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Medical Assisting Chapter 15

PowerPoint® to accompany

Second Edition

Ramutkowski • Booth • Pugh • Thompson • Whicker

Copyright © The McGraw-Hill Companies, Inc. Permission required for reproduction or display.

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Processing Health Care ClaimsObjectives15-1 List the basic steps of the health insurance claim

process. 15-2 Describe your role in insurance claims processing.15-3 Explain how payers set fees.15-4 Define Medicare and Medicaid.15-5 Discuss TRICARE and CHAMPVA healthcare

benefits programs.15-6 Distinguish between HMOs and PPOs.

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Processing Healthcare Claims Objectives (cont.)

15-7 Explain how to manage a workers’ compensation case.

15-8 Apply rules related to coordination of benefits.15-9 Describe the healthcare claim preparation

process. 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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Basic Insurance Terminology Medical insurance (health insurance) is a written

contract policy between a policy holder and a health plan.

Terms To Know

premium Amount of money paid by the policy holder to the insurance carrier.

benefits Medical services provided.

First Party The patient policy holder.

Second Party The physician who provides medical services.

Third Party The health plan.

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Deductible - a fixed dollar amount that must be paid or met once a year before third-party payers begin to cover expenses.

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 - an approved list of drugs.

Basic Insurance Terminology (cont.)

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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.)

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Types of Health Plans

Fee For ServicePlans

Managed CarePlans

• Oldest and most expensive type of plan• Covers costs of select medical services• Amount services determined by the physician

• Controls both the financing and delivery of healthcare to policy holders.

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

• In a capitated managed care plan, providers are paid a fixed amount regardless of the number of times the

patient is seen by the physician.

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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, often $10.

Types of Health Plans (cont.)

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Medicare is the largest federal program that provides healthcare 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.

Part B Covers physician services, outpatient services, and many other

services. Available to persons 65 and older that are US citizens A premium must be paid by all unlike Part A.

Types of Health Plans (cont.)

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Types of Medicare Plans Fee-for-Service: The Original Medicare Plan

Allows the beneficiary to choose any licensed physician certified by Medicare.

A deductible was charged then Medicare paid 80 percent and the patient paid 20 percent.

Medicare + Choice Plans Allows patients to sign up for one of three plans:

Medicare Managed Care Plans Medicare Preferred Provider Organization Plans (PPOs) Medicare Private Fee-for-Service Plans

Types of Health Plans (cont.)

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Types of Health Plans (cont.)

Medicare Managed Care Plans• Medical care is managed by a primary care physician (PCP)• A small co-payment for each visit is required but no deductibles• Some plans allow services from providers outside the network

Medicare Preferred Provider Organization Plan

Medicare Private Fee-For-Service Plan

• Patients do not need a PCP• No referrals are required• Costs less to use referrals within the network

• Operated by a private insurance company

• Co-payment may be required• Physicians can bill patients for

amount not covered by the plan

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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 Funded by the federal and state government Provides assistance such as:

Physician services Emergency services

Laboratory and x-rays SNF care Vaccines

Early diagnostic screening and treatment for minors

Types of Health Plans (cont.)

Medicaid

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Types of Health Plans (cont.)

Medicaid

Medicaid

Accepting Assignment

Medi/Medi

Physicians agreeing to treat Medicaid patients also agree to the set 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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State Guidelines

• Medicaid cards are issued monthly, so always ask the patient for a current card.

• Ensure that the physician signs all claims.• Authorization must be received in advance for medical services.

• Verify deadlines for claim submissions.• Treat Medicaid patients with the same professionalism and courtesy that you extend to other patients.

Types of Health Plans (cont.)

Medicaid

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Types of Health Plans (cont.)

Tricare and Champva

Run by the Defense Department

Healthcare benefit for families of uniformed personnel and retirees

TRICARE for Life is offered to persons 65 and older that are eligible for both TRICARE and Medicare.

Covers the expenses of dependent spouses and children of veterans with disabilities

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

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Types of Health Plans (cont.)

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

profit service organizations that provide prepaid healthcare services to subscribers.

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

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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 servicec. This patient more than likely has a secondary employer

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

- AnswerAnswer

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Insurance covering accidents or diseases incurred in the workplace.

Federal law requires that employers purchase a minimum amount of workers’ compensation insurance.

Coverage Includes

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

Rehabilitation costs

Workers’ Compensation

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The Claims Process: An OverviewServices Provided by the Physician’s Office

• Obtain patient information• Determine diagnosis and fees based on services provided• Records patient payments• Prepares healthcare claims• Reviews the insurer’s processing of the claim

Tasks Supported by usinga Billing Program

• 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

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Obtaining Patient InformationPersonal Information

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

• Current employer• Employer address and telephone number• Insurance carrier and date of coverage• Insurance group plan• Insurance identification number• Name of subscriber or insured

Release Signatures• Form to release insurance

information to insurance carrier

• Form for assignment of benefits

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Coordination of Benefits Legal clauses that

prevent duplication of payment.

Primary or main insurance plan pays first, and then the 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 will become

the primary payer.

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Physician’s Services The physician writes the diagnosis and treatment The medical assistant translates the medical

terminology into codes for reimbursement Referrals to Other Services

The medical assistant may also be requested to secure authorization from the insurance company for additional services.

Coordination of Benefits (cont.)

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Insurer’s Processing and Payment

Insurance claims are reviewed for:

Medical Necessity Allowable Benefits Payment and Explanation of Benefits

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Payment and Remittance Advice Information found on the Remittance

Advice (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 co-payment and payments made Notation of any services not covered

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Reviewing the Insurer’s RemittanceAdvice 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.

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A patient has visited the medical office on two separate occasions within 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 rejected more than likely for which of the following reasons:

Medical necessity Payments

Apply Your Knowledge

Allowable benefits

- AnswerAnswer

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Fee Schedules and ChargesMedicare Payment System: RBRVS The payment system used by Medicare is called the resource

based relative value scale (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.

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Fee Schedules and Charges (cont.)

Payment Methods

Allowed Charges

ContractedFee Schedule

Capitation

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Allowed Charges This represents the most the payer will pay any

provider for that work. Other equivalent terms are:

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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Contracted Fee Schedule Fixed fee schedules are established particularly

with PPOs and participating physicians. Participating providers can bill patients for

procedures and services not covered by the plan. Capitation

The fixed prepayment for each plan member. Calculating Patient Charges

All payers require patients to pay for non-covered services.

Fee Schedules and Charges (cont.)

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Communication with PatientsAbout Charges Some practices may require that the patient sign an

assignment of benefits statement or that they pay in full for services at the time they are rendered.

The policies should explain what is required of the patient and when payment is due.

Unassigned Claims

Assigned Claims

Managed Care Members

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

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

Co-payments must be paid before patients leave the office.

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Preparing and Transmitting Healthcare Claims HIPAA Claims

Electronic and predominately used

Information entered is called data elements

X12 837 Health Care Claim is the official name

Data must be entered in CAPS in only valid fields

No prefixes allowed

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 require 33 form indicators

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Preparing and Transmitting Healthcare Claims (cont.)

Transmission of Electronic Claims There are three major methods of transmitting

claims electronically:

Direct transmission to the payer

Using a clearing house

Direct data entry

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Preparing and Transmitting Healthcare Claims (cont.)

Service facility name, address information

Medicare or benefitsassignment indicator

Part of the name or identifier ofthe referring provider

Or invalid subscriber’s birth date

Information about secondaryinsurance plans

Payer name and/or identifier

Generating Clean Claims requires preventing common errors such as:

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Preparing and Transmitting Healthcare Claims (cont.) Claims Security

The HIPAA rules set standards for protecting individually identifiable health information when maintained or transmitted electronically.

Common security measures used consists of: Access control, passwords, and log files to keep

intruders out Backups (saved copies of files) Security policies to handle violations that do occur

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Tips for the Office/Data Elementsfor HIPAA Electronic Claims

Pay-to provider (the office) Rendering provider (the physician)

The billing provider is the entity that transmits the claim to the payer.

A taxonomy code is a 10-digit number representing the physician specialty.

This code matches the physician’s : license certification education

Reporting ProviderInformation

Taxonomy Information

HIPAA National IdentifiersIdentifiers are numbers of predetermined length and structure like social security numbers.

National identifiers must be established for: Employers Health plans Healthcare providers Patients

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

a. Taxonomy information

b. HIPAA identifiers

Apply Your Knowledge

The taxonomy information would be very different since the physician preparations and licensing is very different.

- AnswerAnswer

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END OF CHAPTER