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15-1
© 2009 The McGraw-Hill Companies, Inc. All rights reserved
Health Insurance Billing ProceduresPowerPoint® presentation to accompany:
Medical AssistingThird Edition
Booth, Whicker, Wyman, Pugh, Thompson
15-2
© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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.
15-5
© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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
Basic Insurance Terminology (cont.)
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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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
Basic Insurance Terminology (cont.)
15-10
© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
Types of Health Plans: Medicaid (cont.)
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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
Types of Health Plans: Medicaid (cont.)
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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
Types of Health Plans (cont.)
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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
Types of Health Plans (cont.)
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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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
Apply Your Knowledge
Allowable benefits
ANSWER: Very Good!
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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
Capitation
ContractedFee Schedule
Fee Schedules and Charges (cont.)
Payment Methods
Allowed Charges
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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
Allowed charges This represents the most the payer will pay any provider
for that work Other equivalent terms
Fee Schedules and Charges (cont.)
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
Fee Schedules and Charges (cont.)
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
Fee Schedules and Charges (cont.)
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
Apply Your Knowledge
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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
Apply Your Knowledge
The taxonomy information would be very different because the physician preparation and licensing are very different.
ANSWER:
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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
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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© 2009 The McGraw-Hill Companies, Inc. All rights reserved
I am always doing that which I can not do, in order that I may learn how to do it.
~ Pablo Picasso
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