LOS ANGELES COUNTY
DEPARTMENT OF MENTAL HEALTH
  Policy 801.06 Private Prepaid Health Care Treatment and Billing
 
Policy Category:  Administrative
Distribution Level:  Directly-Operated Programs and Contracted Agencies
Responsible Party:  Financial Services
 
Approved by Marvin J. Southard, DSW, Director, on September 1, 2004
 
I.  PURPOSE
 
To provide Department of Mental Health (DMH) policy and guidelines concerning treatment and billing procedures for clients covered under Private Prepaid Health Care Plans.
  • DMH policies regarding Medi-Cal Prepaid Health Care Plans and Medicare Prepaid Health Care Plans have been developed as separate policies (801.04 and 801.05 respectively).
II.  BACKGROUND
 
Overview

Prepaid health care plans serve a diverse population, including Medi-Cal, Medicare, and employer or individually paid plans.

Medi-Cal and Medicare prepaid health care plans are capitated programs in which the consumer has opted to been place in a specific prepaid health care plan in lieu of the fee-for service, choice of provider plan. The plan or carrier has already been paid by the government to provide both health and mental health services.

A private prepaid health care plan is an insurance plan obtained through an employer, organization, or personally by the consumer. The private prepaid health care plan is paid a financial consideration by the employer, organization, or the consumer to provide health care, including mental health benefits. Many prepaid health care plans operate as both private and Medi-Cal and/or Medicare providers.

There are currently many indemnity insurance companies that offer Primary Care Physician Plans (PCPP). These are private insurance plans often offered at a reduced cost to the consumer, however, requiring prior authorization by the PCPP for care outside of the plan.

Effective September 1, 1993, Manager Care Plans replaced Primary Care Case Management (PCMM) programs. Persons applying for Aid to Families with Dependent Children (AFDC) who have not already selected a primary care physician will be assigned a primary care physician under a prepaid health care plan. Persons already assigned to a PCCM program will be allowed to continue with that program.

Private Prepaid Health Care Plans 
 
Private prepaid health care plans are capitated plans that have been paid to provide health services and mental health services. These plans allow for treatment of covered services outside the plan, only for medically necessary treatment, with prior authorization from the prepaid health care plan or when the client chooses to personally pay for the cost of treatment.

When a private prepaid health care plan denies authorization and the consumer chooses to use the services of the Department of Mental Health or their contract providers, the consumer is responsible for the full cost of care.

When a private prepaid health care plan indicates that consumers have exhausted their mental health care benefits, this must be documented, in writing, by the prepaid health care plan. Once documentation is received, the members may be treated and charged the Uniform Method for Determining Ability to Pay (UMDAP) liability amount. Once additional benefits become available, usually the following January, consumers are to be referred back to their HMO/PHP.

Collection Follow-Up 
 
The private prepaid health care plan is responsible for payment of the full cost of care for authorized services and is to be billed. If routine collection efforts fail to result in payment, directly operated or County contracted provider staff are to employ stronger methods, including, but not limited to, referral to the Treasurer and Tax Collector.

Members are responsible for payment for services solicited by them and must pay at the time the service is provided. No further treatment is to be provided until each prior visit is paid for.
 
III.  POLICY
 
Members of a private prepaid health care plan, e.g., Health Maintenance Organizations (HMO), Prepaid Health Plans (PHP), Managed Care Plans (MCP), PCPP, and PCCM, must first look to those entities as being responsible for the provision of their mental health services as defined by their contracted benefits.
  • If private prepaid health plan members present themselves at a DMH directly operated clinic or contract agency, the members should be advised that their health care plan is responsible for managing their care. Except in cases deemed medically necessary, members should be referred back to their respective plans unless the prepaid health care plan or the client, as appropriate, is willing to pay for the full cost of their care.
     
  • Medically necessary services describes an emergent situation requiring immediate treatment. A service is medically necessary when it is reasonable and necessary to prevent significant illness or to alleviate severe pain. (WIC 14059.5)
IV.  PROCEDURES
 
No procedures are associated with this policy.
 
V.  AUTHORITIES