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HEALTH CARE CLAIM PREPARATION AND TRANSMISSION Chapter 6.

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Presentation on theme: "HEALTH CARE CLAIM PREPARATION AND TRANSMISSION Chapter 6."— Presentation transcript:

1 HEALTH CARE CLAIM PREPARATION AND TRANSMISSION Chapter 6

2 2 Preparation and Transmission Health Care Claim Preparation and Transmission Learning Objectives process of using medical billing programs Describe the process of using medical billing programs to prepare health care claims. five major sections Briefly describe the information contained in the five major sections of the HIPAA claim. claim control numbersline item control numbers Discuss the importance and use of claim control numbers and line item control numbers. three major methodselectronic claim transmission. Identify the three major methods of electronic claim transmission.

3 Chapter 63 Key Terms Audit-edit claim response Billing provider Birthday rule Claim attachment Claim control number CMS-1500 claim form Coordination of benefits (COB) Database Data element Destination payer Edit Electronic data interchange (EDI) HIPAA claim HIPAA Electronic Health Care Transaction and Code Sets (TCS) HIPAA Security Rule

4 Chapter 64 Key Terms (cont’d) Line item control number National Patient ID National Payer ID National Provider Identifier (NPI) Password Pay-to provider Place of service (POS) code Primary insurance Secondary insurance Referring physician Rendering provider Subscriber Taxonomy code Transactions Verification report

5 Chapter 65 Medical Billing Programs Claim Preparation Using Medical Billing Programs Computerized billing and claims software programs Most medical practices use software programs to prepare claims The program’s databases are set up with data about: Physicians Diagnosis and Procedure Codes Fee Schedules Insurance Carriers (payers)

6 Chapter 66 Medical Billing Programs Claim Preparation Using Medical Billing Programs (cont’d) To prepare a claim To prepare a claim, a medical insurance specialist: Recordsthe patient’s information Records the patient’s information, including primary insurance plan Records the services, charges, and payments Records the services, charges, and payments based on the patient’s encounter form Creates and transmits the claims Creates and transmits the claims to the appropriate payer

7 Chapter 67 Patients’ Information Recording Patients’ Information Patient Information Forms new updated Data from new or updated forms is entered into program New records are created for new patients When a patient is covered by more than one Group Plan, the Medical Insurance Specialist must determine which plan is primary and which is secondary.

8 Chapter 68 Recording Patient’s Information Primary Insurance (Payer) is a Health Plan that pays benefits first when a patient is covered by more than one Group Plan. Secondary Insurance (Payer) is a Health Plan that pays benefits after the Primary Plan, when a patient is covered by more than one Group Plan.

9 Chapter 69 Patient’s Information Recording Patient’s Information Birthday Rule. Dependent Child(ren) – the primary plan is determined by the Birthday Rule. The Rule states that the parent whose day of birth is earlier in the calendar year is Primary.

10 Chapter 610 Benefits Coordination of Benefits Benefits Coordination of Benefits (COB) is a provision which establishes the order in which insurance plans pay claims when an individual has coverage under more than one plan. The insurance industry has developed a consistent and orderly way to determine which plan pays its full benefits and which plan pays a reduced amount (if any), which when added together equal more than a single plan's benefit, but not more than the total amount of the allowable charges incurred. It is intended that individuals do not profit when having coverage under more than one plan, and that Members and/or providers receive the appropriate amount of reimbursement for medical services.

11 Chapter 611 Benefits Coordination of Benefits Coordination of Benefits (COB) applies when: Both spouses cover their family through their employers Both spouses are covered by the same insurance carrier but work for different employers. Member is Federal Medicare eligible Member is retired from one job and actively employed elsewhere Member is injured in an automobile accident Member is injured on the job The primary subscriber has more than one employer

12 Chapter 612 Benefits Coordination of Benefits The following criteria is used to determine the order of benefits: primary The subscriber's active employee plan is primary over their spouse's coverage primary Active employee coverage is primary over inactive (or retiree) employee coverage primary If the Member has two policies that are both active, the policy that has been active the longest is primary.

13 Chapter 613 Benefits Birthday Rule Coordination of Benefits Birthday Rule Birthday Rule: dependent child Birthday Rule: When a dependent child is covered under both parents' health plans, the plan of the parent whose birthday falls earlier in the calendar year pays first. When a newborn is covered for the first 31 days (enrolled or not enrolled), the plan of the parent whose birthday falls earlier in the calendar year pays first.

14 Chapter 614 Benefits Birthday Rule Coordination of Benefits Birthday Rule Only the month and the day are considered, not the parents' years of birth. FOR EXAMPLE: primary If the mother's birthday month is March and the father's birthday month is June, then the mother's health plan is primary primary If both parents have the same birthday, then the plan which covered the parent longer is primary over the plan which covered the parent for a shorter time.

15 Chapter 615 Benefits Coordination of Benefits The Provider is responsible for supplying information about the Secondary Insurance & coverage to the Primary Payer The Providers must also include this information in the Insurance Claim Form.

16 Chapter 616 Benefits Coordination of Benefits– (cont.) When the RA (remittance advice) is received the Medical Insurance Specialist prepares another Claim Form for the Secondary Plan. The claim reports: The Amount the first Insurance Policy paid The Patient Balance, if any After both carriers have made payments, any unpaid bills are submitted to the patient (depending on deductible, coinsurance, PAR, non-PAR, etc)

17 Chapter 617 for Patients’ Encounter Recording Services, Charges, & Payments for Patients’ Encounter Patient’s Encounter Form DiagnosiProcedure Codes Diagnosis and Procedure Codes Charges Charges for Services and Procedures Payment Patient Payment Information Insurance Coverage Patient’s Insurance Coverage for visit is selected Provider Patient’s Provider for visit is entered into the system

18 Chapter 618 Claims To Payers Creating & Transmitting Claims To Payers Electronic Claim Files Medical insurance specialist instructs program to create claims for appropriate payer Program Program draws on databases to create claim files Files electronically Files may then be printed, but most are submitted electronically to payer

19 Chapter 619 Medical Billing Programs Accuracy & Security Issues Medical Billing Programs The Major Databases in Billing Programs are: Provider Provider – The provider database has information about the physician(s), medical office, the practice name, phone number, etc. Patient/Guarantor stored Patient/Guarantor – The database where each patient information form is stored, such as name, address, phone, birth date, social security number, etc.

20 Chapter 620 Medical Billing Programs Accuracy & Security Issues Medical Billing Programs The Major Databases in Billing Programs are: Insurance Carrier Insurance Carrier – This database contains the names, addresses, plan types, and other data about the major health plans used by the practice’s patients. Diagnosis Codes Diagnosis Codes – This database contain the ICD- 9 Codes that indicate the reason a service is provided. The Codes stored are those most frequently used by the Practice.

21 Chapter 621 Medical Billing Programs Accuracy & Security Issues Medical Billing Programs The Major Databases in Billing Programs are: Procedure Codes Procedure Codes – The Procedure Code database contains the data needed to create charges. The CPT Codes most often used by the practice are selected for this database. Transactions Transactions – This database stores information about each patient’s visit, charges and the related diagnoses and procedures, as well as received and outstanding payments.

22 Chapter 622 Tips for accurate Data Entry prefixes Do not use prefixes for names (avoid Mr., Ms., etc.) use special characters Do not use special characters (hyphens, commas, etc.) only valid data Use only valid data in all fields (avoid words such as same) Enter the required number of characters Enter the required number of characters for each data element, but do not worry about the format— most programs reformat data correctly Computer Billing Data Entry in Computer Billing

23 Chapter 623 Data Security HIPAA Security Rule protecting PHIwhen it is maintained or transmitted electronically Sets standards for protecting PHI when it is maintained or transmitted electronically PHI: PHI: Protected Health Information PHI Office’s Database files contain PHI

24 Chapter 624 Data Security Security Measures in a Medical Office Access control and passwords Access control and passwords IDs Passwords Users are given IDs & Passwords that will permit them to use the files that they have been granted access. Backup Files The process of copying files to another medium so that they will be preserved in case the originals are not longer available. Security policy train staff PHI sent. A Process must be in place to train staff on protecting PHI when electronically stored and/or sent.

25 Chapter 625 Claims Types of Claims HIPAA ( Health Insurance Portability & Accountability Act of 1996) Claim 837 claim Electronic transaction called the 837 claim Paper Claim CMS-1500 CMS-1500 claim form (formerly the HCFA-1500 claim form)

26 Chapter 626 Claims Types of Claims (cont’d) HIPAA claim Follows requirements of the HIPAA Electronic (TCS) Health Care Transaction and Code Sets (TCS) Must be sent as an electronic file with required format mandates use of this form for all Medicare claims CMS mandates use of this form for all Medicare claims Required or preferred by most other payers as well Paper Claim very small practices only May be used for Medicare claims by very small practices only Still accepted by most payers

27 Chapter 627 Preparing HIPAA Claims The HIPAA Claim has Five Major Sections 1 Provider information 2 Subscriber and patient information 3 Payer information 4 Claim details 5 Services

28 Chapter 628 Provider Information (National Providers Identifier) Includes Addresses and NPIs (National Providers Identifier) of: organization person Billing provider—organization or person transmitting the claim to payer medical practicean outside organization May be the medical practice or an outside organization (billing service or clearinghouse hired by the practice) Pay-to provider—organization or person receiving payment If billing provider and pay-to provider are the same, not necessary to report pay-to provider

29 Chapter 629 Provider Information (cont’d) NPI National Provider Identifier Ten-digit number PIN (Provider Identification Number UPIN (Unique Provider Identification Number) Recent HIPAA rule: tax identification numberother identifierNPI Until assigned, tax identification number or other identifier can be used in place of NPI

30 Chapter 630 Taxonomy Code Taxonomy Code – is a ten-digit number that stands for a physician’s medical specialty.Example: 207NP0225X for Pediatric Dermatology 207NP0225X for Pediatric Dermatology

31 Chapter 631 Information Subscriber/Patient Information Subscriber Policyholder or Guarantor patient, May be the patient, but if not, patient information also required Data Elements: Subscriber’s name, health plan number, policy number and plan name, claim filing indicator code (shows type of plan, such as HMO)

32 Chapter 632 Information Subscriber/Patient Information (cont’d) Relationship to Patient subscriber is the patient, select“self” If the subscriber is the patient, select “self” subscriber and patient are different, selectthe correct relationship from list of options When the subscriber and patient are different, select the correct relationship from list of options Software stores corresponding code

33 Chapter 633 Information Subscriber/Patient Information (cont’d) Patient Information Data Elements: Name, address, gender, date of birth, primary identifier (such as a health plan member ID—to be replaced soon by National Patient ID under HIPAA) Possibly secondary identifier (such as SSN)

34 Chapter 634 Information Payer Information Destination payer Payer receiving the claim Data Elements: Payer’s name and ID (to be replaced with National Payer ID when legislated) Assignment-of-benefits code

35 Chapter 635 Claim Information Details of the claim Data elements: Claim control number, for tracking medical insurance specialist Assigned by the medical insurance specialist 20 characters Maximum of 20 characters; can incorporate account number but should not be the same Total charges and patient payment, if any Place of service (POS) code; diagnosis codes Place of service (POS) code; diagnosis codes Renderingreferring provider data Rendering or referring provider data, if any

36 Chapter 636 Service Line Information Service Line Information – List the Services performed for patient separate line Each service is listed on separate line Data elements Data elements for each service: Line item control number, for tracking payments from insurance carrier Date of service Procedure code Diagnosis code links Charge

37 Chapter 637 HIPAA Claims Transmitting HIPAA Claims (EDI) Electronic Data Interchange (EDI) HIPAA requires particular format for transmission X12 Called X12 transmission PHI Patients’ PHI must be secure and private, when claims are sent Claim Attachments HIPAA electronic standard underway paper or electronic At present, may be paper or electronic

38 Chapter 638 Sending Claims Methods of Sending Claims Three Major Three Major methods for sending electronic claims Clearinghouse Direct Transmission Direct Data Entry (DDE) Clearinghouses Most medical offices use Clearinghouses for HIPAA EDI Format

39 Chapter 639 Sending Claims Methods of Sending Claims (cont’d) Clearinghouse Clearinghouse Acts as an intermediary between provider and payer Reformats to a form Reformats data from provider to a form accepted by the payer Charges fee Charges fee for service Performs edits Performs edits missing or incorrect data Checks claim for missing or incorrect data Creates audit/edit report for provider Lists errorssends claim back Lists errors and sends claim back for correction (dirty claims)

40 Chapter 640 Sending Claims Methods of Sending Claims Three Major Three Major methods for sending electronic claims – Cont. Direct Transmission - Provider & Payer receive payment directly. Direct Data Entry (DDE) - Office uses the Internet- based Service connected to the payer where data elements are keyed.

41 Chapter 641 Preparing Paper Claims CMS-1500 (HCFA-1500) claim form 33 Paper claim containing 33 form locators 1-13 Form locators 1-13 Patient and patient’s insurance coverage Form locators Provider and transactions data (diagnoses, procedures, charges) Claim is printed and sent to payer

42 Chapter 642 Quiz Matching 837 NPI POS code CMS-1500 Paper claim form Ten-digit number Another name for the HIPAA claim A number that shows where a patient received services

43 Chapter 643 Critical Thinking advantage disadvantage Name one advantage and one disadvantage of electronic claims. Advantages Advantages such as: lower costs, reduced rejection, faster payment, access to status reports. Disadvantages Disadvantages such as: initial expense, security, disruption due to power failure or equipment problems, unable to include attachments.


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