Flow of Health care management system:

The following flow diagram can illustrate the generic flow of health care management system,

4. Eligibility request

5. Eligibility response

6 Claim submission
Insurer/ Payer
7. Claim status request Provider

8. Claim status response

9. Claim payment

Subscriber/ Member

Entities who play vital roles in Health care management system

The major entities who play an important role in health care system includes
the following,
 Payer/ Insurer
 Provider
 Payee/Subscriber
Payer/ Insurer:
 The term Insurer/Payer means the insurance company containing a set of
health care insurance policies from which the subscriber can choose one among them. They
provide user-friendly services to the subscriber. The insurance company also provide an additional
special feature of adding dependents to his/her enrolled policy.
Provider:
The term Provider here defines a hospital, an individual doctor, or any kind
of facility that offers any medical service. He offers treatment to the policyholder (i.e. Payee) and
issues the pay slip to the insurer as a claim. The provider will then receive payment for the
performed treatment from the insurance company where the subscriber has his membership.
Types of provider:
 Billing Provider (say: Billing section in hospital)
 Referring Provider (say: PCP)
 Servicing Provider (say: Staff nurse)
 Rendering Provider (say: Scanning centers)
 Operating Provider (say: Surgeon)
Payee/Subscriber:
The word payee/subscriber/member can be defined as a person who holds
a policy. He can either take policy for his own or add dependents. If he takes an individual policy,
then he will the only person who can obtain benefits from the policy. If he adds dependents in his
policy, the benefits will be shared by the added dependents as well. The dependents can be the
policyholder’s parents, spouse, children, etc.
Terms related to payment:
 Co-payment
 Premium
 Deductible
Premium:
The insurance company depending upon the policy chosen by the
subscriber charges premium amount. This can be paid once in a month or once in a year as per the
type of payment chosen by the subscriber during enrollment.
Co-payment:
It is the amount to be paid by the subscriber from his pocket. It can generally
be defined as the one time visit charge or the consulting fee to be paid by the subscriber himself to
the provider. The remaining medical bill will be paid by the insurer.

Deductible:
 This is the amount deducted yearly from which the insurance company will
pay the medical bills of the subscriber. The subscriber should pay the remaining percentage of
medical bill as per the terms and conditions.
Coverage of health care plans:
Depending on the preference of choosing the provider, the insurer offers
the following types of coverage plans. It includes
 HMO
 PPO
HMO:
HMO is explained as Health Maintenance Organization. Here the insurer
will suggest the provider for a particular policy enrolled by the subscriber. It is the restricted group
of facilities offered by the insurance company. In other words, we can say that the insurance
company will direct the subscriber to the concerned provider for ailment.
PPO:
PPO can be expanded as Preferred Provider Organization. Here the
subscriber is allowed to choose the provider of his preference. The amount paid by the insurance
company is reduced in such case. The out of pocket payment will be increased.
Network:
Here the term “Network” can be defined based upon the availability of the
provider.
Types of network:
 In-Network
 Out-Network

In-Network:
The provider who are all tied up with the insurance company are said to be
in-network range. It suits for both HMO and PPO. All HMO providers should be in in-network
only. Because, the insurer/PCP will not suggest the provider who is not in the range to the HMO
policyholder.

Out-Network:
The provider who does not tie-up with the insurance company are said to
be in out-network range. There is no chance for HMO provider in out-network. There is chance
for PPO provider to fall under this range because; the subscriber may not have thorough knowledge
on the provider availability. In such cases, the out of pocket money is exceeded.
PCP:
 PCP can be expanded as Primary Care Physician. He can give general
diagnosis to the subscriber approaching him. He will also direct the subscriber to the
specialist/surgeon for further treatment in case of further issues. PCP will always be available in
HMO coverage only. They is no need of PCP in case of PPO as the subscriber he can choose the
provider he wants.

Insurer

PCP

Concerned
Subscriber Treatment Provider

Claim:
It is the payment details issued by the provider to the insurer. It can be classified into three broad
groups namely,
 Professional claim
 Institutional claim
 Dental claim

Professional claim:
The person who undergoes treatment within 24 hours (i.e. outpatient) are supposed to pay under
this scheme.
Institutional claim:
The person whose treatment exceeds 24 hours (i.e. inpatient) are billable under institutional claim.
Dental claim:
It is a special type of claim issued only for dental treatment.
Claim adjudication:
This term claim adjudication means validating/processing the claim. The claim issued by the
provider will be verified by the payer and assigned with claim status.
Claim status:
 It is a notification given by the insurer to the provider who treats the subscriber after validating the
claim. The following are the status given the payer,
 Accept
 Deny/Reject
 Paid
Accept: This status is given when the insurer accepts the claim and ready to pay for what the provider
demanded.
Deny/Reject - When the insurer is having some clarifications or if there is any mistake in the claim, the
insurer will issue this status.
Paid: Once the claim is accepted and the amount is transacted to the provider/subscriber, the claim status
will be changed to Paid.
Enrollment:
When a new policy is taken by the person, then he is said to be enrolled in that particular policy.
In other words, we can say this as initial registration for a particular policy. The member change his change
policy if needed. A person can hold more than one policy also.
Membership:
The person who wants to take policy must have enroll himself as a subscriber. This is generally
called as Membership enrollment. Once he enrolled into any one of the policy, he enjoys the benefits of the
particular policy.
The following are the entities of membership enrollment,
 Account
 Group
 Member
Account:
This term is used to represent the insurance company or the payer. They may contain ‘n’ number
of groups in them. They employ groups for their work to be done.
Group:
There may a large number of groups for a single account. They act as a bridge between the account
and the member. They communicate the messages from the account to the member as well as from the
member to the account. They act as the representing medium for the account. Each group contains ‘n’
number of members associated with it.
Member:
They are the subscriber or the policy holder. They cannot directly reach out to the account to clarify
their needs. So that they communicate through the groups working under the control of the account.
Structure of enrollment process:

Account

Group 1 Group 2 Group 3

 ……….

Subscriber 1 Subscriber 2 …….

Medicaid:
The government schemes are also available for people who are not able
to own their policy. This is referred to as “Medicaid”.

Electronic Data Interchange:

EDI is the transfer of data from one computer system to another
using standard code without the help of human intervention. EDI is HIPAA (Health Insurance
Portability and Accountability Act) ANSI X12 format. EDI improves data transferring speed to a
great extent through which information can be exchanged without any time delay.
There are various advantages in using EDI. They include,
 Increased accuracy
 Reduced cost
 Decreased errors
 Increased ROI
 Enhanced visibility
Flow of Health care management system using EDI representation:
The generic flow of health care management system can be illustrated by the following flow
diagram,

4. EDI 270

5. EDI 271

6 Claim submission
Insurer/ Payer
7. EDI 276 Provider

8. EDI 277

9. EDI 835

Subscriber/ Member

Structure of EDI ANSI X12 format:

The following are the segment types in EDI.
  ISA : Interchange Control Header
 GS : Function Group Header
 ST : Transaction Set Header
 SE : Transaction Set Trailer
 GE : Function Group Trailer
 ISE : Interchange Control Trailer
Segment: The group or collection of elements is called as the segment. Each segment is separated
by segment delimiter (“*”).
Element: The group or collection of components is called as the element. Each element is
separated by element delimiter (“~”).
Component: The term component is defined as an individual module. Each component is
separated by component delimiter (“::”).
Diagrammatic representation of EDI segments:

Interchange Control Header (ISA)

Function Group Header (GS)

Transaction Set Header (ST)

EDI payload

Transaction Set Trailer (SE)

Function Group Trailer (GE)

Interchange Control Trailer (IEA)

Interchange Control segment: It contains the source and destination address.

Function Group segment: It contains a set of main values or index of the contents stored.
Transaction Control: It contains the message or the entire content to be transacted.
Trading partners in EDI 834 transaction:
 IKA
 E-Enroll
 HIX
The following table demonstrates some of the EDI transaction values,
EDI value Definition
EDI 270 Eligibility request
EDI 271 Eligibility response
EDI 276 Claim status request
EDI 277 Claim status response
EDI 278 Referral/Authorization request,
Referral/Authorization response

EDI 820 Premium payment

EDI 834 Enrollment

EDI 835 Remittance advice/ Claim payment

EDI 837P Professional claim

EDI 837I Institutional claim

EDI 837D Dental claim