Copyright © 2008 Delmar Learning. All rights reserved. Chapter 4 Life Cycle of an Insurance Claim
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
Copyright © 2008 Delmar Learning. All rights reserved. 3 Life Cycle of an Insurance Claim
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
Copyright © 2008 Delmar Learning. All rights reserved. 5 Accepting Assignment When provider agrees to what the insurance company allows and or approves as payment
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.
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.
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
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
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
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
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
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
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
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
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
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
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.”
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
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
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
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
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
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.
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
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
Copyright © 2008 Delmar Learning. All rights reserved. 27 Claim Submission Problems, Descriptions, and Resolutions Coding errors Delinquent Denied Lost
Copyright © 2008 Delmar Learning. All rights reserved. 28 Claim Submission Problems, Descriptions, and Resolutions Overpayment Payment errors Pending –Suspense Rejected
Copyright © 2008 Delmar Learning. All rights reserved. 1. The patient’s financial record, which can be found in automated or manual format is the a. Day sheetc. patient ledger b.Encounter formd. remittance advice 2. The specified percentage of charges that patient must pay to the provider for each service received or for each visit is the a. Coinsurancec. deductible b.Copaymentd. premium 29
Copyright © 2008 Delmar Learning. All rights reserved. 3. The financial record source document used to record services rendered in a physician’s office is the a. Chargemasterc. patient ledger b.Encounter formd. remittance advice 4. When the provider is required to receive as payment in full whatever amount the insurance reimburses for services, the provider is agreeing to a. Accept assignmentc. authorize services b.Assignment of benefitsd. coordination of benefits 30
Copyright © 2008 Delmar Learning. All rights reserved. 5. Care rendered to a patient that was not properly approved, (e.g., preapproved) by the insurance company is known as a. Medical necessityc. unapproved services b.Noncovered benefitsd. unauthorized services 6. The maximum amount the payer will allow for each procedure or service, according to the patient’s policy, is the a. Allowable chargec. denied charge b.Chargemasterd. maximum charge 7. Approximately how many insurance claims are filed each year? a. 100 millionc. 5 billion b.600 milliond. more than 6 billion 31
Copyright © 2008 Delmar Learning. All rights reserved. 8. The development of a claim begins at a. Clearinghousec. payer’s office b.Patient’s place of employmentd. provider’s office 9. In the development of a claim, data transmitted electronically or manually to payers or clearinghouses for processing is called claims a. Adjudicationc. processing b.Paymentd. submission 32
Copyright © 2008 Delmar Learning. All rights reserved. 10. According to the national standards mandated by HIPAA for the electronic exchange of administrative and financial care transactions, which would be a covered entity? a. Managed care organization b.Multispecialty group practice that conducts only paper- based transactions c.Provider who conducts only paper-based transactions d.Small, self-identified health plan 11.The private, nonprofit organization that administers and coordinates the US private-sector voluntary standardization system is a. ANSIc. ERISA b.CMSd. HIPAA 33
Copyright © 2008 Delmar Learning. All rights reserved. 12. If a claim is found to contain all the data elements required for processing, it is known as a ___________________ claim. a. Cleanc. suspended b.Processedd. Valid 13. A procedure reported on a claim that is not included on the master benefit list will result in ________________ of a claim. a. Agingc. resubmission b.Deniald. Suspension 14. The remittance advice has what name in the Medicare program? a. Encounter formc. Medicare Summary Notice b.Explanation of Benefitsd. Provider Remittance Notice 34
Copyright © 2008 Delmar Learning. All rights reserved. 15. The person responsible for paying the charges for services rendered by the provider is the a. Beneficiaryc. guardian b.Guarantord. Subscriber 16. Which document is used to generate the patient’s financial and medical record? a. Encounter formc. patient ledger b.Patient insurance cardd. patient registration form 17. The rule stating that the policy holder whose birth month and day occur earlier in the calendar year holds the primary policy for dependent children is the ________________ rule. a. Birthdayc. policy b.Genderd. primary 35
Copyright © 2008 Delmar Learning. All rights reserved. 18. To save the expense of mailing invoices to patients, the office may ask the patient to a. Come back on payday and pay the portion of the bill b.Leave a self-addressed, stamped envelope with the office c.Pay the patient’s portion of the bill before treatment of before the patient leaves the office d.Set up an electronic funds transfer account 19. How long must providers retain copies of government insurance claims? a. 30 daysc. seven years b.One yeard. permanently 36
Copyright © 2008 Delmar Learning. All rights reserved. 20. What type of claim is generated for providers who do not accept assignment? a. Delinquentc. suspended b.Rejectedd. Unassigned 21. The process of submitting multiple CPT codes when one code should be submitted is a. Downcodingc. unbundling b.Segmentingd. Upcoding 22. The insurance industry is regulated by whom? a. American Medical Associationc. federal government b.Centers for Medicare/MedicaidServicesd. individual states 37
Copyright © 2008 Delmar Learning. All rights reserved. 23. The development of a claim typically consists of how many stages? a. Fourc. seven b.Fived. six 24. Providers can communicate directly with payers by use of technology that emulates a system connection known as a(n) a. Dial-up connectionc. facsimile b.Extranetd. magnetic tape 25. When a provider performs a procedure for which is no CPT or HCPCS level II code is available, what must be provided to the payer? a. Additional ICD-9-CM codesc. patient’s financial record b.Patient’s medical recordd. supporting documentation 38