Capitation

This term can have many meanings. Capitation represents a set dollar limit that is paid to a provider by an insurance company for treating their members. This set dollar limit can be based on a monthly dollar amount, a per patient dollar amount or a per claim dollar amount. The insurance company can say that they will pay the provider $3,000 per month. This can equate to $10 per day. If the provider treats 10 patients per day, the provider makes $1.00 per patient per visit. The provider may be required to submit a claim but there won’t be any additional payment on the claim. The payment per claim could be $90 per claim. This means you send a claim and each claim should be paid $90 regardless of how many codes are submitted. With a per claim payment, the biller must keep a close eye on the claim payments, this is because some insurance companies will pay the claim less than the amount agreed upon in the contract. This will require you to appeal the incorrect payment and continue until it is paid correctly. Before agreeing to a capitated amount, the provider should make sure the capitated amount is fair and reasonable. This is something that will be discussed more in another document on Insurance Contracts.

Carrier: 

This is nothing more than a shorter name for an insurance company. For example. First Coast is the local carrier for Medicare Part B for Florida and Georgia. Anoher example would be, $75 is the usual and customary reimbursement amount for the carriers in our geographical area. In simplistic terms, all the insurance companies in our area pay $75 for a claim.

Claim: 

A written request by a patient, or insured member submitted to their health insurance carrier, to have their health benefit paid. If a provider is contracted with the patient’s insurance company, the provider has agreed to send the claim on behalf of the patient or member. If the Medicare care provided is a benefit allowed under the patient’s contract, then the benefit is paid. How much is paid depends on the patient’s contract or provider’s contract The patients contract may require the carrier to pay a percentage of their usual and customary reimbursement amount with the patient paying the balance of the usual and customary in addition to any amounts applied to their deductible or the difference between the provider’s charges and the insurance company’s usual and customary allowed amount. The medical biller should have knowledge of how the carrier pays the claim per the patient’s contract and per the contract between the provider and carrier. If the insurance company sends payment of the claim to the provider, the provider applies the payment to the debt owed by the patient. The patient may have a secondary insurance which might pay any deductibles and/or the coinsurance amounts and/or the difference between the charges and payment. This would entail sending a claim to the patients other insurance carrier. When sending a claim to the secondary carrier, you will need to attach a clean EOB from the primary. A clean EOB means you have removed any reference to other patients listed on the EOB. You do this as part of HIPAA privacy. The ways to do this could be to white out the other patient information or using a black marker, then making a photocopy so you cannot see through and view other patients private and personal health information. I use paperport, a scanning program. Using paperport, I can scan the original EOB, then delete any other patient information. Once removed, I can print the changed EOB so that only the current patient’s information is shown. There is no need for white out or a black marker. I also have an undamaged original EOB if needed. To finalize, claims can be sent by paper using a CMS 1500 form for outpatient and provider services. Hospital inpatient claims can be sent using a paper UB04. Instructions on each form are found in a separate publication.