Insurance Handbook for the Medical Office 13th edition Chapter 08 The Electronic Claim

Electronic Claims Submission Overview Lesson 8.1 Electronic Claims Submission Overview Define electronic data interchange. Summarize the advantages of electronic claim submission. Describe the clearinghouse process that follows after a claim is electronically received. Identify the transactions and code sets to use for insurance claim transmission. State which insurance claim data elements are required or situational for the 837P standard transaction format.

Electronic Claims Submission Overview (cont’d) Lesson 8.1 Electronic Claims Submission Overview (cont’d) Define a claim attachment, and explain when the electronic standards will be mandated. Compare and contrast standard unique provider identifiers, health plan identifiers, and patient identifiers. Describe necessary components when adopting a practice management system. Describe the use of patient encounter forms and scannable encounter forms in electronic claim submission.

Electronic Data Interchange Used for transmission of health insurance claims Transmitted data is encrypted Improves efficiency of claims submissions What is “EDI”? (The process by which understandable data items are sent back and forth via computer linkages between two or more entities that function alternatively as sender and receiver.) What is “encryption”? (To assign a code to represent data, for security purposes.)

Advantages of Electronic Claim Submission No signatures or stamps No searching for an insurance carrier’s address No postage costs or trips to post office No need to store or file claim forms Electronic claims leave an audit trail Improved cash flow Quicker processing time and payment Reduced overhead and labor costs Electronic claims are becoming the way business is done; it is efficient and reduces overhead. Errors are reduced partly by computers with prompts to guide processors through a complete and accurate claim, and also by an online error-edit process that flags mistakes immediately so they can be fixed before filing. Define “audit trail.” (A chronological record of submitted data that can be traced to the source to determine the place of origin.) Ask students if anyone has worked with coding. What were some of the challenges? (Answers will vary.)

Clearinghouses Claims are checked electronically Claims with missing/incorrect information are rejected Rejected claims are sent back to the provider with a report Batches of acceptable claims are sent to the appropriate payer Corrected claims are reprocessed What is a “clearinghouse”? (An entity that receives the electronic transmission of claims (EDI) from the healthcare provider’s office and translates it into a standard format prescribed in HIPAA regulations.) A clearinghouse should separate claims by carrier, perform software edits to check for errors, and transmit claims electronically to the correct payer.

Clearinghouses Advantages of a clearinghouse Translation of various formats to the HIPAA-compliant standard format Reduction in time of claims preparation Cost-effective method through loss prevention Fewer claims rejections Fewer delays in processing and quicker response time More accurate coding with claims edits Consistent reimbursement Some medical practices have direct links to the insurance companies and don’t use clearinghouses. CMS had created a standardized system for Medicare claims processing called the Medicare Transaction System (MTS).

Transaction and Code Set Regulations: Streamlining Electronic Data Interchange Benefits More reliable and timely processing Improved data accuracy Easier and more efficient information access Better tracking of transactions Reduction of data entry/manual labor Reduction of office expenses HIPAA TCS was developed to make the healthcare system more efficient by achieving a single standard. Standard transactions are the electronic files in which medical data are compiled to produce a format for use in the health care industry. All healthcare organizations using electronic transactions accept the code set systems required by HIPAA. What is a “code set”? (The allowable set of codes that anyone could use to enter into a specific field on a form) See Table 8-1 (p. 268) for more on the benefits of TCS and EDI.

Transaction and Code Set Standards HIPAA required code and data sets ICD-10-CM/ICD-10-PCS codes HCPCS codes CDT codes NDC codes Taxonomy codes Patient account number Relationship to patient Facility code value Patient signature source code The listed code sets and data are HIPAA-approved and should be used for all submitted insurance claims. What does “situational” mean? (That the items depends on the data content or context [See Example 8-1].)

Electronic Standard HIPAA 837P Electronic formats Specialist authorization Reimbursement claims Request and respond to additional information Healthcare claims/attachments/claims status Coordination of benefits Healthcare payment and remittance advice Plan enrollment/disenrollment/eligibility Premium payments Referrals First report of injury Other transactions DHHS may prescribe by regulation Providers now must use the ASC X12 Version 5010. This version allows providers’ payers to transmit either ICD-9 or ICD-10 data. See Table 8-5 for a comparison of CMS-1500 and 837P v5010.

Claims Attachment Standards Supplemental documents providing additional medical information Certificate of Medical Necessity (CMNs) Discharge summaries Operative reports Currently, PMS uses data field to indicate paper attachment Electronic standards are going to be adopted Regulation to be published in January 2014 Compliance by January 2016 A proposed rule was published in 2005, but the final rule was never adopted.

Standard Unique Identifiers Standard unique employer identifier Standard unique healthcare provider identifier Standard unique health plan identifier Standard unique patient identifier The employer identification number (EIN) is assigned by the Internal Revenue Service (IRS), and is used to identify employers for tax purposes. HIPAA requires that a National Provider Identifier (NPI) be assigned to each provider for use in transactions with health plans. This is the standard unique healthcare provider identifier. Explain why the idea of a standard unique patient identifier is seen as a threat to civil liberties. (Answers will vary.)

Practice Management System Should be able to prepare, send, receive, and process HIPAA standard electronic transactions Can help track receipt of Notice of Privacy Practices (NPP), patient treatment consents or authorization, and mapping disclosures An important function of a PMS is accounts receivable. A clearinghouse will convert older PMS formats to HIPAA standard transactions. Discuss how a good PMS can affect the medical office. (A PMS would improve office efficiency, reduce errors, and optimize reimbursement for services. Answers may vary from students.) Some PMS vendors sell add-ons that link directly to carriers such as Medicare, Medicaid, and Blue Cross Blue Shield.

Practice Management System Set security access to patient files in the software Indicate date of receipt and signing of NPP Insert date of patient’s authorization Maintain files of practice’s authorization and notification forms Track requests for amendments, restrictions on disclosure of PHI, and physician response to request Track expiration dates Remember that HIPAA standards apply only to the format in which data is transmitted. Data can be stored in any format within the PMS databases.

Encounter or Multipurpose Billing Forms Also called charge slip, multipurpose billing form, patient service slip, routing form, superbill, transaction slip Customized to meet the needs of the healthcare office May include preprinted procedural or diagnostic codes Scannable encounter forms save time Doctors use crib sheets or summary forms with key information to ease the burden on them and allow them to focus on clinical matters instead of administrative matters. Some encounter forms are designed so that they may be scanned. An example of a scannable encounter form is in Fig. 8-3. Describe how a hypothetical patient’s primary and secondary diagnoses would be recorded on this form.

Keying Insurance Data for Claim Transmission DO: Use the patient account numbers to differentiate between patients with similar names DO: Use correct numeric locations of service codes, current, valid CPT or HCPCS procedures codes DO: Print an insurance billing worksheet or perform a front-end edit to look for and correct all errors before the claim is transmitted to the third-party payer DO: Request electronic-error reports from the third-party payer to make corrections to the system DO: Obtain and cross-check the electronic status report against all claims transmitted The use of macros saves time and key strokes when completing electronic claims.

Keying Insurance Data for Claim Transmission DON’T: Use special characters DON’T: Bill codes using modifiers -21 or -22 electronically unless the carrier receives documents to justify more payment Always do an edit check before submitting a claim, because the codes must match the documentation.

Encoder Signature requirements Physician Patient An encoder is a PMS add-on software that can greatly reduce the time required to build or review a claim before batching. A signed carrier agreement must be in place for each insurer accepting your electronic claim submissions (ECSs). Other signature requirements are needed for the physician and patient.

Clean Electronic Claims Submission Claim scrubber software Encoder software Electronic clearinghouse Single and batch claims review “Dirty” claims can increase costs in the medical office. These methods increase the likelihood of clean electronic claims. Encoders and other software require an initial investment, but result in increased efficiency in the claims process.

Privacy and Electronic Data Lesson 8.2 Privacy and Electronic Data Name some methods of interactive computer transactions for transmitting insurance claims. Relate the electronic funds transfer process and mandated requirements under the Affordable Care Act (ACA). Identify the ASC X12 Health Care Claim Payment/Advice (835). List the procedures for transmission of an electronic claim. Explain the difference between carrier-direct and clearinghouse electronically transmitted insurance claims.

Privacy and Electronic Data (Cont’d) Lesson 8.2 Privacy and Electronic Data (Cont’d) List computer transmission problems that can occur. List HIPAA administrative safeguards for electronic protected health information. State technical and physical safeguards used to secure privacy of e-mail, Internet, and instant messaging. Explain handling of data storage and data disposal for good electronic records management. Describe elements that should be considered when purchasing an in-office computer system.

Interactive Transactions Back-and-forth communication between two computer systems Real time communication allows instant information transfer Name several transactions that can be done in real time. (Eligibility verification, deductible status, claim inquiries, status of claims. Answers will vary.)

Electronic Funds Transfer Electronic funds transfer (EFT) can speed up reimbursement Federal government has established a uniform procedure Part of HIPAA Administrative Simplification Health care providers must comply by January 2014 The DHHS expects the elimination of paper checks to save physician and hospitals between $3 billion and $4.5 billion over the next decade by saving paper, printing, and postage costs as well as savings in staff time to manually process and deposit paper checks.

Electronic Remittance Advice Online transaction about the status of a claim Medicare ERA Formerly called Medicare explanation of benefits (EOMB or EOB) Based on American National Standards Institute (ANSI) Accredited Standards Committee X12 (ASC X12) Health Care Claim Payment/Advice (835) or ANSI 835 The use of ANSI 835 Version 4010 generates an electronic Medicare remittance advice instead of the paper RA. ANSI 835 allows the electronic funds transfer (EFT) of Medicare payments to the physician’s bank account via direct deposit. This improves cash flow in the medical office. An example of a computer-generated Medicare RA is found in Fig. 8-8.

Driving the Data Set up the database Enter data Batch or compile a group of claims Connect the computerized database with the clearinghouse or direct to the payer Transmit the claims Review the clearinghouse reports These are basic procedures. More detailed steps may be required for different payers or to ensure secure data transmission.

Methods for Sending Claims Cable modem Digital subscriber line (DSL) T-1 Direct data entry (DDE) Application service provider (ASP) Another dimension of a computer system is the network it is connected to, which is important in EDI. The medical office may use various methods, including data transmission (cable modem, DSL, T-1), DDE using dial-up or Internet, and ASP, or “renting” a PMS over the Internet. The ASP server houses the data, and accounts are managed by the health care provider’s staff. Claims are batched as though the software was on the desktop at the provider’s office.

Computer Claims Systems Carrier-direct The medical practice has its own computer and software to process claims The insurer sometimes leases a dedicated terminal to the physician Clearinghouse The physician’s office sends paper claims or a disk or tape to the clearinghouse, which forwards a batch of claims to the insurer Fiscal agents for Medicare and Medicaid and also many private insurers use the carrier-direct system. A clearinghouse is used if the physician’s system cannot be linked with the insurance carrier or if the insurer won’t accept claims directly from the physician’s office.

Transmission Reports Send and receive file reports Batch claim report billed summary Scrubber report Transaction transmission summary Rejection analysis report Electronic inquiry or claims status review Transmission reports are generated for both carrier-direct and clearinghouse claims. A status report of claims is sent from the insurance company to indicate electronic processing problems.

Electronic Processing Problems Upgrade to ASC X12 Version 5010 results in these common errors: Billing provider address Zip code Anesthesia minutes Primary identification code qualifiers Billing provider NPI number National Drug Code (NDC) Data transmission problems arise periodically because of hardware or software problems. If one claim in a batch contains an error, the third-party payer may reject the entire batch. See the textbook for some solutions to electronic processing problems.

Administrative Simplification Enforcement Tool Online tool Assists healthcare providers, payers, clearinghouses, and others to submit complaints regarding the HIPAA TCS rule ASET was implemented by the federal government. ASET addresses issues of noncompliance in regard to the transaction code set (TCS) rule. Discuss possible reasons for the use of ASET.

The Security Rule: Administrative, Physical, and Technical Safeguards Administrative safeguards Information access controls Internal audits Risk analysis and management Termination procedures When employees are terminated, their access to PHI should be removed. This means that passwords and security pass codes should be changed, and former employees’ e-mail accounts should be removed.

The Security Rule: Administrative, Physical, and Technical Safeguards Access controls Audit controls Automatic log-offs Use of passwords Physical safeguards Media and equipment controls Physical access controls Secure workstation Audit controls keep track of log-ins to the computer system, administrative activity, and data changes. Automatic log-offs can prevent unauthorized users from accessing an unattended computer. User names and passwords restrict access and identify computer users. Office policies and procedures (P&P) should dictate the destruction of obsolete data disks and software containing PHI, as well as the recycling of computers. Pass codes may be used to restrict access to administrative offices where patient files and data are kept. Ask students to consider a physician's office they have visited. Are they aware of the presence of physical safeguards?

Records Management Data storage: back up data frequently Data disposal: data must be complete eliminated Electronic power protection: surge suppressors or uninterruptible power supply (UPS) Automated, computer-initiated data backup is available in most programs. A verification process should be done once a week, to compare original records with copies. Backup copies of data should be stored away from the office to protect against fire, flood, or theft. An all-office or whole-office surge suppressor can be installed near a circuit breaker panel to protect all office systems from damage.

Selection of an Office Computer System Cost of basic equipment—purchase or lease? Accessories Space requirements Electrical/transmission lines Separate fax and modem lines? Costs of electricity Telephone lines Maintenance Software This slide lists several points to consider when shopping for computers for the office. Most considerations relate to the costs. Describe some other costs and considerations to take into account when planning to buy a computer system.

Questions?