Blue Cross Blue Shield -BSBS - Chapter 13
Exam Study Guide.
Policyholder - answer✔✔Health insurance is a contract between a ________, one who purchases
the contract
insurance carrier - answer✔✔one who provides the benefits plan or a goverment program
developed to reimburse the policyholder of all or most medical expenses
There are 3 ways an individual can obtain health insurance - answer✔✔Group Insurance,
Personal Insurance, and Pre-paid health Plan
Group Insurance - answer✔✔when a group of employees and their dependents are insured under
one group policy issued to the employer. Generally, the employer pays the premium or a portion
of the premium and the employee pays the difference.
Personal Insurance - answer✔✔an insurance plan issued to an individual. Premium rates are
usually higher than group rates and service availbility is lessened with this type of coverage.
Pre-paid Health Plan - answer✔✔pre-determined set of benefits covered under one set annual fee
Indemnity Insurance - answer✔✔also known as fee-for service. Under this plan, the services that
are paid for are listed in the policy and payments are based on the fees physicians charge for the
service. There are no restrictions as to the physician or hospital the beneficiaries may use and
pre-approval of medical visits is not required. Each year, the beneficiary must meet a deductible,
after which, the benefit may cover fall all or part of the charge. Usually, a coinsurance for each
service applies ( a 80-20 coverage means that the insurance carrier pays 80% and the
policyholder pays 20% of each dollar of medical care provided.)
Health Maintenance Organization (HMO) - answer✔✔is a managed care benefits plan that
provides a wide range of medical services to individuals that have been enrolled into the
program. It is generally the least costly but at the same time also the most restrictive. This plan
uses a gatekeeper physician (primary care physician) whom the beneficiary is required to visit
initially for any case. If the beneficiary goes to another physician without the prior approval of
the primary care physician, the beneficiary will be responsible for all costs for the case.
Physician-hospital organization is when physicians, hospitals and other health care providers
contract with one of more HMO's or directly with employers to provide care.
Preferred Provider Organization (PPO) - answer✔✔is basically the same as HMO in the sense
that the health care provider enters into contract withthe MCOs to render services to the
beneficiaries. There is no gatekeeper-physician and beneficiaries choose the provider from whom
to seek services so long as the provider is within the network. If the beneficiary chooses to seek
care from a provider not within the network, that beneficiary will shoulder all cost of the
services.
Point-of-Service plan (POS) - answer✔✔is a managed care plan that gives beneficiaries the
option whom to see for services. If the beneficiary goes to see s physician within the
network,s/he will receive benefits similar to an HMO. Bit if the beneficiary chooses to see a
physician from out of network, the POS will still pay for the services but at a rate significantly
lower than that of in network physician and the difference between the POS payment and the
billed charges shall be shouldered by the beneficiary.
Preferred Provider plan - answer✔✔is the type of plan a patient may have where they can see
providers outside their plan. The patient is responsible to pay the higher portion of the fee.
Fee Schedule - answer✔✔The Usual, Customary, and Reasonable
Usual, Customary, and Reasonable (UCR) - answer✔✔method is used mostly in reference to
fee-for-service reimbursement. To arrive at a payment amount for a claim
1. Usual - answer✔✔The physician's most frequent charge for a given service
2. Customary - answer✔✔The average charge of all providers of similar training and experience
is a given geographical area
3. Reasonable - answer✔✔The actual charge submitted on a claim (must be reasonable to the
provider)
The allowable charge - answer✔✔The lowest amount is used as the basis for payment (part of
UCR steps)
Relative Value Payment Schedules Method - answer✔✔This involves the use of relative value
scales which assign a relative weight to individual services according to the basis for the scale.
Services that are more difficult, time consuming, or resource intensive to perform typically have
higher relative values than other services.
Medicare's Resource Based Relative Value Scale (RBRVS) Payment Schedule -
answer✔✔Under this schedule, a procedure's relative value is the sum total of three elements:
Work, Overhead, and Malpractice.
Work RBRVS - answer✔✔represents the amount of time, intensity of effort, and medical skill
required of the physician.
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