Health Insurance

Deductible is the amount a member must pay before insurance begins paying (e.g., $1,000/year). Copay is a fixed amount paid per service (e.g., $25 for doctor visit). Coinsurance is a percentage of the allowed amount (e.g., 20% after deductible). These are cost-sharing mechanisms in the benefit design.

837 is the Health Care Claim transaction used by providers to submit claims electronically (837P for professional, 837I for institutional). 835 is the Electronic Remittance Advice sent by payers to providers showing payment details, adjustments, and denial reasons for claims.

COB determines the order of payment when a member has multiple insurance coverages. The primary payer pays first based on their benefit rules. The secondary payer then pays remaining eligible costs. Order is determined by rules like birthday rule for dependents, active employee vs retiree, etc.

Prior authorization is pre-approval required before certain services. Provider submits request with clinical documentation. System checks against medical necessity criteria (InterQual, MCG). Auto-approval for routine cases meeting criteria, else clinical reviewer evaluates. Approved auth is linked to claims for payment.

FHIR (Fast Healthcare Interoperability Resources) is a modern API standard for exchanging healthcare data. It uses REST APIs and JSON/XML formats. CMS mandates FHIR APIs for patient access to claims data. It enables interoperability between payers, providers, and patient apps.

Claims adjudication involves: 1) EDI validation of 837 format, 2) Eligibility verification, 3) Duplicate check, 4) Auth verification, 5) Provider/network validation, 6) Medical policy edits, 7) Pricing using fee schedules, 8) Cost-share calculation, 9) COB if applicable, 10) Payment determination. Automated rules engine handles most claims (auto-adjudication).