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Assignment of Benefits - The transfer of the right for
reimbursement directly to the provider of plan benefits from the insured
person to a health care provider.
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Transferring rights allows the insurer to mail any benefit payment
directly to the provider.
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This legal statement is usually in the initial paperwork requested by
the health care provider and may be signed by the insured person or
his/her legal spouse or guardian.
Authorization - Permission to provide referred or requested a
service that is granted by one or more of the following:
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Health insurance plan, or
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Medical group or the hospital depending upon who is financially
responsible for the requested or referred services that are to be
performed.
Birthday Rule - Used to determine primary and secondary coverage
for children. The word "birthday" refers only to the month and day in a
calendar year, not the year in which the person was born.
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If the parents are not separated or divorced, the insurance of the
parent whose birthday occurs first in a calendar year is considered the
primary insurance while the other parent's benefits are considered the
secondary coverage.
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If the parents have the same birthday, the insurance plan that has
covered the parent for the longest time is considered the primary
insurance
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In situations where the parents are separated or divorced and there is
more than one insurance plan covering the child, the benefits are
determined in the following order. **
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The insurance plan of the parent with legal custody of the child.
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The plan of the spouse of the parent with legal custody of the child.
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Last is the plan of the parent who does not have legal custody of the
child.
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** There can be some discrepancy, depending on a court decree, if there
are no specific terms on a court decree (stating only that the parents
share joint custody), the benefit determination would be the same as the
first bullet above where if the parents are not separated or divorced,
the insurance of the parent whose birthday occurs first in a calendar
year is considered the primary insurance while the other paren'ts
benefits are considered the secondary coverage.
Coordination of Benefits (COB) - A group policy provision which
helps determine the primary carrier in situations where an insured is
covered by more than one policy.
Deductible (DED) - The amount of money, as determined by the
benefit plan. A person must pay for authorized health care services
before insurance payment commences. Deductibles are usually calculated
on a calendar year basis, but can also be based on the anniversary date
of a patient's effective date with that plan or plan year of the named
insured or subscriber.
Exclusive Provider Organization (EPO) - There are two types of
EPO plans.
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The current industry standard requires that a patient select a Primary
Care Physician (PCP) (some patients may only have to choose a medical
group) and when needed obtain authorization from that PCP to receive
specialty services. A patient must stay within the contract network and
only use preferred providers. There typically is a lifetime policy
maximum with this type of plan. In the event a patient goes out of
network (OON) they may be responsible for the entire balance that is not
paid by the payer associated with the services provided.
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The other type of EPO is one where the benefits are those of a PPO but
the provider panel from which members obtain care is smaller than a PPO
panel.
Guarantor - The person or entity who is financially responsible
for payment on a patient's account. Usually the patient is financially
responsible for medical charges. A parent or legal guardian/trustee is
the guarantor for patient's 18 years of age and younger. This is also
the case for patients with a decreased mental capacity.
Medi-Cal - A California state sponsored medical assistance
program enabling eligible recipients to obtain essential medical care
and services.
Medi-Cal Managed Care - The conversion of fee-for-service
Medi-Cal to PCP governed care whereby eligible select a primary care
physician who manages all care provided to the members via treatment or
referrals for treatment by specialists. Patients who do not follow the
prescribed guidelines are responsible for all charges associated with
that episode of care and are not covered by the state of Medi-Cal program
Medicare - Medicare is a federal insurance program which
primarily serves those over 65 years old and younger, disabled people
and dialysis patients. Medicare is divided into two parts:
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Medicare Part A covers inpatient hospital services, nursing home care,
home health care and hospice care.
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Medicare Part B helps pay the cost of doctors' services, outpatient
hospital services, medical equipment and supplies and other health
services and supplies.
Medicare Supplement - A supplemental private insurance policy to
help cover the difference between approved medical charges and benefits
paid by Medicare.
Non-Covered Services - A cost incurred by the patient when
his/her insurance policy does not cover.
Out-of-Network (OON) - Services rendered by a provider which does
not have a contract to offer you care. Typically, managed care plans are
contracted with a panel of providers. If a patient seeks care
out-of-network, they may be financially responsible for some or all of
the care provided. An exception to this rule is emergency medical care.
Point of Service (POS)/Tiered Plan - Health coverage that allows
the patient to utilize a variety of benefits associated with different
level/tiers of coverage. The following is an explanation of the common
tiered POS coverage.
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Tier 1 Level Benefits (HMO Coverage): members are assigned or chose a
PCP; the PCP must manage the care. Stanford Hospital and Clinics must
obtain authorization for specialty services. Typically, patients are
only responsible for their co-pays.
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Tier 2 Level Benefits (PPO Coverage): the patient may self-refer to any
in-network-contracted provider without obtaining authorization from
their PCP but authorization is often required from the insurance
company. Patients are responsible for a deductible and a percentage of
their medical costs.
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Tier 3 Level Benefits: coverage for medical care provided to POS members
from non-contracted provider. Insurance payment amount is dependent on
the benefit offered by the plan. Services may be denied by the insurance
company as not covered and the patient is responsible for 100% of all
charges. Typically the patient is responsible for a larger share of the
charges.
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Care provided to POS members without the required authorization from
their health plan will result in the patient being financially
responsible for 100% of the charges.
Preferred Provider Organization (PPO)
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Health coverage that allows the member to direct his/her own healthcare.
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A patient may self-refer within a contracted network of physicians;
after paying a deductible, a patient is commonly responsible for 10% or
20% of the allowable fee.
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A patient may choose to receive treatment from a provider outside of the
PPO network thereby increasing his/her deductible or out-of-pocket
maximum.
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The patient may be responsible for obtaining authorization from the
health plan for some services such as physical therapy and MRI services.
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There is typically a lifetime policy maximum associated with PPO
coverage.
Primary Care Physician (PCP)
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The primary care physician (can be an internist, pediatrician, family
physician, or OB/Gyn) is responsible for all general medical care of the
patients and referrals to specialists for tertiary care when medically
appropriate.
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Most HMO, EPO and POS plans require members to choose or be assigned to
a primary care physician.
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The PCP is responsible for providing or authorizing all care
(hospitalization, diagnostic, workups and specialty referrals) for that
patient
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Depending on the type of insurance plan, a patient may not be covered
for a visit to a specialist without prior approval of the primary care
provider.
Prior Authorization
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A utilization control measure employed by PPO, EPO, HMO and POS plans,
whereby, elective hospital admissions or other expensive medical
services or procedures must be approved by the insurance company,
medical group, gatekeeper or primary care physician in advance.
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Such advance approval is known as prior authorization and is based on
the insurance companies determination of medical necessity,
appropriateness and other pertinent factors.
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Generally surgeries require prior authorization as do many procedures
and tests done in the physician's office. A utilization review or prior
authorization phone number is usually available from the insurance
company to request authorization.
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For all emergency surgeries and admissions the provider must notify the
insurance carrier of the patient's admission within 24 hours.
Referral - A physician's medical order for services or
consultations to be provided by a specialist.
Subscriber - A person who is enrolled for benefits with an
insurance company. One subscriber may represent.
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Health coverage that allows the member to direct his/her own healthcare.
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A patient may self-refer within a contracted network of physicians;
after paying a deductible, a patient is commonly responsible for 10% or
20% of the allowable fee.
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A patient may choose to receive treatment from a provider outside of the
PPO network thereby several members, such as dependents who are covered
by their parents.
Worker's Compensation - Insurance coverage that is provided by
employers to cover employees injured on the job. This coverage is
separate from regular medical coverage.
Lucile Packard Children's Hospital is located in Palo Alto, adjacent to Stanford University Hospital, approximately 20 miles north of San Jose, CA and 40 miles south of San Francisco.
Lucile Packard Children's Hospital
725 Welch Road
Palo Alto, California 94304
(650) 497-8000
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