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

2. 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.

3. 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.

4. 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.)

5. 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.)

6. 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.

7. 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).

8. 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.

9. 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].)

10. 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 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.

11. 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.

12. 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.)

13. 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.

14. 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.

15. 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 Describe how a hypothetical patient’s primary and secondary diagnoses would be recorded on this form.

16. 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.

17. 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.

18. 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.

19. 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.

20. 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.

21. 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 , 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.

22. 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.)

23. 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.

24. 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.

25. 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.

26. 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.

27. 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.

28. 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.

29. 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.

30. 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.

31. 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’ accounts should be removed.

32. 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?

33. 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.

34. 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.

35. Questions?