healthcare basics

8/4/2019 Healthcare Basics

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_experience the commitmentTM

Healthcare Basics


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Agenda

Introduction to InsuranceKey Business Processes In an InsuranceCompany (General departments)Types of Insurance

Introduction to HealthcareHealthcare TerminologyEvolution and current trends in managed careGovernment sponsorship Medicare, Medicaid &

Tricare.MiscellaneousHealthcare reformis it a gain for us (IT-world)


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What is an Insurance?Insurance is a method of spreading over large number of persons a possiblefinancial loss too serious to be conveniently borne by an individual.

Insurance in simple terms means spreading of risk over a large number of peopleexposed to the same risk. Risk in insurance parlance means uncertainty about

financial loss and represents an accidental or fortuitous event by which theinsured sustains monetary loss.

To relate risk to insurance, focus would be on a risk that can result in financialloss. Financial loss may be defined as a decline in or disappearance of value dueto a contingency.

INTRODUCTION TO INSURANCE


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What is Risk?Risk is defined as the possibility that positive expectations will not be fulfilled.Risk can also be defined as a condition where, there is a possibility of an adversedeviation from the desired outcome.The essential feature of the Risk is the uncertainty as to its occurrence and

invariably beyond ones reasonable control. The possibility of an indeterminate

outcome is a pre-requisite for a Riskto exist.

Classification of Risk..Pure Risk

Personal RiskProperty RiskLiability Risk

Speculative Risk

Note:In general only Pure Risk is covered by insurance

Property Risk

Personal Risk

Liability Risk

Pure Risk

Speculative Risk

Risk

INTRODUCTION TO INSURANCE


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INSURANCELEGAL ASPECTS

What is a contract?An agreement between two or more parties to do or to abstain from doing

an act, with an intention to create a legally binding relationship.

Essentials of valid contract_ Legal relationship

_ Legal of purpose_ Offer and acceptance_ Consideration_ Capacity to contract_ Certainty of terms

_ Possibility of performance


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PRINCIPLES OF INSURANCE

Principle of Utmost Good FaithPrinciple of Insurable InterestPrinciple of Proximate CausePrinciple of IndemnityPrinciple of Subrogation

Principle of Contribution


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INSURANCE - KEY BUSINESS PROCESSES

General departments

Underwriting /New business

Actuarial /Product developmentMarketing & distribution

Policy administration

General Administration

Customer service

Claims management Investment management

ReinsuranceAccounting

Legal

ComplianceHuman resources

IT services


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_ Health insurance_ Life insurance_ Auto insurance (Vehicle insurance)_ Home insurance

_ P&C insurance_ Liability insurance_ Unemployment insurance_ Aviation insurance

_ Other insurance

TYPES OF INSURANCE


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Introduction to Health Insurance


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In todays scenario of escalating medical costs, most people cannot afford to pay

the full costs of their medical treatment should they become seriously ill, nor canmost people afford a loss of income when they are unable to work because of anillness or injury.

Health insurance primarily addresses these two needs of protection againstmedical costs and loss of income.

Life and health insurance companies market a range of individual and grouphealth insurance products designed to protect against the risk of financial loss,which the insured are likely to experience as a result of an illness or injury.

Thus, the health insurance products essentially provide two types of coverage:_ Medical expense coverage providing benefits to pay for the treatment

of an insured's illnesses and injuries._ Disability income coverage providing income replacement benefits to

an insured who is unable to work because of sickness or injury.

INTRODUCTION TO HEALTH INSURANCE


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The two main types of health insurance, they are private and public. Most peopleget their health insurance through one of the many different private healthinsurance companies. People who have children, have limited income, are retiredor are injured on the job might be able to obtain insurance throughgovernmental/public programs.

Private insurance has two majors types: Major medical (Indemnity) and managed

care. Managed care health insurance plans are divided into three major types:HMO - health maintenance organizations, PPO - preferred provider organizationsand POS - point of service.

There are other health insurance plans that can help cover more special needssuch as short-term coverage, disability, Medicare supplements and more.

INTRODUCTION TO HEALTH INSURANCE


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Set 1 (People/Org)

_ Insurer_ Insured_ Payers_ Providers_ Member_ Third party Administrator (TPA)

HEALTHCARE TERMINOLOGY

Set 2 ($)_ Premium_ Co-payments_ Deductibles_ Coinsurance_ Stop Loss_ Out-of-pocket Maximums

Set 3(Others)Pre existing conditionElimination periodMedical Loss Ration (MLR)Explanation of Benefits (EOB)Coordination of Benefits (COB)

Administrative Services Only (ASO)Electronic data interchange (EDI)Centers for Medicare & Medicaid Services (CMS)Health Insurance Portability and Accountability Act(HIPAA)The National Association of Insurance

Commissioners (NAIC)


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Types of Plans and TrendIndemnity/FFS:-"Indemnity" originally meant that insured people were billed by their providers,paid these bills themselves, submitted the bills to their insurance company,and then were reimbursed ("indemnified") for the bills by the insurancecompany. "Fee-For-Service (FFS)" means that providers are paid a specified

amount for each service provided a fee for each service.

Health Maintenance Organizations (HMOs):-An HMO is a private corporation that contracts with physicians, hospitals,employers and individuals to provide health insurance coverage in exchangefor a fixed fee, or premium. Individuals must choose a primary care physician(PCP) within the HMO network, through which all the healthcare decisions willbe made (medication, hospitalization, tests and referrals to specialists).

EVOLUTION OF HEALTHCARE AND ITS TREND


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Preferred Provider Organizations (PPOs) :-

A PPO has a provider network like an HMO, but differs from a traditional HMObecause it provides some coverage for services by providers outside the network.PPO members can see providers outside the network, but must pay more out oftheir own pocket when they do.

Point of Service (POS) :-An option provided by some HMOs that allow covered persons to go outside

the plan's provider network for care, but requires they pay higher cost sharing thanthey would for network providers. These plans can also be PPOs that have stronggatekeeper and utilization review like an HMO, but offer out-of-network coveragelike a PPO. With a POS plan, a member chooses to seek treatment in-network orout-of-network at the time they need the service.

Long term care (LTC) :-"Long Term Care (LTC)" is the general term for ongoing care for a chronic

illness or disability. Long term care can be provided in a variety of settings rangingfrom a person's own home, to an assisted living facility, to a skilled nursing facility.

EVOLUTION OF HEALTHCARE AND ITS TREND


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Consumer Driven Health Care (CDHP)Apart from these regular plans, there are other accounts, which can be used into pay for premiums of the policies. These are driven by the employeesthemselves, Consumer Driven Health Care, so as to be a part of the health carethey get, as they can carefully exercise what amount is being spent and how it isspent for there medical expenses.Consumer Driven Health Plans (CDHPs) are health benefits plans that engage

covered individuals in choosing their own health care providers, managing theirown health expenses, and improving their own health with respect to factors thatthey can control.

Generally CDHPs involve :A three-tier structure of payment for health care: a tax-exempt health account

that an individual uses to pay for health expenses up to a certain amount, ahigh-deductible health insurance policy that pays for expenses over thedeductible, and a gap between those two in which the individual pays any healthcare expenses out of their own pocket

Evolution of Healthcare and its trend:


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Generally CDHPs involve :Individuals have the opportunity to save money that they do not spend this yearfor health care expenses in future years (or, in some plans, for withdrawal duringretirement). Support systems (usually on the internet) to help individuals selectgood providers, get reasonable prices, track their health care expenses, andimprove their health.

These are:Flexible spending accounts (FSAs)Medical savings accounts (MSAs)Health reimbursement arrangements (HRAs)

Health savings accounts (HSAs)

EVOLUTION OF HEALTHCARE AND ITS TREND:

Consumer Driven Health Care


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FLEXIBLE SPENDING ACCOUNTS (FSAs):-A "Flexible SpendingAccount (FSA)" is a federally-qualified, tax-exempt individual health account thatan individual employee uses to pay a portion of their health care bills. There aretwo main tax code restrictions on FSAs: (1) the employee loses whatever fundsare left in the account at the end of the year; and (2) the employee cannotwithdraw cash from the account. FSAs have been used for years to accompanycomplete group health insurance. FSAs can encourage wasteful spending at theend of the year and dilute the cost-containment incentives of Copays oncomplete health insurance.

MEDICAL SAVINGS ACCOUNTS (MSAs) :-One of the most prominenttypes of new health accounts is the "Medical Savings Account (MSA)". An MSAis a federally-qualified, tax-exempt individual health account that an individual

uses to pay their health care expenses. It is similar to an Individual RetirementAccount (IRA) that saves up untaxed money, but is used to fund health careexpenses instead of retirement income.




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HEALTH REIMBURSEMENT ARRANGEMENTS (HRAs) :-Health Reimbursement Arrangements (HRAs) have been developed so thatlarger employers (more than 50 employees) who are not allowed to offer a trueMSA can offer their employees something like an MSA. A HRA is a tax-exemptaccount that an employee uses to pay health care bills. However, unlike a trueMSA, money in a HRA is never really paid to the employee. The money remainswith the employer. The employee just directs how the HRA money is used. An

employee cannot withdraw cash from a HRA.

HEALTH SAVINGS ACCOUNT (HSAs) :-Health SavingsAccounts The Medicare Modernization Act (MMA) of 2003 accelerated theconsumer-directed healthcare movement by creating the most recent CDHP

option, the health savings account (HSA). The HSA is designed to addressseveral of the limitations of previous personal healthcare account products: Itallows funding by both employees and employers and provides for employee (orindividual) account ownership, portability, annual rollover, and tax-freeinvestment earnings and gains.




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GOVERNMENT-SPONSORED PROGRAMS:

MedicareMedicare is available for:Persons age 65 or olderPersons with qualifying disabilities (regardless of age)Persons with end-stage renal disease (ESRD)

Medicare Part A_ Hospitalization_ Confinement in an extended-care facility after hospitalization

_ Home health care services.

Medicare Part BMedigap

Medicare Part C

Medicare Choice (M+C) programMedicare Part D

prescription drug benefit delivered through new Medicare Advantage(MA).


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Medcaid

Title XIX of the Social Security Act of 1965 established Medicaid, a joint federaland state program that provides hospital expense and medical expense coverageto the low-income families with dependent children, certain aged and disabledindividuals.The federal government, through CMS, establishes broad guidelines for Medicaidprograms, provides partial funding for states, and sets minimum standards for

eligibility, benefits, and provider participation and reimbursement. Individualstates provide additional funds and administer the programs.

TricareThe Military Health System (MHS) is a worldwide healthcare system operated bythe U.S. Department of Defense (DoD). The MHS focuses its efforts onpopulation health improvement by integrating the delivery of healthcare servicesfor active-duty personnel, retirees, and the families of active-duty personnel andretirees.



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TricareIn the mid-1990s, the DoD began offering ongoing healthcare coverage tomilitary personnel and their families through the TRICARE health plan.

TRICARE, is a Department of Defense, regionally managed healthcare programfor active duty and retired members of the uniformed services and their familiesthat combines military healthcare resources and networks of civilian healthcareprofessionals.The strategic goal of the TRICARE program is to provide access to high-qualitycare that ensures mission readiness while supporting military operations.Active-duty military personnel typically receive medical care through a network ofmilitary treatment facilities. Military treatment facilities (MTFs) are hospitals,

clinics, and treatment centers that the Army, Navy, Air Force, and Coast Guardoperate to deliver care to MHS beneficiaries.



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Miscellaneous

HIPAA :-The law known as HIPAA stands for the Health InsurancePortability and Accountability Act of 1996. This landmark law to provideconsumers with greater access to health care insurance, to protect the privacy ofhealth care data, and to promote more standardization and efficiency in the healthcare industry. While HIPAA covers a number of important health care issues, thisinformational series focuses on the Administrative Simplification portion of the lawspecifically HIPAAs Electronic Transactions and Code Sets requirements. HIPAApromotes standardization and efficiency in the health care industry.

COBRA :-Title X of the Consolidated Omnibus Budget Reconciliation Actof 1986 (COBRA) is a federal law that gives people with employer-sponsored healthinsurance (from an employer with more than 20 employees) the right to continuecoverage for 18-36 months if they would otherwise lose coverage due tocircumstances beyond their control. These circumstances include: (1) they lose their

job; (2) their hours are cut; (3) their employed spouse dies or divorces them; or (4)they are a student who graduates and losses parental plan coverage. Whencoverage is continued under COBRA, the employee must pay the full premiumincluding any portion previously paid by the employer.


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Healthcare Reform

In March 2010 Congress enacted the PatientProtection and Affordable Care Act (PPACA),often referred to as the Affordable Care Act (ACA)and commonly called simply healthcare reform.

Addresses following:Medical loss ratioPreventive careTechnology

Data reporting is high and Information technology need more newtechnology and staff to address this.


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Q & A


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Thank you!!!

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