© 2009 the mcgraw-hill companies, inc. all rights reserved 15-1 health insurance billing procedures...

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© 2009 The McGraw-Hill Companies, Inc. All rights reserved

Health Insurance Billing ProceduresPowerPoint® presentation to accompany:

Medical AssistingThird Edition

Booth, Whicker, Wyman, Pugh, Thompson

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Learning Outcomes

15.1 Define Medicare and Medicaid.

15.2 Discuss TRICARE and CHAMPVA health-care benefits programs.

15.3 Distinguish between HMOs and PPOs.

15.4 Explain how to manage a workers’ compensation case.

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Learning Outcomes (cont.)

15.5 List the basic steps of the health insurance claim process.

15.6 Describe your role in insurance claims processing.

15.7 Apply rules related to the coordination of benefits.

15.8 Describe the health-care claim preparation process.

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Learning Outcomes (cont.)

15.9 Explain how payers set fees.

15.10 Complete a Centers for Medicare and Medicaid Service (CMS-1500) claim form.

15.11 Identify three ways to transmit electronic claims.

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Introduction Health care claims = reimbursement

Accuracy = maximum appropriate payment Medical assistant

Prepare claims Review insurance coverage Explain fees Estimate charges for payers Prepare claims

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Basic Insurance Terminology Medical insurance – written contract between a

policy holder and a health plan

First Party – the patient or policy holder

Premium – the amount of money paid by the policy holder to the insurance carrier

Second Party – the physician who provides medical services

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Basic Insurance Terminology (cont.)

Benefits – Payment by the insurance carrier for medical services provided

Third-party payer – the health plan that agrees to carry the risk of paying for services

Deductible – a fixed dollar amount paid or met once a year before third-party payers begin to cover expenses

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Coinsurance – a fixed percentage of coverage charges after the deductible is met

Co-payment – a small fee that is collected at the time of the visit

Exclusions – uncovered expenses

Formulary – a list of approved drugs


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Elective procedure – one not required to sustain life

Pre-authorization – approval in advance for a specific procedure

Liability insurance – covers injuries caused by the insured or on their property

Disability insurance – insurance that is activated when the insured is injured or disabled


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Apply Your Knowledge

What is the difference between first party, second party, and third-party payer?

ANSWER: The first party is the patient or owner of the policy; the second party is the physician or facility the provides services, and the third-party payer is the insurance company that agrees to carry the risk of paying for approved services.

Good Job!

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Types of Health Plans Insurance companies

Rules about benefits and procedures Manuals, printed or online Representatives to assist

Sources of health plans Group policies – through

employer Individual plans Government plans

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Types of Health Plans

Oldest and most expensive type of plan

Covers costs of select medical services

Amount charged for services determined by the physician

Fee-for-ServicePlans

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Types of Health Plans Controls both the financing and

delivery of health care to policy holders

Both policy holders and physicians (participating physicians) are enrolled by the Managed Care Organizations (MCOs)

MCOs pay physicians in two ways Contracted fees Capitated fees – fixed amount per month to provide

contracted services to patients enrolled in the plan

Managed CarePlans

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Preferred Provider Organization (PPO) A network of providers to perform services to plan

members Physicians in the plan agree to charge discounted fees

Health Maintenance Organization (HMO) Physicians who contract with HMOs are often paid a

capitated rate Patients pay premiums and a small co-payment for each

office visit

Types of Health Plans (cont.)

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The largest federal program that provides health care to citizens aged 65 and older

Managed by the Centers for Medicare and Medicaid Services (CMS)

Part A Hospital insurance available to anyone receiving social

security benefits No premium unless ineligible for social security benefits

Types of Health Plans: Medicare

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Types of Health Plans: Medicare (cont.)

Part B Covers physician services,

outpatient services, and many other services

Available to United States citizens and permanent residents 65 and older

Participants must pay a premium

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Fee-for-Service: The Original Medicare Plan Allows the beneficiary to choose any licensed

physician certified by Medicare

An annual deductible fee

Medicare pays 80 percent and the patient pays 20 percent Medigap plan – secondary insurance

Types of Health Plans: Medicare Plans

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Medicare + Choice Plans Medicare Managed Care Plans

Monthly premium and copayment, but no deductible

Care managed by primary care physician (PCP)

Referrals from PCP for additional services outside

network

Types of Health Plans: Medicare Plans (cont.)

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Medicare Preferred Provider Organization Plans (PPOs) No PCP or referrals for services Costs less to use physicians within network

Medicare Private Fee-for-Service Plans Can use any provider or facility as long as it is approved

by Medicare Operated by private insurance companies May or may not require a copayment Physicians can bill patients for amount not covered by

the plan

Types of Health Plans: Medicare Plans (cont.)

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A health-benefit program designed for: Low-income Blind Disabled patients Temporary assistance to needy families Foster children Children born with disabilities

Not an insurance program

Types of Health Plans: Medicaid

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Types of Health Plans: Medicaid (cont.)

Funded by the federal and state governments

Provides assistance such as: Physician services Emergency services Laboratory and x-rays Skilled nursing facility (SNF) care Vaccines Early diagnostic screening and treatment for minors

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Medicaid

Accepting Assignment

Medi/Medi

Physicians agreeing to treat Medicaid patients also agree to the set amount for reimbursements

Older or disabled patients unable to pay the difference between the bill and the Medicaid payment may qualify for both Medicaid and Medicare

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Comply with state guidelines Verify Medicaid eligibility

Ensure that the physician signs all claims

Authorization must be received in advance for medical services except in an emergency

Verify deadlines for claim submissions

Treat Medicaid patients with the same professionalism and courtesy that you extend to other patients


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Department of Defense

Families of uniformed personnel and retirees

TRICARE for Life Medicare-eligible

military retirees 65 and older

Dependent spouses and children of veterans with disabilities

Surviving spouses and dependent children of veterans who died in the line of duty or from service-connected disabilities

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Blue Cross and Blue Shield A nationwide federation of nonprofit and for-

profit service organizations that provide prepaid health-care services to subscribers

Specific plans for BCBS can vary greatly because each local organization operates under its own state laws


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Covers accidents or diseases incurred in the workplace

By federal law, employers must purchase a minimum amount of workers’ compensation insurance

Coverage Includes

Basic medical treatment Weekly or monthly amount paid to patient while not employedRehabilitation costs

Types of Health Plans: Workers’ Compensation

Verify coverage before accepting patient.

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Apply Your KnowledgeA 72-year-old disabled patient is being treated at an office that accepts Medicaid. The total office visit is $165, but Medicaid will only reimburse a set fee of $125. In this situation, what is the most likely solution?

a. Bill the patient for the balance due.b. Expect the balance to be paid at the time of service.c. This patient probably has a secondary employer health

insurance plan.d. This patient may qualify for the Medi/Medi coverage.

ANSWER:

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The Claims Process: An Overview

Obtains patient information Determines diagnosis and fees based on

services provided Records patient payments Prepares health-care claims Reviews the insurer’s processing of the claim

Services Provided by the Physician’s Office

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The Claims Process: An Overview (cont.)

Gathering and reporting patient information

Verifying patient’s insurance coverage

Recording procedures and services performed

Filing insurance claims and billing patients

Reviewing and recording payments

Tasks Supported by using a Billing Program

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The Claims Process: Obtaining Patient Information

Insurance information Current employer Employer address and

telephone number Insurance carrier and date of

coverage Insurance group plan Insurance identification

number Name of subscriber or insured

Personal information Name Home address Telephone number Date of birth Social security number Emergency contact person

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Release signatures Form to release insurance

information to insurance carrier

Form for assignment of benefits

Verify eligibility Check effective date of coverage

The Claims Process: Obtaining Patient Information (cont.)

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Coordination of benefits Legal clauses to prevent

duplication of payment

Primary or main insurance plan pays first

Secondary or supplemental plan pays the deductible and co-payment

The Birthday Rule

If a husband and wife both have a family insurance plan, the insurance plan of the person born first becomes the primary payer.

The Claims Process: Obtaining Patient Information (cont.)

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Physician’s services Examines patient Documents symptoms, diagnosis, and treatment

plan in medical record

Medical coding Translates the medical terminology into codes for

reimbursement

The Claims Process: Delivering Services

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Referrals to other services The medical assistant

Secure authorization from the insurance company for additional services

Arrange an appointment for referred services

The Claims Process: Delivering Services (cont.)

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The Claims Process: Preparing the Health-Care Claim

Filing the insurance claim Once prepared, the physician

reviews the claim Usually transmitted to payer

electronically Time limits

Vary by company and state Medicare and Medicaid

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Insurance claims are reviewed for:

Medical necessity

Allowable benefits

Payment and remittance advice

The Claims Process: Insurer’s Processing and Payment

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Remittance advice (RA) Sent with payment to patient and physician Also known as explanation of benefits (EOB)

Information the RA Form Insured name and identification number Name of beneficiary Claim number Date, place, and type of service Amount billed and amount allowed Amount of copayment and payments made Notation of any services not covered

The Claims Process: Insurer’s Processing and Payment (cont.)

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Reviewing the insurer’s RA and payment Verify all information on the remittance advice

(RA) line by line

If a claim is rejected, check the diagnosis codes for accuracy

Track all unpaid claims using either a follow-up log or computer automation

The Claims Process: Insurer’s Processing and Payment (cont.)

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A patient had two appointments in the same week for different ailments. On Monday, the patient complains of back pain and receives a prescription for a muscle relaxant. On Wednesday, the patient complains of hair loss. When the medical assistant files the claims, she accidentally codes the first visit diagnosis (muscle spasm) with the prescribed treatment for the second visit (hair loss) which was an anti-fungal shampoo. The insurance claim is probably rejected for which of the following reasons:

Medical necessity Payments


Allowable benefits

ANSWER: Very Good!

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Fee Schedules and Charges: Medicare Payment Systems—RBRVS

A nationally uniform conversion factor

The nationally uniform relative value

A geographic adjustment factor

The current annual Medicare Fee Schedule (MFS) is published by CMS in the Federal Register

Resource-based relative value scale (RBRVS) Payment system used by Medicare

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Capitation

ContractedFee Schedule

Fee Schedules and Charges (cont.)

Payment Methods

Allowed Charges

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Allowed charges This represents the most the payer will pay any provider

for that work Other equivalent terms


Maximum allowable fee Maximum charge

Allowed amount

Maximum charge

Allowed feeAllowable charge

Billing the patient for the difference between the higher usual fee and a lower allowed charge is called balance billing

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Contracted fee schedule Fixed fee schedules for

participating physicians Non-covered services billed

to patient Capitation

The fixed prepayment for each plan member

Non-covered services billed to patient

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Calculating patient charges Depending on plan, patients

are obligated to pay Premiums and deductibles Copayments and

coinsurance Excluded and over-limit

services Balance billing

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Communication with Patients About Charges A practice may

require patients to Sign an assignment

of benefits statement

or Pay in full for

services at the time provided

Remind patients of financial obligation Ask patients to

agree in writing to cost of procedures not covered by plan

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Communication with Patients About Charges (cont.)

Copayments must be paid before patients leave the office

Managed Care Members

The patient is responsible for any amounts not covered by the insurance carrier

Assigned Claims

Unassigned Claims

Unless other prior arrangements are made, payment is expected at the time service is delivered

Financial policy Patient responsibility for payment for services

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What do you need to consider when calculating patient charges?

ANSWER: You need to consider whether the patient has met the deductible, if the patient has to pay a copayment, if the service is excluded, or if the patient is over his/her limit for services.

Nice Job!

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Preparing and Transmitting Health-Care Claims HIPAA claims

Electronic Used predominantly X12 837 Health Care Claim - official name Information entered is called data elements Data must be entered in CAPS in valid fields No prefixes or special characters allowed

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Preparing and Transmitting Health-Care Claims Paper claims

A CMS-1500 paper form is used May be mailed or faxed to the third-party payer Not widely used as a result of HIPAA

requirements CMS-1500 requires 33 form indicators

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Data Elements on HIPAA Electronic Claims Provider information

Billing provider – transmits the claim to payer Pay-to provider – practice that receives payment from

insurance carrier Rendering provider – physician that treats patient

Taxonomy information Taxonomy code is a 10-digit number representing the

physician specialty Physicians select codes to match education, license, or

certification

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HIPAA national identifiers Established for

Employers Health-care providers Health plans Patients

Identifiers are numbers of predetermined length and structure like social security numbers

Data Elements on HIPAA Electronic Claims (cont.)

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Preparing and Transmitting Health-Care Claims (cont.)

Transmission of Electronic Claims Three major methods of transmitting

claims electronically

Direct transmission to the payer

Using a clearinghouse

Direct data entry

Offices and payers exchange information directly by electronic data interchange (EDI)

Translates nonstandard data into standard format. Clearinghouse cannot create or modify data

Internet-based service that loads data elements directly into the health plan’s computer

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Preparing and Transmitting Health-Care Claims (cont.)

Generate clean claims by avoiding common errors

Payer name and/or identifier or invalid subscriber’s birth date

Part of the name or identifier of the referring provider

Service facility name and address information

Information about secondary insurance plans

Medicare or benefits assignment indicator

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Preparing and Transmitting Health-Care Claims (cont.) Claims security

The HIPAA rules Standards for protecting individually identifiable health

information when maintained or transmitted electronically

Common security measures Access control, passwords, and log files Backup copies Security policies to handle violations

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A medical assistant has two part-time positions, one for a pediatrician and the other for a surgeon. When completing the X12 837, which of the following would be a major difference?

a. Provider information

b. Taxonomy information

c. HIPAA identifiers


The taxonomy information would be very different because the physician preparation and licensing are very different.

ANSWER:

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In Summary Medical assistant

Handles patients’ questions about plans and claims Reviews patients’ insurance coverage Explains physician’s fees Estimates

Charges covered by payer Charges patient must cover

Prepares complete and accurate health-care claims

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I am always doing that which I can not do, in order that I may learn how to do it.

~ Pablo Picasso