Module 10                         Return to the Beginning

Insurance Information Exchange
(Enrollment, Membership and Registration)

You Should Know This

Information is the lifeblood of insurance. All insurance business processes, from plan sale to the final report of claims payments, depend on an accurate exchange of information between the member, the group, the insurer and the providers of care. Insurance information is obtained first from paper enrollment forms and then entered into the managed care plan membership computer system. When a member uses health services, health facilities gather and enter the patient’s insurance information into a medical billing computer system. To complete a successful insurance transaction the information gathered and transmitted as a claim (a bill for medical services) by the medical facility must exactly match the demographic and insurance information maintained by the insurance plan. When the patient, the medical facility or the insurer, makes a mistake in gathering, recording or transmitting information, the whole insurance process is disrupted and claims payment is delayed.

Key Points

Open Enrollment Period - Groups enroll in insurance plans for a period of one calendar year. Every year, the group must offer an open enrollment period when employees may choose to join company sponsored health insurance plans, change their status or select a new plan if several are offered. Prior to open enrollment, a sales representative from the plan informs the group about new rates and plan options. New employees, hired before or after the open enrollment period, are enrolled when they become eligible.

Group Representative or Benefits Administrator - The individual responsible for maintaining membership records and paying premiums for groups enrolled in the plan. In an employee group, the representative is usually a staff person in the Human Resources Department. The Benefits Administrator is responsible for tracking eligibility, enrolling members into the plan, communicating plan changes to members, tracking and reporting changes in member status, paying premiums, working with the plan to resolve employee insurance problems and complying with those federal and state regulations that govern employee benefits.

Eligibility - Criteria for enrollment in an insurance plan as defined by the plan's underwriting guidelines. Insurers provide their groups with a set of eligibility requirements for plan participation. For example, most plans require a certain minimum number of hours of employment before an employee becomes eligible for coverage.

Subscriber - The holder of the insurance contract with the managed care plan; sometimes also called "the insured."

Dependents - Members of the subscriber's family who are eligible for coverage of medical expenses under the subscriber's insurance plan. The term "dependent" is defined in the subscriber agreement.
 

                           ! Issue Alert !

                         Student Dependents

Managed care plans have an age cut-off for dependent eligibility (usually age 18 or 19). After that time, children are no longer eligible to be covered under their parents' plan unless they are full time students. If the student is able to provide proof (usually in the form of a letter from an accredited school or college) that he or she is a full time student, eligibility is extended to age 22 or 23. A new letter verifying student status is usually required every calendar year.

Member Application - A form that constitutes an agreement between the subscriber and the insurer. A prospective member completes and signs the membership application and returns it to the benefits administrator. Once the form is complete, the administrator sends the application to the insurer with a premium payment. Components of the membership application include:

 Plan Selection - If the group offers more than one insurance option.
 Demographic Information - For each family member including member name, address, age, sex and social security number.
 PCP Selection - In gatekeeper plans, members are asked to indicate their choice of a primary care physician on the application form.
 Signature - The signature is the member's official agreement to release medical information to the plan and to abide by plan rules.

Health Statement - Some plans require potential members, who are not part of a group (individual members), to complete a health statement. This document is a brief description of the individual's medical history. The insurer's underwriting department reviews this form, estimates member risk, and makes a decision to sell or deny insurance to this individual.

Steps in the Insurance Information Exchange

Member	Group Representative/ Benefits Administrator	HMO Member Services Department	Health Facility
Complete and sign plan enrollment form.  Pay cost share portion of premium. Select primary care physician from plan network. (in gatekeeper plans)	Check and complete enrollment form with group information.  Send enrollment forms to plan.  Send premium to plan.  Administer employee adds, terminations or demographic changes.	Enter member information into plan membership system.  Enter effective date into plan computer system.  Assign ID number.  Send member ID card and plan documents.	Gather member information at medical visits.  Copy ID card.  Obtain patient signature.  Enter patient and insurance info into medical billing system.

Group Enrollment - The insurance process begins when a group member selects a managed care plan and completes and signs an enrollment application. The group benefits administrator or plan representative completes the group information on the application and forwards it to the plan with the appropriate premium payment.

Membership Enrollment at the Managed Care Plan - The enrollment process activates the individual's membership in the plan. The new member is enrolled when the plan membership department enters member data into the plan computer system. The membership department also manages member information changes and changes in plan selection. When a member leaves a plan, the department processes the termination. Termination is also called disenrollment. Components of the enrollment process include:

 Assignment of a member identification number - Many plans use the subscriber's social security number with an additional number at the end (suffix) or at the beginning (prefix) to indicate position in the family. For example, the subscriber would be 01, the spouse 02, the oldest child 03, etc.

 Assignment of an effective date - The effective date is the first day that the member is eligible to receive coverage. The termination date is the date that coverage ends.

 Linkage of member to group information - Each insured group has a unique identification number called the group number. This group number is linked to the ID numbers of the group’s members in the plan computer system. The group number is used for premium billing and for tracking utilization.

 Mailing plan documents and cards to new members. Plan documents include:

• Member Insurance ID card - The card that identifies the patient as a member of the health plan. It contains the patient name, displays the insurance ID number, the plan name, and the co-pay for office visits. Many ID cards also contain additional information such as a phone number to call for hospital admissions authorization (see below for a sample member ID card).

Click Here to See an Example of a Typical Insurance Card (Opens a New Window)
 

Additional plan documents:

• Service agreement (also called a subscriber or member agreement) - A document that describes the terms of the legal contract between the policy holder (subscriber) and the plan. The service agreement lists and explains benefits, exclusions and utilization management rules, usually in formal legal, language. The claims department uses this document as the ultimate authority for claims payment or denial decisions.
   
• Plan description or plan summary - A short document that summarizes plan rules and coverage. Usually written in less complex language than the service agreement and intended for member use.
   
• Provider directory - A complete listing of participating health professionals and facilities. See the NETWORK section page 23 for an example.
   
• Mail order prescription materials - Instructions and envelopes are usually mailed as a separate package from the prescription drug service vendor.
   
• Member handbook and member newsletter - Many plans publish short handbooks that contain a summary of plan rules in lay language. The newsletter is generally used to describe plan services or to update members on changes in plan rules. Some plans offer update information for members only on their websites.

Registration - The medical provider’s process of gathering patient personal and insurance information. The key steps in the registration process include:

 Patient check-in and identification.

 Completion of a paper registration form or providing verbal registration information to office staff.

 Identification of a guarantor (person responsible for the patient's bills) and signature of a financial responsibility statement. The signing of this form allows the medical facility to bill the patient directly for services not paid by insurance.

 Copying the insurance card, back and front. The back of the card is copied to obtain the plan address for claims submittal.

 Verification of eligibility (optional) - Health care facility staff may check with the insurer to verify that the patient is actively enrolled and eligible for coverage. Some insurers and state Medicaid programs offer electronic eligibility checks via credit card machine or computer.

 Entry of patient personal, demographic and insurance data into the medical facility billing computer system. The system usually assigns a unique account number to each new patient. This account number is used by the facility to establish a patient account, to bill and to track payments.
 

                           ! Issue Alert !

                         Accurate Registration

The demographic and insurance information obtained by the medical facility and used in claim submittal must exactly match the demographic and insurance information in the insurer's computer system. Missing or erroneous registration information is a major cause of claims denials and may result in thousands of dollars in lost revenue to the provider.

 

 Checkpoint

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A. Group representative B. Insurance company Membership or Customer Service Department C. Medical Office D. Health Plan Documents
Where to Get Help:
1.) A member receives an insurance card on which his last name is spelled incorrectly.		B
2.) A 12 year old boy needs a camp physical. His parents don't know if the physical is covered by their HMO plan.	or	D or B
3.) The 22 year old son of an HMO subscriber is a full time college student. The plan provides coverage for students until age 23 with proof of student status. The family receives notification that his membership has been terminated even though he is still a full time student.		B
4.) A patient receives a bill from his physician's office indicating that a claim was sent to his old insurance plan. The claim was denied and now the doctor is seeking payment from the patient.		C
5.) A group enrolls new members for January 1. The completed forms are sent to the plan by December 15. By January 10, members of the group still have not received their membership identification cards and several members have physician appointments in the next week.	or	A or B

In Real Life

Cardiotherapy and Fitness has changed HMOs several times in recent years to reduce costs. Most recently, they switched from United Independent to Premier Health. During the first month of their enrollment, Premier Health merged with Medcount, another HMO. The merger created serious confusion in the Membership Department as the two companies struggled to combine their computer systems and numerous employees quit in anticipation of layoffs. Cardiotherapy and Fitness employees did not receive identification cards on the first day of their enrollment as the newly merged HMO had a huge backlog of enrollment forms to enter.

Some physicians and pharmacies insisted on payment at the time of service since without ID cards or member numbers, claims could not be submitted for payment. After fielding a flood of complaints from employees, the group administrator insisted on obtaining a faxed certificate of eligibility for company employees from the Membership Department. Within one month of enrollment, all employees had received their cards but were still coping with a new network that did not contain all of their old primary care physicians.

Think About It

The manager of an Internal Medicine group practice has done an analysis of claims rejections in the last 6 months. She has found that inaccurate registration information is the most common source of claims rejections. These errors consist of wrong ID numbers, outdated insurance information, and missing claims department addresses. What steps might the manager take to understand and fix the registration problems? How could staff help?

She should observe reception staff to determine whether they are conducting registration properly. She might give each receptionist a difficult registration and observe as it is completed. She might also collect data on which errors are most common, when they occur, and who registered the patient, for clues on where, and with whom, the problem originated. She could conduct a refresher class for all receptionists.

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