Commercial Insurance and Medical Billing and Coding

By Karen Smiley

Most commercial payers, or insurance companies, offer several different levels of coverage to their members, ranging from health maintenance organizations (HMOs) to preferred provider ­organizations (PPOs) and point‐of‐service groups (POSs). You’ll also run into exclusive provider option plans, high deductible plans, discount plans, and ultra‐specific plans that provide only prescription coverage, vision coverage, or other specialized coverage.

All of these various flavors of commercial insurance come into play as your claims process.

The commercial insurance world revolves on an axis of variety. From PPO to HMO and in between, a commercial insurance plan exists for just about every situation. Some of these plans are even combinations or iterations of other existing plans.

No matter what plans you work with, though, the bottom line is that your provider’s bottom line is your ultimate priority. For that reason, one of your top priorities should be to know which commercial insurance products are included in the provider contract, the reimbursement level associated with each product, and the eccentricities of each commercial insurance plan you encounter.

Noting big names in commercial insurance

You probably already know the names of some of the most common insurance companies. How can you not? Healthcare and the insurance industry are constantly popping up in the news, and many of them run huge PR campaigns that blanket everything from billboards to your TV.

These commercial insurance companies basically underwrite the policies or group plans that patients and employers pay for. Some of the larger, more well‐recognized players in the commercial insurance game are UnitedHealthcare, Aetna, Cigna, and Coventry. These companies are nationwide and offer all types of healthcare plans for their membership.

Another big dog on the commercial insurance block is BlueCross BlueShield (BCBS). This commercial group may, in fact, be the largest of the bunch. The Blue Cross Blue Shield Association has 38 different companies that operate independently yet allow full reciprocity among plans. In other words — and in most cases — if a provider is contracted with a local Blue Cross association, the contract is honored by out‐of‐state BCBS plans.

This reciprocity makes life a bit easier for BCBS patients who may need care outside of their local zones. Specifically, a provider contracts with the local BCBS company, known as the local plan. Some companies that operate in different locations around the country get a plan that’s local to the company but underwritten by BCBS affiliates that cover employees who live elsewhere.

Claims are submitted to the local BCBS, where they’re priced based on the provider’s contract. Then they’re sent to the sponsoring BCBS company for payment. This way, the patient gets covered, no matter what.

Because commercial insurance companies are the bread and butter of the industry, providers contracted with the major commercial insurance ­companies have a solid patient base. As such, you can expect to spend a majority of your time working with these payers.

Working with the major players

As the coder, you and all members of the office staff who are part of the revenue cycle should be familiar with the provider’s commercial payers. Specifically, you need to know the following:

  • Where the majority of commercial insurance accounts receivable are located. This info lets you know where the accounts receivable is based.

  • How much revenue is associated with each payer. This info lets you know where the accounts receivable (outstanding payments) are to be found.

  • The eccentricities associated with each payer. These include things such as timely filing requirements, timely payment obligations, and the other obligations outlined in each payer’s contract.

Because each commercial payer is different, always, always follow the pertinent contract as you move claims through the coding process. The payer contract is the final word on what you can and cannot code, so stick to it like glue.

Although you must bill each carrier as obligated by the individual contract, varying the charge schedule for different payers is unethical. Suppose, for example, that the fee for a certain procedure is $5,000, and most payers have a reimbursement allowance based on the CPT (procedural) code, but one contract pays a percentage of the billed amount. In this situation, changing the fee when you’re billing the carrier that pays a percentage of the amount isn’t ethical.

As a coder, you should not bill carriers different amounts unless a contract that obligates billing according to a specific formula stipulates that you do so.