Chapter 9 Flashcards
Yo puedo… Yo puedo… Yo puedo…
Yo Soy una Mujersona triple E!
Excelente!l
Eficiente!
Exitosa!
La Inteligencia Q hace girar los planetas en el inmenso espacio…. vive dentro de mi…
entrelazada en el doble helice de mi ADN
envuelta en mis genes… y es por eso Q yo puedo HTS todo lo Q mi corazon desea.
The data entry process is critical in the claims billing cycle. Data entry is used to capture demographic information, CPT®, HCPCS Level II, and ICD-10-CM codes necessary to report the services for patient encounters. Payments and adjustments from insurance carriers are also entered into the practice management system through data entry.
Even the smallest mistake can result in a denied claim. For example, when a number is transposed, which is a simple mistake, the result can be a denied claim for an invalid ID number, or invalid ICD-10-CM/CPT® code, depending on the number transposed.
Reduce Payment Delay
Verify insurance.
Submit Clean Claims.
Submit Claims Electronically
Check Status Reports
Submit Documentation
Post Contractual Adjustments
Section Review 9.1
Cost-based fee schedules are developed using which of the following?
C. Total cost of all the procedures the physician will perform.
What is the physician payment schedule determined by?
Answer: B. The insurance payer
Given the following information:
National conversion factor $33.89
RVU value of 3.26
What is the provider’s fee schedule for 99203 (new patient office visit) using the above values?
Answer: A. $110.00
Rationale: The correct fee would be $108.00. Multiply $33.89 (national CF) x 3.26 (RVU value) = $110.48. This calculation is rounded to the nearest whole dollar, which would set the fee for 99203 at $110.00.
What will happen if there is failure to post a contractual adjustment to a patient’s account?
Answer: C. It will leave a balance on the patient’s account that should not be there.
Which of the following tasks is the most basic element of the billing process?
Answer: C. Data entry
Prior Authorization
Prior authorization is a requirement imposed by insurance payers to determine the medical necessity and benefit coverage eligibility before the patient receives a service or undergoes a procedure.
Typical information required for prior authorization is the following:
Patient’s name (as it appears on the insurance card)
Patient’s date of birth
Insured’s ID number
CPT®/HCPCS Level II code(s)
ICD-10-CM code(s)
Location where service is performed
Ordering physician
Date of service for the procedure if scheduled
Insurance contracts and policies should be reviewed to determine when prior authorization is required.
If one is required and was not obtained, the service will not be covered by the insurance company. Furthermore, the patient is not responsible for payment of this service if the prior authorization was not obtained.
BILLING TIP
Many facilities will have an authorizations department.
If authorization is not obtained prior to the procedure, some insurance carriers will allow for a retroactive authorization under special circumstances.
Claim Scrubbers
A claim scrubber is a software program that reviews claims for key components and flags any detected errors before claims are sent to an insurance company.
The claim scrubber verifies CPT®/HCPCS Level II codes and ICD-10-CM codes.
The scrubber looks at the procedure code and diagnosis code to justify the medical necessity of the procedure.
Some practice management systems can build in medical necessity policies based on the insurance carrier. This can be cumbersome to maintain.
A more manageable process is to have the NCDs, LCDs, and Billing and Coding Articles for your area loaded in the system and maintained as many insurance carriers will follow CMS guidelines.
Claims may be scrubbed within the medical billing department prior to submitting to the clearinghouse,
and then again by the clearinghouse before submitting to the payer.
Applying their knowledge of coding concepts and payer policies will increase the professional medical biller’s value to a medical practice…
allowing for the practice to maintain a healthy revenue flow.
A/R Deposit Balancing
Accounts receivable or A/R is money owed to the practice for services rendered and billed. Payments due from patients, payers, or other guarantors are considered accounts receivables.
Daily Deposits
When patients are seen in the office, any copayments, deductibles, coinsurance, or patient balances may be collected by the office staff.
The amount posted in the practice management system must match the deposit amount for that batch. I
Direct Deposits
Many insurance payers pay claims using direct deposit. When the adjudication process has been finalized, the payer sends the remittance advice (RA) to the provider and an explanation of benefits (EOB) to the patient.
This process must be performed with great accuracy to avoid posting errors.
Section Review 9.2
What is the function of a claim scrubber?
Answer: A. To identify errors that will prevent a claim from being paid
What are payments due from patients, payers, or other guarantors considered to be?
Answer: B. Accounts receivable
Who is required to obtain a prior authorization for a service or procedure?
Answer: D. The physician performing the procedure or service
Who generates the remittance advice?
Answer: D. To the insurance payer
When a claim has been paid, where is an EOB sent?
Answer: B. To the patient
Rationale: Once the adjudication process has been finalized, the payer will send the remittance advice (RA) to the provider and an explanation of benefits (EOB) to the patient.
Technology and Claims Submission
Healthcare claims can be submitted manually, by paper, or electronically by computer. Electronic claims submission has many benefits such as:
*Minimize claim rejections and re-submissions
*Deliver the claims to health insurers in real time
*Expedite payer responses and boost the cash flow
*Reduce cost of claim submission
The savings inherent in electronic claims submission is substantial.
Cost to submit manual claims: $6.63 x 6,200 = $41,106
Cost to submit electronic claims: $2.90 x 6,200 = $17,980
Average annual savings per physician from automating claims submission: ≈$23,126*
Based on an annual average of 6,200 claims submitted for a single physician.
Electronic Claims
Electronic claims can be submitted to a carrier from a provider’s office using a computer with software that meets electronic filing requirements as established by the HIPAA claim standards.
Clearinghouse Report
Due to the vast amount of insurance payers, each with their own specific criteria for submitting claims, it would be an overwhelming task for individual practices and billing companies to maintain the required billing software needed to submit claims to each individual payer. This dilemma is resolved through the services of a clearinghouse.
A clearinghouse is an entity that processes or facilitates the processing of claims for providers and healthcare plans.
Clearinghouses have the capability to convert nonstandard data received from payers to standard transaction data to meet HIPAA requirements.
Clearinghouses can also offer other services such as claims status tracking, insurance eligibility determination, and secondary billing services.
How does a clearinghouse work? A claim or batch of claims is submitted electronically to the clearinghouse. Typically, within 24 hours the clearinghouse will send a report back to the provider identifying the status of all claims sent and all rejected claims.
The clearinghouse report provides feedback on whether the claim was rejected or forwarded to the payer.
If the claim is rejected, there will be a statement identifying the error.
When selecting a clearinghouse for claims submission, a provider should select a clearinghouse that is accredited by the Electronic Healthcare Network Accreditation Commission (EHNAC).
Accreditation by this entity will ensure that the clearinghouse adheres to standards that promote and support interoperability, stakeholder trust, regulatory compliance, and quality service.
BILLING TIP
Claims rejected from a clearinghouse are typically due to invalid data entry errors, such as an invalid ID number, invalid provider number, or missing information. When a claim is rejected from the clearinghouse, the information submitted should be verified before taking action. If the information is incorrect, the information should be corrected in the system and the claim resubmitted.
Timely Filing
Timely filing is the deadline for submitting a clean claim to an insurance payer. Each payer has its own timely filing limits, which should be clearly stated in the contract. When a claim is denied for timely filing, the biller can use the electronic acceptance reports from the payer to prove the claim was filed within the timely filing limit originally.
In cases when the timely filing deadline was missed, obtaining payment for these types of claims can be challenging.
Whenever there is a valid explanation, it’s worth appealing.
Section Review 9.3
A patient with ABC insurance is seen on May 1, and the claim is submitted on July 15 of the same year. Has the claim met the timely filing deadline?
Answer: C. Maybe. ABC’s timely filing policy should be reviewed to determine if the deadline was met.
To submit claims data through EDI, what format must claim’s data be changed to?
Answer: B. Flat files format
A batch of claims is submitted to the clearinghouse for processing. The status report shows that 20 claims were acknowledged and forwarded on to the payer for payment and 10 claims were rejected. What is the next step the medical biller should take in this situation?
Answer: D. Review the status report to identify the reasons for rejection, make needed corrections and resubmit for payment.
When a claim is returned to the provider, at the clearinghouse level, what is it considered to be?
Answer: C. Rejected
What is the purpose of EHNAC?
Answer: C. To promote interoperability, quality service, and regulatory compliance.
Audits
An audit is a review and evaluation of healthcare procedures and documentation for comparing the quality of services or products provided in a given situation. Audits may be initiated both internally and externally.
When being audited, it is important to have all the documentation available to support the charges.
*Medical Record
*CMS 1500
*Dx, CPT, supplies etc
*Encounter form
Hospital Facility Billing
The UB-04 claim form is used for reporting the hospital facility’s charges.
Chargemaster
A hospital charge description master (CDM), also called a chargemaster, is a master price list of all services, supplies, devices, and medications charged for inpatient or outpatient services by a healthcare facility.
It is like a charge ticket or encounter form in the medical office, but much more extensive.
CDM
charge description master
healthcare workers enter the data into the facility’s software system,
*Upon discharge the patient’s account is reviewed and verified by the billing department personnel.
*Once the review is complete, the data is transmitted electronically in UB-04 claim format either directly to the payer or to a clearinghouse.
Reimbursement for Medicare and other payers is based on either the Medicare severity—diagnosis related group (MS-DRG) payment amount for the inpatient stay or the ambulatory payment classification (APC) payment amount for outpatient encounters or services.
In the case of Medicare reimbursement for outpatient services, CPT® or HCPCS Level II codes assigned to charges will be translated into APC groups
Although many separate APCs may be billed and reimbursed for covered outpatient services on one claim or date of service, most supplies and many of the drugs associated with the services are bundled and will not receive a separate APC payment.
As a result, capture and coding of all service charges, medical visits, or diagnostic and surgical procedures are critical to facility reimbursement per encounter, because the APC payment theoretically includes payment for drugs and supplies.
Like Medicare, third-party payers each have their own respective reimbursement guidelines.
They may or may not reimburse a charge without a CPT® or HCPCS Level II code, but they will all require at least a revenue code for reimbursement of charge items.
A revenue code indicates the location or type of service provided for an inpatient and is reported with a four-digit code.
Example:
Revenue Code 0320
The symbol *** indicates these services do not have a CPT/HCPCS code built into them CDM.
Some services, ie. surgeries are dynamically coded (hand entered)
Although most state Medicaid programs follow Medicare rules, many have created coding requirements specific to their states.
Hospitals may have a CDM task force or a single individual who maintains data within the CDM
CDM charge description master
*CMD reviewed annually
*Updated thru year
*Reviews and maintains payer information
CDM is essential for reimbursements.
75% of OP services are driven by the CDM
CDM = Charge Description Master
CDM = Charge Description Master
is compared to Medicare’s OCE to determine if s/s/p should be billed.
OCE = Outpatient Code Editor
Inpatient versus Outpatient Payment Errors
Inpatient = patient admitted to a hospital w/ anticipated stay of 48 hours.
*Medical necessity to support this
Example: patient has an OP surgery; then a complication arises that requires admission.
The inpatient admission converts the outpatient procedure that would have been paid under the Outpatient Prospective Payment System (OPPS) to an inpatient admission,
which is paid under the Inpatient Prospective Payment System (IPPS). Under IPPS, claims are paid based on MS-DRGs, which are based upon the diagnosis code(s) assigned to the patient at admission.
OPPS
Outpatient Prospective Payment System
*Under OPPS, outpatient services base their payment on Ambulatory Payment Classifications (APCs
IPPS
Inpatient Prospective Payment System
*Under IPPS, claims are paid based on MS-DRGs
Primary vs. Secondary Insurance
When a patient is the subscriber for their insurance coverage, this insurance payer is considered the patient’s primary insurance.
Secondary
If the patient is also covered under another insurance, for instance from a spouse, the spouse’s coverage would be the secondary insurance.
When a child is covered by insurance plans from both parents, the birthday rule is used to determine the primary and secondary insurance.
the health plan of the parent whose birthday comes first in the calendar year is designated as the primary plan.
*The year of birth is not a factor in this rule. The month and day are the only factors the health plan considers.
Billing secondary payers may be offered as a courtesy for patients or may be required depending on the office policy. Billing departments may designate billing staff that concentrate only on billing secondary claims.
Secondary claims can be submitted once the primary payer has processed the initial claim. The remittance advice (RA) from the primary payer will accompany the claim to the secondary payer
Many group health insurance policies have a coordination of benefits provision in place to prevent multiple payers from paying benefits covered by other policies.
Coordination of benefit provisions also define the order or sequencing of payment when more than one payer is involved.
Medicare performs “crossover” process
Mayor payers capability to transfer primary claims to secondary payer to facilitate the process.
Section Review 9.4
The billing department manager reviews the claims paid by HIJ insurance company. This would be considered which type of audit?
Answer: B. Post-payment audit
A physician writes an order for his patient to be admitted to the hospital for observation for suspected dehydration. The patient is observed for 8 hours and discharged to home following hydration therapy. What type of patient is this considered to be?
Answer: A. Outpatient
Rationale: Even though the physician ordered the patient to be admitted to the hospital, it was for observation and the patient did not stay longer than 48 hours.
A family has health insurance coverage from both the father and mother. The father’s birthday is May 29, 1989, and the mother’s birthday is May 26, 1990. Which insurance would be primary for their three children?
Answer: C. The mother’s insurance would be primary, based on the month and day of her birthday.
Inpatient reimbursement is based on which of the following methodologies?
Answer: D. IPPS and MS-DRG
Rationale: Inpatient services are reimbursed under Inpatient Prospective Payment System (IPPS) and Medicare Severity - Diagnosis Related Groups (MS-DRG). Outpatient Prospective Payment System (OPPS) and Ambulatory Payment Classifications (APC) are applied for outpatient services.
In the chargemaster, what is the four-digit code that reports the location or type of service is known as?
B. Revenue code
Subrogation
When an insurance company attempts to recoup expenses for a paid claim when another payer should have been responsible.
CPT®—
Current Procedural Terminology is a five-digit code used to describe s/s/p
Electronic data interchange (EDI)—
Describes the process of transferring data electronically between providers and insurance payers.
HCPCS Level II
Alphanumeric codes that primarily include non-physician services, such as ambulance services and prosthetic devices, and represent items and supplies and non-physician services.
LCD
NCD
LCD Local coverage determination rulings … Medicare coverage of specific services
National Coverage Determination rulings …. Medicare coverage of services on a national level
