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Assignment 4.1 - 4.6 Part 1: Fill in the Blank 1. A/an contract is a legally enforceable agreement between two or more parties. 2. An individual promising to pay for medical services rendered is known as a/an guarantor . 3. List five health insurance policy renewal provisions. a. A cancelable policy grants the insurer the right to cancel the policy at any time and for any reason. The insurance company notifies the insured that the policy is canceled and refunds any advance premium the policyholder has paid. In some states, this type of policy is illegal. b. In an optionally renewable policy, the insurer has the right to terminate coverage on the premium or anniversary date. The insurer may not cancel the policy at any time in between. c. Conditionally renewable policies grant the insurance company a limited right to refuse to renew a health insurance policy at the end of a premium payment period. Reasons stated in the policy may relate to age, employment status, or both, but may not relate to the insured’s health status. d. The guaranteed renewable classification is desirable because the insurer is required to renew the policy as long as premium payments are made. However, these policies often have age limits. e. In a noncancelable policy , the insurer cannot increase premium rates and must renew the policy until the insured reaches the age specified in the contract. Some disability income policies have noncancelable terms. 4. Traditional or fee-for-service health plans are also called indemnity health insurance . 5. Name two examples of services that are typically excluded in general health insurance policies. a. Dental b. Vision 6. Under PPACA, health plans must allow employees to keep their children on their plans until the children are 26 years old. 7. The act of determining whether treatment is covered under an individual’s health insurance policy is called precertification . 8. The procedure to obtain permission for a procedure before it is done, to determine whether the insurance program agrees it is medically necessary, is termed preauthorization . 9. Determining the maximum dollar amount the insurance company will pay for a procedure before it is done is known as predetermination . 10. Name two ways an individual may obtain health insurance. a. Group plan b. Individual contract 11. List four methods a health care organization may use to submit insurance claims to insurance companies. a. CMS-1500 or CMS-1450 claim form b. Electronic or manual claims submission c. Contract with outside billing services d. Direct data entry into payers system 12. A document signed by the insured directing the insurance company to pay benefits directly to the health care organization is known as a/an assignment of insurance benefits.

13. A patient service slip personalized to the health care organization and used as a communications/billing tool during routing of the patient can also be referred to as the following terms. a. Encounter form b. Charge slip c. Multipurpose billing form d. Transaction slip e. Routing form f. Superbill 14. Digital data attached to a computerized document as verification of the provider’s intent to sign the document is known as a/an electronic signature. 15. A method of making an automatic deposit of funds from the payer into the provider’s bank account and used in place of a mailed paper check is referred to as electronic funds transfer (EFT). Part 2: Mix and Match 16. Part 3: Multiple Choice 17. When a patient goes to a health care organization seeking medical services, the health care organization accepts the patient and agrees to render treatment, and both parties agree. This contract is known as a/an: a. expressed contract. b. agreed contract. c. implied contract. d. written contract. d. Coordination of benefits (COB) An insurance company considering benefits payable by another carrier in determining its own liability a. Adjuster b. Assignment Transfer of one’s right to collect an amount payable under an insurance contract b. Assignment a. Adjuster Acts for insurance company or insured in settlement of claims c. Guarantor g. Premium Periodic payment to keep insurance policy in force d. Coordination of benefits (COB) e. Deductible Amount insured person must pay before policy will pay e. Deductible i. Time limit Time period in which a claim must be filed f. Exclusions f. Exclusions Certain illnesses or injuries listed in a policy that the insurance company will not cover g. Premium c. Guarantor Individual responsible for payment of health care services h. Subscriber h. Subscriber The policyholder, or insured of an insurance plan i. Time limit

18. The process of checking and confirming that a patient is covered under an insurance plan is known as: a. precertification. b. eligibility verification. c. COB. d. predetermination. 19. A provision that allows the policyholder the right to refuse to renew the insurance policy on a premium due date is called: a. conditionally renewable. b. guaranteed renewable. c. optionally renewable. d. noncancelable. 20. A provision in a health insurance policy in which two insurance carriers work together for payment so that there is no duplication of benefits paid between the primary insurance carrier and the secondary insurance carrier is called: a. copayment. b. coinsurance. c. COB. d. cost-share rider. 21. A type of tax-free savings account that allows individuals and their employers to set aside money to pay for health care expenses is known as: a. a health savings account. b. a medical savings account. c. a flexible spending account. d. all of the above. 22. Time limits for filing insurance claims to a commercial carrier may have a range of: a. 10 days from the date medical service is received to 1 year. b. 30 days from the date of service to 1½ years. c. 60 days from the date of service. d. no time limit. Part 4: True/False TRUE 23. A preferred provider organization (PPO) occurs when a large employer or organization contracts with a hospital to offer medical care at a reduced rate. TRUE 24. The birthday rule is a change in the order of determination of COB regarding primary and secondary insurance carriers for dependent children. TRUE 25. The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) mandates that when an employee is laid off from a company, the group health insurance coverage must continue at group rates for up to 18 months. TRUE 26. A group policy usually provides better benefits; however, the premiums are generally higher than an individual contract would be. FALSE 27. A signature stamp is acceptable by all insurances as proof of the provider’s signature on a CMS-1500 claim form.

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4.2: Critical Thinking: Administrative Sequence of Processing an Insurance Claim Directions: Arrange the listed steps 1 through 18 in proper sequence by placing the correct number to the left of the statement. (Note: Each medical practice has its own order of the way office procedures are carried out; thus, these steps may vary slightly from practice to practice.) ___16__ Bank deposit made and unpaid claims followed up ___7___ Patient’s financial account is pulled ___2___ Insurance information (obtained and verified) ___15__ Payer processing/payment received with explanation of benefits (EOB) document ___9___ Patient’s financial data posted and patient checkout ___1___ Patient appointment and preregistration ___11__ CMS-1500 paper claim forms submitted ___13__ Provider’s signature is obtained ___12__ Electronic (Health Insurance Portability and Accountability Act [HIPAA] X12 837) claims transmitted ___10__ Insurance claims preparation ___3___ HIPAA Notice of Privacy is reviewed and signed ___17__ Balance due statement mailed to patient ___14__ Track pending insurance claims ___5___ All required patient’s signatures are obtained ___6___ Assignment of benefits ___8___ Medical services performed and encounter form completed ___4___ Insurance identification card photocopied ___18__ Full payment received and financial records retained 4.3: Critical Thinking: Differences in Insurance Key terms 1. Explain the difference between the following: Blanket contract is comprehensive group coverage through plans sponsored by the professional organizations to which they belong. Individual contract any insurance plan issued directly to an individual and their dependents. 2. Explain the difference between a participating health care organization and a nonparticipating health care organization for the following: Commercial insurance company or managed care plan participating health care organization: A healthcare organization that has contracted with a plan to provide medical services to plan members Commercial insurance company or managed care plan nonparticipating health care organization: A health care organization that has not contracted with a managed care plan to provide medical services to plan members. Medicare participating health care organization: A health care organization that accepts assignment on Medicare claims. It may not bill or accept payment for the difference between the submitted charge and the Medicare allowed amount. However, an attempt must be made to collect the 20% coinsurance and any amount applied to the deductible. Medicare nonparticipating health care organization: A health care organization that does not participate and has an option regarding assignment. The health care organization either may not accept assignment for all services or may exercise the

option of accepting assignment for some services and collecting from the patient for other services performed at the same time and place. The health care organization collects the fee from the patient but may bill no more than the Medicare-limiting charge. The check is sent to the patient. 3. State the difference between the following: Implied contract is created by the actions of the parties involved; it is not written or spoken. Example: If Mary Johnson goes to Dr. Doe’s office and Dr. Doe provides medical service to her, this is implied contract. Expressed contract is a verbal or written contract. 4. Explain the birthday law (rule) and when it is used The Birthday law (rule) is an informal rule that the health insurance industry has widely adopted for the COBs. It is used when children are listed as dependents on two parents’ insurance plans. 4.4: Abstract Data from an Insurance Identification Card Directions: An identification card provides much of the information needed to establish a patient’s insurance coverage. You have photocopied the front and back sides of three patients’ cards and placed copies in their patient records, returning the originals to the patients. Answer the questions by abstracting or obtaining the data from the cards. Case A: 1. Name of patient covered by the policy. Linda L Field 2. Provide the insurance policy’s effective date. 05-01-1995 3. List the telephone number for preauthorization. 800-274-7767 4. State name and address of insurance company. Blue Cross of California PO Box 9072, Oxnard CA 93031-9072 5. List the telephone number to call for provider access . 800-274-7767 6. Name the type of insurance plan. California Care Health Plans, Prudent Buyer Plan 7. List the insurance identification number (e.g., subscriber, certificate, or member numbers). XDS-564-00-9044

8. Furnish the: group number: C54G28 Plan or coverage code : 040 9. State the copay requirements. $20 office 10. Does the card indicate the patient has pharmacy coverage ? Yes 4.5 Abstract Data from an Insurance Identification Card Case B 1. Name of patient covered by the policy. M T Fordham 2. Provide the insurance policy’s effective date. 010120XX 3. List the telephone number for preauthorization. 1-800-343-1691 4. State name of insurance company. Blue Shield of California 5. List the telephone number to call for patient benefits and eligibility. 800-331-2001 6. Name the type of insurance plan. PPO Preferred Plan 7. List the insurance identification number (e.g., subscriber, certificate, or member numbers). AJC557469969 8. Furnish the: group number. 00P1901 Plan or coverage code. 542 9. State the copay requirements, if any. No listed copay requirements.

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10. List the Blue Shield website. www.blueshieldca.com 4.6 Abstract Data from an Insurance Card Case C: 1. Name of patient covered by the policy. Linda L Flores 2. Provide the insurance policy’s effective date, if there is one. No known effective date 3. List the number to call for out-of-network preauthorization. 800-842-5751 4. State name and address of insurance company. United Health Care PO Box 30990, Salt Lake City, UT 84130-0990 5. List the telephone number to call for member inquiries. 800-842-5751 6. Name the type of insurance plan. POS PCP Plan with RX D-UHC and MH/CD 7. List the insurance identification number (e.g., subscriber, certificate, or member numbers). 52170-5172 8. Furnish the group number. 176422 9. State the copay requirements, if any. $10 Office Visit $50 ER $35 Urgent 10. Who is the patient’s primary care physician? G Loman

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