Domain Knowledge Healthcare Industry Part 1

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Domain Knowledge Healthcare Industry Part 1

This article discuss common healthcare terms from a payer perspective and gives a overview basic HIPAA messages.

Common healthcare terms: -

Payer Plan Provider Member Subscriber Claim Product COB (Coordination of benefits) PCP (Primary Care Provider) Capitation HIPAA

Healthcare payer services: - Revenue Management - Customer Service - Product Management - Consumer Management - Risk Management - Care Management - Provider Management - Member Management - Reimbursement Management Standard Code Sets: ICD-9-CM    Diagnosis & Inpatient Procedures CPT-4        Outpatient Procedures HCPCS             Ancillary Services & Procedures CDT-2         Dental Terminology NDC         National Drug Codes DRG         Diagnostic Related Groupings 



Domain Knowledge Healthcare Industry Part 1

International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM, ICD-10-CM) - This is the universal coding method used to document the incidence of disease, injury, mortality and illness. A diagnosis and procedure classification system designed to facilitate collection of uniform and comparable health information. The ICD-9-CM was issued in 1979. This system is used to group patients into DRGs, prepare hospital and physician billings and prepare cost reports. Classification of disease by diagnosis codified into six-digit numbers. 

Diagnosis Related Groups (DRGs):

An inpatient or hospital classification system used to pay a hospital or other provider for their services and to categorize illness by diagnosis and treatment. A classification scheme used by Medicare that clusters patients into 468 categories on the basis of patients' illnesses, diseases and medical problems. Groupings of diagnostic categories drawn from the International Classification of Diseases and modified by the presence of a surgical procedure, patient age, presence or absence of significant complications/other relevant criteria. System involving classification of medical cases and payment to hospitals on the basis of diagnosis.

Common Health Plan Types:

HMO PPO POS Medicaid Medicare Defined Contribution



Domain Knowledge Healthcare Industry Part 1

A health maintenance organization (HMO) is a health care delivery system that accepts responsibility and financial risk for providing a specified set of health care services to an enrolled membership in exchange for a fixed, prepaid fee from the purchaser (i.e., either the employer, government or an individual.) HMOs build network through contracts with selected physicians or physician groups, hospitals, and other providers who render care for a given population for a discounted fee in anticipation of an increased volume of patients. Those individuals who become members of an HMO (i.e., enrollees) agree to receive care from this contracted network of providers. Characterized by a PCP, all treatment/referrals thru PCP


A Preferred Provider Organization (PPO) is a group of health care professionals and/or hospitals that contract with an employer or insurance company to provide medical care to a specified group of patients. Participating health care providers exchange discounted services for an increased volume of patients from this group. Insurance companies offer PPOs to give their members a choice of either in-network benefits or out-of-network benefits.

Continues in Part 2...


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