15. Health Insurance Billing Procedures. Learning Outcomes. 15.1 Define Medicare and Medicaid. 15.2 Discuss TRICARE and CHAMPVA health-care benefits programs. 15.3 Distinguish between HMOs and PPOs. 15.4 Explain how to manage a workers’ compensation case. Learning Outcomes (cont.).
Health Insurance Billing Procedures
15.1 Define Medicare and Medicaid.
15.2 Discuss TRICARE and CHAMPVA health-care benefits programs.
15.3 Distinguish between HMOs and PPOs.
15.4 Explain how to manage a workers’ compensation case.
15.5 List the basic steps of the health insurance claim process.
15.6 Describe your role in insurance claims processing.
15.7 Apply rules related to the coordination of benefits.
15.8 Describe the health-care claim preparation process.
15.9 Explain how payers set fees.
15.10 Complete a Centers for Medicare and Medicaid Service (CMS-1500) claim form.
15.11 Identify three ways to transmit electronic claims.
Medical insurance – written contract between a policy holder and a health plan
First Party – the patient or policy holder
Premium– the amount of money paid by the policy holder to the insurance carrier
Lifetime maximum benefit – a total sum that the health plan will pay out over the patient’s lifeBasic Insurance Terminology
Pre-authorization – approval in advance of the need for a specific procedure
Pre-certification – determination of whether the proposed procedure is a covered service under the patient’s insurance plan
Liability insurance – covers injuries caused by the insured or on their property
Disability insurance – insurance that is activated when the insured is injured or disabledBasic Insurance Terminology(cont.)
What is the difference between first party, second party, and third-party payer?
ANSWER: The first party is the patient or owner of the policy; the second party is the physician or facility that provides services, and the third-party payer is the insurance company that agrees to carry the risk of paying for approved services.
Provides choices in types of plans
Medicare Advantage plans
Private Fee for Service (PFFS)
Special Needs Plans
Medicare Medical Savings plan (MSA)
Part D –
Passed in 2003
Coverage began in 2006
Prescription drug planMedicare (cont.)
Fee-for-Service: The Original Medicare Plan
Allows the beneficiary to choose any licensed physician certified by Medicare
An annual deductible fee
Medicare pays 80 percent and the patient pays 20 percent
Medigap plan – secondary insuranceMedicare Plans
Older or disabled patients unable to pay the difference between the bill and the Medicaid payment may qualify for both Medicaid and Medicare
Physicians agreeing to treat Medicaid patients also agree to the set amount for reimbursements
Families of uniformed personnel and retirees
TRICARE for Life
Medicare-eligible military retirees 65 and older
Dependent spouses and children of veterans with disabilities
Surviving spouses and dependent children of veterans who died in the line of duty or from service-connected disabilitiesTypes of Health Plans
Verify coverage prior to procedures and treatments.
A 72-year-old disabled patient is being treated at an office that accepts Medicaid. The total office visit is $165, but Medicaid will only reimburse a set fee of $125. In this situation, what is the most likely solution?
Services Provided by the Physician’s Office
Tasks Supported by Using a Billing Program
Employer address and telephone number
Insurance carrier and date of coverage
Insurance group plan
Insurance identification number
Name of subscriber or insured
Date of birth
Social security number
Emergency contact personObtaining Patient Information
Legal clauses to prevent duplication of payment
Primary or main insurance plan pays first
Secondary or supplemental plan pays the deductible and co-payment
The Birthday RuleObtaining Patient Information (cont.)
If a husband and wife both have a family insurance plan, the insurance plan of the person born first becomes the primary payer.
Referrals to other services
The medical assistant
Secures authorization from the insurance company for additional services
Arranges an appointment for referred servicesDelivering Services(cont.)
Insurance claims are reviewed for:
A patient had two appointments in the same week for different ailments. On Monday, the patient complains of back pain and receives a prescription for a muscle relaxant. On Wednesday, the patient complains of hair loss. When the medical assistant files the claims, she accidentally codes the first visit diagnosis (muscle spasm) with the prescribed treatment for the second visit (hair loss) which was an anti-fungal shampoo. The insurance claim is probably rejected for which of the following reasons:
A geographic adjustment factorFee Schedules and Charges: Medicare Payment Systems—RBRVS
Three Parts to an RBRVS Fee:
A nationally uniform conversion factor
The current annual Medicare Fee Schedule (MFS) is published by CMS in the Federal Register
Fee ScheduleFee Schedules and Charges(cont.)
Maximum allowable fee
Billing the patient for the difference between the higher usual fee and a lower allowed charge is called balance billing
Sign an assignment of benefits statement
Pay in full for services at the time provided
Remind patients of financial obligation
Ask patients to agree in writing to cost of procedures not covered by plan
Advance Beneficiary Notice of Noncoverage (ABN)Communication with Patients About Charges
Unless other prior arrangements are made, payment is expected at the time service is delivered
The patient is responsible for any amounts not covered by the insurance carrier
Copayments must be paid before patients leave the office
Managed Care Members
What do you need to consider when calculating patient charges?
ANSWER:You need to consider whether the patient has met thedeductible, if the patient has to pay a copayment, if the service is excluded, or if the patient is over his/her limit for services.
X12 837 Health Care Claim- official name
Information entered is called data elements
Data must be entered in CAPS in valid fields
No prefixes or special characters allowedPreparing and Transmitting Health-Care Claims
Transmission of Electronic Claims
Three major methods of transmitting
to the payer
Direct data entry
Internet-based service that loads data elements directly into the health plan’s computer
Offices and payers exchange information directly by electronic data interchange (EDI)
Generate clean claims by avoiding common errors
or incomplete service facility name, address, and identification for services rendered outside the office or home
Medicare assignment indicator or benefits assignment indicator
part of the name or the identifier of the referring provider
or invalid subscriber’s birth date
information about secondary insurance plans, such as spouse’s payer
payer name and/or payer identifierPreparing and Transmitting Health-Care Claims(cont.)
A medical assistant has two part-time positions, one for a pediatrician and the other for a surgeon. When completing the X12 837, which of the following would be a major difference?
The taxonomy information would be very different because the physician preparation and licensing are very different.
15.1 Medicare provides health care for citizens aged 65 and over, and certain patients under 65 may also qualify for Medicare. Medicaid is a health benefits program for low-income, blind or disabled patients, needy families, foster children, and children born with birth defects.
15.2 TRICARE is a health insurance plan for families of uniformed personnel and retirees from the uniformed services. CHAMPVA covers the expenses of families of veterans with total, permanent, service-connected disabilities, as well as the surviving spouses and children of veterans in this same category.In Summary
15.3 HMOs generally seek services from a specific group of providers within their plan. PPOs establish a network of providers to perform services for their plan members.
15.4 Keep medical and financial records of workers’ compensation cases separate from other employee records; verify coverage and maintain confidentiality.
15.5 The claims process consists of obtaining patient information, determining diagnosis and fees, recording charges and codes, preparing the claim, reviewing the processing of the claim and remittance advice, and making sure the payment comes into the office.In Summary (cont.)
15.6 Medical assistants gather and record patient information; verify coverage, record procedures and services performed; file claims; bill patients; and review and record payments.
15.7 The rules that determine the coordination of benefits are guidelines for payments from insurance companies.
15.8 Preparing the health-care claim consists of filing the claim, setting time limits for filing the claim, reviewing the claim for medical necessity, reviewing for allowable benefits, payment, and remittance advice.In Summary (cont.)
15. 9 Payers set fees based on the amounts that Medicare allows, geographic factors, a uniform conversion factor, practice costs, insurance, and the physician’s work.
15.10 The CMS-1500 form contains numbered items that refer to the patient and the patient’s insurance coverage.
15.11 Three ways to transmit electronic claims are to
Transmit claims directly to the clearinghouse
Use a clearinghouse to prepare and send claims
Use direct data entry using an Internet-based serviceIn Summary (cont.)
I am always doing that which I can not do, in order that I may learn how to do it.
~ Pablo Picasso