In this chapter you will learn: Define Medicare and Medicaid, discuss TRICARE and CHAMPVA healthcare benefits programs, distinguish between HMOs and PPOs, explain how to manage a workers’ compensation case, explain how payers set fees, complete a Centers for Medicare and Medicaid Service (CMS1500) claim form, identify three ways to transmit electronic claims.
CHAPTER 17 Insurance and Billing 17-2 Learning Outcomes (cont.) 17.1 Define the basic terms used by the insurance industry 17.2 Compare fee-for- service plans, HMOs, and PPOs 17.3 Outline the key requirements for coverage by the Medicare, Medicaid, TRICARE and CHAMPVA programs 17.4 Describe allowed charge, contracted fee, capitation and formula for RBRVS 17-3 Learning Outcomes (cont.) 17.5 Outline the tasks performed to obtain the information required to produce an insurance claim 17.6 Produce a clean CMS-1500 health insurance claim form 17.7 Explain the methods used to submit an insurance claim electronically 17.8 Recall the information found on every payer’s remittance advice 17-4 Introduction • Health care claims – Reimbursement for services – Accuracy = maximum appropriate payment • Medical assistant – Prepare claims – Review insurance coverage – Explain fees – Estimate charges – Understand payment explanation – Calculate the patient’s financial responsibility 17-5 Basic Insurance Terminology • Medical insurance • Benefits • Policy holder • Dependents • Premium • Lifetime maximum benefits 17-6 Basic Insurance Terminology (cont.) • Three participants in an insurance contract: – First party ~ patient – Second party ~ healthcare provider – Third-party payer ~ health plan 17-7 Basic Insurance Terminology (cont.) • Deductible ~ met annually • Coinsurance ~ fixed percentage • Copayment – Managed care plans – Preferred provider • Exclusions • Formulary 17-8 Basic Insurance Terminology (cont.) • Elective procedure • Preauthorization ~ medically necessary • Predetermination 17-9 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 17-10 Private Health Plans • Insurance companies ~ rules about benefits and procedures • Sources of health plans – Group policies – Individual plans – Government plans • National Provider Identifier (NPI) 17-47 Paper Claim Completion (cont.) Block – 13: patient and insurance information Block 14 – 22: provider information Block Block 14 x Block 1a IN00011123 04 15 20XX Block 15 17-48 Apply Your Knowledge What are the major data element sections required by the X12 837 transaction? ANSWER: They are • • • • • Provider Subscriber Patient and payer Claim details Services 17-49 Transmitting Electronic Claims • Three methods Transmitting claims directly Offices and payers exchange information directly by electronic data interchange (EDI) Using a clearinghouse Using direct data entry 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 17-50 Generating Clean Claims • Carefully check claim before submission – Missing or incomplete information – Invalid information • Rejected claims – Provide missing information – Submit new claim 17-51 Claims Security • The HIPAA rules • Common security measures – Access control, passwords, and log files – Backup copies – Security policies 17-52 Apply Your Knowledge What are the three methods for electronic transmission of insurance claims? ANSWER: •Direct transmission to insurance carrier using EDI •Using a clearinghouse that translated information into standard formats and “scrub” claims prior to submission •Direct data entry into the insurance carrier’s system 17-53 Insurer’s Processing and Payment • Claims Register – Created by billing program or clearinghouse – Track submitted claims • Review for medical necessity • Review for allowable benefits 17-54 Payment and Remittance Advice • With payment of a claim – Remittance advice (RA) – Amount billed – Amount allowed – Amount of patient liability – Amount paid – Services not covered 17-55 Reviewing the Insurer’s RA and Payment • Review line by line – If correct, make appropriate entry in claims log – If unpaid or different than records • Trace • Place a query – If rejected ~ review claim for accuracy 17-56 Apply Your Knowledge When reviewing the RA, you note that several claims were rejected and one was not paid What should you do? ANSWER: You need to review the rejected claims to be sure all information was correct Either resubmit with corrected information or submit a new claim, depending on the carrier’s policy You would have to call the insurance company to trace the claim that was not paid 17-57 In Summary 17.1 There are a variety of terms used by insurance companies, knowledgeable medical assistants, medical billers, and coders 17.2 Fee-for-service plans are traditional plans where the insurance plan pays for a percentage of the charges HMOs are prepaid plans that pay the providers either by capitation or by contracted fee-for-service A PPO is a managed care plan that establishes a network of providers to perform services for plan members 17-58 In Summary (cont.) 17.3 Medicare provides health insurance for citizens aged 65 and older as well as certain categories of others Medicaid is a health benefit plan for low-income and certain others with disabilities TRICARE is a healthcare benefit for families of uniformed personnel and retirees CHAMPVA covers the expenses of the families of veterans with total, permanent, service-connected disabilities as well as expenses for survivors of veterans who died in the line of duty or from serviceconnected disabilities 17-59 In Summary (cont.) 17.4 An allowed charge is the maximum dollar amount an insurance carrier will base its reimbursement on A contracted fee is negotiated between the MCO and the provider Capitation is a fixed prepayment paid to the PCP RBRVS stands for resource-based relative value scale Its formula is RVU X GAF X CF 17.5 The claims process includes: obtaining patient information; delivering services to the patient and determining the diagnosis and fee; recording charges and codes; documenting payment from the patient; and preparing the healthcare claims 17-60 In Summary (cont.) 17.6 The student should be able to produce a legible, clean, and acceptable CMS-1505 claim form 17.7 The three methods used to submit claims electronically are: a directly to the payer’s website; the use of a clearinghouse; and the use of direct data entry or DDE 17.8 Although the format may vary from payer to payer, all RAs (EOBs) contain similar information 17-61 End of Chapter 17 I am always doing that which I can not do, in order that I may learn how to it ~ Pablo Picasso .. .17- 2 Learning Outcomes (cont.) 17. 1 Define the basic terms used by the insurance industry 17. 2 Compare fee-for- service plans, HMOs, and PPOs 17. 3 Outline the key requirements... required to produce an insurance claim 17. 6 Produce a clean CMS-1500 health insurance claim form 17. 7 Explain the methods used to submit an insurance claim electronically 17. 8 Recall the information... and the third-party payer is the insurance company that agrees to carry the risk of paying for approved services 17- 10 Private Health Plans • Insurance companies ~ rules about benefits and procedures