Business Analyst Healthcare online training in India

HEALTH INSURANCE DOMAIN
BASICS
Facilitator: Bharath

Main Entities
Healthcare
Provider/
Doctor/
Hospital/
Facility
Member/Subscriber Group
Health
insurance
Provider/
Carrier
Federal and State
governments
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Basic terminology
 Health Insurance - A contract that requires your health insurer to pay some or all of
your health care costs in exchange for a Premium
 Health insurance provider - the health insurance company whose plan pays to help
cover the cost of your care. Also called Payer or Carrier
 Healthcare provider - Any person (doctor or nurse) or institution (hospital, clinic, or
laboratory) that provides medical care
 Preferred Provider - A provider who has a contract with your health insurer or plan to
provide services to you at a discount
 Facility - hospital setting
 Member - A person who is enrolled in a health plan (also called an enrollee or
subscriber)
 Group - Employer, group insurance
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Basic terminology
 Insurance plan - plan selected by the member or group for
coverage, based on the premium and benefits
 Premium - the amount a plan member or employer pays each
month in exchange for insurance coverage
 Effective date - the date on which a policyholder's coverage
begins
 Benefits - specific areas of cover that offer protection against
financial loss or damage
 Claim - a request by a plan member's health care provider,
for the insurance company to pay for medical services
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Basic terminology
 Coinsurance: An arrangement under which the member pays a fixed percentage of
the cost of medical care after the deductible has been paid. For example, an
insurance company might pay 80 percent of the allowable charge, with the member
responsible for the remaining 20 percent; the 20 percent amount is then referred to
as the coinsurance amount
 Copayment: One of the ways the member shares medical costs. For example, a flat
fee for certain medical expenses (e.g., $10 for every visit to the doctor), while your
insurance company pays the rest
 Deductible: The amount of eligible expenses a member must pay each calendar year
(or contract year) before the insurance company will make a payment for eligible
benefits. Usually applies to the out-of-network services, but may apply to in-network
services for certain products
 Allowed amount: Maximum amount on which payment is based for covered health
care services. This may be called “eligible expense,” “payment allowance" or
"negotiated rate." If the provider charges more than the allowed amount, the member
may have to pay the difference
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Types of health insurance
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 Indemnity plans – These major medical plans typically have a deductible (the amount you pay
before the insurance company begins paying benefits). After your covered expenses exceed the
deductible amount, benefits usually are paid as a percentage of actual expenses, often 80
percent. These plans usually provide the most flexibility in choosing where to receive care.
 Preferred Provider Organization (PPO) plans – In these major medical plans, the insurance
company enters into contracts with selected hospitals and doctors to furnish services at a
discounted rate. As a member of a PPO, you may be able to seek care from a doctor or hospital
that is not a preferred provider, but you will probably have to pay a higher deductible or co-
payment.
 Health Maintenance Organization (HMO) plans – These major medical plans usually make you
choose a primary care physician (PCP) from a list of network providers. Your PCP is responsible
for managing all of your healthcare. If you need care from any network provider other than your
PCP, you may have to get a referral from your PCP to see that provider. You must receive care
from a network provider in order to have your claim paid through the HMO. Treatment received
outside the network is usually not covered, or covered at a significantly reduced level.
 Point of Service (POS) plans – These major medical plans are a hybrid of the PPO and HMO
models. They are more flexible than HMOs, but do require you to select a primary care physician
(PCP). Like a PPO, you can go to an out-of-network provider and pay more of the cost. However,
if the PCP refers you to an out-of-network doctor, the health plan will pay the cost.

Claims processing – steps
 A member with valid health insurance visits an in-network healthcare
provider for a doctor service
 The healthcare provider renders a service
 The healthcare provider submits a claim to health insurance provider
 The health insurance provider processes the claim
 If the member has a financial responsibility (other than an office visit co-
pay), the member will receive and Explanation of Benefits (EOBs) detailing
what the health insurance provider has paid. The member may sign up to
receive your EOB electronically
 The healthcare provider will send a bill to the member if a balance needs to
be paid
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Explanation of benefits (EOBs)
 An explanation of benefits (commonly referred to as an EOB form) is a statement sent by a health
insurance company to covered individuals explaining what medical treatments and/or services
were paid for on their behalf
 An EOB typically describes:
 the payee, the payer and the patient
 the service performed
 the date of the service,
 the description and/or insurer's code for the service,
 the name of the person or place that provided the service, and
 the name of the patient
 the doctor's fee, and what the insurer allows—the amount initially claimed by the doctor or hospital, minus
any reductions applied by the insurer
 the amount the patient is responsible for
 adjustment reasons, adjustment codes
 EOB documents are protected health information. Electronic EOB documents are called edit 835
5010 files
 There normally also will be at least a brief explanation of any claims that were denied, along with
a point to start an appeal
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Final statuses attached to a
claim
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 Finalized
 Paid
 Denied
 Revised – adjudication information has been
changed
 Pending – claims put on hold for more
information or claims in the process of
adjudication in the system

Claims pricing based on DRG
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 DRG – Diagnosis Related Grouping
 DRG is a classification based on clinical factors and utilization of
resources
 DRG pricing is used only for inpatient admissions. Other hospital
visits use different pricing methods
 DRG pricing is a fixed payment methodology based on two primary
factors:
 Negotiated rates with the facility (based on a patient's coverage)
 Every hospital negotiates its own rates with a payer, known as Standard Base
Rate (SBR). These rates are based on the hospital's patient mix, the size of
the facility, and the hospital's average charges for treating specific conditions.
 Normal resource consumption for the patient's case
 Normal resource consumption is the average amount of resources used to
treat any given condition. Resources include anything that hospitals use to
treat and care for a patient - food, band-aids, medication, x-rays, surgery,
nurses time and anything else required.
 Related claims eligible for DRG pricing are grouped together and
paid in lump sum amount

Appeals
 If your health insurer refuses to pay a claim or ends your coverage, you
have the right to appeal the decision and have it reviewed either internally
or by a third party
 You can ask that your insurance company reconsider its decision. Insurers
have to tell you why they’ve denied your claim or ended your coverage. And
they have to let you know how you can dispute their decisions
 There are two ways to appeal a health plan decision:
 Internal appeal: If your claim is denied or your health insurance coverage
cancelled, you have the right to an internal appeal. You may ask your insurance
company to conduct a full and fair review of its decision. If the case is urgent,
your insurance company must speed up this process
 External review: You have the right to take your appeal to an independent third
party for review. This is called external review. External review means that the
insurance company no longer gets the final say over whether to pay a claim
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Eligibility & Benefits
 Patient eligibility and benefits should be verified prior to every scheduled appointment
 Eligibility and benefit quotes include membership verification, coverage status and other important information,
such as applicable copayment, coinsurance and deductible amounts
 It’s strongly recommended that providers ask to see the member’s ID card for current information and photo ID in
order to guard against medical identity theft. When services may not be covered, members should be notified that
they may be billed directly
 Generally members and Providers have access to the following info, online or through telephone:
 Patient/Subscriber information
 Group Number
 Group Name
 Plan/Product
 Current Effective Dates
 Copayment*
 Deductible (original and remaining amounts)
 Out-of-pocket (original and remaining amounts)
 Coinsurance
 Limitations/Maximums*
 Preauthorization indicators and contacts
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(Prior/Pre) Authorization
process
 A prior authorization is an extra step that some insurance companies require before
they decide if they want to pay for the doctor services
 Some medical procedures and drugs need prior authorization from the Insurance
providers
 During this process, the insurance provider may request and review medical records,
test results and other information so that they understand what services are being
performed, and are able to make an informed decision
 It’ll be determined if the requested service(s) are medically necessary and identified
as covered services under the terms of your health insurance plan based on the
information available
 Typically notified either in writing, or via telephone within two business days of
receiving all necessary documentation. In addition, the member portal of our website
gives the status of your authorization online
 Emergencies do not need prior authorization
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EDI transaction sets in
healthcare
 EDI – Electronic Data Interchange
 HIPAA mandates EDI standards
 As of March 31, 2012, healthcare providers must be compliant with version
5010 of the HIPAA EDI standards. The earlier version was 4010
 HIPAA - Health Insurance Portability and Accountability Act
 Enacted in 1996
 Title I of HIPAA protects health insurance coverage for workers and their families
when they change or lose their jobs
 Title II of HIPAA, known as the Administrative Simplification (AS) provisions,
requires the establishment of national standards for electronic health care
transactions and national identifiers for providers, health insurance plans, and
employers
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EDI transaction sets in
healthcare
 The following are the common EDI transaction
sets in healthcare:
 T-Set: 270 - Eligibility, Coverage or Benefit Inquiry
 T-Set: 271 - Eligibility, Coverage or Benefit
Information
 T-Set: 834 - Benefit Enrollment and Maintenance
 T-Set: 835 - Health Care Claim Payment/Advice
 T-Set: 837 - Health Care Claim
 T-Set: 276 - Health Care Claim Status Request
 T-Set: 277 - Health Care Claim Status Notification
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T-Set: 270 - Eligibility, Coverage or
Benefit Inquiry
 The EDI 270 Health Care Eligibility/Benefit Inquiry transaction set is
used to request information from a healthcare insurance company
about a policy’s coverages, typically in relation to a particular plan
subscriber
 This transaction is typically sent by healthcare service providers,
such as hospitals or medical facilities, and sent to insurance
companies, government agencies like Medicare or Medicaid, or
other organizations that would have information about a given policy
 The 270 document typically includes the following:
 Details of the sender of the inquiry (name and contact information of the
information receiver)
 Name of the recipient of the inquiry (the information source)
 Details of the plan subscriber about to the inquiry is referring
 Description of eligibility or benefit information requested
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T-Set: 271 - Eligibility, Coverage or
Benefit Information
 The EDI 271 Health Care Eligibility/Benefit Response transaction set is
used to provide information about healthcare policy coverages relative to a
specific subscriber or the subscriber’s dependent seeking medical services.
It is sent in response to a 270 inquiry transaction
 This transaction is typically sent by insurance companies, government
agencies like Medicare or Medicaid, or other organizations that would have
information about a given policy. It is sent to healthcare service providers,
such as hospitals or medical clinics that inquire to ascertain whether and to
what extent a patient is covered for certain services
 The 271 document typically includes the following:
 Details of the sender of the inquiry (name and contact information of the
information receiver)
 Name of the recipient of the inquiry (the information source)
 Details of the plan subscriber about to the inquiry is referring
 Description of eligibility or benefit information requested
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T-Set: 834 - Benefit Enrollment and
Maintenance
 The EDI 834 transaction set represents a Benefit Enrollment and Maintenance document. It is
used by employers, as well as unions, government agencies or insurance agencies, to enroll
members in a healthcare benefit plan. The 834 has been specified by HIPAA 5010 standards for
the electronic exchange of member enrollment information, including benefits, plan subscription
and employee demographic information
 The 834 transaction may be used for any of the following functions relative to health plans:
 New enrollments
 Changes in a member’s enrollment
 Reinstatement of a member’s enrollment
 Disenrollment of members (i.e., termination of plan membership)
 The information is submitted, typically by the employer, to healthcare payer organizations who are
responsible for payment of health claims and administering insurance and/or benefits. This may include
insurance companies, healthcare professional organizations such as HMOs or PPOs, government agencies
such as Medicare and Medicaid
 A typical 834 document may include the following information:
 Subscriber name and identification
 Plan network identification
 Subscriber eligibility and/or benefit information
 Product/service identification
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T-Set: 835 - Health Care Claim
Payment/Advice
 The EDI 835 transaction set is called Health Care Claim Payment
and Remittance Advice
 The 835 is used primarily by Healthcare insurance plans to make
payments to healthcare providers, to provide Explanations of
Benefits (EOBs), or both. When a healthcare service provider
submits an 837 Health Care Claim, the insurance plan uses the 835
to detail the payment to that claim, with the following details:
 What charges were paid, reduced or denied
 Whether there was a deductible, co-insurance, co-pay, etc.
 Any bundling or splitting of claims or line items
 How the payment was made, such as through a clearinghouse
 The 835 is important to healthcare providers, to track what
payments were received for services they provided and billed
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 The EDI 837 transaction set is the format established to meet HIPAA requirements for the
electronic submission of healthcare claim information. The claim information included amounts to
the following, for a single care encounter between patient and provider:
 A description of the patient
 The patient’s condition for which treatment was provided
 The services provided
 The cost of the treatment
 The 5010 standards divide the 837 transaction set into three groups, as follows:
 837P for professionals
 837I for institutions
 837D for dental practices. The 837 is no longer used by retail pharmacies.
 This transaction set is sent by the providers to payers, which include insurance companies,
health maintenance organizations (HMOs), preferred provider organizations (PPOs), or
government agencies such as Medicare, Medicaid, etc. These transactions may be sent either
directly or indirectly via clearinghouses
 Health insurers and other payers send their payments and coordination of benefits information
back to providers via the EDI 835 transaction set
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Status Request
 The EDI 276 transaction set is a Health Care Claim Status Inquiry. It is used by healthcare
providers to verify the status of a claim submitted previously to a payer, such as an insurance
company, HMO, government agency like Medicare or Medicaid, etc.
 The 276 transaction is specified by HIPAA for the electronic submission of claim status requests.
The transaction typically includes:
 Provider identification
 Patient identification
 Subscriber information
 Date(s) of service(s)
 Charges
 Submitting a 276 status request to a payer is the first step in the claim status request/response
process. The payer provides the requested information in response to the 276 request using a
277 Claim Status Response transaction
 The use of EDI 276 inquiries, along with the 277 response, replaces the manual process of
managing payments and claims. By submitting the inquiry via EDI with the 276 transaction,
administrators can receive the information more quickly and with little or no manual intervention
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Status Notification
 The EDI 277 Health Care Claim Status Response transaction set is used by
healthcare payers (insurance companies, Medicare, etc.) to report on the status of
claims (837 transactions) previously submitted by providers
 The 277 transaction, which has been specified by HIPAA for the submission of claim
status information, can be used in one of the following three ways:
 A 277 transaction may be sent in response to a previously received EDI 276 Claim Status
Inquiry
 A payer may use a 277 to request additional information about a submitted claim (without a
276)
 A payer may provide claim status information to a provider using the 277, without receiving a
276
 Information provided in a 277 transaction generally indicates where the claim is in
process, either as Pending or Finalized. If finalized, the transaction indicates the
disposition of the claim – rejected, denied, approved for payment or paid
 If the claim was approved or paid, payment information may also be provided in the
277, such as method, date, amount, etc. If the claim has been denied or rejected, the
transaction may include an explanation, such as if the patient is not eligible
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HIPAA 4010 to 5010 conversion –
what are the changes?
 Version 5010 compliance date – January 1, 2012
 With the Version 5010, the formats currently used must be
upgraded from X12 Version
 Formats that must be upgraded include:
 Claims (837-I, 837-P)
 Remittance Advice (835)
 No job requirements currently related to 5010 conversion. But
there could be projects related to fixing any issues related to
the 4010 – 5010 conversion projects implemented earlier
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ICD-9 to ICD-10 conversion
 ICD-9 follows an outdated 1970's medical coding system which fails to capture
detailed health care data and is inconsistent with current medical practice. By
transitioning to ICD-10, providers will have:
 Improved operational processes by classifying detail within codes to accurately process
payments and reimbursements
 Detailed information on condition, severity, co-morbidities, complications and locations
 Detailed health reporting and analytics such as cost, utilization and outcome
 Expanded coding flexibility by increasing code length to seven characters
 Important Dates:
 January 1, 2012 - ALL providers must upgrade to Version 5010 in order to accommodate
ICD-10 codes
 October 1, 2013 - ICD-10 codes must be used for all procedures and diagnosis on and after
this date. Claims with ICD-9 codes for services provided on or after October 1, 2013 cannot
be paid. This was extended to 2014 I guess (not sure)
 No requirements currently related to ICD-10 conversion. But there could be projects
related to fixing any issues related to the ICD-9 – ICD-10 conversion projects
implemented earlier
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Care Management/
Case Management
 Care management is a set of activities
intended to improve patient care and reduce
the need for medical services by helping
patients and caregivers more effectively
manage health conditions
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CM – goals and objectives
 The overall goals of care management are:
1. to optimize the patient’s ability to take care of himself or herself; and
2. to identify and coordinate needed resources and support.
 Steps:
1. Patient identification and comprehensive assessment:
 Patients are identified through direct referrals, by mining administrative claims data (e.g., risk stratification
tools, frequent hospital and emergency room admissions), through screenings and assessments, and through
chart reviews that identify gaps in care.
2. Developing an individualized care plan:
 The health care team — including the care manager, primary care provider, patient and family/caregiver —
agree on goals in a care plan.
3. Care coordination:
 The care manager ensures the patient’s care plan is implemented, communicating and coordinating across
providers and delivery settings. Care manager interventions are identified and documented.
4. Reassessment and monitoring:
 Patient’s progress is monitored toward goal achievement on an ongoing basis, adjusting care plans, as
needed.
5. Outcomes and evaluation:
 The care manager uses the quality metrics (discussed in Modules 7 and 10), assessment and survey results,
and utilization of services to monitor and evaluate the impact of interventions.
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CM Projects
 Projects related to System replacement and
Up gradation of analytics capability
 Vendors – McKesson, Landacorp, ZeOmega,
Medecision, TriZetto, Click4Care, CaseNet,
DST Health Solutions, ikaSystems
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Medicare
 Medicare is a Federal health insurance program that pays for hospital and medical care for
elderly and certain disabled Americans
 Eligibility:
 An individual must either be at least 65 years old, under 65 and disabled, or any age with
End-Stage Renal Disease (permanent kidney failure that requires dialysis or a transplant.)
 In addition, eligibility for Medicare requires that an individual is a U.S. citizen or permanent
legal resident for 5 continuous years and is eligible for Social Security benefits with at least
ten years of payments contributed into the system
 The program consists of two main parts for hospital and medical insurance (Part A and Part B)
and two additional parts that provide flexibility and prescription drugs (Part C and Part D)
 Medicare Part A, or Hospital Insurance (HI), helps pay for hospital stays
 Medicare Part B is also called Supplementary Medical Insurance (SMI). It helps pay for
medically necessary physician visits, outpatient hospital visits, home health care costs, and
other services for the aged and disabled
 Medicare Advantage Plans (sometimes known as Medicare Part C, or Medicare + Choice)
allow users to design a custom plan that can be more closely aligned with their medical
needs
 In 2006, Medicare expanded to include a prescription drug plan known as Medicare Part D
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Medicare contd.
 Supplemental coverage for medical expenses and services
that are not covered by Medicare are offered through
MediGap plans
 Who pays for Medicare?
 Payroll taxes collected through FICA (Federal Insurance
Contributions Act) and the Self-Employment Contributions
Act are a primary component of Medicare funding. The tax
is 2.9% of wages, usually half paid by the employee and
half paid by the employer
 Moneys are set aside in a trust fund that the government
uses to reimburse doctors, hospitals, and private insurance
companies. Additional funding for Medicare services
comes from premiums, deductibles, coinsurance, and
copays
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Medicaid
 Medicaid is a means-tested health and medical services
program for certain individuals and families with low incomes
and few resources. Primary oversight of the program is
handled at the federal level, but each state:
 Establishes its own eligibility standards,
 Determines the type, amount, duration, and scope of services,
 Sets the rate of payment for services, and
 Administers its own Medicaid program.
 Who is eligible for Medicaid?
 Each state sets its own Medicaid eligibility guidelines. The
program is geared towards people with low incomes, but
eligibility also depends on meeting other requirements based on
age, pregnancy status, disability status, other assets, and
citizens
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Medicaid contd.
 Who pays for services provided by Medicaid?
 Medicaid does not pay money to individuals, but operates in a program that
sends payments to the health care providers. States make these payments
based on a fee-for-service agreement or through prepayment arrangements such
as health maintenance organizations (HMOs)
 Each State is then reimbursed for a share of their Medicaid expenditures from the
Federal Government
 States may impose nominal deductibles, coinsurance, or copayments on
some Medicaid beneficiaries for certain services. However, the following
Medicaid beneficiaries must be excluded from cost sharing:
 Pregnant women,
 Children under age 18, and
 Hospital or nursing home patients who are expected to contribute most of their
income to institutional care.
 All Medicaid beneficiaries must be exempt from copayments for emergency
services and family planning services.
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Consumer-driven health care
(CDHC)
 Refers to third tier health insurance plans that allow members to use Health savings
accounts (HSAs), Health Reimbursement Accounts (HRAs), or similar medical
payment products to pay routine health care expenses directly, while a high-
deductible health plan (HDHP) protects them from catastrophic medical expenses
 High-deductible policies cost less, but the user pays routine medical claims using a
pre-funded spending account, often with a special debit card provided by a bank or
insurance plan. If the balance on this account runs out, the user then pays claims
just like under a regular deductible. Users keep any unused balance or "rollover" at
the end of the year to increase future balances, or to invest for future expenses
 Examples:
 Flexible spending account (FSA)
 Health Reimbursement Account (HRA)
 Health savings account (HSA)
 High-deductible health plan (HDHP)
 Medical savings account (MSA)
 Private Fee-For-Service (PFFS)
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Flexible spending account
(FSA)
 A flexible spending account (FSA), also known as a flexible spending
arrangement, is one of a number of tax-advantaged financial accounts that
can be set up through an employer

 An FSA allows an employee to set aside a portion of earnings to pay for
qualified expenses, most commonly for medical expenses but often for
dependent care or other expenses
 Money deducted from an employee's pay into an FSA is not subject to
payroll taxes, resulting in substantial payroll tax savings
 Before the Affordable Care Act, one significant disadvantage to using an
FSA is that funds not used by the end of the plan year are lost to the
employee, known as the "use it or lose it" rule. Under the terms of the
Affordable Care Act, an employee can carryover up to $500 into the next
year without losing the funds
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Health Reimbursement Account
(HRA)
 Health Reimbursement Accounts or Health
Reimbursement Arrangements (HRAs) are
Internal Revenue Service (IRS)-sanctioned
employer-funded, tax-advantaged employer
health benefit plans that reimburse employees for
out-of-pocket medical expenses and individual
health insurance premiums
 Health Reimbursement Accounts are funded
solely by the employer, and cannot be funded
through employee salary deductions. The
employer sets the parameters for the Health
Reimbursement Accounts, and unused dollars
remain with the employer 12/18/2014
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Health savings account (HSA)
 A health savings account (HSA) is a tax-advantaged
medical savings account available to taxpayers in the
United States who are enrolled in a high-deductible
health plan (HDHP)
 The funds contributed to an account are not subject to
federal income tax at the time of deposit. Unlike a
flexible spending account (FSA), funds roll over and
accumulate year to year if not spent
 HSAs are owned by the individual, which differentiates
them from company-owned Health Reimbursement
Arrangements (HRA)
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Healthcare Data warehousing
 Data warehouse is critical in healthcare industry for reporting
and analytics needs
 Data from the operational systems handling Claims, Groups,
Membership, Eligibility etc is transferred to the data
warehouse on a daily basis
 It is a normal practice to use the data warehouse for both
internal and external reporting needs unless the real time
data in required
 Data dictionaries provide information related to the tables and
the structure of data storage in the warehouse
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Data warehousing contd.
Operationa
l
systems
Staging
area
Data
warehouse
Reporting (Internal and
external) and analytic needs
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Data warehousing requirements
 Reports
 Understanding the user requirements
 Designing the layout
 Defining the elements in the report – business
definition without any ambiguity
 For example, ‘Member ID’ – define whether it is internal or
external Member ID and the number of digits etc.
 Other info
 Frequency of reporting
 Internal or external
 Recipients
 Mode of delivery
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 Analytics – Third party vendor applications are used by the clients
to enable their analytic capabilities
 Role
 To understand the client requirements related to the analytic capabilities
 Coordinating with the vendors on how they would be delivered
 Coordinating with tech folks to provide the vendor with the data required
for analytics
 Explore if the vendor’s standard capabilities could be leveraged for the
client needs
 Else customize to meet client needs
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 Impact assessment and remediation - Lot of projects
in this area
 The requirements arise as a result of any project
implementation with the operational systems that
impact the data flow to the warehouse
 It leads to remediation of the data flow, and all the
reports and analytics dependent on them
 These jobs need an understanding of the business
process and the data flow as well
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The Affordable Care Act of 2010
(ACA) – Obamacare – What is it?
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 The Affordable Care Act is the nation’s health
reform law enacted in March 2010
 It contains numerous provisions that will
 expand health coverage to 25 million Americans,
 increase benefits and lower costs for consumers,
 provide new funding for public health and
prevention,
 bolster our health care and public health
workforce and infrastructure,
 foster innovation and quality in our system, and
more.

The Affordable Care Act of 2010
(ACA) – Obamacare – impacts
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 Insurance companies will make some changes as a result of Obama Care
 For example, companies can no longer exclude people with pre-existing conditions,
and children will be allowed on their parents’ policies until age 26
 There are some lesser-known provisions that will impact insurance companies, like
the medical loss ratio, for example. The medical loss ratio provision states that 80%
of an insurance premium must go to actual paying of coverage and only 20% may be
used for overhead, marketing and profit
 The good news is that insurance companies avoided the worst possible outcome,
which is being subject to market reforms and not having the new, young, healthy
people requiring health insurance. With a health insurance mandate, the young and
healthy demographic that were previously uninsured will now buy insurance,
balancing out the good risk and the bad risk for insurance companies
 Boards of insurance companies need to be quite focused on implementation of
market place and deadlines in place for 2014

Claims processing flowchart
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Claims processing flowchart
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HIPAA 4010 to 5010 conversion –
what are the changes?
 A physical street address must be reported for the billing provider’s service address. A PO Box address will not be
accepted
 Only a provider Pay-to address can be a PO Box address
 Require 9 digit zip code
 Enhanced NPI Reporting rules
 Support for atypical providers (taxi drivers, carpenters and personal care providers)
 837I - Expansion of the number of Diagnosis Codes
 837I - Present on Admission Indicators can now be reported for diagnosis codes
 837P - Supports Ambulance related billing
 837P - Allows reporting of Anesthesia units only in minutes
 Coordination of Benefits – clarification and enhancements on how to report primary, secondary and tertiary
payers for claims transactions
 Remaining Patient Liability can now be calculated for claims transactions
 Adjustment reporting has been clarified now allowing for the Primary payer claim level adjustment codes reported
in the 835 to be sent to the Secondary payer
 835 - New sections have been added to organize the payment remittance process
 835 - Claim splitting has been clarified by specifying the use of the MIA or MOA segments
 835 - Segment has been added for Lost and Reissue Payment to prevent recreation or retransmittal
 of a remittance
 835 - Encounter reporting has been clarified
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