Financial & Insurance

Financial and insurance issues can be stressful and confusing for you and your caregivers. It is important to create an organized system for managing this aspect of cancer care. By educating yourself about insurance benefits and keeping organized financial records, you may prevent financial dilemmas, thereby preventing unnecessary stress.  Here are some general tips on insurance, a glossary of common insurance terms and information about medical costs and tax returns.

Consider using a binder as your filing system to organize your healthcare records and financial information. Keep a record of all phone conversations with your insurance provider.  In addition, some patients find it helpful to designate a caregiver or family member to keep track of all insurance/financial information.

Insurance Tips
Understanding Insurance Terms
Expensing Medical Costs on Your Tax Return 
 

Insurance Tips
Medical insurance and bill management can be one of the most frustrating aspects of cancer care for you and your caregivers.  Importantly, most hospitals and clinics will provide a patient services representative to assist you.  You should identify these individuals and seek help from them whenever necessary.

Get the maximum benefit from your insurance policy!

• Get a copy of your policy and find out exactly what your coverage includes.  Your employer or insurance company can help you with this.
  
• Call your health insurance provider to clarify any questions that you may have. Also, make sure you are aware of any possible coverage issues before you start treatment.
  
• Talk to your healthcare team to request that insurance coverage of any procedure, test or treatment be verified prior to you receiving them. If you healthcare team is unable to provide this service, they should be able to identify an alternative resource to assist you.
  
• Keep careful records of all your covered expenses, claims, denials and appeals throughout the claims process.  Do not throw any correspondence away.
  
• Take notes during your conversations with insurance representatives.  Include their names and job titles.  Keep these notes with your records.  If you think the representative is wrong, ask to speak with his or her supervisor.
  
• If you have a claim that has been denied, talk to your health insurance provider to find out what steps you can take to appeal.

Understanding Insurance Terms
Accreditation - An evaluative process in which a healthcare organization undergoes an examination of its operating procedures to determine whether the procedures meet designated criteria as defined by the accrediting body, and to ensure that the organization meets a specified level of quality.

ancillary services - Auxiliary or supplemental services, such as diagnostic services, home health services, physical therapy, and occupational therapy, used to support diagnosis and treatment of a patient's condition.

annual maximum benefit amount - The maximum dollar amount set by an MCO that limits the total amount the plan must pay for all healthcare services provided to a subscriber in a year.

appropriateness review - An analysis of healthcare services with the goal of reviewing the extent to which necessary care was provided and unnecessary care was avoided.

case management - A process of identifying plan members with special healthcare needs, developing a health-care strategy that meets those needs, and coordinating and monitoring the care, with the ultimate goal of achieving the optimum healthcare outcome in an efficient and cost-effective manner. Also known as large case management (LCM).

claim - An itemized statement of healthcare services and their costs provided by a hospital, physician's office, or other provider facility. Claims are submitted to the insurer or managed care plan by either the plan member or the provider for payment of the costs incurred.

claim form - An application for payment of benefits under a health plan.

claimant - The person or entity submitting a claim.

claims administration - The process of receiving, reviewing, adjudicating, and processing claims.

clinical practice guideline - A utilization and quality management mechanism designed to aid providers in making decisions about the most appropriate course of treatment for a specific clinical case.

coinsurance - A method of cost-sharing in a health insurance policy that requires a group member to pay a stated percentage of all remaining eligible medical expenses after the deductible amount has been paid.

Consolidated Omnibus Budget Reconciliation Act (COBRA) - A federal act which requires each group health plan to allow employees and certain dependents to continue their group coverage for a stated period of time following a qualifying event that causes the loss of group health coverage. Qualifying events include reduced work hours, death or divorce of a covered employee, and termination of employment.

copayment - A specified dollar amount that a member must pay out-of-pocket for a specified service at the time the service is rendered.

credentialing - The process of obtaining, reviewing, and verifying a provider's credentials—the documentation related to licenses, certifications, training, and other qualifications—for the purpose of determining whether the provider meets the MCO's preestablished criteria for participation in the network.

deductible - A flat amount a group member must pay before the insurer will make any benefit payments.

diagnostic and treatment codes - Special codes that consist of a brief, specific description of each diagnosis or treatment and a number used to identify each diagnosis and treatment.

disease management (DM) - A coordinated system of preventive, diagnostic, and therapeutic measures intended to provide cost-effective, quality healthcare for a patient population who have or are at risk for a specific chronic illness or medical condition. Also known as disease state management.

Employee Retirement Income Security Act (ERISA) - A broad-reaching law that establishes the rights of pension plan participants, standards for the investment of pension plan assets, and requirements for the disclosure of plan provisions and funding.

fee-for-service (FFS) payment system - A system in which the insurer will either reimburse the group member or pay the provider directly for each covered medical expense after the expense has been incurred.

fee schedule -The fee determined by an MCO to be acceptable for a procedure or service, which the physician agrees to accept as payment in full. Also known as a fee allowance, fee maximum, or capped fee.

formulary - A listing of drugs, classified by therapeutic category or disease class, that are considered preferred therapy for a given managed population and that are to be used by an MCO's providers in prescribing medications.

generic substitution -The dispensing of a drug that is the generic equivalent of a drug listed on a pharmacy benefit management plan's formulary. In most cases, generic substitution can be performed without physician approval.

Health Insurance Portability and Accountability Act (HIPAA) - A federal act that protects people who change jobs, are self-employed, or who have pre-existing medical conditions. HIPAA standardizes an approach to the continuation of healthcare benefits for individuals and members of small group health plans and establishes parity between the benefits extended to these individuals and those benefits offered to employees in large group plans. The act also contains provisions designed to ensure that prospective or current enrollees in a group health plan are not discriminated against based on health status.

Health Maintenance Organization (HMO) - A healthcare system that assumes or shares both the financial risks and the delivery risks associated with providing comprehensive medical services to a voluntarily enrolled population in a particular geographic area, usually in return for a fixed, prepaid fee.

Indemnity Insurance - Traditional indemnity insurance is sometimes referred to as “fee for service.” This type of insurance plan allows patients to go to any doctor or hospital that they select, anywhere in the United States or abroad. Although insurance plans will vary, patients will generally be responsible for a deductible and copayments.

lifetime maximum benefit amount - The maximum dollar amount set by an MCO that limits the total amount the plan must pay for all healthcare services provided to a subscriber in the sub-scriber's lifetime.

managed care - The integration of both the financing and delivery of healthcare within a system that seeks to manage the accessibility, cost, and quality of that care.

managed care organization (MCO) - Any entity that utilizes certain concepts or techniques to manage the accessibility, cost, and quality of healthcare. Also known as a managed care plan.

Medicaid - A jointly funded federal and state program that provides hospital expense and medical expense coverage to the low-income population and certain aged and disabled individuals.

medical advisory committee - Committee whose purpose is to review general medical management issues brought to it by the medical director.

medical director - Manager in a healthcare organization responsible for provider relations, provider recruiting, quality and utilization management, and medical policy.

Medicare - A federal government hospital expense and medical expense insurance plan primarily for elderly and disabled persons. See also Medicare Part A, Medicare Part B, and Medicare Part C.

Medicare Part A - The part of Medicare that provides basic hospital insurance coverage automatically for most eligible persons. See also Medicare.

Medicare Part B - A voluntary program that is part of Medicare and provides benefits to cover the costs of physicians' services. See also Medicare.

Medicare Part C - The part of Medicare that expands the list of different types of entities allowed to offer health plans to Medicare beneficiaries. Also known as Medicare+Choice. See also Medicare.

Medicare supplement - A private medical expense insurance plan that supplements Medicare coverage. Also known as a Medigap policy.

Omnibus Budget Reconciliation Act (OBRA) of 1990 - A federal act which established the Medicare SELECT program, a Medicare supplement that uses a preferred provider organization to supplement Medicare Part B coverage.

outcomes measures -Healthcare quality indicators that gauge the extent to which healthcare services succeed in improving patient health.

Patient Bill of Rights - Refers to the Consumer Bill of Rights and Responsibilities, a report prepared by the President's Advisory Commission on Consumer Protection and Quality in the Health Care Industry in an effort to ensure the security of patient information, promote healthcare quality, and improve the availability of healthcare treatment and services. The report lists a number "rights," subdivided into eight general areas, that all healthcare consumers should be guaranteed and describes responsibilities that consumers need to accept for the sake of their own health.

peer review -The analysis of a clinician's care by a group of that clinician's professional colleagues. The provider's care is generally compared to applicable standards of care, and the group's analysis is used as a learning tool for the members of the group.

pharmacy and therapeutics committee - Committee charged with developing a formulary, reviewing changes to that formulary, and reviewing abnormal prescription utilization patterns by providers.

pharmacy benefit management (PBM) plan - A type of managed care specialty service organization that seeks to contain the costs, while promoting safer and more efficient use, of prescription drugs or pharmaceuticals. Also known as a prescription benefit management plan.

Preferred Provider Organization (PPO) - A PPO allows patients to see a doctor from the plan’s network of physicians for a small copayment fee. Patients who choose to see a doctor out of the network must pay the balance between the PPO’s scheduled fee and the billed amount.

premium - A prepaid payment or series of payments made to a health plan by purchasers, and often plan members, for medical benefits.

prior authorization - In the context of a pharmacy benefit management (PBM) plan, a program that requires physicians to obtain certification of medical necessity prior to drug dispensing. Also known as a medical-necessity review.

therapeutic substitution - The dispensing of a different chemical entity within the same drug class of a drug listed on a pharmacy benefit management plan's formulary. Therapeutic substitution always requires physician approval.

usual, customary, and reasonable (UCR) fee - The amount commonly charged for a particular medical service by physicians within a particular geographic region. UCR fees are used by traditional health insurance companies as the basis for physician reimbursement.

utilization management (UM) - Managing the use of medical services to ensure that a patient receives necessary, appropriate, high-quality care in a cost-effective manner.

utilization review (UR) - The evaluation of the medical necessity, efficiency, and/or appropriateness of healthcare services and treatment plans.

utilization review committee - Committee that reviews utilization issues brought to it by the medical director, often approving or reviewing policy regarding coverage, reviewing utilization patterns of providers, and approving or reviewing the sanctioning process against providers.

Expensing Medical Costs on Your Tax Return
Even with good insurance, treatment and follow-up care for cancer can incur many out-of-pocket expenses. One way to recoup some of these expenses is to do an itemized deduction for your medical and dental expenses on your tax return. Note that you are only allowed to deduct the amount of your medical and dental expenses that is greater than a percentage of your income, currently 7.5% of your adjusted gross income (this is subject to change). If your income is high or your expenses are low, you might not benefit from an itemized deduction of medical expenses.

The obvious deductible expenses include any medical or dental care costs for you, your spouse (if filing jointly), your child or dependent that were not covered by insurance. Any out-of-pocket medical expense that was reimbursed by insurance is not deductible. Other obscure expenses that are deductible include acupuncture, therapeutic massage, chiropractic medicine, contact lenses, eye glasses and laser eye surgery. Cosmetic or illegal surgeries are not deductible.

If your treatment requires travel, transportation costs for travel by bus, taxi, train or plane are deductible. If traveling by car, you can expense the actual cost for oil and gas or allot 12 cents per mile. In either case, include parking fees and tolls. Lodging, but not meals, can also be deducted while traveling for the explicit purpose of medical treatment. Allowable lodging expenses may not exceed $50 per night per person.

Other miscellaneous expenses you should keep track of and are allowed to deduct include medical conferences, prescription medication (including birth control pills), artificial limbs, wigs and nursing services. Nutritional supplements and household help other than nursing are not currently deductible.

By keeping track of expenses and deducting them on your tax returns, you may be able to partially recover some of the out-of-pocket medical expenses not covered by your insurance. For more information on deducting medical and dental expenses look at Publication 502 and the instructions for Schedule A of form 1040 at www.irs.gov or see your accountant.