Chapter 10

Question 1

Introduction

The denial and appeals process is an important step in the accounts receivables and collections of a practice. In this chapter, we will discuss the management of the accounts receivable (A/R) management and the denial process. The objectives for this chapter include:

Answer 1

Identify types of denials
List the steps to working the A/R
Understand patient collection practices
Review the bankruptcy concepts

Question 2

Explanation of Benefits (EOB) and Remittance Advice (RA)

Answer 2

EOB = is a statement sent by an Ins carrier explaining what services were paid.

RA = is a statement sent by Ins carrier which explain adjudication decisions on those claims.

Question 3

ERA

Electronic Remittance Advice

Answer 3

is an electronic statement sent by Ins carrier to provider … explains adjudication decisions on claims submitted.

Question 4

The RA and ERA include?

Answer 4

*Identifying information

*Claim amounts, adjustments etc

*Claim status … paid, denied or pending

*Explanation of decision

Question 5

EOB to patient

Answer 5

will have a statement “this is not a bill”

Question 6

A/R Management

Answer 6

(A/R) represents money owed to the healthcare practice by patients and/or insurance carriers.

Question 7

AR functions include

Answer 7

The functions of accounts receivable management include insurance verification, insurance eligibility, prior authorization, billing and claims submission, posting payments, and collections.

Question 8

Days in A/R

Answer 8

The success of a practice’s billing operations is often measured in A/R days. The A/R balance can be reduced by receiving payments or by entering contractual or write off adjustments. It is important to manage the A/R balance as claims become much more difficult to collect the older they become.

Question 9

poor A/R process can result in loss of money…

Answer 9

If all these tasks are being done properly, the days in A/R number should be low, in contrast, high days in A/R number will most likely tell you there is a problem in your revenue cycle.

Question 10

BILLING TIP

Days in A/R is a fraction. The numerator is the total A/R. The denominator is average daily charges. Average daily charges are calculated by taking the total charges over the last 2 months (can also be one month) and dividing by the total number of days in those two (or one) months.

Answer 10

Example:

Total A/R = $200,000

Average Daily Charge = $4,250

Days in A/R = $200,000/$4,250 = 47.06 days in A/R

Question 11

Steps to Working the Account Receivables

Answer 11

*Financial policy: conveys copays etc. are required at time of visit.

*Verify insurance: verified every time.

*Registration Process: update new information.

*Collections: copays collected upfront.

*Submit Claims Correctly:

*Monitor: ERAs and RAs posted immediately.

*Denials: correct claim, appeal etc.

*Patient Statements/Invoices: send patient statements of any balance once RA posted.

*Write-offs: policy for small balances for which processing costs exceed collections.

Question 12

The accounts receivable aging summary should be worked starting with the oldest claims and/or largest balances first.

Answer 12

The longer a balance sits in the accounts receivable the less likely it will be paid.

Question 13

Claims Tracking

Answer 13

Most carriers will process a claim and make payment within 15 days.

Question 14

The Prompt Payment Act is a federal law that ensures federal agencies pay their bills within …

Answer 14

30 days of receipt and acceptance of material and/or services.

Question 15

Denials and Appeals

Answer 15

If the claim is denied, the denial is reviewed by the biller and actions are taken based on the denial.

Question 16

Common denials include:

Answer 16

*Incorrect information

*Coordination of Benefits

*Timely filing

*Missing referral: from PCP

*Non-covered service

*Prior Authorization

*Coverage Terminated

*Not Medically Necessary: review dx, cpt codes to make sure it supports LOMN - Letter Of Medical Necessity.

Pre-existing Condition: As of January 2014, the ACA eliminated pre-existing conditions clauses.

Lower Level of Care: care on an IP could’ve been don as OP… SNF care could’ve been done as Home Health, OP procedure could’ve been done at Provider’s.

Question 17

BILLING TIP

Some insurance companies will allow incorrect information to be changed over the phone and they will reprocess the claim without a new claim being sent to them. For example, the numbers in the subscriber ID were transposed when put in the practice management system.

Answer 17

When this is discovered, some insurance companies will allow a phone call to change this information and have the claim reprocessed. You should always try to obtain a tracking or reference number from the insurance company for any further follow up that may be needed on the claim.

Question 18

Working a Denial

Answer 18

*Determine why the claim was denied.

*Contact the insurance carrier with questions.

*Correct the information.

*Resubmit or appeal the claim.

*Track the details and stay organized—Make sure you are tracking the denials.

Question 19

Section Review 10.1

Which denial is when the patient is covered under another insurance?

Answer 19

Answer: A. Coordination of benefits

Question 20

Which is the best way to handle a denial for incorrect information?

Answer 20

Answer: C. Contact the insurance and the patient to figure out where the error is and get it corrected

Question 21

Which of the following is a statement sent to the patient from the insurance carrier explaining services paid for on their behalf?

Answer 21

Answer: C. Explanation of Benefits

Question 22

What is the first step in working a denied claim?

Answer 22

Answer: D. Determine and understand why the claim was denied

Question 23

What is a lower level of care denial?

Answer 23

Answer: B. Care is provided on an inpatient basis that is typically provided on an outpatient basis.

Question 24

Appeals:

Appeals are made by either providers or an employee of the healthcare provider or facility. It is a formal request for a third-party payer or insurance carrier to reconsider a decision about a denied claim. An appeal is filed when the provider disagrees with the determination made by the insurance carrier to deny a claim.

Answer 24

Gather documentation.

**Copy of the remittance advice for the denied claim

**Copy of the medical record (supporting documentation)

**Copy of the original claim

**Letter (or form specified by the insurance carrier) detailing why the claim should be paid

Question 25

Every insurance carrier has an appeals process and some carriers will identify when a claim should be sent as a corrected claim or appealed.

Answer 25

Some insurance carriers may have a specific form to complete when appealing claims. Most insurers have multiple levels of appeals. Here are some examples of different appeals processes.

Question 26

Medicare Appeals Process: Five Levels

Answer 26

Under original Medicare there are five levels of the claims appeal process. All requests for appeals must be in writing.

Question 27

Level 1 – Redetermination

Answer 27

A redetermination is an examination of the claim by the MAC personnel. The personnel who review the redetermination is different from the personnel who made the initial claim determination.

Question 28

A redetermination request must be filed within 120 days from the date of receipt of the remittance advice, which lists the initial determination.

Answer 28

There is not a minimum monetary threshold required to request a redetermination.

Question 29

The request for redetermination must be a written request or be filed on Form CMS-20027.

Answer 29

The instructions are provided on the following web:

https://www.cms.gov/medicare/appeals-grievances/fee-for-service/first-level-appeal-redetermination-medicare-contractor

Question 30

The following elements listed below are required for the redetermination:

Answer 30

*Beneficiary’s name

*Medicare Health Insurance Claim (HIC) number or Medicare Beneficiary’s Identifier (MBI)

*Specific service(s) and/or item(s) for which a redetermination is being requested

*Specific date(s) of service

*Name of the party or the authorized or appointed representative of the party.

*An explanation of why the appellant disagrees with the contractor’s determination.

Question 31

In addition to the above information on the written request, the supporting documentation should also be attached to the request.

Answer 31

Generally, the decision on the issue will be sent within 60 days of receipt of the redetermination request. You will receive notice of the decision via a Medicare Redetermination Notice (MRN) from your MAC, or if the initial decision is reversed and the claim is paid in full, you will receive a revised RA

Question 32

Level 2 – Reconsideration

Answer 32

If dissatisfied with the redetermination decision, a reconsideration by a Qualified Independent Contractor (QIC) can be requested.

Question 33

The request for reconsideration must be filed with a QIC within 180 days of receipt of the redetermination.

Answer 33

This request must be submitted on the standard CMS-20033, which is sent with the Medicare Redetermination Notice (MRN) or with a written request including the following information:

Question 34

Information needed for Level 2 Reconsideration…

Answer 34

*Beneficiary’s name

*Beneficiary’s Medicare health insurance claim (HIC) number or Medicare Beneficiary’s Identifier (MBI)

*Specific service(s) and item(s) for which the reconsideration is requested, and the specific date(s) of service

*Name of the party or representative of the party

*Name of the contractor that made the redetermination

*Any missing documentation identified in the notice of redetermination.

Question 35

Level 2 Reconsideration…

Answer 35

A copy of the MRN also needs to be included. Generally, the decision will be sent within 60 days of receipt of the reconsideration.

Question 36

Level 3 – Administrative Law Judge

Answer 36

If the reconsideration is still not acceptable, the next step is to request a hearing with the Administrative Law Judge (ALJ) within 60 days of receipt of the reconsideration decision. To request a hearing, the amount remaining in controversy must meet the threshold requirement, which is updated annually.

Question 37

5 levels of appeals

Answer 37

1. Redetermination (120 days from RA)
2. Reconsideration (180 days from redetermination)
3. Administrative Law Judge (60 days from Reconsideration)
4. Appeals Council (60 days from ALJ)
5. Judicial Review (60 days from AC in Fed Court

Question 38

Level 4 – Appeals Council

Answer 38

*The request must be submitted in writing within 60 days of receipt of the ALJs decision and must specify the issues and findings that are being contested.

*The Appeal Form DAB-101 should be submitted.

*Generally, the decision will be issued within 90 days of receipt of a request for review.

Question 39

Level 5 – Judicial Review

Answer 39

*Federal district court.

*This level also has a threshold requirement, which is updated annually.

*A request must be made within 60 days of receipt of the Medicare Appeals Council’s decision.

Question 40

Blue Cross Blue Shield of Illinois Appeals Process

Answer 40

*The appeals process is an official request for reconsideration of a previous denial issued by Blue Cross Blue Shield of Illinois Medical Management area.

*Appeals may be submitted in writing or by telephone. A routing form with relevant claim information and supporting documentation must be included with the appeal request. The peer review process takes 30 days, and a written notification of appeals determination will be sent.

To request the review, the Claim Review Form https://www.bcbsil.com/provider/claims/claims-eligibility/claim-review

Question 41

UnitedHealthcare Appeals Process

Answer 41

*Request for Reconsideration is the first step in the appeals process at UnitedHealthcare.

*The Reconsideration Form should be completed online through claims Link https://www.uhcprovider.com/en/claims-payments-billing.html

When further consideration is warranted, an appeal letter needs to be submitted in writing to the address on the back of the patient’s ID card.

Question 42

Medical Record Request

Answer 42

*Make a copy of the medical record only for the specific date of service requested.
Review the medical record to make sure the services billed are accurate.

*If the provider referenced documentation from another area of the record during the encounter, make sure this information is copied and sent with the date of service information.

*Document in the computer system indicating a copy of the record was sent to the insurance carrier.

*Attach a copy of the medical record claim and the remittance advice.

*Send all of the gathered information to the insurance carrier.

Question 43

Patient Statements

Answer 43

*Electronic systems can be programmed to generate statements monthly.

*After a payment is posted to a charge, and a balance is transferred to patient responsibility, a patient statement will be generated.

*With this system, if the patient balance is not paid after the first statement another statement will be generated within 30 days.

Question 44

Refunds

Answer 44

*According to chapter 30 of the Medicare Claims Processing Manual, any refund due to a Medicare recipient must be made to the beneficiary within 30 days.

*Knowingly and willfully failing to make appropriate refunds may be subject to civil money penalties and/or exclusion from the Medicare program.

*Also make sure before the overpayment is refunded that there are no outstanding claims that may result in the patient owing a balance.

*Sending a refund to the patient and then turning around and sending them an invoice will cost time and money and create confusion for the patient.

Question 45

Professional Courtesy /Discounts/Financial Hardship

Answer 45

*Professional courtesy is a long-standing tradition in medical practices. The American Medical Association’s (AMA) first code of ethics created an obligation among doctors to reciprocate medical care and to extend the courtesy to physician family members.

*The AMA recognizes professional courtesy as a long-standing tradition, but not an ethical requirement.

*Before a provider extends professional courtesy for free or discounted medical care to the public, an attorney should be consulted.

*Fraud and Abuse laws, Anti-Kickback Statute, Stark Laws, and False Claims Act may apply.

Question 46

Provider offices and facilities may also choose to give discounts to financially needy individuals or for other reasons.

Answer 46

A policy should be developed on how discounts and financial hardship will be determined.

Question 47

Patient Collection Practices

Answer 47

Each office or facility should have a written patient collection policy

Question 48

Patient Ledger

Answer 48

The patient ledger is an account of service descriptions, charges, payments, adjustments, and current balances.

Question 49

Itemized Statement

Answer 49

An itemized statement is a detailed statement (bill) sent to the patient or responsible party reflecting the patient’s responsibility

Question 50

Collection Account

Answer 50

The law requires that all patients who present with an emergency medical condition must receive treatment to the extent that their emergency condition is medically “stabilized,” regardless of their ability to pay for such treatment.

Question 51

emergency medical condition is defined under federal law

Answer 51

Placing the health of the individual (or unborn child) in serious jeopardy
The serious impairment of a bodily function
The serious dysfunction of bodily organs

Question 52

Doctors have a general right to refuse treatment if an individual is seeking routine medical care or scheduling a doctor’s appointment for non-emergency medical problems

Answer 52

and the individual has no insurance or any other means of paying for the care provided.

Question 53

Telephone Etiquette

Answer 53

*HIPAA Privacy information

*Instructions on how to respond to an angry patient. (each office should have guidelines, instructions, etc.)

*Payment plan guidelines

Question 54

1BILLING TIP

Answer 54

A biller may contact someone other than the patient (for example, spouse or guardian) as necessary to obtain payment for healthcare services. In this instance, it is necessary for the covered entity or business associate to apply the minimum necessary standard and reasonably limit the amount of information disclosed. All reasonable requests for confidential communication from the patient or any agreed-to restrictions on disclosure of PHI must be adhered to.

Question 55

Payments Plans
Credit (follow regulations of the Consumer Credit Protection Act)

Answer 55

*Another regulation a medical office or facility should be aware of if offering credit to patients is the Fair Debt Collection Practices Act (FDCPA).

*The FDCPA states that third-party debt collectors are prohibited from employing deceptive or abusive conduct in the collection of consumer debts incurred for personal, family, or household purposes.

Question 56

Bankruptcy Concepts

Answer 56

For providers listed as a creditor, stop all collection efforts on balances incurred prior to the filing of bankruptcy. The provider or facility may continue to collect balances due from the insurance companies.

Question 57

Dismissal of Patient Due to Nonpayment

Answer 57

A patient can legally be dismissed from a practice for nonpayment. It is important to avoid a claim of abandonment and make sure patient care is not neglected.

*Documentation
*Explanation in writing
*Give patient some time to respond
*Send official letter to patient (termination)

Question 58

Section Review 10.2

Can a patient be refused treatment due to inability to pay for the service?

Answer 58

Answer: C. Yes, a provider can refuse to see a patient if it is not an emergency.

Question 59

Which of the following is the highest level of the appeals process of Medicare?

Answer 59

Answer: B. Judicial Review

Question 60

what is the accept assignment write-off?

Answer 60

it’s the Insurance Adjustments.

Question 61

Which federal act states that third-party debt collectors are prohibited from employing deceptive or abusive conduct in the collection of the debt?

Answer 61

Answer: D. Fair Debt Collection Practices Act

Question 62

Which are the two main types of Bankruptcy seen by medical practices and facilities?

Answer 62

A. Chapters 7 & 13

Question 63

Bad Debt—

Answer 63

A bad debt is accounts receivable or money owed that will likely remain uncollectable and will be written off.

Question 64

Coordination of Benefits—

*Determine Primary, Secondary, etc.

Answer 64

Coordination of benefits is used to ensure that insurance claims are not being paid multiple times.

Question 65

Fair Credit Reporting Act—

Answer 65

The Fair Credit Reporting Act protects information collected by the consumer reporting agencies such as the credit bureaus, medical information companies, and tenant screening services.

Question 66

Fee-For-Service—

Answer 66

is a payment model where payment is made to a provider for each individual service rendered to a patient.

Question 67

Prompt Payment Act

Answer 67

The Prompt Payment Act is a federal law that ensures that federal agencies pay their bills within 30 days of receipt and acceptance of materials and/or services.

Question 68

Relative Value Unit

Answer 68

standardized way to determine the value of a service. RVU considers the work done by the physicians, practice expense, and the cost of malpractice.

Question 69

Resource Based Relative Value Scale

Answer 69

is a payment system that considers the work done by the physicians, malpractice insurance, and practice expenses. Practice expenses include overhead, supplies, equipment, and staff salaries.