Third Party Programs

Understanding third-party insurance programs

A growing number of medical and nonmedical insurance plans cover eye care services and materials delivered by doctors of optometry. As third-party programs continue to proliferate, the rules, regulations and paperwork requirements will play an increasing role in your daily activities in practice, impacting your patient load, your billing procedures and your fees.

The third-party system is based on the symptom, diagnosis and treatment model used by physicians, putting the emphasis on professional services rather than on materials. Eyeglasses and contact lenses still play an important role, but the primary focus of third-party reimbursement is on medical services covered by insurance.

A review of the basic information needed to comprehend third-party insurance programs

Types of providers—A variety of third-party programs provide benefits for eye care services. There’s private, pre-paid insurance and publicly funded health care services like Medicare and Medicaid. Many patients receive medical eye-care benefits through their employers, plus health maintenance organizations (HMOs) and preferred provider organizations (PPO) — both referred to as "managed care" programs.

Major medical benefits versus vision care benefits—When insurance carriers pay eye/vision care benefits, the funds come from one of two sources: major medical programs and vision care programs. Insurance companies use your diagnosis to determine which source of money will be used and which benefits are allowable.

Participation agreements—When you enroll in a third-party program, you’ll be required to sign an agreement. Make sure you read and understand any contract or participating agreement.

Filing claims—When you examine or treat a patient covered by a third-party program, you will have to file a form requesting payment from the insurer. More and more vision plans and thirdparty programs require filing electronically via computers. Each plan will have its own filing requirements and procedures which must be learned. Here are some basics to help to you get started focusing on codes for the HCPCS (Health Care Financing Administration’s Common Procedure Coding System).:

• E/M codes: These are known as Current Procedural Terminology codes (99000) used to report evaluation/management services provided in the physician’s office or in an outpatient or other ambulatory facility. The E/M codes are determined by the complexity of three components: the history, examination and medical decision making. For definitions of the key components, see Evaluation and Management Service Guidelines in the American Medical Association’s Physicians Current Procedural Terminology.
• Ophthalmological codes: These are 92000 codes used to bill general ophthalmological services, such as comprehensive examinations, in addition to specific procedures such as gonioscopy, sensory motor examination, extended ophthalmoscopy and visual fields.
• Surgical codes: For surgical procedures see Surgery, Eye and Ocular Adnexa, 65000 CPT codes.
• HCPCS Supply Codes: This group of codes are national codes not found in the CPT system and they cover materials (frames, lenses, contact lenses and prosthetic devices).
• ICD Codes: In addition to HCPCS codes, you’ll use International Classification of Diseases (ICD) Codes. These codes are used for reporting diagnoses and diseases. Medicare and Medicaid, insurance and managed-care systems require the use of ICD codes for reporting diagnoses and diseases.

Medicare reimbursement —To gain a better understanding of Medicare procedures, contact your affiliated optometric association or the Medicare carrier in your state. Obtain a copy of the Medicare B Manual and read it thoroughly.

PAR vs. NON-PAR in Medicare—Each year, you’ll have to decide if you want to be a participating provider (PAR) or a non-participant (NON-PAR) in Medicare. The following list summarizes the features of both options:

Non-participating

• Can collect payment at the time of service.
• Will be required to submit claims for the beneficiary.
• May not bill amounts for services that exceed the Medicare Maximum Allowable Actual Charge (MAAC) that the carrier calculates for individuals. Having charges controlled makes it difficult to raise the customary allowable.
• Medigap insurance does not cross over automatically. The patient must submit on his/her own. A major inconvenience for the patient if the provider does not assist.
• Medicare payment and Explanation of Benefits (EOB) goes to the patient, not to the provider of services.
• Medicare allowable fees (amounts paid) are lower than those for participating doctors.
• Claims from non-participating doctors do not receive priority processing.

Participating

• Receives payment and EOB directly from the carrier.
• Must submit the claim for the beneficiary.
• Claims get priority processing.
• Name is printed in the Medicare list of participating doctors, which is readily available to senior citizens.
• Patient’s Medicare supplemental insurance crosses over automatically when properly listed on the claim form and generally payment will go directly to the provider.
• The doctor agrees to meet Medicare’s allowable fees as payment in full on all claims. Doctor is allowed to collect only the 20 percent co-insurance amount and the deductible from the patient.

Using a superbill with third-party programs—An essential step to streamline your interactions with third-party payors is to use a well-designed superbill that lists the procedure and diagnosis codes most often used in your practice, offering a shortcut to third-party billing.

Completing claim forms—Be sure that you’ve used the correct diagnostic and procedure codes as specified by each carrier. Make sure your provider information (social security number, employer identification number, etc.) is correct and that you have signed the claim form. For detailed information on completing claim forms, refer to AOA’s "Manual on Completion of Insurance Claim Forms."

Handling rejected claims—The most common reasons for rejected claims are missing information, non-covered services, unnecessary medical services, use of incorrect terminology or code and discrimination.

Additional resources—AOA Codes for Optometry include procedural, diagnostic, material andformulary codes in a three-ring binder. To order, contact the AOA Member Resource center at memberservices@aoa.org or call 1-800-262-2210.