not reasonable or nec- essary), the physician may not collect from the patient unless the patient was notified in advance or should have known that the services were not reimbursable. (In many cases the patient will be asked to sign an advance notice.) The 1989 law does not limit hospital outpatient charges. This means that Medicare patients who are responsible for 20% of the charges can have sizable out-of-pocket expenses for hospital outpatient services.27 medIcaId Medicaid (also called Medical Assistance) is a federal grant-in-aid program under which the states may con- tract with the Secretary of Health and Human Services to finance health-care services for public assistance recipients. California’s program is called Medi-Cal. These programs provide comprehensive care and nurs- ing home coverage for certain categories of indigent and medically indigent persons.28 There are about 52 million eligible persons, including the aged, blind, disabled, and members of single-parent families with dependent children. The proportion of state-to-federal funding of the program is determined by a formula based on each state’s per capita income. Eligibility requirements differ from state to state but generally require a low income and few assets. Some people establish eligibility by incur- ring medical expenses until their assets are depleted and their net income after medical expenses is low enough to qualify. Of those eligible for Medicaid, nearly half are eligible to receive Medicare. PPACA calls for increased services and eligibility starting in 2013. otHer government-sponsored programs Several other federally sponsored programs offer care to millions of Americans. Details of their offerings are fully described on their Web sites. The Veterans Health Administration (www.va.gov/ health) is a large network of clinics and hospitals that serve veterans who served on active military duty and various other people who provided military-related ser- vices. The families of veterans may be eligible for care through CHAMPVA (www.va.gov/hac/forbeneficiaries/ champva/champva.asp). The Military Health System (www.health.mil) provides hospital and outpatient care to members of the armed forces and their families. It includes TRICARE (www.tricare.osd.mil), which covers military retirees, their dependents, and dependents of active duty per- sonnel. TRICARE also serves members of the National Guard and Reserves and their families, but its benefits vary depending on the sponsor’s military status. The Indian Health Service (www.ihs.gov) provides comprehensive health services to about 1.9 million American Indian and Alaskan Native people who belong to federally recognized tribes in 35 states. The Children’s Health Insurance Program (CHIP) (www.cms.gov/home/chip.asp) is a federally subdized program that provides free or low-cost medical, den- tal, and hospital services up to age 19 for children of uninsured families that do not qualify for Medicaid. Eligibility and fees depend on the age of the child and the family’s size and gross income. The Program of All-Inclusive Care for the Elderly (PACE) (www.cms.hhs.gov/pace) is a capitated HMO for persons age 55 or older who are certified as eligible for nursing care. long-term–care Insurance Long-term care refers to the nursing, medical, and so- cial services provided to an individual over a prolonged period (see Chapter 22). The most common settings are nursing homes and individual homes. The levels of service provided in nursing homes are classified as skilled nursing care (intensive medical and rehabilitative care by trained personnel), intermediate nursing care (less intensive care by trained personnel), and custodial care (daily activities such as meals, bath- ing, and dressing). In home care, patients may receive skilled nursing care (also occupational and physical therapy), home health aide services (personal and custo- dial care), and homemaker services (cleaning, cooking, and running errands). In 2002 Spillman and Lubitz29 estimated that 46% of Americans who were 65 would enter a nursing home some time before they die and that 55% of these would spend at least 1 year there and 19% would stay for more than 5 years. The Genworth 2011 Cost of Care Survey30 found that the median annual cost of a semiprivate room in a nursing home was $70,445 ($193/day) and that home care averaged $18 per hour. The premiums for long-term–care insurance de- pend on the age of the person, daily benefit levels, how long benefits are paid, and length of elimination period (number of days or home visits before coverage begins). Part Six Protection of the Consumer482 Most policies require passage of a period of time before covering the treatment of pre-existing conditions. The cost can be reduced by selecting a policy with a long waiting period (such as 100 days) or a shorter benefit period (3 or 4 years rather than lifetime benefits). Policies with benefits that increase with inflation cost about 40% more than those that provide a fixed monthly amount. Eligibility for benefits is based on the severity of impair- ment and the inability to perform a certain number of activities of daily living. In 1996, HIPPA made premiums for long-term–care insurance deductible as a medical expense for income tax purposes. People whose income and assets are low enough or nearly low enough to qualify for Medicaid cannot afford to purchase long-term–care insurance. To encourage the purchase of long-term–care insurance, most states have established Long-Term Care Partnership Programs that enable purchasers to retain assets equal to the amount spent on their premiums if their policy benefits run out.31 At age 55, a typical individual non-Partnership policy offering two years of coverage, a 100-day elimination period, at a benefit level of $200 per day for nursing home, assisted living, and home care, five different policies are offered by three companies and the premiums range from $720 to $1268 per year without inflation protection and from $1723 to $3063 per year with inflation protection. For the same policy purchased at age 65, the premiums range from $1581 to $2767 per year without inflation protection and from $2874 to $5049 per year with inflation protection.32 Long-term care insurance is most suitable for indi- viduals with assets between $200,000 and $1 million (in addition to their home) who can afford to spend up to 7% of their income to purchase the insurance. Consumers investigating long-term–care insurance should examine sample copies as well as outlines of the policies and should obtain answers to these questions:

• Does the policy cover skilled nursing, intermediate care, and custodial care, at a nursing home, other assisted living facilities, and at home? What services are covered?
• What is the daily benefit? It should pay half to two-thirds of the cost. Will benefits increase with inflation?
• How long will the benefits last? • When do benefits begin? (The longer the elimination period,

the less costly the policy.) • Under what circumstances can the premiums increase? • Is payment of further premiums waived if the insured person stays in a nursing home? • Do benefits hinge on prior hospitalization? (Nearly two- thirds of the patients who enter a nursing home have not been hospitalized beforehand.)

• Is Alzheimer’s disease covered? To what extent? Is any other illness or injury excluded from coverage?
• What are the restrictions on pre-existing conditions? Wait- ing periods? Deductible?
• Are there any other limitations or exclusions? • Are policies guaranteed renewable? • Is the company’s loss ratio 80% or higher? • Is the company’s financial strength rated “B” or better by

Weiss Ratings’ health insurance and HMO/PPO guides. Consumer guides to long-term–care insurance are available online from America’s Health Insurance Plans (www.hiaa.org) and many state agencies. dental Insurance Dental insurance programs were started by nonprofit dental service corporations sponsored by local den- tal societies. Nearly all private plans are group plans sponsored by employers or labor unions. Medicaid also provides coverage in some states. The most common plans can be grouped into three categories: direCt reimbursement Programs reimburse a percentage of the dollar amount spent and provide free choice of dentist. Preferred Provider organization (PPo) programs are plans in which contracting dentists agree to discount their fees as a financial incentive for patients to select their practices. In some plans, patients who choose a nonparticipating dentist will have benefits reduced or withdrawn completely. dental health maintenanCe organization/CaPitation Plans pay contracting dentists a fixed amount (usually monthly) per enrolled family or individual. In return, the dentist agrees to provide specific types of treatment at no charge or with a co-payment. About half of Americans older than 2 have dental insurance coverage. This usually covers examinations, fillings, x-ray films, extractions, cleaning, and dentures. Orthodontic and endodontic care, bridgework, oral surgery, and periodontics are often limited or excluded unless a higher premium is paid. Other common exclu- sions or limitations apply to pre-existing conditions, replacement of lost dentures, dentures and bridgework to replace teeth lost prior to coverage, and expenses covered by other insurance. In 2008, the National Association of Dental Plans reported that monthly premiums for individual coverage averaged about $170/year for HMO plans and $524/year for PPO plans and that family plans averaged $488/year for HMO plans and $1532/year for PPO plans. Individual plans, purchasable directly from an insurance company, have higher premiums, more limited coverage, and larger out-of-pocket expenses. Dental costs that can be covered by insurance are much more predictable than medical costs and can fit within most budgets. People whose teeth and gums are healthy do not need dental insurance if the annual cost of Chapter Twenty-Three Health Insurance 483 dental checkups and cleaning will be less than the cost of dental insurance. People who expect to need more care should compare their anticipated expenses with the cost of insurance premiums. collectIon of Insurance BenefIts When a policy is issued, covered individuals will be issued a card indicating the name of the company, the group and policy number, and the type of plan. Providers generally ask new patients to complete a registration form that includes basic information (name, address, and age), current problem, past medical history, medications taken, and insurance information. The insur- ance card will also be requested and a copy made. For HMOs, a plastic card may be used to fill out encounter and referral forms. After the service is completed, the patient will be given a charge slip or a receipt. If the patient has insur- ance, that form can be submitted to the insurance com- pany by either the patient or the provider. For Medicare, the provider must submit the bill. Figure 23-1 shows the HCFA 1500 claim form re- quired by Medicare but used by many other companies. Forms completed with a computer or typewriter can be processed by scanning, which may result in earlier payment. Many providers submit the data electronically, which makes processing even more efficient. The patient (or other responsible party) will usually be asked to sign the claim form. If payment is not made at the time of the visit, the patient will usually be asked to assign payment to the doctor, either by indicating this on the claim form or by signing a separate statement. When this is done, payment is made directly to the provider. Hospitals and most other providers routinely file claims for basic insurance coverage either electronically or by filling out forms. If not, the patient is responsible for the filing. For reimbursement under major medical policies, the insured files the claims. Physicians often elect to accept what insurance pays in return for a guarantee that payment will be made di- rectly to them rather than to the patient. This procedure is known as accepting assignment. When a physician accepts assignment, the patient may not be billed for the difference between the provider’s charge fee and the amount paid by the insurance company (except for amounts that involve deductibles or co-insurance). Pro- viders are likely to accept assignment when patients have financial difficulties or when the physicians think that a patient might pocket a direct insurance payment without paying the medical bill. If the provider does not belong to a fixed-fee plan and has not accepted assignment, the patient will be liable for the difference between the physician’s fee and the policy allowance. Patients who belong to an HMO are responsible only for co-payment (usually $10 to $25 per office visit) for covered services, plus any fees for noncovered services. Since 1989 physicians have been required to submit appropriate codes when billing for services to Medi- care recipients. The diagnosis codes are listed in the International Classification of Diseases, Tenth Edition, Clinical Modification (ICD-10-CM), which is available from several publishers. Most insurance companies have the same requirement. Procedure codes have been stan- dardized in Current Procedural Terminology, which is updated annually by the American Medical Association and incorporated into manuals published by the AMA, insurance companies, and commercial publishers. These codes are usually referred to as “CPT codes.” The codes for medical evaluation and management are based on the complexity of the service and whether the patient has been seen previously. Some insurance companies ask providers to submit a descriptive phrase in addition to the CPT code. In 1992 Medicare implemented the resource-based relative value system, a method of payment quite dif- ferent from the UCR method. The system is intended to help control costs and to provide more equitable reim- bursement for services rendered. Under this system:fIgure 23-1. HCFA 1500 insurance claim form. Part Six Protection of the Consumer484

• Payment is made according to the resource-based relative value scale (RBRVS), a nationwide fee scale that takes into account (a) the extent of history taking and physi- cian examination, (b) the complexity of medical decision making, (c) the time spent counseling the patient, (d) the severity of the patient’s health problem, and (e) the time spent with the patient.
• Fees that Medicare patients can be charged by doctors who do not accept assignment cannot exceed Medicare- approved fees by more than 15%.
• Doctors are prohibited from offsetting fee reductions by ordering more tests, doing more procedures, or submitting a higher proportion of claims for higher-priced services.
• Restrictions were placed on referral of patients to clinical laboratories or other health-care facilities in which the referring physician has a financial interest.

Table 23-5 illustrates how the severity and com- plexity of the problem are related to the level of care for which physicians are permitted to bill Medicare. Virtually all health insurance companies now use the RBRVS coding system. After receiving the claim, the insurer determines what the provider and patient should be paid. Payment is accompanied by an Explanation of Benefits (EOB) statement that itemizes the services, indicates what is covered, and explains whatever amounts are not paid. Figure 23-2 illustrates a sample report. Health insurance companies process billions of claims each year, and errors and delays do occur. These suggestions may help you obtain the benefits to which you are entitled:

• Know and follow your plan’s rules. • Keep careful records of all health-related bills. • Be sure that claim forms are filled out accurately and com-

pletely. Keep a photocopy for reference. • If asked for documentation, send pho

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