1. CHAPTER © 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 3 Patient Encounters and Billing Information

2. Learning Outcomes When you finish this chapter, you will be able to: 3.1Explain the method used to classify patients as new or established. 3.2Discuss the five categories of information required of new patients. 3.3Explain how information for established patients is updated. 3.4Verify patients’ eligibility for insurance benefits. 3.5Discuss the importance of requesting referral or preauthorization approval. 3-2

3. Learning Outcomes (continued) When you finish this chapter, you will be able to: 3.6Determine primary insurance for patients who have more than one health plan. 3.7Summarize the use of encounter forms. 3.8Identify the eight types of charges that may be collected from patients at the time of service. 3.9Explain the use of real-time claims adjudication tools in calculating time-of-service payments. 3-3

4. Key Terms accept assignment Acknowledgment of Receipt of Notice of Privacy Practices assignment of benefits birthday rule cash flow certification number charge capture chart number 3-4 coordination of benefits (COB) direct provider encounter form established patient (EP) financial policy gender rule guarantor HIPAA Coordination of Benefits HIPAA Eligibility for a Health Plan

5. Key Terms (continued) HIPAA Referral Certification and Authorization indirect provider insured new patient (NP) nonparticipating provider (nonPAR) participating provider (PAR) partial payment patient information form 3-5 primary insurance prior authorization number real-time claims adjudication (RTCA) referral number referral waiver referring physician secondary insurance

6. Key Terms (continued) self-pay patient subscriber supplemental insurance tertiary insurance trace number 3-6

7. Patient Encounters and Billing Information Healthcare is business – Big business! Financial health of a practice depends on billing and collection of fees Regular cash flow – monies moving in and out – must be maintained Standardized billing procedures assist in success of practice 3-7

8. 3.1 New Versus Established Patients 3-8 New patient (NP)—patient who has not seen a provider within the past three years Established patient (EP)—patient who has seen a provider within the past three years

9. 3.2 Information for New Patients 3-9 When a patient is new to the practice, five categories of information are important: 1. Preregistration and scheduling information 2. Medical history 3. Patient/guarantor and insurance data 4. Assignment of benefits 5. Acknowledgment of Receipt of Notice of Privacy Practices

10. 3.2 Information for New Patients (continued) 3-10 Referring physician—physician who refers a patient to another physician Participating provider (PAR)—provider who agrees to provide medical services to a payer’s policyholders according to a contract Nonparticipating provider (nonPAR)— provider who does not join a particular health plan Patient information form—form that includes a patient’s personal, employment, and insurance company data

11. 3.2 Information for New Patients (continued) 3-11 Other terms for the policyholder of a health plan include: –Insured –Subscriber –Guarantor Assignment of benefits—authorization allowing benefits to be paid directly to a provider

12. 3.2 Information for New Patients (continued) 3-12 Acknowledgment of Receipt of Notice of Privacy Practices—form accompanying a covered entity’s Notice of Privacy Practices Direct provider—clinician who treats a patient face-to-face Indirect provider—clinician who does not interact face-to-face with the patient

13. 3.3 Information for Established Patients 3-13 When EPs arrive for appointments, they are asked if any pertinent personal or insurance information has changed EPs should review their information forms for accuracy at least once per year Any changes to an EP’s information should be entered in the practice management program (PMP) Chart number—unique number that identifies a patient

14. 3.4 Verifying Patient Eligibility for Insurance Benefits 3-14 First step is to verify patients’ eligibility for benefits Next contact the payer to verify three points: 1.Patient’s general eligibility for benefits 2.Amount of the copayment or coinsurance required at the time of service 3.Determine that the planned encounter is for a covered service considered medically necessary under the payer’s rules

15. 3.4 Verifying Patient Eligibility for Insurance Benefits (continued) 3-15 Check out-of-network benefits if the practice does not participate with the insurance plan presented by the patient Verify amounts for copayment and coinsurance because these could have changed over time Contact the payer for verification of coverage on unusual or unfamiliar services

16. 3.4 Verifying Patient Eligibility for Insurance Benefits (continued) 3-16 HIPAA Eligibility for a Health Plan— transaction in which a provider asks for and receives an answer about a patient’s eligibility for benefits (X12 270/271) Trace number—number assigned to a HIPAA 270 electronic transaction

17. 3.5 Determining Preauthorization and Referral Requirements 3-17 Preauthorization is requested before a patient is given certain types of medical care –Prior authorization number—identifying code assigned when preauthorization is required (also called a certification number) –HIPAA Referral Certification and Authorization— transaction in which a provider asks a health plan for approval of a service and gets a response (X12 278) –Referral number—authorization number given to the referred physician Providers must handle these situations correctly to ensure that services are covered if possible

18. 3.5 Determining Preauthorization and Referral Requirements (continued) 3-18 Referral waiver—document a patient signs to guarantee payment when a referral authorization is pending –Used if a patient does not have the required referral document –Patient may have chosen to “self-refer” and signing the waiver provides documentation of that situation

19. 3.6 Determining the Primary Insurance 3-19 Primary insurance—health plan that pays benefits first Secondary insurance—second payer on a claim Tertiary insurance—third payer on a claim Supplemental insurance—health plan that covers services not normally covered by a primary plan

20. 3.6 Determining the Primary Insurance (continued) 3-20 To determine a patient’s primary insurance, medical insurance specialists: –Examine the patient information form and insurance card –Follow coordination of benefits guidelines –Follow any rules that may apply –Communicate with the patient as needed

21. 3.6 Determining the Primary Insurance (continued) 3-21 Coordination of benefits (COB)—explains how an insurance policy will pay if more than one policy applies –HIPAA Coordination of Benefits—transaction sent to a secondary or tertiary payer (X12 837) Birthday rule—guideline to determine which parent has the primary insurance for a child Gender rule—coordination of benefits rule for a child insured under both parents’ plans

22. 3.6 Determining the Primary Insurance (continued) 3-22 Entering Insurance Information in the Practice Management Program –Database of payers is maintained to reflect changes in participation agreements or contact information –Database is kept up-to-date to assist with information on secondary payers, policy numbers, effective dates and referral numbers

23. 3.6 Determining the Primary Insurance (continued) 3-23 Communications with payers –Checking on eligibility –Receiving referral certification –Resolving billing disputes –Documenting all communication with payer into patient’s financial record

24. 3.7 Working with Encounter Forms 3-24 An encounter form (electronic or paper) is completed by a provider to summarize billing information for a patient’s visit –Lists medical practice’s most frequently performed procedures with associated procedure codes –Blank spaces for diagnosis codes, and often includes other various information –Paper forms may be preprinted or computer- generated Charge capture—procedures that ensure billable services are recorded and reported for payment

25. 3.8 Understanding Time-of-Service (TOS) Payments 3-25 Practices routinely collect these charges at the time of service: 1.Previous balances 2.Copayments 3.Coinsurance 4.Noncovered or overlimit fees 5.Charges of nonPAR providers 6.Charges for self-pay patients 7.Deductibles for patients with CDHPs 8.Charges for supplies and copies of medical records

26. 3.8 Understanding Time-of-Service (TOS) Payments (continued) 3-26 Accept assignment—participating physician’s agreement to accept allowed charge as full payment Self-pay patient—patient with no insurance Partial payment—payment made during checkout based on an estimate

27. 3.9 Calculating TOS Payments 3-27 Real-time claims adjudication—process used to generate the amount owed by a patient at the time of service Financial policy—practice’s rules governing payment from patients Credit and debit cards usually accepted

28. Summary