Welcome back. In this lesson, we're diving into one of the most important topics in medical billing and coding: health care payers and insurance plans. If you're new to the industry, all the different types of insurance, plans, and payer models can feel a bit overwhelming at first, but don't worry. I'm here to guide you through it all.

By the end of this video, you'll understand who pays for health care, how insurance works, and how various insurance models affect both patients and the health care providers you'll be working with as a revenue cycle management professional.

So, let's get started. When we talk about healthcare payers, we're essentially referring to who is responsible for paying for healthcare services. The main types of payers in the US healthcare system fall into four broad categories.
Private insurance companies, government programs like Medicare and Medicaid, self funded employer plans, and out of pocket payments. Let's break each of these down. First, let's talk about private insurance companies.

These are for profit or nonprofit organizations like Blue Cross Blue Shield, UnitedHealthcare, and Aetna.

Individuals can purchase insurance directly from these companies, or they can get coverage through their employers.

Private insurance is the most common form of health care coverage in the US, and as a medical biller or coder, you'll work with them frequently.

Next, we have government programs, which include Medicare and Medicaid. Medicare primarily covers individuals aged sixty five and older, as well as some younger individuals with disabilities. Medicaid, on the other hand, provides health coverage for low income individuals and families. Both programs are critical parts of the U. S. Healthcare system, and understanding the rules for billing and coding for these programs is a big part of your job in revenue cycle management. These programs operate differently from private insurance, so it's important to be aware of the specific guidelines and reimbursement models for each.

Then, we have self funded employer plans. Some larger companies don't purchase traditional health insurance for their employees. Instead, they pay for health care costs directly, using a third party administrator to handle the claims process.

As an RCM professional, you'll need to know how to navigate these types of plans, as they can have different rules compared to standard private insurance. Finally, there are out of pocket payments where patients pay for services themselves.

This might happen if someone doesn't have insurance, or for services that aren't covered by their plan. Understanding how to handle direct payments and navigate self pay accounts is an important part of the billing process.

Now that we've talked about the types of payers, let's get into some of the key insurance coverage terms you'll encounter.

These terms explain how insurance works for both the patient and the healthcare provider.

If you understand these terms, you'll be much better equipped to navigate the billing process. Let's start with the premium. This is the amount the patient or the employer pays, usually monthly, to maintain their health insurance coverage.

It's a fixed cost, and it's the first step in understanding what patients pay for insurance. Next up is the deductible. This is the amount a patient must pay out of pocket for health care services before the insurance kicks in.

For example, if a patient has a thousand dollar deductible, they need to pay a thousand dollars in medical bills before their insurance starts covering costs. The deductible resets every year which is something to keep in mind when working with claims.

Then we have copayments and coinsurance.

These are the patient's share of their costs after they meet their deductible. A copayment, or copay, is a fixed amount the patient pays for a specific service, like twenty five dollars for a doctor's visit. Coinsurance, on the other hand, is a percentage of the cost the patient pays. For example, if they have an eightytwenty plan, the insurance company pays eighty percent of the bill and the patient pays twenty percent. As an RCM professional, you'll be responsible for knowing these amounts to ensure accurate billing.

Lastly, we have the out of pocket maximum.

This is the total amount a patient will pay for healthcare services in a given year, including deductibles, co pays, and coinsurance. Once they hit this limit, the insurance covers one hundred percent of their costs for the rest of the year.

Understanding this limit is important because once a patient hits it, you know they won't be responsible for additional payments.

When you grasp these concepts, you'll be better equipped to handle claims, communicate with patients about their bills, and ensure accurate payments. Now let's move on to managed care organizations, specifically, health maintenance organizations, HMOs, and preferred provider organizations, PPOs. These are two common types of health insurance plans, and they have a big impact on both healthcare delivery and reimbursement.

Let's start with HMOs. With an HMO plan, patients are required to choose a primary care physician, PCP, who acts as the gatekeeper for all their healthcare needs. If the patient needs to see a specialist, they must get a referral from their PCP.

One important thing to remember is that HMO networks are often more limited.

If a patient sees a doctor outside of their HMO network, their insurance typically won't cover the visit and they'll need to pay out of pocket.

For you, as a revenue cycle management professional, this means you need to be very clear about whether the services being billed are within the patient's HMO network. If not, the claim could be denied.

Now, let's talk about PPOs. A PPO offers patients more flexibility. They don't need a referral to see a specialist, and they can see doctors both inside and outside the network, although staying within the network usually means lower costs.

With PPOs, patients have the freedom to manage their own health care more directly, and that also means more variation in coverage.

As an RCM professional, it's important to pay attention to whether services were provided in network or out of network. Patients will often have different co pays and coinsurance amounts depending on which type of provider they see. So, how do HMOs and PPOs affect reimbursement? With an HMO, there's more control over healthcare costs because patients are required to stay within a specific network.

This means that billing is generally more straightforward. With a PPO, billing can be more complex, as out of network services may involve different rates and require more follow-up to ensure claims are paid correctly.

So, there you have it, an introduction to the types of health care payers, key insurance concepts, and how managed care organizations influence health care delivery and reimbursement.

Understanding these concepts is crucial for anyone working in medical coding and billing because they form the foundation of how health care providers get paid.

It might feel like a lot of information right now, but don't worry. This knowledge will become second nature as you continue learning and practicing. Just remember to take it one step at a time, and don't hesitate to revisit these terms as you move forward in your journey. You're doing great, and I'm excited to continue helping you build your expertise. I'll see you in the next lesson.