When the provider agrees to accept whatever the patients insurance pays for a claim as a payment in full this is known as?

An Advanced Beneficiary Notice is a form advising you that tests performed by your doctor may not be covered by Medicare. The purpose of the ABN is to let you know in advance that these services may not be covered and to advise you that you will be responsible for payment of these charges.

Assignment of Benefits

Assignment of Benefits means the physician agrees to accept payment from an insurance company first and then bill the patient for any after-insurance balances. In this arrangement, the patient has assigned rights for payment, via signature, to the physician for services rendered.

Billing Statement

A summary of current activity on an account.

Birthday Rule

The Birthday Rule is endorsed by the National Association of Insurance Commissioners (NAIC). The Birthday Rule states that the plan of the parent whose date of birth (month and day) falls earlier in the calendar year is the primary plan for dependent children. For example, if the father’s birth date is March 4 and the mother’s birth date is January 22, the mother’s plan would be primary. If both parents have the same birth date, the health plan in effect for the longer period of time will be primary.

Claim

The information billed to the insurance company for services provided.

Co-Insurance

Co-insurance is an arrangement by which the patient and the insurance company share in the payment of a service. Co-insurance takes effect after the approved deductible amount has been met.
For example, assigned Medicare benefits have a 20 percent co-insurance. This means that after the approved deductible amount has been met, Medicare pays 80 percent of the approved amount and the patient, or the patient’s supplemental insurance pays the remaining 20 percent. The deductible in most cases becomes the responsibility of the patient.

Coordination of Benefits

Coordination of Benefits is the determination of benefits payable under more than one group health insurance so the insured’s total benefits do not exceed 100 percent of the medical expenses.

Deductible

The portion of eligible (covered) expenses that you must pay each year before coverage begins.

Eligible Charges (Allowed Amount)

The maximum dollar amount allowed for covered services rendered by participating providers and facilities or by nonparticipating providers and facilities. Deductibles and coinsurance amounts are calculated from eligible charges. Participating providers and facilities accept this allowed amount as payment in full for covered services. Nonparticipating providers and facilities may not accept this amount as payment in full for covered services.

Evidence of Coverage (EOC)

A written guide from your health plan that explains what the plan does and does not cover and the rules you must follow for getting care.

Explanation of Benefits (EOB)

A statement provided to the insured by an insurance company explaining how the claim was processed.

Flexible Spending Account

A short-term savings account that lets you set aside pre-tax income and use it to pay for health care or child care during the year.

Guarantor

The person responsible for paying the bill.

Insurance Deductible

An insurance deductible is a minimum amount the patient must pay before the insurance company will pay anything toward charges. Usually the deductible needs to be met and paid by the patient each year.

Insurance Copay

An insurance copay is the amount of money or percent of charges for Basic or Supplemental Health Services that a member is required to pay, as set forth by their health plan. This is often associated with an office visit or emergency room visit. For example $5, $10 or $25.

Non-Participation

Non-participation means the physician does not participate in the patient’s health plan; therefore, the patient is billed directly for services and is responsible for payment in full.

Open Enrollment

The period each year during which you can join a plan or change plans if your employer offers more than one plan.

Out-of-Pocket Maximum

The total amount of eligible charges each year payable by insured directly to providers or facilities; 100 percent of eligible charges will be paid during the remainder of the year once the applicable out of pocket maximum is satisfied.

Payer

A third-party entity (commercial or government insurance carriers) that pays medical claims.

Physician Participation

Physician participation is a method by which a physician agrees to accept an insurance company’s payment level as payment in full. The bill is sent directly to the insurance company with payment made directly to the physician. This excludes amounts considered patient obligation under the patient’s coverage plan. For example, co-insurance, deductibles, and non-covered services would still have to be paid by the patient.

Pre-Approval

Permission from your medical group or health plan to get a service that requires a referral from your doctor. Also called authorization or prior-authorization.

Pre-existing condition

An illness or injury you have before you join a health plan.

Premium

What your health plan charges each month to maintain your health care coverage.

Primary Insurance

The insurance primarily responsible for the payment of the claim.

Prior Authorization/Precertification

A formal approval obtained from the insurance company prior to delivery of medical services.

Secondary Insurance

The insurance responsible for processing the claim after the primary insurance determination of benefits.

Subscriber

The person who holds and/or is responsible for the medical insurance policy.

Supplemental Insurance

An additional insurance policy that processes claims after Medicare reimbursement.

Yearly Deductible

The amount you must pay each year before your health plan starts to pay. Also called annual deductible.

Yearly Out-of-Pocket Maximum

The most you have to pay for most health care services in a year. In some cases, you may still have to pay copays for some services.

Medicare compliance in Public Hospitals is an in-depth topic. To help you find the answers you are looking for, we have compiled an FAQ to complement the content below.

Patient election status and practitioner billing options

Patients are public patients unless they elect to be a private patient. This decision may be based on their health insurance cover and the type of hospital they attend.

A public patient in a public hospital

Public patients in a public hospital should be treated free of charge
If a patient is admitted to a public hospital they are treated as a public patient, unless they elect to be treated as a private patient. This decision needs to be based on informed financial consent.

Public services provided to public patients are funded under the National Health Reform Agreement (NHRA).

A public patient in a public hospital is treated free of charge, if:

• they have a current Medicare card
• the treatment is deemed clinically necessary.

When treating a public patient, no claims should be made against the Medicare Benefits Schedule (MBS). This is regardless of whether the service is bulk billed or not (a bulk billed service is not a public service).

All of a public patient's associated care is the responsibility of the hospital, including pathology and diagnostic tests.

Practitioners should not refer public patients for private MBS services. This includes tests done before patient admission and follow-up appointments related to the episode of care.

A private patient in a public hospital 

Patients can receive private services in a public hospital
Patients can receive private (MBS and private health insurance-rebated) services in a public hospital where the hospital arrangements support this type of service. This helps to ensure the sustainability of the health system.

• A patient can choose to be treated as a private patient in a public hospital, after providing informed financial consent.
• The patient is entitled to MBS rebates for attendances.
• Practitioners with a right to private practice must ensure arrangements do not involve the practitioner or hospital being paid twice for a service.

A private patient in a private hospital

• A patient's visit will likely be funded through a mix of private health insurance and MBS arrangements.
• It is unlikely (noting that practitioners in private hospitals can see public patients) that MBS claiming for a private patient in a private hospital also involves a public hospital payment.

A public patient in a private hospital

• Private hospitals can contract out to provide services to public patients.
• Record keeping for these patients is carefully managed.
• A patient's election status is clearly tracked, including if they elect to change their status.
• MBS claims must not made for services funded as public services.

Patients should be given the choice to receive public or private services
Patients should be given the choice of whether they receive public or private services as part of informed financial consent. Patients should not receive preferential treatment – such as earlier access to the same health practitioner in the same hospital – based on this choice.

Commonwealth Health Insurance Act 1973

Eligibility for Medicare is governed by the Health Insurance Act 1973.

Section 19(2) of the Health Insurance Act 1973 states that ‘unless the Minister otherwise directs’ a Medicare benefit is not payable in respect of a professional service that has been rendered by, or on behalf of, or under an arrangement with:

• the Commonwealth
• a state or territory
• a local governing body, or
• an authority established by a law of the Commonwealth, a law of a state or a law of an internal territory.

This means, unless the Minister provides an exemption, patients can't claim a Medicare benefit for a professional service if the service has already been paid for through another mechanism or arrangement with the Australian Government or a state or territory government.

Health practitioners should actively manage referrals, requests and claiming arrangements to ensure services are not paid for twice through public hospital and MBS funding.

The variety and complexity of working arrangements in a public hospital can lead to inadvertent inappropriate claiming.

Health practitioners should consider:

• the public or private election status of a patient (it is particularly important that this is established where referred or requested services, imaging or testing is provided)
• whether the practitioner has rights to private practice, or is receiving payment for the service from the public hospital
• whether the service could be part of pre-care (such as tests prior to admission) or aftercare (follow-up) relating to a public episode that should be funded as a public service.

National Health Reform Agreement (NHRA)

Clause G17 of the NHRA outlines that public patients should not generate charges against the Medicare Benefits Scheme (MBS).

To claim a professional service rendered to a patient in a public hospital as a Medicare benefit, all of the following criteria must be met:

• the patient has elected, in writing, to be treated as a private patient
• the patient is eligible for a Medicare benefit
• any referrals the patient has are valid for Medicare and NHRA purposes
• the MBS item number is billed correctly (and only for the services rendered by the individual provider)
• when the medical service (or MBS item) delivered is billed under Medicare. The service must not be partly or fully paid under an alternative arrangement (such as NHRA or WorkCover)
• as a healthcare provider, you must have rights through a hospital agreement to treat the patient under private practice. You can only bill Medicare if the patient has elected to be a private patient under admission
• the patient has been referred to a named specialist (if relevant) who is exercising their rights of private practice and the patient has chosen to be treated as a private patient.

Patient election – movement between public and private

Under the NHRA, if an eligible patient is admitted to a public hospital, they have the right to be treated as a public patient.

In writing, through informed financial consent, a public patient can elect to be treated as a private patient. Once the patient has chosen to be treated as a private patient, they cannot change back to a public patient unless unforeseen circumstances occur. Section G30 of the NHRA outlines unforeseen circumstances, such as:

• complications requiring extra procedures
• extensions in the patient's length of stay beyond what was originally planned by a health professional
• a change in the patient's social circumstances (such as the loss of a job).

If a patient changes their status, it is effective from the date of change. Once they have chosen to change from a public to a private patient, all services provided to them are claimable under Medicare. This is only in effect from the point of private election onward for the duration of their hospital episode.

Any services that have been rendered to the patient before becoming a private patient are not eligible for Medicare payments.

Case studies for billing Medicare in a public hospital

Practitioners should be cautious not to generalise the answers given in these case studies. Practitioners are ultimately responsible for Medicare claims made against their provider number, including whether they are compliant. When in doubt, practitioners should seek advice.