CHAPTER 3

1. Patient Encounters and Billing Information CHAPTER 3

2. See the ten-step Revenue Cycle figure (at the beginning of the chapter). • This chapter focuses on the following steps: • Preregister patients • Establish financial responsibility • Check in patients • Review coding compliance • Review billing compliance • Check out patients • Prepare and transmit claims • Monitor payer adjudication • Generate patient statements • Follow up payments and collections Chapter 3Patient Encounters and Billing Information (1)

3. Healthcare is business – big business! Financial health of a practice depends on billing and collecting fees for services Regular cash flow (monies moving in and out of the business) must be maintained Standardized information gathering (and billing procedures) assist in the success of the practice Patients must understand their financial responsibility Patient Encounters and Billing Information (2)

4. When you finish this chapter, you will be able to: 3.1 Explain the method used to classify patients as new or established. 3.2 Discuss the five categories of information required of new patients. 3.3 Explain how information for established patients is updated. 3.4 Verify patients’ eligibility for insurance benefits. 3.5 Discuss the importance of requesting referral or preauthorization approval. Learning Outcomes (1)

5. When you finish this chapter, you will be able to: 3.6 Determine primary insurance for patients who have more than one health plan. 3.7 Summarize the use of encounter forms. 3.8 Identify the eight types of charges that may be collected from patients at the time of service. 3.9 Explain the use of real-time adjudication tools in calculating time-of-service payments. Learning Outcomes (2)

6. Key Terms (1) • accept assignment • Acknowledgment of Receipt of Notice of Privacy Practices • assignment of benefits • birthday rule • certification number • charge capture • chart number • coordination of benefits (COB) • credit card on file (CCOF) • direct provider • electronic eligibility verification • encounter form • established patient (EP) • financial policy • gender rule • guarantor • HIPAA Coordination of Benefits • HIPAA Eligibility for a Health Plan

7. Key Terms (2) • HIPAA Referral Certification and Authorization • indirect provider • insured • new patient (NP) • nonparticipating provider (nonPAR) • partial payment • participating provider (PAR) • patient information form • portal • primary insurance • prior authorization number • real-time adjudication (RTA) • referral number • referral waiver • referring physician • secondary insurance

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

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

10. When a patient is new to the practice, five types of information are important: 1. Preregistration and scheduling information (see Figure 3.1) 2. Medical history (see Figure 3.2) 3. Patient/guarantor and insurance data (see Figures 3.3 and 3.4) 4. Assignment of benefits (see Figure 3.5) 5. Acknowledgment of Receipt of Notice of Privacy Practices (see Figure 3.6) 3.2 Information for New Patients (1)

11. Referring physician—physician who transfers care of 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 3.2 Information for New Patients (2)

12. Other terms for the policyholder of a health plan include: • Insured • Subscriber • Guarantor—person who is financially responsible for the bill • Assignment of benefits—authorization allowing benefits to be paid directly to a provider 3.2 Information for New Patients (3)

13. Acknowledgment of Receipt of Notice of Privacy Practices—form accompanying a covered entity’s NPP (Notice of Privacy Practices) for the patient’s signature, indicating the NPP has been read Direct provider—clinician who treats a patient face-to-face Indirect provider—clinician who does not interact face-to-face with the patient 3.2 Information for New Patients (4)

14. When an EP (established patient) arrives for an appointment, the front desk asks if any pertinent personal or insurance information has changed EPs should review their information forms for accuracy at least once per year Changes to an EP’s information are entered in the practice management program (PMP) Chart number—unique number that identifies a patient Remember! Customer service is as important as billing. Good communication means satisfied customers/patients. 3.3 Information for Established Patients

15. Establish financial responsibility before an encounter (except in emergency): • Verify patient’s eligibility for benefits from the patient information form (PIF)and insurance card • Contact the payer to verify: • Patient’s eligibility for benefits • Amount of the copayment or coinsurance required at the time of service • Whether the planned encounter is for a covered service considered medically necessary under the payer’s rules • Determine preauthorization and referral requirements • Determine the primary payer if more than one insurance plan is in effect 3.4 Verifying Patient Eligibility forInsurance Benefits (1)

16. 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 If the service will not be covered, inform the patient of his or her financial responsibility in advance 3.4 Verifying Patient Eligibility forInsurance Benefits (2)

17. HIPAA Eligibility for a Health Plan—electronic 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 Advance beneficiary notice (ABN)—Medicare financial agreement form, signed by the patient, that proves you have informed the patient of his or her financial responsibility for a service not covered by benefits 3.4 Verifying Patient Eligibility forInsurance Benefits (3)

18. Preauthorizationis 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 3.5 Determining Preauthorization and Referral Requirements (1)

19. 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 3.5 Determining Preauthorization and Referral Requirements (2)

20. 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 insurance plan 3.6 Determining the Primary Insurance (1)

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 stating that the parent whose day of birth is earlier in the calendar year holds the primary policy • Gender rule—guideline stating that when a child is covered by two health plans, the father's plan is the primary policy 3.6 Determining the Primary Insurance (2)

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

23. Entering Insurance Information in the Practice Management Program (PMP) • 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 3.6 Determining the Primary Insurance (4)

24. Communication with payers includes: • Checking on eligibility • Receiving referral certification • Resolving billing disputes • Document all communication with payer in the patient’s financial record (not the clinical record) • Keep current with reimbursement policies • Professional communication skills are important 3.6 Determining the Primary Insurance (5)

25. An encounter form (electronic or paper) is completed by a provider to summarize billing information for a patient’s visit (see Figure 3.11) • Also called a superbill, charge slip, charge ticket, or routing slip • Lists medical practice’s most frequently performed procedures with associated medical procedure codes • Often has blank spaces for diagnosis codes, and often includes other information • Paper forms may be preprinted or computer-generated • Charge capture—procedures that ensure billable services are recorded and reported for payment 3.7 Working with Encounter Forms

26. Practices routinely collect these charges at the time of service (TOS) before the patient leaves the office: • Previous balances • Copayments • Coinsurance • Noncovered or overlimit fees • Charges of nonPAR providers • Charges for self-pay patients • Deductibles for patients with consumer-driven health plans (CDHPs) • Charges for supplies and copies of medical records • Some practices also collect partial payment or unmet deductible at TOS 3.8 Understanding Time-of-Service (TOS) Payments (1)

27. 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 3.8 Understanding Time-of-Service (TOS) Payments (2)

28. Financial policy—practice’s rules governing payment from patients • Credit and debit cards usually accepted • Credit card on file (CCOF) is the policy of collecting and retaining patients’ credit card information to protect practice from nonpayment • Practice manager approval usually required for payment plan for large unpaid bills • Real-time adjudication (RTA)—process used to generate the amount owed by a patient at the time of service *end of presentation* 3.9 Calculating TOS Payments