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Patient Consumer Rights: Financial Hardship Forms, Powerful Health Coverage and Insurance Terms, What is an HMO - PPO - POS?

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Emphasis on California Law; each state has specific laws relating to patient rights.
KNOW YOUR MEDICAL COSTS UPFRONT: Charges For Tens of Thousands of Dollars Can Be Devastating To Your Pocketbook

If you need medical care and you have to pay for it yourself without benefit of a negotiated insurance network discount, try to find out how much you will have to pay. Sometimes it is hard to find out costs. And there may be more than one charge, such as one charge from the doctor and another from the hospital or clinic. Here is a guide to understanding medical costs.

· Every doctor’s office should publish a list of its most common procedures and office visit charges that you can take home on request. Fees typically are revised every six months. . A great way to compare one provider’s charges with another provider’s is to compare their list of fees that should be given to you upon request. You should also ask to see the list of provider fees of any provider within the practice or outside of the practice who might take call to treat you in your doctor’s absence because the on-call provider might charge twice that of your own doctor if the on-call doctor is not limited to those fees agreed to as a participating provider in your insurance network’s agreement.

· The Gold Standard for provider fees for Medicare patients and younger non-Medicare patients alike are called “Medicare Allowable” charges. Most doctors base their fees on a percentage of Medicare Allowable charges. The office administered by the author, for example, charges non-Medicare out-of-network insured patients approximately 120% of Medicare Allowable fees at this printing and provides a list of common procedures and fees to patients upon request. Here is a sample of our list of fees for you to compare with all of the providers who serve you. Ask your doctor, hospital, or other provider what each item or service will cost you.

· If you are not protected by a discount fee arrangement such those provided by private insurance plans such as HMOs and PPOs, or publicly-funded plans such as Medicare and Medi-Cal THEN NEGOTIATE EVERY LIKELY CHARGE IN ADVANCE IN WRITING as a percentage of Medicare Allowable charges with doctors and hospital outpatient and inpatient admissions’ managers.

· Ask if there is a discount for people who pay with cash or credit card. Ask if you can make payments on a short-term payment plan. A physician payment contract sample is included as an addendum in the back of this manual.

· In the case of in-patient hospitalization, ask for an estimate of charges for each encounter with a respiratory therapist and or/anesthesiologist in the case of pain management or surgery. Remember, every medical service and every item you are provided while an in-patient the hospital by every provider (e.g. bedside doctor, respiratory therapist, anesthesiologist, rehabilitation center) will incur an extra charge to your account. If an outside specialist is referred to you for care anywhere in the hospital and the specialist does not participate in your discounted insurance network, that specialist can charge any fee, whether or not it is reasonable or customary in the community. That could mean a five times marked up charge for choosing an out-of-network provider, e.g. $50,000 for heart surgery charge out-of-network versus $10,000 in-network). Every hospital must provide a list of its 25 most common procedures. These include inpatient services, like hip surgery, as well as outpatient services, like cataract surgery or colonoscopy. You can read these lists on the Office of Statewide Health Planning and Development website [see typical hospital charges sample in back of manual for a reality check].

· The law in California says that a hospital must help you by giving you a written estimate of hospital charges if you do not have health insurance. Study this carefully in detail even when under stress. The hospital must also give you counseling and information on financial aid programs and charity care. [Author’s Note: In California, a hospital’s estimate of charge are required to be given to you in writing for your personal records from of all but small, rural hospitals for both outpatient services and in-patient admissions. Always ask for a written estimate to take home prior to receiving outpatient or inpatient care at any hospital.]

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UNDERSTANDING HEALTH INSURANCE TERMS

The Key to Getting Top Value from Your Healthcare Coverage Is To Understand Your Detailed Policy and Use The Correct Legal and Insurance Terms in Communications.

COMMERCIAL INSURANCE FOR THOSE UNDER 65

Annual Deductible The amount you must pay for covered services each year before your health plan starts to pay

Co-payment/co-pay A fee you pay each time you see a doctor, get other services, or fill a prescription.

Yearly out-of-pocket maximum The most you have to pay for covered health services in a year (Once you have paid this amount, your health plan pays all of your covered health care costs.)

PPO Network (Preferred Provider Organization): In health insurance, a preferred provider organization (or "PPO") is a managed care organization of medical doctors, hospitals, and other health care providers who have agreed with an insurer or a third-party administrator to provide health care at substantially-reduced rates(sometimes up to 500% discount to patients who are subscribers to a PPO Plan. Providers include doctors, nurse practitioners, physician assistants, physical therapists, chiropractors, etc. PPOs generally will reimburse 70%-80% of insured members’ health care costs after an annual deductible is met. Doctors who are networked in a PPO accept Fee-for-Service, example: a charge of $95.00 for a routine office visit). As a general rule, insured patients who seek medical services from out-of-network non-participating providers may be reimbursed from 0% up to only 50%, depending on Plan rules. Plan typically has a lifetime benefit of one million dollars which should be verified in the Plan agreement.

HMO Network (Health Maintenance Organization), differs from a PPO in that insureds who do not use participating health care providers receive little or no benefit from their health plan. Doctors are generally paid by Capitation (a fixed dollar amount paid to the provider per patient per month, regardless of the frequency with which providers treat patients each month; example: $18.00 per patient per month). Thus, to get maximum dollar value from an HMO, patients should always utilize providers who have contracted network agreements with patients’ HMOs. In an HMO, your PCP (Primary Care Provider) coordinates all your health care services and treatments and sends you to a specialist when the PCP determines the need. Providers include doctors, nurse practitioners, physician assistants, physical therapists, chiropractors, etc. Plan typically has a lifetime benefit of one million dollars which should be verified in the Plan agreement.

EPO Network (Exclusive Provider Organizations) are similar to PPOs, except that they strictly limit reimbursement to only those preferred providers on their network and do not provide any benefit if the insured chooses a non-preferred provider, except for some exceptions in cases of emergencies. Some state regulations limit how much and under what circumstance an insurance plan can lower the insured's benefit for using a non-preferred provider (see California Department of Managed Health Care website). Typically has a lifetime benefit of one million dollars which should be verified in the Plan agreement.

Bare Bones Plans: A PPO, HMO or EPO Plan with a very high annual deductible per person (e.g. $5000. per year/$10,000 per family per year) that kicks in reimbursement coverage only when huge medical expenses over the annual deductible are met. Sometimes called a “catastrophic” plan. Plan typically has a $1,000,000 lifetime benefit which should be verified. See “Yearly Out-of-Pocket Maximum” on this sheet.

COBRA/Cal-COBRA. Laws that help you and your family keep your group health insurance if your job ends or your hours are cut. Generally, federal COBRA benefit cover former employees of employers with 20 or more employees and Cal-COBRA covers employees of employers with less that 20 employees. Eligibility and benefits are expanding quickly by order of the White House in response to the economy.

Evidence of Coverage (EOC) Written guide to services your health plan covers and does not cover and what you pay for services (An EOC also called a contract or letter of entitlement). More detailed and binding than brochures.

Exclusions Medical services that a health plan will not pay for (are usually listed in your Evidence of Coverage)

Formulary/drug formulary A list of the prescription drugs that your health plan covers

Gap in coverage More than 62 days in a row without health insurance (Warning: can affect your eligibility for HIPAA or conversion plans).

Generic drug vs. Brand Name Drug A drug no longer owned and patented by one company (A generic drug has the same active ingredients as the brand name drug, but it costs less; example, Valium = brand name and Diazepam = generic version of the same tranquilizer.)

Grievance / Appeal / Complaint A request to your health plan, asking your plan to solve a problem or change a decision because the patient is dissatisfied or because a vital medical diagnosis or treatment has been denied by the insurer. 24-hour turnaround is available in emergencies. When an insurer denies an appeal, one can request grievance intervention by California insurance regulators and intervention may be granted depending on circumstances.

Medical Necessity: The Legal Language For Acceptance or Denial of Claims Medicare defines "medical necessity" as services or items reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body, determined on a case by case basis, and may include consideration of reasonable frequency of service. In California, for commercial, non-Medicare insurance assessment of Medical Necessity, court cases insurance regulations also take into account Evidence of Coverage (EOC) official Plan language and clinically accepted standard of practice.

Pre-existing condition A health condition for which you received medical advice, diagnosis, or care in a specific period before you joined a health Plan. Waiting Period The time you must wait before your health plan covers care for a pre-existing condition (A waiting period begins on the date your benefits start.) Note: California law may override and be more powerful than that which is written down in your Evidence of Coverage Plan Agreement.

Pre-existing condition credit The amount of time you were covered by a previous health plan (You can reduce your new plan's pre-existing condition exclusion by one month for every month you had creditable coverage, as long as the gap in coverage between your previous plan and your new plan is 62 days or less.).

Prior approval/prior authorization Formal approval process from your health plan before you get services.

Second Opinion: Advice you get from a second doctor after the first doctor has made a diagnosis or recommended a certain treatment and you want to make sure it is the right diagnosis or decision for you. Many PPO and HMO Plans with reimburse at network rates for out-of-network second opinions, particularly when an appropriate specialist is not contracted in your network or geographically closest specialist is not adequately trained to deal with specific conditions. Example: University medical school Super-specialists with new FDA-approved procedures.

ADDITIONAL TERMS FOR MEDICARE AND DUAL COVERAGE MEDICARE/MEDI-CAL CALIFORNIA

Medi-Cal – health coverage for people who meet program requires for California’s Medicaid program. Benefits include doctor visits, hospital stays, prescription drugs, rehabilitation, and other medical services. Medi-Cal may pay other insurance premiums in certain situations. Eligibility for the many Medi-Cal categories, each with its own unique requirements, is available on the internet. Participation is limited to legal California residents with disabilities and disabilities with limited incomes. See dual Medicare/Medi-Cal participation requirements for differences in eligibility by age (65+) and early Medicare eligibility (those younger than 65)

Medicare A federal health insurance program for people 65 and older and some people who are permanently disabled under the age of 65. Medicare eligibility requirements are available in the guide.

Medigap insurance policy (Medicare Supplemental Insurance) Private insurance that helps cover the services and costs that Medicare does not cover, e.g. annual deductibles, 20% co-payments and other non-Medicare services.

ABN Form - Medicare's Advance Beneficiary Notice (ABN) form notifies the Medicare patient in advance of receiving a service or item from a provider that it is unlikely that Medicare will reimburse for it because Medicare determines a service or item is not medically necessary. ABN services typically include vaccinations, EKGs, pap smears, occult blood in stool tests, office surgeries, etc;

Other terminology covered in companion guide: Dual Medicare/Medi-Cal (Medi-Medi), Medicare managed care Plans, Medicare Advantage Plans, Medicare HMO Plans, Medicare PPO Plans, Social Security Disability SSI, Medicare Part D Drug Coverage, Part D “Donut Hole”, Medicare Providers’ Fee Schedule.

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Source online, California Department of Managed Care

http://www.dmhc.ca.gov/dmhc_consumer/hp/hp_ppos.aspx

Understanding PPO, POS and HMO Plans

[Author’s Note: Managed healthcare plans were created after World War II, starting with the Kaiser Permanente cradle-to-grave HMO. As employers realized the benefit of Kaiser’s model of controlling healthcare premiums for employers, then PPOs, POSs and newer HMOs emerged to became the dominant form of healthcare coverage for most Americans. The primary reasons that premium costs are controlled by these plans are 1) physicians and hospitals accept from managed care plans very low reimbursements, and 2) the plans ration (limit) care based upon government regulation and whatever restrictions on covered services consumers will bear. Definitions and laws regarding HMOs, PPOs, and POS Plan will differ from those of California’s presented here.]

Like an HMO, PPO and POS plans have provider networks, but you can choose to see doctors outside of the network and pay more.

The Department of Managed Health Care (DMHC) oversees Blue Cross of California and Blue Shield of California PPO health plans. The California Department of Insurance oversees most other PPOs in California.

PPO Plans

A PPO is a preferred provider organization. A PPO is good plan for people who want to see providers without prior approval from their health plan or medical group and who do not want to choose a primary care doctor.

· You get most of your health care from a network of doctors and other providers.

· You can choose to go outside of the network for some care and pay a higher cost.

· You usually pay a yearly deductible before the PPO starts to pay some or all of your bills.

· You usually pay a co-insurance, or percent of the bill, when you get a covered service. The PPO pays the rest.

POS PLANS
A POS is a point of service plan. It is a mix between an HMO and a PPO.

· You have a primary care doctor and you get most of your health care from an HMO network.

Out-of-Network PPO Costs – Avoid Going Out of Network Except to Avoid Worsening Health

You are most at risk for needing out-of-network physicians and hospitals when you travel out-of-state. The exception to this rule may apply to emergency room care, so read your policy carefully. Some premium credit cards offer travel healthcare plans when you travel out of area or abroad, so if you expect to make an extended trip, check with your credit card company to see what benefit they offer at modest additional charge.

If you see a doctor or other provider who is not in your health plan's network, you and your plan share the cost of the service. However, your cost will usually depend on the plan's Maximum Allowable Amount for the service. This is the most your plan will pay for a service. It is usually about the same as what the plan pays providers who are in the network.

Before you see an out-of-network provider, you can ask your plan to tell you how much it will pay and how much you will have to pay.

Compare in-network and out-of-network PPO costs for beneficiaries who have met their annual deductibles for themselves and their families:

Example of an in-network hospital billing using your PPO. In a 80% covered charge plan, if a $22,000 hospital charge is billed to you, and you are in-network, the PPO will contract for a $14,000 maximum allowable for the service, and your PPO will pay the hospital $11,200 ($14,000 x 80%). You will pay the balance of $2,800 ($14,000 x 20%) after your responsibilities for annual deductibles are met.

Example of an out-of-network hospital billing using your PPO: In an out-of-network situation, the PPO will only be responsible for 50-60% coverage instead the 80% example provided above. Let’s assume a 60% covered charge plan. In this example, if a $22,000 hospital charge is billed to you, and you are out-of-network, the PPO will contract for $14,000 maximum allowable for the service, and your PPO will pay the hospital $8,400 ($14,000 x 60%). You will pay the balance of $13,600 ($14,000 x 40%) after your responsibilities for annual deductibles are met. If you are uninsured, without benefit of a network managed care plan, you will be responsible for all $22,000. Today, hospital bills in excess of $100,000 are common.

Online Source: http://www.opa.ca.gov/report_card/hmowhatis.aspx

What Is an HMO?

An HMO is a health maintenance organization. It is a kind of health insurance. An HMO offers many kinds of health care services to its members. In return, members (and their employers) pay a fixed cost each month for these services. HMOs are sometimes called health plans or managed care organizations. Almost half of the people in California belong to an HMO.

How Does an HMO Work?

HMOs are different from other kinds of health insurance in the way they manage the cost of health care and the services they offer. HMOs try to keep health care costs down. They do this in a number of ways. For example, HMOs decide how much they will pay for each service. Then they contract with doctors and hospitals who agree to accept those payments. In some cases, HMOs pay doctors a fixed amount each month for each patient they see. Members must get their care from the doctors, hospitals and other providers who work with the HMO. This is called a network.

HMOs usually only pay for treatments or procedures that they can show are effective. They may require their members to try less expensive tests or treatments before they will cover ones that cost more. HMOs usually require members to pay for part of their care. Members may pay a fixed amount, called a co-payment, for each service they get. The HMO may also have a yearly deductible. This is the amount members have to pay each year before the HMO pays for any services. Co-payments and deductibles help keep the cost of health care down. If members have to pay part of the cost of a service, they are not as likely to get services they do not need.

HMOs also require members to get approval before the HMO will pay for some services and treatments. This usually means that members have to get a referral from their primary care doctor or an approval from their HMO. If members get services without a referral and approval they may have to pay for the service themselves.

If the HMO will not approve a service, the member or the doctor can appeal the decision with the HMO. If the HMO still will not approve the service, the member can appeal to the HMO Help Center , which is part of the California Department of Managed Health Care (DMHC).