There are several different types of health insurance plans any payers we describe here. Medical billing and coding specialists need to understand the types of insurance and payers as they have unique requirements you need to be familiar with.
Patients may not always know the details of their insurance plan coverage and cost. The patient financial responsibility may not be know until claims are processed and payments applied.
Types of Insurance Payers
The three primary types of health insurance payers are:
- Commercial (Aetna, Cigna, United Healthcare, etc.)
- Private (Blue Cross Blue Shield)
- Government (Medicare, Medicaid, TRICARE, etc.)
Types of Insurance Plans
The most common types of insurance plans are:
- Managed Care
- Consumer Driven
Medicare is a federal government single payer health insurance program for people over 65 and younger people with disabilities or End-Stage Renal Disease (Kidney Failure). Medicare claims are processed by contractors called a MAC – Medicare Administrative Contractor.
Medicare consists of four types:
Part A – Hospital for elderly or people with certain disabilities.
Part B – Health insurance for retirement age and those with certain disabilities.
Part C – Medicare Advantage managed care option to Parts A & B.
Part D – Prescription Coverage
Other Government Insurance Types
MEDICAID is a Federal healthcare program for low income and disabled that is administered by state governments with federal matching funds. Coverage and benefits vary by state. Federal government sets minimum coverage requirements.
TRICARE was formerly called CHAMPUS and provides medical care for:
- Active duty military personnel & their families
- Retired military and their families.
- Survivors not eligible for Medicare.
CHAMPVA is Civilian Health and Medical Program of the Department of Veterans Affairs which shares health care costs with beneficiaries.
Verification of Insurance
Verification determines if insurance policy is:
- Requires referral
- Determines type of plan
- Determines Deductible, Coinsurance, & CoPays
Coordination of Benefits (COB) is necessary when a patient has more than one insurance policy. COB is the is establishes which insurance payer is primary and which is secondary. This prevents duplicate payments and insures payments from both primary and secondary policies do not exceed provider’s charges.
To participate as a network provider for an insurance payer, a provider must be credentialed or contracted with the payer.
- Credentialing is the process of requesting to participate in a health insurance providers network – or to be contracted with the insurer.
- This qualifies them for the benefits or privileges of being associated with the insurer or a “network provider” for that insurance carrier.
- Claim payments to an out-of-network provider are usually not as high and may require patients to pay higher co-pays and co-insurance.
- Depending on the insurance payer, credentialing can take weeks or months. Medicare can take up to 90 days. Commercial and private payers are usually less than a month.
- For many practices, the billing specialist is involved with the credentialing or expected to “take care” of it.
Patient Responsibilities After Insurance
Patient financial responsibilities are in three categories:
CoPay – Fixed amount the patient pays directly to provider at time of visit. Typically does not count towards annual deductible but some plans may.
Deductible – Amount patient pays each year before insurance begins paying.
Coinsurance – Patient portion once deductible is met.