2 Processing Health Care Claims Objectives 15-1 List the basic steps of the health insurance claim process Describe your role in insurance claims processing Explain how payers set fees Define Medicare and Medicaid Discuss TRICARE and CHAMPVA healthcare benefits programs Distinguish between HMOs and PPOs.
3 Processing Healthcare Claims Objectives (cont.) 15-7 Explain how to manage a workers compensation case Apply rules related to coordination of benefits Describe the healthcare claim preparation process Complete a Centers for Medicare and Medicaid service (CMS-1500) claim form Identify three ways to transmit electronic claims.
4 Basic Insurance Terminology Medical insurance (health insurance) is a written contract policy between a policy holder and a health plan. Terms To Know premium Amount of money paid by the policy holder to the insurance carrier. benefits Medical services provided. First Party The patient policy holder. Second Party The physician who provides medical services. Third Party The health plan.
5 Deductible - a fixed dollar amount that must be paid or met once a year before third-party payers begin to cover expenses. Coinsurance - a fixed percentage of coverage charges after the deductible is met. Co-payment - a small fee that is collected at the time of the visit. Exclusions - uncovered expenses. Formulary - an approved list of drugs. Basic Insurance Terminology (cont.)
6 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. Basic Insurance Terminology (cont.)
7 Types of Health Plans Fee For Service Plans Managed Care Plans Oldest and most expensive type of plan Covers costs of select medical services Amount services determined by the physician Controls both the financing and delivery of healthcare to policy holders. Both policy holders and physicians (participating physicians) are enrolled by the Managed Care Organizations (MCOs). In a capitated managed care plan, providers are paid a fixed amount regardless of the number of times the patient is seen by the physician.
8 Preferred Provider Organization (PPO) A network of providers to perform services to plan members. Physicians in the plan agree to charge discounted fees. Health Maintenance Organization (HMO) Physicians who contract with HMOs are often paid a capitated rate. Patients pay premiums and a small co-payment, often $10. Types of Health Plans (cont.)
9 Medicare is the largest federal program that provides healthcare to citizens aged 65 and older. Managed by the Centers for Medicare and Medicaid Services (CMS) Part A Hospital insurance available to anyone receiving social security benefits. Part B Covers physician services, outpatient services, and many other services. Available to persons 65 and older that are US citizens A premium must be paid by all unlike Part A. Types of Health Plans (cont.)
10 Types of Medicare Plans Fee-for-Service: The Original Medicare Plan Allows the beneficiary to choose any licensed physician certified by Medicare. A deductible was charged then Medicare paid 80 percent and the patient paid 20 percent. Medicare + Choice Plans Allows patients to sign up for one of three plans: Medicare Managed Care Plans Medicare Preferred Provider Organization Plans (PPOs) Medicare Private Fee-for-Service Plans Types of Health Plans (cont.)
11 Types of Health Plans (cont.) Medicare Managed Care Plans Medical care is managed by a primary care physician (PCP) A small co-payment for each visit is required but no deductibles Some plans allow services from providers outside the network Medicare Preferred Provider Organization Plan Medicare Private Fee-For- Service Plan Patients do not need a PCP No referrals are required Costs less to use referrals within the network Operated by a private insurance company Co-payment may be required Physicians can bill patients for amount not covered by the plan
12 A health-benefit program designed for: Low-income Blind Disabled patients Temporary assistance to needy families Foster children Children born with disabilities Not an insurance program Funded by the federal and state government Provides assistance such as: Physician services Emergency services Laboratory and x-rays SNF care Vaccines Early diagnostic screening and treatment for minors Types of Health Plans (cont.) Medicaid
13 Types of Health Plans (cont.) Medicaid Medicaid Accepting Assignment Medi/Medi Physicians agreeing to treat Medicaid patients also agree to the set reimbursements. Older or disabled patients unable to pay the difference between the bill and the Medicaid payment may qualify for both Medicaid and Medicare.
14 State Guidelines Medicaid cards are issued monthly, so always ask the patient for a current card. Ensure that the physician signs all claims. Authorization must be received in advance for medical services. Verify deadlines for claim submissions. Treat Medicaid patients with the same professionalism and courtesy that you extend to other patients. Types of Health Plans (cont.) Medicaid
15 Types of Health Plans (cont.) Tricare and Champva Run by the Defense Department Healthcare benefit for families of uniformed personnel and retirees TRICARE for Life is offered to persons 65 and older that are eligible for both TRICARE and Medicare. Covers the expenses of dependent spouses and children of veterans with disabilities Also covers surviving spouses and dependent children of veterans who died in the line of duty or from service-connected disabilities
16 Types of Health Plans (cont.) Blue Cross and Blue Shield A nationwide federation of nonprofit and for- profit service organizations that provide prepaid healthcare services to subscribers. Specific plans for BCBS can vary greatly because each local organization operates under its own state laws.
17 Apply Your Knowledge A 72-year old disabled patient is being treated at an office that accepts Medicaid. The total office visit is $165, but Medicaid will only reimburse a set fee of $125. In this situation, what is the most likely solution? a.Bill the patient for the balance due. b.Expect the balance to be paid at the time of service c.This patient more than likely has a secondary employer health insurance plan. d.This patient may qualify for the Medi/Medi coverage. Answer - Answer
18 Insurance covering accidents or diseases incurred in the workplace. Federal law requires that employers purchase a minimum amount of workers compensation insurance. Coverage Includes Basic medical treatment Weekly or monthly amount paid to patient while not employed Rehabilitation costs Workers Compensation
19 The Claims Process: An Overview Services Provided by the Physicians Office Obtain patient information Determine diagnosis and fees based on services provided Records patient payments Prepares healthcare claims Reviews the insurers processing of the claim Tasks Supported by using a Billing Program Gathering and reporting patient information Verifying patients insurance coverage Recording procedures and services performed Filing insurance claims and billing patients Reviewing and recording payments
20 Obtaining Patient Information Personal Information Name Home address Telephone number Date of birth Social security number Emergency contact person Current employer Employer address and telephone number Insurance carrier and date of coverage Insurance group plan Insurance identification number Name of subscriber or insured Release Signatures Form to release insurance information to insurance carrier Form for assignment of benefits
21 Coordination of Benefits Legal clauses that prevent duplication of payment. Primary or main insurance plan pays first, and then the secondary or supplemental plan pays the deductible and co-payment. The Birthday Rule If a husband and wife both have a family insurance plan, the insurance plan of the person born first will become the primary payer.
22 Physicians Services The physician writes the diagnosis and treatment The medical assistant translates the medical terminology into codes for reimbursement Referrals to Other Services The medical assistant may also be requested to secure authorization from the insurance company for additional services. Coordination of Benefits (cont.)
23 Insurers Processing and Payment Insurance claims are reviewed for: Medical Necessity Allowable Benefits Payment and Explanation of Benefits
24 Payment and Remittance Advice Information found on the Remittance Advice (RA) Form: Insured name and identification number Name of beneficiary Claim number Date, place, and type of service Amount billed and amount allowed Amount of co-payment and payments made Notation of any services not covered
25 Reviewing the Insurers Remittance Advice and Payment Verify all information on the remittance advice (RA) line by line. If a claim is rejected check the diagnosis codes for accuracy. Track all unpaid claims using either a follow-up log or computer automation.
26 A patient has visited the medical office on two separate occasions within the same week for different ailments. On Monday, the patient complains of back pain and receives a prescription for a muscle relaxant. On Wednesday, the patient complains of hair loss. When the medical assistant files the claims, she accidentally codes the first visit diagnosis (muscle spasm) with the prescribed treatment for the second visit (hair loss) which was an anti-fungal shampoo. The insurance claim is rejected more than likely for which of the following reasons: Medical necessity Payments Apply Your Knowledge Allowable benefits Answer - Answer
27 Fee Schedules and Charges Medicare Payment System: RBRVS The payment system used by Medicare is called the resource based relative value scale (RBRVS). A nationally uniform conversion factor The nationally uniform relative valueA geographic adjustment factor The current annual Medicare Fee Schedule (MFS) is published by CMS in the Federal Register.
29 Allowed Charges This represents the most the payer will pay any provider for that work. Other equivalent terms are: Fee Schedules and Charges (cont.) Maximum allowable fee Maximum charge Allowed amount Maximum charge Allowed fee Allowable charge Billing the patient for the difference between the higher usual fee and a lower allowed charge is called balance billing.
30 Contracted Fee Schedule Fixed fee schedules are established particularly with PPOs and participating physicians. Participating providers can bill patients for procedures and services not covered by the plan. Capitation The fixed prepayment for each plan member. Calculating Patient Charges All payers require patients to pay for non-covered services. Fee Schedules and Charges (cont.)
31 Communication with Patients About Charges Some practices may require that the patient sign an assignment of benefits statement or that they pay in full for services at the time they are rendered. The policies should explain what is required of the patient and when payment is due. 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. Co-payments must be paid before patients leave the office.
32 Preparing and Transmitting Healthcare Claims HIPAA Claims Electronic and predominately used Information entered is called data elements X Health Care Claim is the official name Data must be entered in CAPS in only valid fields No prefixes allowed 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 require 33 form indicators
33 Preparing and Transmitting Healthcare Claims (cont.) Transmission of Electronic Claims There are three major methods of transmitting claims electronically: Direct transmission to the payer Using a clearing house Direct data entry
34 Preparing and Transmitting Healthcare Claims (cont.) Service facility name, address information Medicare or benefits assignment indicator Part of the name or identifier of the referring provider Or invalid subscribers birth date Information about secondary insurance plans Payer name and/or identifier Generating Clean Claims requires preventing common errors such as:
35 Preparing and Transmitting Healthcare Claims (cont.) Claims Security The HIPAA rules set standards for protecting individually identifiable health information when maintained or transmitted electronically. Common security measures used consists of: Access control, passwords, and log files to keep intruders out Backups (saved copies of files) Security policies to handle violations that do occur
36 Tips for the Office/Data Elements for HIPAA Electronic Claims Pay-to provider (the office) Rendering provider (the physician) The billing provider is the entity that transmits the claim to the payer. A taxonomy code is a 10-digit number representing the physician specialty. This code matches the physicians : license certification education Reporting ProviderInformation Taxonomy Information HIPAA National Identifiers Identifiers are numbers of predetermined length and structure like social security numbers. National identifiers must be established for: Employers Health plans Healthcare providers Patients
37 A medical assistant has two part-time positions. One for a pediatrician and the other position is for a surgeon. When completing the X12 837, which of the following would be a major difference: a.Taxonomy information b.HIPAA identifiers Apply Your Knowledge The taxonomy information would be very different since the physician preparations and licensing is very different. Answer - Answer