2Processing Health Care Claims Objectives15-1 List the basic steps of the health insurance claim process.15-2 Describe your role in insurance claims processing.15-3 Explain how payers set fees.15-4 Define Medicare and Medicaid.15-5 Discuss TRICARE and CHAMPVA healthcare benefits programs.15-6 Distinguish between HMOs and PPOs.
3Processing Healthcare Claims Objectives (cont.)15-7 Explain how to manage a workers’ compensation case.15-8 Apply rules related to coordination of benefits.15-9 Describe the healthcare claim preparation process.Complete a Centers for Medicare and Medicaid service (CMS-1500) claim form.15-11 Identify three ways to transmit electronic claims.
4Basic Insurance Terminology Medical insurance (health insurance) is a written contract policy between a policy holder and a health plan.Terms To KnowFirst PartyThe patient policy holder.premiumAmount of money paid by the policy holder to the insurance carrier.Second PartyThe physician who provides medical services.benefitsMedical services provided.Third PartyThe health plan.
5Basic Insurance Terminology (cont.) 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.
6Basic Insurance Terminology (cont.) Liability InsuranceCovers injuries caused by the insured or on their property.Disability InsuranceInsurance that is activated when the insured is injured or disabled.
7Types of Health PlansManaged CarePlansControls 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.Fee For ServicePlansOldest and most expensive type of planCovers costs of select medical servicesAmount services determined by the physician
8Types of Health Plans (cont.) 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.
9Types of Health Plans (cont.) 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 AHospital insurance available to anyone receiving social security benefits.Part BCovers physician services, outpatient services, and many other services.Available to persons 65 and older that are US citizensA premium must be paid by all unlike Part A.
10Types of Health Plans (cont.) Types of Medicare PlansFee-for-Service: The Original Medicare PlanAllows 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 PlansAllows patients to sign up for one of three plans:Medicare Managed Care PlansMedicare Preferred Provider Organization Plans (PPOs)Medicare Private Fee-for-Service Plans
11Types of Health Plans (cont.) Medicare Managed Care PlansMedical care is managed by a primary care physician (PCP)A small co-payment for each visit is required but no deductiblesSome plans allow services from providers outside the networkMedicare Preferred Provider Organization PlanMedicare Private Fee-For-Service PlanOperated by a private insurance companyCo-payment may be requiredPhysicians can bill patients for amount not covered by the planPatients do not need a PCPNo referrals are requiredCosts less to use referralswithin the network
12Types of Health Plans (cont.) Medicaid A health-benefit program designed for: Low-income Blind Disabled patients Temporary assistance to needy families Foster children Children born with disabilitiesNot an insurance programFunded by the federal and state governmentProvides assistance such as: Physician services Emergency services Laboratory and x-rays SNF care Vaccines Early diagnostic screening and treatment for minors
13Types of Health Plans (cont.) Medicaid Accepting AssignmentMedicaidMedi/MediOlder or disabled patients unable to pay the difference between the bill and the Medicaid payment may qualify for both Medicaid and Medicare.Physicians agreeing to treat Medicaid patients also agree to the set reimbursements.
14Types of Health Plans (cont.) Medicaid State GuidelinesMedicaid 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.
15Types of Health Plans (cont.) Tricare and Champva Run by the Defense DepartmentHealthcare benefit for families of uniformed personnel and retireesTRICARE 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 disabilitiesAlso covers surviving spouses and dependent children of veterans who died in the line of duty or from service-connected disabilities
16Types 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.
17Apply Your Knowledge - Answer 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?Bill the patient for the balance due.Expect the balance to be paid at the time of serviceThis patient more than likely has a secondary employer health insurance plan.This patient may qualify for the Medi/Medi coverage.
18Workers’ Compensation 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 treatmentWeekly or monthly amount paidto patient while not employed Rehabilitation costs
19The Claims Process: An Overview Services Provided bythe Physician’s OfficeTasks Supported by usinga Billing ProgramObtain patient informationDetermine diagnosis and fees based on services providedRecords patient paymentsPrepares healthcare claimsReviews the insurer’s processing of the claimGathering and reporting patient informationVerifying patient’s insurance coverageRecording procedures and services performedFiling insurance claims and billing patientsReviewing and recording payments
20Obtaining Patient Information Personal InformationNameHome addressTelephone numberDate of birthSocial security numberEmergency contact personRelease SignaturesCurrent employerEmployer address and telephone numberInsurance carrier and date of coverageInsurance group planInsurance identification numberName of subscriber or insuredForm to release insurance information to insurance carrierForm for assignment of benefits
21Coordination of Benefits The Birthday RuleLegal 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.If a husband and wife both have a family insurance plan, the insurance plan of the person born first will become the primary payer.
22Coordination of Benefits (cont.) Physician’s ServicesThe physician writes the diagnosis and treatmentThe medical assistant translates the medical terminology into codes for reimbursementReferrals to Other ServicesThe medical assistant may also be requested to secure authorization from the insurance company for additional services.
23Insurer’s Processing and Payment Insurance claims are reviewed for:Medical NecessityAllowable BenefitsPayment and Explanation of Benefits
24Payment and Remittance Advice Information found on the Remittance Advice (RA) Form:Insured name and identification numberName of beneficiaryClaim numberDate, place, and type of serviceAmount billed and amount allowedAmount of co-payment and payments madeNotation of any services not covered
25Reviewing the Insurer’s 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.
26Apply Your Knowledge - Answer 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:Allowable benefitsMedical necessityPayments
27Fee Schedules and Charges Medicare Payment System: RBRVSThe payment system used by Medicare is called the resource based relative value scale (RBRVS).Three Parts to an RBRVS Fee:The nationally uniform relative valueA geographic adjustment factorA nationally uniform conversion factorThe current annual Medicare Fee Schedule (MFS) is published by CMS in the Federal Register.
28Fee Schedules and Charges (cont.) Payment MethodsCapitationAllowedChargesContractedFee Schedule
29Fee Schedules and Charges (cont.) Allowed ChargesThis represents the most the payer will pay any provider for that work.Other equivalent terms are:Maximum allowable feeMaximum chargeAllowable chargeAllowed amountAllowed feeMaximum chargeBilling the patient for the difference between the higher usual fee and a lower allowed charge is called balance billing.
30Fee Schedules and Charges (cont.) Contracted Fee ScheduleFixed fee schedules are established particularly with PPOs and participating physicians.Participating providers can bill patients for procedures and services not covered by the plan.CapitationThe fixed prepayment for each plan member.Calculating Patient ChargesAll payers require patients to pay for non-covered services.
31Communication 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.Unless other prior arrangements are made, payment is expected at the time service is delivered.Unassigned ClaimsThe patient is responsible for any amounts not covered by the insurance carrier.Assigned ClaimsManaged Care MembersCo-payments must be paid before patients leave the office.
32Preparing and Transmitting Healthcare Claims HIPAA ClaimsElectronic and predominately usedInformation entered is called data elementsX Health Care Claim is the official nameData must be entered in CAPS in only valid fieldsNo prefixes allowedPaper ClaimsA CMS-1500 paper form is usedMay be mailed or faxed to the third-party payerNot widely used as a result of HIPAA requirementsCMS-1500 require 33 form indicators
33Preparing and Transmitting Healthcare Claims (cont.) Transmission of Electronic ClaimsThere are three major methods of transmittingclaims electronically:Direct transmissionto the payerUsing aclearing houseDirect data entry
34Preparing and Transmitting Healthcare Claims (cont.) Generating Clean Claims requires preventing common errors such as:Missing...Payer name and/or identifierOr invalid subscriber’s birth datePart of the name or identifier ofthe referring providerService facility name, address informationInformation about secondaryinsurance plansMedicare or benefitsassignment indicator
35Preparing and Transmitting Healthcare Claims (cont.) Claims SecurityThe 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 outBackups (saved copies of files)Security policies to handle violations that do occur
36Tips for the Office/Data Elements for HIPAA Electronic Claims Reporting ProviderInformationPay-to provider (the office)Rendering provider (the physician)The billing provider is the entity that transmits the claim to the payer. Taxonomy InformationA taxonomy code is a 10-digit number representing the physician specialty.This code matches the physician’s : license certification education HIPAA National IdentifiersIdentifiers are numbers of predetermined length and structure like social security numbers.National identifiers mustbe established for: Employers Health plansHealthcare providers Patients
37Apply Your Knowledge - Answer The taxonomy information would be very different since the physician preparations and licensing is very different.- AnswerA 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:Taxonomy informationHIPAA identifiers