CBCS Payer Types and Policies 2 — Questions and Answers
Question 1: What is TRICARE and who is eligible for it?
- A federal health program for low-income families
- The health care program for active-duty service members, retirees, and their families through the Department of Defense (Correct answer)
- A supplemental insurance plan for Medicare beneficiaries
- A state-administered insurance program for government employees
Correct answer: The health care program for active-duty service members, retirees, and their families through the Department of Defense
TRICARE is the healthcare benefit for members of the uniformed services (active duty, National Guard/Reserve, retired) and their eligible family members, administered by the Department of Defense.
TRICARE offers several plan options: TRICARE Prime (HMO-like, requires PCM/referral), TRICARE Select (PPO-like, more flexibility), TRICARE For Life (secondary to Medicare for eligible retirees), and others. Billing TRICARE requires enrollment as a TRICARE-authorized provider. TRICARE follows Medicare rates and coding guidelines closely. Claims for active-duty members require special handling. Understanding TRICARE is important for providers near military installations and for billing staff serving veteran/military communities.
Question 2: What is a Medicare Administrative Contractor (MAC)?
- A private company that designs Medicare benefit plans
- A private company contracted by CMS to process Medicare fee-for-service claims in a specific geographic jurisdiction (Correct answer)
- A Medicare-approved company that provides managed care plans
- A contractor that audits Medicare Advantage organizations
Correct answer: A private company contracted by CMS to process Medicare fee-for-service claims in a specific geographic jurisdiction
MACs are private companies that serve as Medicare's claim processors in specific geographic regions (jurisdictions), handling Part A and Part B claims submission, payment, and audit functions.
CMS divides the US into 12 MAC jurisdictions for Part A/B processing. Each MAC is responsible for: processing claims, making payment determinations, responding to provider inquiries, conducting medical review, performing audit and recovery activities, and issuing Local Coverage Determinations (LCDs). Examples of MACs include Novitas Solutions, Noridian Healthcare Solutions, CGS Administrators, and Palmetto GBA. Providers must enroll with their specific MAC to bill Medicare. The MAC also handles redetermination appeals (Level 1).
Question 3: What is the Federal Employees Health Benefits (FEHB) Program?
- A health plan exclusively for members of Congress
- The health benefits program for federal civilian employees, retirees, and their dependents, offering a choice of health plans (Correct answer)
- A government-subsidized program for unemployed federal workers
- Medicare coverage for federal government retirees
Correct answer: The health benefits program for federal civilian employees, retirees, and their dependents, offering a choice of health plans
FEHB is the health benefits program for federal civilian employees and retirees, offering enrollment in a choice of approved health plans (fee-for-service, HMO, HDHP/HSA) administered by OPM.
FEHB is administered by the Office of Personnel Management (OPM). Key features: largest employer-sponsored group health insurance program in the world, ~200 health plan options, government pays majority of premium, enrollees choose from comprehensive menu of plans. For billing purposes: FEHB plans follow commercial billing practices (not Medicare), use CMS-1500 claims, have their own fee schedules and network arrangements. Some FEHB plans are administered by familiar insurance companies (Blue Cross, Aetna, UnitedHealth). Providers should verify FEHB-specific network participation.
Question 4: What is a self-funded (self-insured) employer health plan?
- An employer that purchases a standard insurance policy from an insurer
- An employer that assumes financial responsibility for employee health claims rather than paying premiums to an insurance company; typically administered by a TPA (Correct answer)
- A small employer that qualifies for a government subsidy to fund health benefits
- An employer that provides health benefits funded entirely by employee payroll deductions
Correct answer: An employer that assumes financial responsibility for employee health claims rather than paying premiums to an insurance company; typically administered by a TPA
In a self-funded plan, the employer directly pays employee health claims from its own funds rather than buying insurance. A Third-Party Administrator (TPA) typically processes claims using the employer's money.
Self-funded plans are governed by ERISA (Employee Retirement Income Security Act) rather than state insurance laws, which means they are exempt from state insurance mandates. This is important for billing: self-funded plans cannot be required to cover state-mandated benefits. Large employers often self-fund to control costs and customize benefits. Stop-loss insurance protects against catastrophic claims. Billing a self-funded plan requires submitting to the TPA (which often appears to be a regular commercial insurer). Common TPAs include Cigna, Aetna, UnitedHealthcare (acting as administrators, not insurers).
Question 5: What is Workers' Compensation insurance, and how does billing differ from standard health insurance?
- Insurance for employers to cover their liability if an employee injures a patient
- Insurance that covers medical treatment and lost wages for employees injured on the job or who develop work-related illnesses; billing uses separate forms and diagnosis coding specific to the injury (Correct answer)
- Insurance that employees purchase themselves to cover job-related injuries
- A federal insurance program for all injury-related medical care
Correct answer: Insurance that covers medical treatment and lost wages for employees injured on the job or who develop work-related illnesses; billing uses separate forms and diagnosis coding specific to the injury
Workers' compensation covers medical care and lost wages for work-related injuries/illnesses. Claims are billed to the employer's WC carrier using state-specific forms, focus only on the work injury, and follow different reimbursement rules than standard health insurance.
Workers' comp billing differences: (1) Separate claim forms (varies by state — many use modified CMS-1500), (2) Authorization for treatment often required from the WC adjuster before providing care, (3) Only treat the work-related condition (separate from the patient's general health), (4) Fee schedules set by state WC boards, often lower than commercial rates, (5) Bill the WC carrier, NOT the patient's health insurance, (6) No balance billing of the employee, (7) May use separate diagnosis codes (e.g., E codes for cause of injury), (8) Third-party liability recovery rules apply if a non-employer is at fault.
Question 6: What is a National Coverage Determination (NCD)?
- A state-level insurance mandate requiring coverage of specific conditions
- A CMS policy determining whether a service, item, or procedure is covered nationally under Medicare, binding on all MACs and Medicare Advantage plans (Correct answer)
- A determination made by a provider as to whether a service is medically necessary
- A coverage decision made by a commercial insurer for its subscriber population
Correct answer: A CMS policy determining whether a service, item, or procedure is covered nationally under Medicare, binding on all MACs and Medicare Advantage plans
An NCD is a national Medicare coverage policy issued by CMS that determines whether a specific medical service is covered, covered with conditions, or non-covered for all Medicare beneficiaries nationwide.
NCDs are developed by CMS through an evidence-based process including technology assessment and public comment. They take precedence over MAC Local Coverage Determinations (LCDs). Types of NCDs: coverage (covered nationally, no additional requirements), coverage with conditions (covered if specific criteria are met — e.g., CPAP coverage requires documented obstructive sleep apnea test), non-coverage (explicitly excluded). There are ~400 NCDs. When an NCD doesn't exist for a service, the MAC issues an LCD governing coverage within its jurisdiction. Providers must comply with NCDs or face claims denial.
CBCS Payer Types and Policies 2
What is TRICARE and who is eligible for it?