Presentation on theme: "The Medical Billing Cycle"— Presentation transcript:
1 The Medical Billing Cycle 1The Medical Billing Cycle
2 When you finish this chapter, you will be able to: Learning Outcomes1-2When you finish this chapter, you will be able to:1.1 Identify four types of information collected during preregistration.1.2 Compare fee-for-service and managed care health plans, and describe three types of managed care approaches.1.3 Discuss the activities completed during patient check-in.1.4 Discuss the information contained on an encounter form at check-out.1.5 Explain the importance of medical necessity.
3 Learning Outcomes (Continued) 1-3When you finish this chapter, you will be able to:1.6 Explain why billing compliance is important.1.7 Describe the information required on an insurance claim.1.8 List the information contained on a remittance advice.1.9 Explain the role of patient statements in reimbursement.1.10 List the reports created to monitor a practice’s accounts receivable.
4 Key Terms accounting cycle accounts receivable (A/R) adjudication 1-4accounting cycleaccounts receivable (A/R)adjudicationcapitationcodingcoinsuranceconsumer-driven health plan (CDHP)copaymentdeductiblediagnosisdiagnosis codedocumentationelectronic health records (EHRs)encounter formexplanation of benefits (EOB)fee-for-servicehealth maintenance organization (HMO)health planmanaged careHave students define all key terms as an assignment. Then, in class, ask each student to define one key term aloud.Optional assignment: Have students do an Internet search of one key term and write a short paragraph describing what they learned about that term from looking at a few websites.
5 Key Terms (Continued) medical coder medical necessity medical record 1-5medical codermedical necessitymedical recordmodifierpatient information formpayerpolicyholderpractice management program (PMP)preferred provider organization (PPO)premiumprocedureprocedure coderemittance advice (RA)statementHave students define all key terms as an assignment. Then, in class, ask each student to define one key term aloud.Optional assignment: Have students do an Internet search of one key term and write a short paragraph describing what they learned about that term from looking at a few websites.
6 Step 1 in the Medical Billing Cycle: Preregister Patients 1-6Patient information gathered via phone or Internet before visit:NameContact informationReason for the visitWhether patient is new to practiceLearning Outcome: 1.1 Identify four types of information collected during preregistration.Pages: 4-5Information for preregistration can also be obtained by mailing the patient paperwork before the actual visit. The patient can bring it in on the day of the appointment or mail it back prior to the appointment . All these ways help speed up the process of registering a new patient. It lessens the patient’s time in the waiting room. It keeps your day from getting backed up if patients do not arrive a little before their actual appointment time.
7 Step 2 in the Medical Billing Cycle: Establish Financial Responsibility for Visit 1-7Many patients have medical insurance, which is an agreement between a policyholder and a health planTo secure medical insurance, policyholders pay premiums to payers, which are health plans such as government plans and private insuranceLearning Outcome: 1.2 Compare fee-for-service and managed care health plans, and describe three types of managed care approaches.Pages: 5-7Show examples in your state of fee-for-service and managed care health plans. (Try United Health Group, WellPoint, Aetna, Humana, or Cigna—some of the largest.)Have students describe plans in which they have participated.
8 Fee-for-Service Health Plans Step 2 in the Medical Billing Cycle: Establish Financial Responsibility for Visit (Continued)1-8Fee-for-Service Health PlansPolicyholders are repaid for medical costsRequires payment of coinsuranceUsually a deductible must be paid before benefits beginManaged Care Health PlansManaged care organizations control both financing and delivery of health careHave contracts with both patients and providersLearning Outcome: 1.2 Compare fee-for-service and managed care health plans, and describe three types of managed care approaches.Pages: 5-7Show examples in your state of fee-for-service and managed care health plans. (Try United Health Group, WellPoint, Aetna, Humana, or Cigna—some of the largest.)Have students describe plans in which they have participated.Fee-for-service plans (also called indemnity plans) are more expensive than managed care plans.Fee-for-service plans usually have deductibles and are more flexible than managed care plans.
9 Types of managed care health plans Step 2 in the Medical Billing Cycle: Establish Financial Responsibility for Visit (Continued)1-9Types of managed care health plansPreferred provider organization (PPO): provider network for plan members; discounted feesHealth maintenance organization (HMO): pays fixed amounts called capitation payments to contracted providers; patients must pay a small fixed fee called a copayment per visitConsumer-driven health plan (CDHP): combines a health plan with a high deductible with a policyholder's savings accountLearning Outcome: 1.2 Compare fee-for-service and managed care health plans, and describe three types of managed care approaches.Pages: 5-7 Provide students with examples of both types of plans in area. Discuss some of the largest companies. Kaiser Foundation Health Plan/Northern California is the largest HMO with 2,722,738 enrollees; followed by Kaiser Foundation Health Plan/Southern California with 2,591,555 enrollees; then PacifiCare of California with 2,260,334 enrollees. Total HMO enrollment in the US reached 670 million for the first time while eight plans passed the million-member mark, according to a study by The Interstate Competitive Edge HMO Industry Report. Some of the largest PPO’s are Blue Cross and Blue Shield of California, Pacific Foundation for Medical Care, Aetna US Healthcare, Cigna. Some of the largest CDHP’s are UnitedHealth Group, Inc. , Aetna Inc., Cigna Healthcare, Humana, Inc., Meritain Health. Have students visit major industry websites and compare.
10 Step 3 in the Medical Billing Cycle: Check In Patients 1-10Patients complete the patient information form that contains personal, employment, and medical insurance informationPatient identity is verifiedTime-of-service payments due before treatment are collectedLearning Outcome: 1.3 Discuss the activities completed during patient check-in.Pages: 8-10Have students fill in the patient information form in Figure 1-2 using their own information. If they do not have insurance information, have them pick a company from one of the sources documents.Ask students if they would like to discuss their personal experiences regarding check-in at their doctor’s office. They have probably never really thought about the check-in procedure, so this will give them some insight. Ask them if their copay was collected before or after the visit. This helps engage the students early in the course.
11 Step 4 in the Medical Billing Cycle: Check Out Patients 1-11Every time a patient is treated by a health care provider, a record, known as documentation, is made of the encounterThis chronological medical record, or chart, includes information that the patient providesLearning Outcome: 1.4 Discuss the information contained on an encounter form at check-out.Pages: 10-13Have students discuss items that are filled in on an encounter form at check-out.
12 Step 4 in the Medical Billing Cycle: Check Out Patients (Continued) 1-12Diagnoses and ProceduresA diagnosis is the physician’s opinion of the nature of the patient’s illness or injuryProcedures are the services performedCoding is the process of translating a description of a diagnosis or procedure into a standardized codeA patient’s diagnosis is communicated to a health plan as a diagnosis codeA procedure code stands for a particular service, treatment, or testA modifier is a two-digit character that is appended to a CPT code to report special circumstancesLearning Outcome: 1.4 Discuss the information contained on an encounter form at check-out.Pages: 10-13Show the class examples of the ICD-9 coding book and the CPT coding book. Read them a few of the common codes and their descriptions so they have an idea of what the coding process is about. Refer to the figures in the book also. Actual copies of ICD-9 and CPT will help clarify Figures 1.4 and 1.5.
13 Step 4 in the Medical Billing Cycle: Check Out Patients (Continued) 1-13The diagnosis and procedure codes are recorded on an encounter form, also known as a superbillA practice management program (PMP) is a software program that automates the administrative and financial tasks required to run a medical practiceLearning Outcome: 1.4 Discuss the information contained on an encounter form at check-out.Pages: 10-13Get a blank superbill from a practice in your area to show students that the most common codes are on the superbill.
14 Step 5 in the Medical Billing Cycle: Review Coding Compliance 1-14A physician, medical coder, or medical insurance specialist assigns codesThe documented diagnosis and medical services should be logically connected, so that the medical necessity of the charges is clear to the insurance companyMedical necessity is treatment by a physician for the purpose of preventing, diagnosing, or treating an illness, injury, or its symptoms in an appropriate mannerLearning Outcome: 1.5 Explain the importance of medical necessity.Pages: 13-15Discuss how medical necessity is related to payment.
15 Step 6 in the Medical Billing Cycle: Check Billing Compliance 1-15Each charge, or fee, for a visit is represented by a specific procedure codeThe provider’s fees for services are listed on the medical practice’s fee scheduleMedical billers use their knowledge to analyze what can be billed on health care claimsLearning Outcome: 1.6 Explain why billing compliance is important.Page: 15Show an example of a bill that is not in compliance. Explain why an insurance company will not pay for a strep test performed on a patient with a diagnosis of urinary tract infection. Have the students fill out the Encounter Form in Figure 1.6.