CHAPTER 15 Health Insurance Billing Procedures © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-2 Learning Outcomes 15.1 Define Medicare and Medicaid 15.2 Discuss TRICARE and CHAMPVA healthcare benefits programs 15.3 Distinguish between HMOs and PPOs 15.4 Explain how to manage a workers’ compensation case © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-3 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 © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-4 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 © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-5 Introduction • Health care claims = reimbursement – Accuracy = maximum appropriate payment • Medical assistant – Prepare claims – Review insurance coverage – Explain fees – Estimate charges for payers – Prepare claims © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-6 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 • Lifetime maximum benefit – a total sum that the health plan will pay out over the patient’s life © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-7 Basic Insurance Terminology (cont.) • Second Party – the physician who provides medical services • 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 © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-8 Basic Insurance Terminology (cont.) • Coinsurance – a fixed percentage of coverage charges after the deductible is met • Copayment – a small fee that is collected at the time of the visit • Exclusions – uncovered expenses • Formulary – a list of approved drugs • Elective procedure – one not required to sustain life © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-9 Basic Insurance Terminology (cont.) • Pre-authorization – approval in advance of the need for a specific procedure • Pre-certification – determination of whether the proposed procedure is a covered service under the patient’s insurance plan • 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 © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-10 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 that provides services, and the third-party payer is the insurance company that agrees to carry the risk of paying for approved services Good Job! © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-48 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 • Advance Beneficiary Notice of Noncoverage (ABN) © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-49 Communication with Patients About Charges (cont.) • Financial policy – Patient responsibility for payment for services 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 Copayments must be paid before patients leave the office © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-50 Apply Your Knowledge What 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! © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d Preparing and Transmitting Health-Care Claims 15-51 • HIPAA claims – Electronic – 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 © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d Preparing and Transmitting Health-Care Claims 15-52 • Data elements – five major sections – Provider section – • Billing and rendering provider • Taxonomy information – Subscriber (insured or policyholder) section – Patient (may be the subscriber or another person) and payer section – Claim details – Services © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-53 Preparing and Transmitting Health-Care Claims (cont.) • 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 © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-54 Preparing and Transmitting Health-Care Claims (cont.) Transmission of Electronic Claims Three major methods of transmitting claims electronically Direct transmission to the payer Offices and payers exchange information directly by electronic data interchange (EDI) Direct data entry Internet-based service that loads data elements directly into the health plan’s computer Using a clearinghouse Translates nonstandard data into standard format Clearinghouse cannot create or modify data © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-55 Preparing and Transmitting Health-Care Claims (cont.) • Generate clean claims by avoiding common errors or incomplete service facility name, address, and identification for services rendered outside the office or home Medicare assignment indicator or benefits assignment indicator part of the name or the identifier of the referring provider or invalid subscriber’s birth date information about secondary insurance plans, such as spouse’s payer payer name and/or payer identifier © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-56 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 © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-57 Apply Your Knowledge 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? ANSWER: 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 © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-58 In Summary 15.1 Medicare provides health care for citizens aged 65 and over, and certain patients under 65 may also qualify for Medicare Medicaid is a health benefits program for low-income, blind or disabled patients, needy families, foster children, and children born with birth defects 15.2 TRICARE is a health insurance plan for families of uniformed personnel and retirees from the uniformed services CHAMPVA covers the expenses of families of veterans with total, permanent, service-connected disabilities, as well as the surviving spouses and children of veterans in this same category © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-59 In Summary (cont.) 15.3 HMOs generally seek services from a specific group of providers within their plan PPOs establish a network of providers to perform services for their plan members 15.4 Keep medical and financial records of workers’ compensation cases separate from other employee records; verify coverage and maintain confidentiality 15.5 The claims process consists of obtaining patient information, determining diagnosis and fees, recording charges and codes, preparing the claim, reviewing the processing of the claim and remittance advice, and making sure the payment comes into the office © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-60 In Summary (cont.) 15.6 Medical assistants gather and record patient information; verify coverage, record procedures and services performed; file claims; bill patients; and review and record payments 15.7 The rules that determine the coordination of benefits are guidelines for payments from insurance companies 15.8 Preparing the health-care claim consists of filing the claim, setting time limits for filing the claim, reviewing the claim for medical necessity, reviewing for allowable benefits, payment, and remittance advice © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-61 In Summary (cont.) 15 Payers set fees based on the amounts that Medicare allows, geographic factors, a uniform conversion factor, practice costs, insurance, and the physician’s work 15.10 The CMS-1500 form contains numbered items that refer to the patient and the patient’s insurance coverage 15.11 Three ways to transmit electronic claims are to – – – Transmit claims directly to the clearinghouse Use a clearinghouse to prepare and send claims Use direct data entry using an Internet-based service © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d 15-62 End of Chapter 15 I am always doing that which I can not do, in order that I may learn how to it ~ Pablo Picasso © 2011 The McGraw -Hill Com panies, Inc A ll rights reserv e d