Insurance and the ATC

George Wham, MS, ATC

Costs of Healthcare

• US spent $1.1 trillion on healthcare in 1998 (13.5% of GDP)– 34% for hospital care– 20% for physician services– 26.7% for other medical services– 7.2% for prescription drugs

• Fastest growing cost – increased 14% in 2000, 20% in 2001, 16% in 2002, and 15% in 2003

More Costs of Healthcare

• 18% of people generate 80% of the cost

• .4% generate 20%• In 2002 43.6 million

in US were uninsured– Mostly working poor

Insurance Background

• 1798 1st form of health insurance in US provided by Marine Hospitals for seaman

• Post WWII medical insurance becomes a common benefit for many jobs

• 1979 – 85% of population covered by private insurance

• Mid 1990’s – 70%• Increasing cost of healthcare making insurance

less affordable – during 1980’s and early ’90’s moved to managed

care

Insurance Terms

• Premium• Deductible• Copay• Balance• Riders• Exclusions• Capitation

Insurance Systems

• Medical Insurance– Only covers medical bills

• Health Insurance– Also covers prevention and health maintenance

• Athletic Accident Insurance– Usually supplemental to family policy to reimburse

part of cost of an athletic injury– Some plans may only cover acute injuries, but not

overuse or chronic conditions

More Insurance Systems

• Catastrophic Insurance– To cover lifetime medical and disability coverage– NCAA provides to all it’s athletes free– Takes affect after 1st $50,000 of bills accumulate

• Disability Insurance– Protects athletes against future loss of earnings to disability

while competing– NCAA sponsored program that may be purchased

• Workman’s Compensation Insurance– State mandated program provides benefits to injured workers– Employer funded– Compensation varies with severity

Fees

• Usual, customary, reasonable (UCR)– Commonly used fee

system for medical services originally developed for Medicare

– Ideally want to deal w/ providers who accept UCR as payment

Types of Athletic Insurance• Self Insured

– Institution purchases catastrophic coverage and pays all other bills themselves

• 1º Coverage– Insurance begins to pay medical bills as soon as deductible is

covered• Very costly• Less than 1% of institutions currently provide this

• 2º Coverage (AKA “Excess”)– Policy pays for all or a portion of medical bills after the 1º has

paid• Most common • More cost efficient• Provides a sense of shared responsibility with athlete and parents• Claims process is complicated • See Athletic Accident Insurance Sheet***Important to communicate how this coverage works***

Important to try to decrease the number of insurance claims to

decrease the cost of future premiums for the institution

Ways to decrease insurance costs for an institution

• Require athletes to have a primary policy• Consider limitations as to what services will be

covered or to the amount paid• Require athletes to pay an insurance fee• Require athletes to go through your “system” to

get coverage• Require medical providers to accept UCR• Conduct an annual risk assessment audit• Hire an ATC to act as a gatekeeper and reduce

outside medical costs

3rd Party Reimbursement

• Process whereby a healthcare provider is compensated by an insurance company for services provided to a policyholder

• 1º method of payment for medical services in the US

• 3rd party is the healthcare provider

Models of 3rd Party Payments

• Indemnity Plan (AKA “Fee for Services”)– Free to choose any provider and plan reimburses a

portion of the cost of services after deductible and/or copay

– Patient covers the balance

• Managed Care Plan– Cost control through coordination of medical services– 55% of all Americans covered through managed care– 85% of working insured population in 1999

• Government Plans

Managed Care Plans

• HMO (Health Maintenance Organization)

• PPO (Preferred Provider Organization)

• Hybrids

HMO• Members have

designated 1º physician– gatekeeper

• Requires a referral to specialists

• Fees paid to providers often capitated or fixed-fee system

• Usually have a copay• Group Model or IPA• Example: Companion

PPO

• Select a provider from within a network– Will pay outside

network, but pays less

• No designated 1º care physician

• No referral required to see specialist

• Example: State Health Plan

Other Managed Care • Open Access HMO

– Have 1º physician, but also may “self refer” at greater cost

• PSO (Provider Sponsored Organization)– Owned or controlled by provider and contract with patients– Example: MUSC option for state employees

• EPO (Exclusive Provider Organization)– Type of PPO in which must go in-network or doesn’t pay

• POS (Point of Service)– Like a PPO, but with a 1º physician as a gatekeeper– May “self refer”, but at higher cost

• Open Access PPO – may go to any provider– higher premiums

Government Sponsored Programs

• CMS – Center for Medicare and Medicaid – Medicaid (1965)– Medicare (1965)

• Champus/TRICARE

Medicaid

• Cost shared by federal & state governments• 40 million Americans covered in 1997 • Provides coverage for low income, blind, and

disabled– Covers inpatient, outpatient, labs, and diagnostic tests– States decide whether to also include prescription drugs

and hearing aids– Eligibility based on income (poverty level)– See Medicaid Handout

Medicare

• Provides coverage for those 65 and older, and disabled Social Security beneficiaries

• Part A: covers hospital, skilled nursing facilities, home health, and hospice

• Optional parts (w/ an additional cost to enrollee):– Part B: covers physician visits and labs

• Federal funds pay 75%, premium covers 25% ($42.50)

– Part C: optional managed care plans– Part D: prescription drug coverage

CHAMPUS/TRICARE

• Insurance for military and their dependents when services can not be rendered at a military hospital

• Humana has recently signed on to convert TRICARE to a Humana system

Other Insurance Programs

• Flexible Spending Accounts– Set aside a certain amount from each paycheck for medical

expenses before taxes– Use it or lose it

• Health Savings Accounts– New in 2004– Low premium, high deductible– May contribute (before taxes) to an interest bearing account to

pay for medical expenses incurred before the high deductible is met

– May take with you to other jobs – Replaced Medical Savings Accounts – Example: State Health Plan’s “Savings Plan”

Blue Cross/Blue Shield

• 1 out of 4 Americans is insured with BCBS

• 95% of all doctors and hospitals are in their network

Coding

• Diagnostic– ICD-9-CM

• International Classification of Disease• 5 digit code used to identify an injury• Assigned by doctor

• Procedural– CPT

• Current Procedural Terminology• 5 digit code for various procedure or services rendered• In 2002 AT evaluation and reevaluation codes were

established• ATC’s may also use physical medicine (97000 series) codes

to describe services rendered

Insurance Claims

• What does the ATC’s need to do to file an insurance claim for an injured athlete?– See claim form

• EOB (Explanation of Benefits) – Describes how benefits were paid and the

remaining balance– See copy of EOB

Read recommendations for ATC’s in dealing w/ insurance

on page 210

Claim forms completed by the provider and sent to the insurer….

• In a clinic a HCFA1500 claim form must be completed

• In a hospital must complete an UB-92 claim form

*** Best if these are submitted electronically using EDI (electronic data interchange)***

When Purchasing Insurance for the Athletic Program at an Institution… • Shared function between the AD, business

office, risk managers, and hopefully ATC’s

• Bid?

• Direct Purchase?

• Ask companies to present their package?

• Details of the policy– Coverage– How to file a claim