Presentation on theme: "The Medical Billing Cycle"— Presentation transcript:
1The Medical Billing Cycle 1The Medical Billing Cycle
2When you finish this chapter, you will be able to: Learning Outcomes1-2When you finish this chapter, you will be able to:1.1 Identify four types of information collected during preregistration.1.2 Compare fee-for-service and managed care health plans, and describe three types of managed care approaches.1.3 Discuss the activities completed during patient check-in.1.4 Discuss the information contained on an encounter form at check-out.1.5 Explain the importance of medical necessity.
3Learning Outcomes (Continued) 1-3When you finish this chapter, you will be able to:1.6 Explain why billing compliance is important.1.7 Describe the information required on an insurance claim.1.8 List the information contained on a remittance advice.1.9 Explain the role of patient statements in reimbursement.1.10 List the reports created to monitor a practice’s accounts receivable.
4Key Terms accounting cycle accounts receivable (A/R) adjudication 1-4accounting cycleaccounts receivable (A/R)adjudicationcapitationcodingcoinsuranceconsumer-driven health plan (CDHP)copaymentdeductiblediagnosisdiagnosis codedocumentationelectronic health records (EHRs)encounter formexplanation of benefits (EOB)fee-for-servicehealth maintenance organization (HMO)health planmanaged care
5Key Terms (Continued) medical coder medical necessity medical record 1-5medical codermedical necessitymedical recordmodifierpatient information formpayerpolicyholderpractice management program (PMP)preferred provider organization (PPO)premiumprocedureprocedure coderemittance advice (RA)statement
6Step 1 in the Medical Billing Cycle: Preregister Patients 1-6Patient information gathered via phone or Internet before visit:NameContact informationReason for the visitWhether patient is new to practiceLearning Outcome: 1.1 Identify four types of information collected during preregistration.Pages: 4-5Information for preregistration can also be obtained by mailing the patient paperwork before the actual visit. The patient can bring it in on the day of the appointment or mail it back prior to the appointment . All these ways help speed up the process of registering a new patient. It lessens the patient’s time in the waiting room. It keeps your day from getting backed up if patients do not arrive a little before their actual appointment time.
7Step 2 in the Medical Billing Cycle: Establish Financial Responsibility for Visit 1-7Many patients have medical insurance, which is an agreement between a policyholder and a health planTo secure medical insurance, policyholders pay premiums to payers, which are health plans such as government plans and private insuranceLearning Outcome: 1.2 Compare fee-for-service and managed care health plans, and describe three types of managed care approaches.Pages: 5-7
8Fee-for-Service Health Plans Step 2 in the Medical Billing Cycle: Establish Financial Responsibility for Visit (Continued)1-8Fee-for-Service Health PlansPolicyholders are repaid for medical costsRequires payment of coinsuranceUsually a deductible must be paid before benefits beginManaged Care Health PlansManaged care organizations control both financing and delivery of health careHave contracts with both patients and providersLearning Outcome: 1.2 Compare fee-for-service and managed care health plans, and describe three types of managed care approaches.Pages: 5-7
9Types of managed care health plans Step 2 in the Medical Billing Cycle: Establish Financial Responsibility for Visit (Continued)1-9Types of managed care health plansPreferred provider organization (PPO): provider network for plan members; discounted feesHealth maintenance organization (HMO): pays fixed amounts called capitation payments to contracted providers; patients must pay a small fixed fee called a copayment per visitConsumer-driven health plan (CDHP): combines a health plan with a high deductible with a policyholder's savings accountLearning Outcome: 1.2 Compare fee-for-service and managed care health plans, and describe three types of managed care approaches.Pages: 5-7Kaiser Foundation Health Plan/Northern California is the largest HMO with 2,722,738 enrollees; followed by Kaiser Foundation Health Plan/Southern California with 2,591,555 enrollees; then PacifiCare of California with 2,260,334 enrollees. Total HMO enrollment in the US reached 670 million for the first time while eight plans passed the million-member mark, according to a study by The Interstate Competitive Edge HMO Industry Report. Some of the largest PPO’s are Blue Cross and Blue Shield of California, Pacific Foundation for Medical Care, Aetna US Healthcare, Cigna. Some of the largest CDHP’s are UnitedHealth Group, Inc. , Aetna Inc., Cigna Healthcare, Humana, Inc., Meritain Health.
10Step 3 in the Medical Billing Cycle: Check In Patients 1-10Patients complete the patient information form that contains personal, employment, and medical insurance informationPatient identity is verifiedTime-of-service payments due before treatment are collectedLearning Outcome: 1.3 Discuss the activities completed during patient check-in.Pages: 8-10
11Step 4 in the Medical Billing Cycle: Check Out Patients 1-11Every time a patient is treated by a health care provider, a record, known as documentation, is made of the encounterThis chronological medical record, or chart, includes information that the patient providesLearning Outcome: 1.4 Discuss the information contained on an encounter form at check-out.Pages: 10-13
12Step 4 in the Medical Billing Cycle: Check Out Patients (Continued) 1-12Diagnoses and ProceduresA diagnosis is the physician’s opinion of the nature of the patient’s illness or injuryProcedures are the services performedCoding is the process of translating a description of a diagnosis or procedure into a standardized codeA patient’s diagnosis is communicated to a health plan as a diagnosis codeA procedure code stands for a particular service, treatment, or testA modifier is a two-digit character that is appended to a CPT code to report special circumstancesLearning Outcome: 1.4 Discuss the information contained on an encounter form at check-out.Pages: 10-13
13Step 4 in the Medical Billing Cycle: Check Out Patients (Continued) 1-13The diagnosis and procedure codes are recorded on an encounter form, also known as a superbillA practice management program (PMP) is a software program that automates the administrative and financial tasks required to run a medical practiceLearning Outcome: 1.4 Discuss the information contained on an encounter form at check-out.Pages: 10-13
14Step 5 in the Medical Billing Cycle: Review Coding Compliance 1-14A physician, medical coder, or medical insurance specialist assigns codesThe documented diagnosis and medical services should be logically connected, so that the medical necessity of the charges is clear to the insurance companyMedical necessity is treatment by a physician for the purpose of preventing, diagnosing, or treating an illness, injury, or its symptoms in an appropriate mannerLearning Outcome: 1.5 Explain the importance of medical necessity.Pages: 13-15Discuss how medical necessity is related to payment.
15Step 6 in the Medical Billing Cycle: Check Billing Compliance 1-15Each charge, or fee, for a visit is represented by a specific procedure codeThe provider’s fees for services are listed on the medical practice’s fee scheduleMedical billers use their knowledge to analyze what can be billed on health care claimsLearning Outcome: 1.6 Explain why billing compliance is important.Page: 15Explain why an insurance company will not pay for a strep test performed on a patient with a diagnosis of urinary tract infection.
16Step 7 in the Medical Billing Cycle: Prepare and Transmit Claims 1-16Medical practices produce insurance claims to receive paymentPMPs generate health care claims for electronic transmittalLearning Outcome: 1.7 Describe the information required on an insurance claim.Pages: 15-16Explain the relationship between accurate information on claim forms and prompt payment.
17Step 8 in the Medical Billing Cycle: Monitor Payer Adjudication 1-17When a claim is received by a payer, it is reviewed following a process known as adjudication—a series of steps designed to judge whether it should be paidThe document explaining the results of the adjudication process is called a remittance advice (RA) or explanation of benefits (EOB)Learning Outcome: 1.8 List the information contained on a remittance advice.Pages: 16-18Refer to Figure 1.7 in the text. Go over it now in detail. This will help students later when they have to use the RA in the Medisoft exercises.
18Step 9 in the Medical Billing Cycle: Generate Patient Statements 1-18A statement lists all services performed, along with the charges for each serviceStatements list the amount paid by the health plan and the remaining balance that is the responsibility of the patientLearning Outcome: 1.9 Explain the role of patient statements in reimbursement.Page: 18Refer to Figure 1.8. Dissect it for the students.
19Step 10 in the Medical Billing Cycle: Follow Up Patient Payments and Handle Collections 1-19The accounting cycle is the flow of financial transactions in a businessPMPs are used to track accounts receivable (AR)—monies that are coming into the practicePMPs are also used to create day sheets, monthly reports, and outstanding balances reportsLearning Outcome: 1.10 List the reports created to monitor a practice’s accounts receivable.Pages: 18-20Refer to Figure 1.9 while discussing this slide.