Private Insurers

Medicare Basics and Private Health Insurance Cheat Sheet

Hoxton MPM provided training at all of the RACS Prep for Practice events over the past two months.

Overwhelmed by a barrage of new learning, we decided to publish our cheat sheet to Medicare and Private Health Insurance Billing.

Of course the expert team at Hoxton help you manage all of this, so as a client you may not need to remember it all!

These services, registration and administration support are all provided by our Practice Start-Up Service and Medical and Surgical Billing Service 

Medicare underwrites health service delivery in Australia.

To participate as a specialist in the Medicare system, you need:

Medicare Benefits Schedule

The funding that is available is outlined in the MBS benefits schedule (schedule of fees).

This schedule is arranged according to “items of service”. For each item (of service) the schedule records:

  • A definition
  • A number (item number)
  • A fee (Medicare scheduled fee)
Medicare will pay
  • 75% of Medicare scheduled fee for in-hospital items
  • 85% of Medicare scheduled fee for out-of-hospital items
In-hospital MBS items have different classifications:
  • Type A
    • Overnight stay in major hospital
  • Type B
    • Procedures that occurs in Day-Hospital (<24 hour admission)
  • Type C
    • Procedure normally not done in hospital
  • Certified Type C
    • Procedure that may need to be done in hospital
    • Requires documentation for approval
Submission to Medicare – always require patient approval

Generally done electronically

  • Via ECLIPSE from Medical Software
  • May be done via PHI
  • Can be done through payment portals

To be paid, a claim requires:

  • Provider number of claimant
  • Referral from other doctor (including active Provider Number)
  • Date
  • Item numbers
  • In some instanced specific details

Unpaid, or rejected claims:

  • Can be up to 15% of claims
  • Reasons vary
    • Out of date referral
    • Referring changed practices
    • Incorrect item numbers
    • Multiple claims for same item
      • Same day
      • Within exclusion period (e.g. annual items)
      • 2 or more of the same item (e.g. multiple excisions on same day)
  • Need to be corrected and re-submitted
Responsibilities

Under the Health Insurance Act 1973 doctors are legally responsible for services billed to Medicare under their Medicare provider number or in their name.

Medicare have sophisticated ways of detecting possible inappropriate practice or incorrect claiming:

  • monitoring and comparing the claiming profiles of health professionals to identify inconsistencies
  • identifying unusual patterns of item usage and item combinations
  • identifying and applying patterns learned from previous cases of non compliance
  • investigating tip offs

Private Health Insurers

PHI Works along side Medicare
  • Private insurers pay a minimum of 25% of the MBS scheduled fee for in-hospital items
  • Private insurers pays Doctors and Hospitals
Generally Private Insurance covers
  • In-hospital treatment
  • Procedures
  • Prosthetics
  • Rehabilitation
  • Allied Health
  • Health maintenance

Patients will pay excess (e.g. the first $500 of admission)

Substantial PHI Reform is occurring, moving us towards four tiered system:
  • Gold Cover
    • Covers everything
  • Silver Cover
    • Excludes some things (e.g. IVF, pregnancy)
  • Bronze Cover
    • Substantial exclusions (e.g. some prosthetics)
  • Basic Cover
    • “Junk Cover” really restricted coverage
PHIs have individual contracts with Hospitals
  • Patient may not be covered for the hospital you work at
  • Insurer would not pay hospital, may not pay doctor
PHIs have individual contracts with Doctors
  • You must register with an Insurer
  • PHIs set their own Schedule of Fees
  • You must decide ONE way to charge for clients of insurer
    • No Gap
      • You charge fee according to PHI Schedule of fees
        • Easier to claim
        • Faster payment from PHI to you
    • Known Gap
      • You charge fee yo to agreed limit set by PHI
        • A little more difficult to claim
        • Slower payment from PHI to you
    • Gap
      • You charge whatever you like
        • More difficult to claim
        • More difficult to reconcile
        • Patient gets lower rebate
You require informed financial consent from the patient
  • Fair process
  • Involving patient
  • Discussion of the options
  • Meticulous record keeping
Develop a strategy for your fees
  • Whole of practice approach
  • Consider administration burden
  • Price your expertise
  • Start with AMA Fees List
Rejections
  • Can amount to $10k’s per year
  • Reasons vary
  • Same as Medicare
  • Dependent on other Providers
    • Assistant and Anaesthetic items
  • Multiple claims for same item
    • Same day
    • 2 or more of the same item (e.g. left & right procedures)

Advice

  1. Monitor your Billings
  2. Be aware of process
  3. Invest time and energy to follow paper trails
  4. Outsource to Hoxton Medical and Surgical Billing Service and be assured that you’re receiving full service, end to end billing.
  • Maximised return
  • Minimises costs
  • Reduces need for in-house oversight
  • The whole service, including access to Smartphone App costs 3% of receipted claims

Remember our friendly team are always able to help.

Call now for free advice 03 8060 4277