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CHAPTER
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3Patient Encounters
and Billing Information
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
Learning Outcomes
When you finish this chapter, you will be able to:3.1 Explain the method used to classify patients as
new and or established.
3.2 List the five types of information that new patients provide before their encounters.
3.3 Discuss the procedures that are followed to update established patient information.
3.4 Explain the process for verifying patients’ eligibility for insurance benefits.
3.5 Discuss the importance of requesting referral or preauthorization approval.
3-2
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
Learning Outcomes (Continued)
When you finish this chapter, you will be able to:3.6 Explain how to determine the primary insurance
for patients who have more than one health plan.
3.7 Summarize the use and typical formats of encounter forms.
3.8 Identify the seven types of charges that may be collected from patients at the time of service.
3.9 Explain the use of real-time claims adjudication tools in calculating time-of-service payments.
3.10 Describe the billing procedures and transactions that occur during patient checkout.
3-3
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
Key Terms
• accept assignment• Acknowledgment of
Receipt of Notice of Privacy Practices
• adjustment• assignment of benefits• birthday rule• cash flow• certification number• charge capture• chart number
3-4
• coordination of benefits (COB)
• direct provider
• encounter form
• established patient (EP)
• financial policy
• gender rule
• guarantor
• HIPAA Coordination of Benefits
• HIPAA Eligibility for a Health Plan
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
Key Terms (Continued)
• HIPAA Referral Certification and Authorization
• indirect provider• insured• new patient (NP)• nonparticipating provider
(nonPAR)• participating provider
(PAR)• partial payment• patient information form
3-5
• primary insurance
• prior authorization number
• real-time claims adjudication (RTCA)
• referral number• referral waiver• referring physician• revenue cycle
management (RCM)• secondary insurance
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
Key Terms (Continued)
• self-pay patient• subscriber• supplemental insurance
• tertiary insurance
• trace number
• walkout receipt
3-6
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
Chapter 3 Introduction 3-7
• Cash flow—movement of monies into or out of a business
• Revenue cycle management (RCM)—the actions that ensure the provider receives the maximum appropriate payment
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.1 New Versus Established Patients 3-8
• New patient (NP)—patient who has not seen a provider within the past three years
• Established patient (EP)—patient who has seen a provider within the past three years
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.2 Information for New Patients 3-9
• When the patient is new to the practice, five types of information are important:1. Preregistration and scheduling information
2. Medical history
3. Patient/guarantor and insurance data
4. Assignment of benefits
5. Acknowledgment of Receipt of Notice of Privacy Practices
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.2 Information for New Patients (Continued)
3-10
• Referring physician—physician who refers a patient to another physician
• Participating provider (PAR)—provider who agrees to provide medical services to a payer’s policyholders according to a contract
• Nonparticipating provider (nonPAR)—provider who does not join a particular health plan
• Patient information form—form that includes a patient’s personal, employment, and insurance company data
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.2 Information for New Patients (Continued)
3-11
• Other terms for the policyholder of a health plan include:– Insured– Subscriber– Guarantor
• Assignment of benefits—authorization allowing benefits to be paid directly to a provider
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.2 Information for New Patients (Continued)
3-12
• Acknowledgment of Receipt of Notice of Privacy Practices—form accompanying a covered entity’s Notice of Privacy Practices
• Direct provider—clinician who treats a patient face-to-face
• Indirect provider—clinician who does not interact face-to-face with the patient
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.3 Information for Established Patients 3-13
• When EPs arrive for appointments, they are asked if any pertinent personal or insurance information has changed
• EPs should review their information forms for accuracy at least once per year
• Any changes to an EP’s information should be entered in the practice management program (PMP)
• Chart number—unique number that identifies a patient
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.4 Verifying Patient Eligibility forInsurance Benefits
3-14
• First step is to verify patients’ eligibility for benefits
• Then contact the payer to verify three points:1. Patient’s general eligibility for benefits
2. Amount of the copayment or coinsurance required at the time of service
3. That the planned encounter is for a covered service that is medically necessary under the payer’s rules
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.4 Verifying Patient Eligibility forInsurance Benefits (Continued)
3-15
• HIPAA Eligibility for a Health Plan—transaction in which a provider asks for and receives an answer about a patient’s eligibility for benefits (X12 270/271)
• Trace number—number assigned to a HIPAA 270 electronic transaction
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.5 Determining Preauthorization and Referral Requirements
3-16
• Preauthorization is requested before a patient is given certain types of medical care– Prior authorization number—identifying code
assigned when preauthorization is required (also called a certification number)
– HIPAA Referral Certification and Authorization: transaction in which a provider asks a health plan for approval of a service and gets a response (X12 278)
– Referral number—authorization number given to the referred physician
• Providers must handle these situations correctly to ensure that services are covered if possible
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.5 Determining Preauthorization and Referral Requirements (Continued)
3-17
• Referral waiver—document a patient signs to guarantee payment when a referral authorization is pending– Used if a patient does not have the required referral
document
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.6 Determining the Primary Insurance 3-18
• Primary insurance—health plan that pays benefits first
• Secondary insurance—second payer on a claim
• Tertiary insurance—third payer on a claim• Supplemental insurance—health plan that
covers services not normally covered by a primary plan
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.6 Determining the Primary Insurance (Continued)
3-19
• To determine a patient’s primary insurance, medical insurance specialists:– Examine the patient information form and insurance
card– Follow the coordination of benefits guidelines– Follow any rules that may apply– Communicate with the patient as needed
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.6 Determining the Primary Insurance (Continued)
3-20
• Coordination of benefits (COB)—explains how an insurance policy will pay if more than one policy applies– HIPAA Coordination of Benefits—transaction sent
to a secondary or tertiary payer (X12 837)
• Birthday rule—guideline that determines which parent has the primary insurance for a child
• Gender rule—coordination of benefits rule for a child insured under both parents’ plans
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.7 Working with Encounter Forms 3-21
• An encounter form (electronic or paper) is completed by a provider to summarize billing information for a patient’s visit– Lists the medical practice’s most frequently performed
procedures with their procedure codes– Blank spaces for diagnoses codes, and often includes
other various information– Paper forms may be preprinted or computer-
generated
• Charge capture—procedures that ensure billable services are recorded and reported for payment
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.8 Understanding Time-of-Service (TOS) Payments
3-22
• Practices routinely collect these charges at the time of service:1. Previous balances
2. Copayments
3. Coinsurance
4. Noncovered or overlimit fees
5. Charges of nonPAR providers
6. Charges for self-pay patients
7. Deductibles for patients with CDHPs
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.8 Understanding Time-of-Service (TOS) Payments (Continued)
3-23
• Accept assignment—participating physician’s agreement to accept allowed charge as full payment
• Self-pay patient—patient with no insurance• Partial payment—payment made during
checkout based on an estimate
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.9 Calculating TOS Payments 3-24
• Real-time claims adjudication—process used to generate the amount owed by a patient at the time of service
• Real-time benefit information—process used to generate information about a patient’s benefits at the time of service
• Financial policy—practice’s rules governing payment from patients
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.10 Collecting TOS Payments and Checking Out Patients
3-25
• The PMP is used to record the financial transactions from patients’ visits:– Charges—amounts providers bill– Payments—monies the practice receives– Adjustments—changes to patients’ accounts
• Information from the encounter form is entered into the PMP to calculate charges and compute balances
• Payment methods may include cash, check, and a credit or debit card
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
3.10 Collecting TOS Payments and Checking Out Patients (Continued)
3-26
• Walkout receipt—report that lists the diagnoses, services provided, fees, and payments received and due after an encounter