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.) 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.
Learning Outcomes (cont.) 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.
Introduction • Health care claims = reimbursement • Accuracy = maximum appropriate payment • Medical assistant • Prepare claims • Review insurance coverage • Explain fees • Estimate charges for payers • Prepare 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 life Basic Insurance Terminology
Basic Insurance Terminology (cont.) • Second Party–the physician who provides medical services • Benefits – payment by the insurance carrier for medical services provided • Third-party payer – the health plan that agrees to carry the risk of paying for services • Deductible–a fixed dollar amount paid or met once a year before third-party payers begin to cover expenses
Basic Insurance Terminology(cont.) • Coinsurance– a fixed percentage of coverage charges after the deductible is met • Copayment– a small fee that is collected at the time of the visit • Exclusions– uncovered expenses • Formulary–a list of approved drugs • Elective procedure – one not required to sustain life
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 disabled Basic Insurance Terminology(cont.)
Apply Your Knowledge 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. Good Job!
Types of Health Plans • Insurance companies • Rules about benefits and procedures • Manuals, printed or online • Representatives to assist • Sources of health plans • Group policies – through employer • Individual plans • Government plans
Fee-for-Service Plans • Oldest and most expensive type of plan • Covers costs of select medical services • Amount charged for services is determined by the physician • Amount paid for services is controlled by the insurance carrier
Managed Care Plans • Controls both the financing and delivery of health care to policy holders • Both policy holders and physicians (participating physicians) are enrolled by the Managed Care Organizations (MCOs) • MCOs pay physicians in two ways • Contracted fees • Capitated fees – fixed amount per month to provide contracted services to patients enrolled in the plan
Managed Care Plans (cont.) • Preferred Provider Organization (PPO) • A network of providers to perform services to plan members • Physicians in the plan agree to charge discounted fees • Health Maintenance Organization (HMO) • Physicians who contract with HMOs are often paid a capitated rate • Patients pay premiums and a small copayment for each office visit
Government Plans • Health care • Retirees • Low-income and disadvantaged • Active or retired military personnel and their families • Maintain features of managed care plans
Medicare • The largest federal program that provides health care to citizens aged 65 and older • Managed by the Centers for Medicare and Medicaid Services (CMS) • Part A • Hospital insurance available to anyone receiving social security benefits • No premium unless ineligible for social security benefits
Medicare (cont.) • Part B • Covers physician services, outpatient services, and many other services • Available to United States citizens and permanent residents 65 and older • Participants must pay a premium
Part C – 1997 Provides choices in types of plans Medicare Advantage plans PPO HMO Private Fee for Service (PFFS) Special Needs Plans Medicare Medical Savings plan (MSA) Part D – Passed in 2003 Coverage began in 2006 Prescription drug plan Medicare (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 insurance Medicare Plans
Medicare Managed Care Plans • Medicare Preferred Provider Organization Plans (PPOs) • Medicare Private Fee-for-Service Plans Medicare Advantage Plans
Medicare Plans (cont.) • Recovery Audit Contractor (RAC) Program • Designed to guard the Medicare Trust Fund • Identify improper payments Overpayment Underpayment
Medicaid • A health-benefit program designed for: • Low-income • Blind • Disabled patients • Temporary assistance to needy families • Foster children • Children born with disabilities • Not an insurance program
Medicaid (cont.) • Funded by the federal and state governments • Provides assistance such as: • Physician services • Emergency services • Laboratory and x-rays • Skilled nursing facility (SNF) care • Vaccines • Early diagnostic screening and treatment for minors
Medicaid (cont.) Medi/Medi Accepting Assignment Medicaid 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
Medicaid(cont.) • Comply with state guidelines • Verify Medicaid eligibility • Ensure that the physician signs all claims • Authorization must be received in advance for medical services except in an emergency • Verify deadlines for claim submissions • Treat Medicaid patients with the same professionalism and courtesy that you extend to other patients
Department of Defense 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 disabilities Types of Health Plans TRICARE CHAMPVA
Blue Cross and Blue Shield • A nationwide federation of nonprofit and for-profit service organizations that provide prepaid health-care services to subscribers • Specific plans for BCBS can vary greatly because each local organization operates under its own state laws
State Children’s Health Plan (SCHIP) • Enacted in 1997 and reauthorized in 2009 • State-provided health coverage for uninsured children in families that do not qualify for Medicaid
Types of Health Plans:Workers’ Compensation • Covers accidents or diseases incurred in the workplace • By federal law, employers must purchase a minimum amount of workers’ compensation insurance Coverage Includes • Basic medical treatment • Weekly or monthly amount paid to patient while not employed • Rehabilitation costs Verify coverage prior to procedures and treatments.
Apply Your Knowledge 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? ANSWER: Correct! • Bill the patient for the balance due. • Expect the balance to be paid at the time of service. • This patient probably has a secondary employer health insurance plan. • This patient may qualify for the Medi/Medi coverage.
The Claims Process: An Overview • Obtains patient information • Determines diagnosis and fees based on services provided • Records patient payments • Prepares health-care claims • Reviews the insurer’s processing of the claim Services Provided by the Physician’s Office
The Claims Process: An Overview(cont.) • Gathering and reporting patient information • Verifying patient’s insurance coverage • Recording procedures and services performed • Recording applicable diagnosis and codes for each procedure performed • Filing insurance claims and billing patients • Reviewing and recording payments Tasks Supported by Using a Billing Program
Insurance information Current employer Employer address and telephone number Insurance carrier and date of coverage Insurance group plan Insurance identification number Name of subscriber or insured Personal information Name Home address Telephone number Date of birth Social security number Emergency contact person Obtaining Patient Information
Obtaining Patient Information (cont.) • Release signatures • Form to release insuranceinformation to insurance carrier • Form for assignment of benefits • Verify eligibility • Check effective date of coverage
Coordination of benefits 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 Rule Obtaining 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.
Delivering Services • Physician’s services • Examines patient • Documents symptoms, diagnosis, and treatment plan in medical record • Medical coding • Translates the medical terminology into codes for reimbursement
Referrals to other services The medical assistant Secures authorization from the insurance company for additional services Arranges an appointment for referred services Delivering Services(cont.)
Preparing the Health-Care Claim • Filing the insurance claim • Once prepared, the physician reviews the claim • Usually transmitted to payer electronically • Time limits • Vary by company and state • Medicare and Medicaid
Insurer’s Processing and Payment Insurance claims are reviewed for: • Medical necessity • Allowable benefits • Payment and remittance advice
Insurer’s Processing and Payment (cont.) • Remittance advice (RA) • Sent with payment to patient and physician • Also known as explanation of benefits (EOB) • Information the RA Form • Insured name and identification number • Name of beneficiary • Claim number • Date, place, and type of service • Amount billed and amount allowed • Amount of copayment and payments made • Notation of any services not covered
Reviewing the Insurer’s RA and Payment • Verify all information on the remittance advice (RA) line by line • If a claim is rejected, check the diagnosis codes for accuracy • Track all unpaid claims using either a follow-up log or computer automation
ANSWER: Apply Your Knowledge 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: Allowable benefits Payments Medical necessity Very Good!
The nationally uniform relative value A geographic adjustment factor Fee Schedules and Charges: Medicare Payment Systems—RBRVS • Resource-based relative value scale (RBRVS) • Payment system used byMedicare 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
Allowed Charges Capitation Contracted Fee Schedule Fee Schedules and Charges(cont.) Payment Methods
Fee Schedules and Charges (cont.) • Allowed charges • This represents the most the payer will pay any provider for that work • Other equivalent terms Maximum allowable fee Maximum charge Allowed amount Allowed fee Allowable charge Maximum charge Billing the patient for the difference between the higher usual fee and a lower allowed charge is called balance billing
Fee Schedules and Charges (cont.) • Contracted fee schedule • Fixed fee schedules for participating physicians • Non-covered services billed to patient • Capitation • The fixed prepayment for each plan member • Non-covered services billed to patient
Fee Schedules and Charges (cont.) • Calculating patient charges • Depending on plan, patients may be obligated to pay • Premiums and deductibles • Copayments and coinsurance • Excluded and over-limit services • Balance billing
A practice may require patients to Sign an assignment of benefits statement or 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
Communication with Patients About Charges(cont.) • Financial policy • Patient responsibility for payment for services Unless other prior arrangements are made, payment is expected at the time service is delivered Unassigned Claims The patient is responsible for any amounts not covered by the insurance carrier Assigned Claims Copayments must be paid before patients leave the office Managed Care Members
Apply Your Knowledge 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. Nice Job!