1. Copyright © 2008 Delmar Learning. All rights reserved. Chapter 4 Life Cycle of an Insurance Claim

2. Copyright © 2008 Delmar Learning. All rights reserved. 2 Development of an Insurance Claim CMS-1500 claim is used to report professional and technical services Patient encounter form (or Superbill) is used to generate the provider’s claim for payment

3. Copyright © 2008 Delmar Learning. All rights reserved. 3 Life Cycle of an Insurance Claim

4. Copyright © 2008 Delmar Learning. All rights reserved. 4 Information to Claim Information from the Superbill, patient record, or chart is then transferred to the CMS-1500 claim

5. Copyright © 2008 Delmar Learning. All rights reserved. 5 Accepting Assignment When provider agrees to what the insurance company allows and or approves as payment

6. Copyright © 2008 Delmar Learning. All rights reserved. 6 Accepting Assignment CMS-1500 claim: –Requires responses pertaining to patient’s condition and if related to employment, auto or any other accident, additional insurance coverage, or use of an outside laboratory.

7. Copyright © 2008 Delmar Learning. All rights reserved. 7 Accepting Assignment Patient is responsible for co-payment and coinsurance amounts “Signature on File” can be used as a substitute for patient’s signature, as long as real signature is on file.

8. Copyright © 2008 Delmar Learning. All rights reserved. 8 Accepting Assignment Claim is proofread and double checked –Any supporting documents are copied from patient’s chart and attached to claim

9. Copyright © 2008 Delmar Learning. All rights reserved. 9 Managing New Patients Office policy and procedures (paying co-payments) –Should be explained and posted at receptionist desk Determine whether appropriate office has been contacted –Then preregister new patients

10. Copyright © 2008 Delmar Learning. All rights reserved. 10 Managing New Patients Patient must complete a patient registration form upon arrival Make photocopy (front and back) of patient’s insurance card –File in patient’s financial record

11. Copyright © 2008 Delmar Learning. All rights reserved. 11 Managing New Patients Contact payer –Confirm patient’s insurance information located on back of insurance card Verify information with patient and/or subscriber –Make changes –Enter information using computer entry software

12. Copyright © 2008 Delmar Learning. All rights reserved. 12 Managing New Patients Create a new medical record for the patient Generate patient’s encounter form Encounter form is a financial record that documents treated diagnoses and services

13. Copyright © 2008 Delmar Learning. All rights reserved. 13 Managing Established Patients Schedule a return appointment when patient is checking out or when patient calls office Verify all registration information Encounter form needs to be generated for patient’s current visit

14. Copyright © 2008 Delmar Learning. All rights reserved. 14 Managing Office Finances CPT and HCPCS level 2 (national) codes are assigned to procedures Enter charges for services and/or procedures Post charges to patient’s account Collect payment from patient

15. Copyright © 2008 Delmar Learning. All rights reserved. 15 Managing Office Finances Post payment to patient’s account Complete insurance claim Attach documents that support the claim Obtain provider’s signature on claim if processed manually

16. Copyright © 2008 Delmar Learning. All rights reserved. 16 Managing Office Finances File copies of the claim and attachments in the practice’s insurance files Log completed claims in an insurance registry Send claims by mail or electronically

17. Copyright © 2008 Delmar Learning. All rights reserved. 17 Appealing Denied Claims Remittance advice indicates that the payment was denied for reasons other than a processing error

18. Copyright © 2008 Delmar Learning. All rights reserved. 18 Steps to Appeal Denial 1.Procedure or services should be reviewed from original documents for diagnostic supporting documentation –Research procedure and patient documentation when denied for “medical necessity.”

19. Copyright © 2008 Delmar Learning. All rights reserved. 19 Steps to Appeal Denial 2.Determine if condition is pre-existing –If incorrect diagnosis code was submitted on original claim Correct claim and resubmit

20. Copyright © 2008 Delmar Learning. All rights reserved. 20 Steps to Appeal Denial 3.Noncovered benefit –Determine if treatment submitted was excluded –If incorrect procedure code was submitted Correct claim, resubmit, and attach copy of medical record documentation to support code change

21. Copyright © 2008 Delmar Learning. All rights reserved. 21 Steps to Appeal Denial 4.Termination of coverage –Contact patient –Determine current coverage –Authorization should be performed prior to service –If this was performed, submit with authorization number

22. Copyright © 2008 Delmar Learning. All rights reserved. 22 Steps to Appeal Denial 5.Failure to obtain preauthorization requests is a costly error for practice –Retrospective review of claims are more difficult or sometimes impossible to obtain

23. Copyright © 2008 Delmar Learning. All rights reserved. 23 Steps to Appeal Denial 6.Out of network providers –Write letter of appeal explaining why treatment was sought outside the provider network

24. Copyright © 2008 Delmar Learning. All rights reserved. 24 Steps to Appeal Denial 7.Provide letter of appeal explaining why higher level of care was required –Copies of patient’s chart may be needed for review by insurance adjudicator.

25. Copyright © 2008 Delmar Learning. All rights reserved. 25 Credit and Collections Delinquent claims and prevention Verify health insurance cards Determine each patient’s coverage Electronically submit a clean claim

26. Copyright © 2008 Delmar Learning. All rights reserved. 26 Credit and Collections Contact payer to verify received claim Review records to determine if claim is paid, denied, or pending Submit supporting documents

27. Copyright © 2008 Delmar Learning. All rights reserved. 27 Claim Submission Problems, Descriptions, and Resolutions Coding errors Delinquent Denied Lost

28. Copyright © 2008 Delmar Learning. All rights reserved. 28 Claim Submission Problems, Descriptions, and Resolutions Overpayment Payment errors Pending –Suspense Rejected