Insurance Terminology and Policy

 

Its often incredibly difficult to understand terminology in conversations around insurance coverage and access to care.  It helpful for families to have a guide of terminology and definitions to reference when discussing financial arrangements and options for treatment.  These definitions, resources and guidelines allow families to gain this necessary understanding when having those difficult conversations.

 

 

Policy Trends from the Eating Disorder Coalition:

As the White House Parity Task Force noted in in an October 31, 2016 report, there is still a cultural belief that eating disorders are not a true medical issue, often leading to automatic insurance denial. This stigma also pervades into the public and to our health professionals, leading to a lack of early identification, formal training about eating disorders, and the identification and treatment for such disorders for our health professionals who sit on the frontlines of identifying this illness. Only 1/3 of persons with eating disorders receive any medical, psychiatric, or therapeutic care.

  • Universal Healthcare System and Eating Disorder Treatment…Providing easier access to insurance when the problem first arises will lead to higher recovery rates and lower cost to the insurance company. Additionally, in response to rising healthcare costs, many insurance companies will approve eating disorder treatment, but only if the course of treatment is shortened. Research has found that is actually causing more harm than good, as it is more successful, and therefore less expensive, to provide coverage for one full round of treatment. Statistics show that, “as length of stay decreases, and weight at discharge becomes lower, the need for readmission increases [4].”
  • Can I Still Get Treatment For My Eating Disorder With Medicare? Tips around utilizing insurance / medicare coverage for treatment, how identifying co-occurring mental health disorders can identify a higher level of risk of complications will solidify medical necessity for extended length of stay even if risk of relapse will not meet the minimum standard to prove medical necessity.

 

Insurance and Policy Definitions

“A Patients Guide to Navigating the Insurance Appeals Process” Though not eating disorder specific, contains an overview of rights as insurance policy holder.

 

Deductible is the amount that must be met before insurance begins coverage

Co-pay is the portion (percentage) insurance will cover once deductible is met

OOP – Out of pocket maximum is the highest dollar amount that a member expected to spend before the coverage is at 100% (may be based on usual and customary rates).

OON – Out of Network  Out‐of‐network (OON) refers to insurance plan benefits. An out‐of‐network provider is one who does not have a contract with the patient’s insurance company and, therefore, is not obligated to accept whatever discounted reimbursement the insurance company was able to negotiate with its in‐­network providers. Every commercial insurance plan outlines the benefit level for members.

EPO – Exclusive Provider Organization  EPO stands for “Exclusive Provider Organization” plan. As a member of an EPO, you can use the doctors and hospitals within the EPO network, but cannot go outside the network for care. There are no out-of-network benefits.

POS – Point of Service  A type of plan where you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. POS plans require you to get a referral from your primary care doctor in order to see a specialist.

PPO – Preferred Provider Organization  PPO plans provide more flexibility when picking a doctor or hospital. They also feature a network of providers, but there are fewer restrictions on seeing non-network providers. In addition, your PPO insurance will pay if you see a non-network provider, although it may be at a lower rate.  Here are some key features:

  • You can see the doctor or specialist you’d like without having to see a PCP first.
  • You can see a doctor or go to a hospital outside the network and you may be covered. However, your benefits will be better if you stay in the PPO network.
  • Premiums tend to be higher, and it’s common for there to be a deductible.

HMO – Health Maintenance Organization  An HMO gives you access to certain doctors and hospitals within its network. A network is made up of providers that have agreed to lower their rates for plan members and also meet quality standards. But unlike PPO plans, care under an HMO plan is covered only if you see a provider within that HMO’s network. There are few opportunities to see a non-network provider. There are also typically more restrictions for coverage than other plans, such as allowing only a certain number of visits, tests or treatments.  Some other key points about HMOs:

  • Some plans may require you to select a primary care physician (PCP), who will determine what treatment you need.
  • With some plans, you may need a PCP referral to be covered when you see a specialist or have a special test done.
  • If you opt to see a doctor outside of an HMO network, there is no coverage, meaning you will have to pay the entire cost of medical services.
  • Premiums are generally lower for HMO plans, and there is usually no deductible or a low one.

       Some HMO plans don’t require you to select a PCP or have a referral to see a specialist.

Fully Insured Group Health Plan – Employer provided plans, insured and administered by 3rd party.  e.g. Blue Cross Blue Shield Plan Administrator*, e.g. Benefit Management Inc.

Self-funded Group Health Plan – Employer provided plans, funded by company, administered by 3rd party 

Individual Health Insurance Policy – Policy purchased by individual on open market or state insurance exchange

Governmental Plan – Government employee, Medicaid, Medicare, Tri-care, State Pool

 

Carve Outs

From NEDA: Proper treatment of an eating disorder must address both the psychological and physical aspects of the disorder. Many insurance companies have mental health benefits (also known as behavioral health benefits) under a separate umbrella from their physical health benefits. The recent passage of mental health parity means that, legally, mental health must be covered on par with physical health. However, the separation can still exist, and behavioral health coverage may even be contracted out to a separate company (AKA carve outs) under the supervision of the insurer. All of this combines to create a confusing patchwork array of coverage and rules that can make obtaining proper care for your loved one difficult. Common reasons for denying insurance benefits include:

  • Weight – typically, that it’s not low enough
  • Treatment history:
    • Patient has not tried a lower level of care prior to requesting a higher level of care
    • Patient’s condition is chronic and past treatments at the requested level of care have been ineffective
  • Lack of progress in treatment
    • Patient is not restoring weight
    • No reduction in behaviors
    • Lack of motivation in treatment
    • Inconsistent attendance
  • Absence of behaviors – treatment is going well, and it may be appropriate to step down in level of care
  • No medical complications

Difference between PPO & HMO

HMOs tend to be more affordable, but you’ll usually get less coverage and more restrictions. PPOs are more flexible and provide greater coverage, but come with a higher price tag and probably a deductible. Here’s a summary of some of the key comparison points.

HMO PPO
Access to a network of doctors, hospitals and other healthcare providers
Ability to see the doctor you want without a PCP to authorize treatment
Referral from a PCP not needed to see a specialist
Low or no deductible and generally lower premiums
Coverage for medical expenses outside the plan’s network Possibly

 

Which Policy First?

COB (Coordination of Benefits): The process by which a health insurance company determines if it should be the primary or secondary payer of claims for a patient who has coverage from more than one health insurance policy.  The National Association of Health Insurance commissioners rules are as follows though families always need to check the specifics of their policies:

  • If the Policy Holder is the same for both contracts, the plan that covers the policyholder as an active employee is primary.
  • If the policyholder has the same employment status (active/retired) under both plans, the plan with the earliest effective date is primary.
  • If the Policy Holder is the spouse or domestic partner, the plan that covers the policyholder as an employee is primary. The spouse’s is secondary.
  • If children are covered under more than one policy and the parents are married or living together, the policy of the parent whose birthday (month and day) is earlier in the year is primary.
  • If the parents share the same birthday (month and day), the policy with the earlier effective date is primary.

If children are covered under more than one policy and the parents are divorced or living apart:

  • The policy of the parent that the court has made responsible for health care insurance is primary.
  • The policy of the parent who has custody of the children is primary.

If the court has not placed responsibility on one parent to insure the children and the parents have joint custody:

  • The policy of the parent whose birthday (month and day) is earlier in the year is primary.
  • If the parents share the same birthday (month and day), the policy with the earlier effective date is primary.

When children are covered under three or more plans, coverage is determined in this order:

  1. The policy of the primary parent
  2. The policy of the primary parent’s spouse
  3. The policy of the other parent
  4. The policy of the other parent’s spouse

 

 

Our Mission

Providing critical resources and support to those navigating a loved one's path to full recovery from an eating disorder