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Weekly Overview

Week Three

Overview

The profitability of a health care provider is dependent on the organization’s ability to operate efficiently with respect to handling patients at the time of delivery of service. Although the direct care with doctors and support staff have a lot to do with the patient experience, coordinating staff and handling the billing process with the various payors effectively is paramount to being successful. It is important that all of the necessary and required information is obtained upfront from the patient to deliver the best care and services. This starts during the patient registration process.

Even though much of this effort is behind the scenes for patients, the billing for reimbursement is vital to maintaining a reasonable revenue cycle. This is accomplished with a solid understanding of how claims are coded, processed, and resubmitted in working with the different payors. In addition, there are various rules and regulations that must be followed in handling patient information during the registration process and the billing cycle.

What you will cover

1. Health Care Billing

a. Identify rules and regulations governing patient billing.

1) Provider liability for overpayments

a) Medicare providers responsible for overpayment for claims that do not meet medical necessity, correct coding initiatives, or have documentation to support codes reported on claims

2) Medicare Shared Savings Program

a) Program to facilitate coordination and cooperation to improve the quality of care for Medicare fee-for-service beneficiaries

3) Recovery audit contractors

a) Mandated to find and correct improper Medicare payments made to providers

4) Medicaid Integrity Program

a) Provides funds to combat fraud, waste, and abuse of those providers seeking reimbursement from Medicaid

5) Health Insurance Portability and Accountability Act (Title 1 and 2)

a) Provides federal protections for individually identifiable health information held by covered entities and their business associates and gives patients an array of rights with respect to that information

6) Retention of records

a) Ensure the availability of records for governmental and other third-party agencies, time mandated by federal or state regulations

7) National Correct Coding Initiative

a) Medicare program introduced in 1996 to reduce expenditures because of inappropriate codes submitted on claims

b. Identify processes associated with the medical revenue cycle.

1) Register patients

a) Consent

1) Must obtain consent to treat and release information

b) Verify identity, demographics, and payor information

1) Name

2) Age

3) Contact Information

4) Mailing address

5) Coverage information

c) Establish patient guarantor

1) Person or entity responsible for the remaining payment of services after insurance has paid

a) Ensure guarantor signs the financial policy and assignment of benefits

b) Must be over 18

d) No-show, missed, and canceled appointments

1) Charges and fees

2) Follow-up procedures

2) Insurance coverage and medical necessity

a) Verify insurance coverage/review insurance card

b) Verify coverage benefits, including co-pay and deductible information and other out-of-pocket expenses

c) Verify changes in coverage

d) Clinical review completed by insurance company to the necessity of services

e) Preauthorization and precertification

1) Permission for reimbursement of services given by insurance provider

3) Collect co-pays or outstanding balances

a) Follow office policy as to whether to collect co-pays prior to seeing doctor or at the time of discharge

1) Check patient’s ledger for outstanding balances

2) Use coverage benefits information to collect appropriate co-pays

3) Receipt for payment

4) Discharge patients

a) Encounter data

(1) Ensure each encounter has diagnosis and procedure codes checked off and provider has signed off

b) Statements

1) Office visit invoices

2) Exit receipt

c) Schedule follow-up appointment (if necessary)

1) Rescheduling appointments

5) End of day close

a) Balance cash drawer

b) Balance day sheet

c) No-show, missed, and canceled appointments

1) Charges and fees associated with missed and no-show appointments

2) Follow-up procedures, documentation, calls, etc.

6) Collect claims data

a) Charge entry

1) Paper submission of claims is usually done through the Postal Service.

2) Electronic claims processing

a) Either directly to the payor or through a third-party vendor called a clearinghouse

b) Allows claim editing and monitoring of claim status through the Internet

b) Procedure coding: code types

1) ICD-10-CM

a) International Classification of Diseases, Tenth Revision, Clinical Modification

b) The U.S. adaptation of the World Health Organization International Statistical Classification of Diseases and Related Health Problems

a. Adopted by every country that participates in maintaining health care statistics

b. Used to classify diagnoses and reasons for visits or encounters in all health care settings

2) ICD-10-PCS

a) International Classification of Diseases, Tenth Revision, Procedure Coding System

b) For procedural coding in inpatient setting

3) Current Procedural Terminology (CPT)

a) Used for physician services in ambulatory, office, or outpatient setting

4) Healthcare Common Procedure Coding System (HCPCS)

a) Codes used to report items

a. Medication, dental procedures, durable medical equipment, and chiropractic services

5) Ambulatory Payment Classification (APC)

a) Used to group outpatient procedures and diagnoses together for hospital outpatient billing

6) Diagnosis-related group (DRG)

a) Used to code inpatient hospital service in groups that are medically related in diagnosis and services. Medicare has a preset reimbursement rate for each DRG.

c) CMS-1500 claim forms

1) Centers for Medicare & Medicaid Services form 1500

2) Insurance billing form

3) Used by physicians and other providers and medical suppliers to submit claims for services or items to patients who are not hospitalized

d) UB04/CMS-1450 claim forms

1) Uniform Billing form 04 / Centers for Medicare & Medicaid Services form 1450

2) The universal hospital claim form required to submit the minimal information needed to report all hospital discharges.

e) Check coding and billing for accuracy

7) Prepare and electronically submit claims or mail

8) Payment collections

a) Review admittance advice or explanation of benefits (EOB)

b) Posting payments

1) Manual posting vs. electronic posting

a) After payment for medical services by insurance or patient, payment can be posted in accounting system either one at a time (manual) or hundreds at a time using a software file (electronic) from the insurance payor and the billing software system.

2) Explanation of benefits

a) A document sent to the patient and provider from the insurance payor that explains how the reimbursement amount for services is determined

3) Remittance information

a) An explanation of benefits document that is sent to the physician. It is a complete summary of all benefits paid to a provider for services completed for patients during a certain period of time

4) Line items posting vs. claim posting

a) Payment posting for each procedure vs. payment posting for an encounter or complete invoice

5) Self-pay and collections posting

a) Posting payment from patients directly or collected from patients by a collections agency

6) Write-off

a) The part of a charge that is eventually paid by no one

7) Contractual adjustment

a) Amount of a charge is not allowed the insurance payor

8) Bad debt

a) Charges that have no payor with the legal liability to pay or the ability to pay

9) Charity care

a) Health care given to low-income patients for free or at a reduced rate

9) Follow up with insurance carrier and patients for outstanding amounts owed

a) Claim denials

b) Appeals process

(1) Creating a letter to appeal a claim

c) Balance bill patients for approved amounts or denied coverage benefits

10) Collection process for outstanding patient balances

11) Patient billing

a) Billing statement sent to patients for unpaid co-insurance amounts, deductible, balance billing (when allowed), and contractual amounts due from patients

(1) 30-, 60-, 90-day notices

1) Precollections

2) Bad debt write-offs

c. Compare uses of coding.

1) Procedural vs. diagnosis codes

a) Diagnosis codes

1) Interpret the medical reason or medical necessity for the patient visit or encounter.

b) Procedural codes

1) Interpret the health services provided by the physician during the encounter.

2) Current Procedure Terminology (CPT) Coding Purpose

a) Category 1, 2, 3 codes

1) Category 1 contains the six main sections of procedure codes.

2) Category 2 contains supplemental tracking codes used for performance measures.

3) Category 3 contains codes for emerging technology.

b) Evaluation and management codes

1) Used for office and outpatient services.

c) Modifiers

1) Two-digit codes added to the five-digit CPT codes to further define the service procedure.

d) Place of service codes

1) Two-digit codes on the billing form to describe the physical location the patient received service

a) Example: the physician’s office or patient’s home

e) Levels of coding key components

1) Used in most evaluation and management and CPT codes to describe a patient visit and level of complexity of the visit

3) Healthcare Common Procedure Coding System (HCPCS) Level 11 coding purposes

a) Used to report physician and non-physician services

1) Ambulance services, dental services, chiropractic, durable medical equipment, and other services

b) Codes required by Medicare and other insurance companies

4) Purpose of ICD-10-PCS codes

a) Used to code medical necessity

5) Purpose of ICD-10-CM codes

a) Used to code hospital inpatient treatments and services

6) Anesthesiology coding

a) CPT codes (00100–01999)

b) Used to support the administration of anesthesiology services

7) Surgical coding

a) CPT codes (10021–69990)

b) Used to support the administration of surgical services

8) Professional component vs. technical component

a) Physician services are considered the professional component of billing

b) Technician services are considered the technical component of billing

1) Example: imaging and equipment cost of radiology

9) Medically necessary documentation

a) Documentation provided by the physician to prove a procedure’s medical justification

1) Example: diagnosis and lab test.

2) Diagnosis-related groups (IPPS, inpatient payment)

a) Used to code inpatient hospital service in groups that are medically related in diagnosis and services

3) Preset reimbursement rate set by Medicare for each DRG

10) Relative value units (RVU)

a) Includes physician work, practice expenses, and malpractice cost

b) Used by CMS to devise the annual physician procedure fee schedule

11) Revenue codes

a) A four-digit code on a facility’s charge master to indicate the location or type of service provided to an institutional patient

1) Example: emergency medical services

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