All About Medical Billing
Not to be confused with medical coding, medical billing is the process
of submitting and following up on claims to insurance companies.
Clearinghouses
This is a company who will check claims for accuracy and
reformat them on the format specified by the carrier. Clearinghouses are a major part of a billing
service's ability to conduct business.
Gathering & Entering Data
Paper Claims Processing
Electronic Claims Processing
In US about 500 million claims are generated per month,
over 6 billion claims per year.40%of this claims are filed electronically and the remaining 60% are done by manually this
is done in HCFA 1500 or CMS1500 format.
Congress has mandated electronic Claims Submissions format
because Electronic Claims Processing reduces payment turn-around time by shortening the payment cycle
Electronic Claims Processing and Medical Billing can reduce
average error rates to less than 1 or 2% by filing claims electronically.
Paper claims contain errors on them,
which significantly reduces payment turn-around time. About 30 to 35% of all paper claims are rejected due to typos, errors
and omissions. Electronic Claims are submitted to the carrier via modem after being checked for accuracy either by a billing
service's software or claims Clearinghouse
This audit/edit process reduces the normal rejection rate of 30 to 35% down to around 1 or 2%. By checking electronic
claims for accuracy up front, the claim is put in a payable status when the insurance carrier, thus reducing payment turn-around
time, receives it
Annual healthcare expenditures increase by more than 10%. Each year, for
the rest of this decade, it is estimated that there will be more than 4 million babies born, 20 million children will be below
age 5, over 4 million people will reach the age of 45, and more than 2 million people will turn age 65. The average person
accounts for 6 physician encounters per year. Some form of health insurance covers more than 220 million Americans. That's
a lot of electronic claims processing services to provide!
Faster payment turn-around
time (90-120 days down to 7-14 days), Requires no staff training or retraining. Usually no startup investment for the practice.
Allows staff to focus on their patient's ills rather than their bills .Get paid on more claims because of reduction in errors.
Reduces staff work hours and overhead expenses
In a study conducted by the American Medical Association, it was estimated to cost healthcare providers an average of
$6 to $12 to file a claim. Using the services of a billing company, a physician will spend around $2 to $3 on each claim with
Electronic Claims Processing.
The Administrative Simplification provisions of the Health Insurance Portability and Accountability
Act of 1996 (HIPAA, Title II) required the Department of Health and Human Services (HHS) to establish national standards for
electronic health care transactions and national identifiers for providers, health plans, and employers. It also addressed
the security and privacy of health data. As the industry adopts these standards for the efficiency and effectiveness of the
nation's health care system will improve the use of electronic data interchange.
Payment Entry
Enter the Payment received from the client or carrier
Payment Posting
The process of posting payments creates balanced accounting entries from payment-related transactions
– system created payments, manual payments, and canceled payments
Generating
Reports
Generating Super Bills
Types of Insurance coverage
1.Group Health
Group Health Insurance provides medical expense coverage for many people in a single policy.
All the eligible participants are covered, regardless of age or physical condition. Groups Coverage is ideal for International
employees; missionaries, students and travelers are just some of the types of groups
2. Individual Policies
Any citizen can buy individual health insurance policies
3. Medicare
The Centers for Medicare & Medicaid Services (CMS) administers Medicare, the nation's largest
health insurance program, which covers nearly 40 million Americans. Medicare is a Health Insurance Program for people 65 years
of age and older, some disabled people under 65 years of age, and people with End-Stage Renal Disease (permanent kidney failure
treated with dialysis or a transplant).
4. Medicaid
Medicaid is available only to certain low-income individuals and families who fit into an eligibility
group that is recognized by federal and state law. Medicaid does not pay money to you; instead, it sends payments directly
to your health care providers. Depending on your state's rules, you may also be asked to pay a small part of the cost (co-payment)
for some medical services.
Medicaid is a state administered program and each state sets its own guidelines regarding eligibility
and services.
Medicaid covers many groups of people. Even within these groups, though, certain requirements
must be met. These may include your age, whether you are pregnant, disabled, blind, or aged; your income and resources (like
bank accounts, real property, or other items that can be sold for cash); and whether you are a U.S. citizen or a lawfully
admitted immigrant. The rules for counting your income and resources vary from state to state and from group to group. There
are special rules for those who live in nursing homes and for disabled children living at home.
Your child may be eligible for coverage if he or she is a U.S. citizen or a lawfully admitted
immigrant, even if you are not (however, there is a 5-year limit that applies to lawful permanent residents). Eligibility
for children is based on the child's status, not the parent's. Also, if someone else's child lives with you, the child may
be eligible even if you are not because your income and resources will not count for the child.
In general, you should apply for Medicaid if your income is low and you match one of the descriptions
of the Eligibility Groups. (Even if you are not sure whether you qualify, if you or someone in your family needs health
care, you should apply for Medicaid and have a qualified caseworker in your state evaluate your situation.)
Medicaid does not provide medical assistance for all poor persons. Even under the broadest
provisions of the Federal statute (except for emergency services for certain persons), the Medicaid program does not provide
health care services, even for very poor persons, unless they are in one of the designated eligibility groups. Low income
is only one test for Medicaid eligibility; assets and resources are also tested against established thresholds. As noted earlier,
categorically needy persons who are eligible for Medicaid may or may not also receive cash assistance from the TANF program
or from the SSI program. Medically needy persons who would be categorically eligible except for income or assets may become
eligible for Medicaid solely because of excessive medical expenses.
5. Personal Injury (PIP)
Personal Injury Protection (PIP) is an insurance coverage for medical and other expenses resulting
from an automobile accident, for people specified in the policy, regardless of who is at fault in the accident
Washington's Mandatory Insurance law does not require PIP coverage on automobile policies.
An insurance company is required to offer you the coverage when you buy an automobile policy. If you don’t want it you
can reject it in writing. If you haven't signed the rejection the company must add the coverage and charge you a premium for
it. (RCW 48.22.085 through RCW 48.22.100 and WAC
284-30-395)
The person named in the policy as the 'named insured', and residents of the named insured's
household related by blood, marriage or adoption, step or foster children are covered for injuries incurred in an accident.
Also passengers or pedestrians are covered. These people will be eligible for payments no matter who is at fault in the accident.
PIP covers reasonable and necessary medical expenses for injuries sustained in an automobile
accident, up to three years from the date of the accident and up to $10,000. PIP also offers income replacement coverage limited
to a maximum of $200 per week for one year, after a person has been disabled for 14 days after the accident. Funeral expenses
of $2,000 and loss of services (payment to others for work you can't do) of up to $5,000 are also included in the coverage.
Payments are made for costs that are actually incurred by the injured person
PIP doesn't cover injuries caused by using farm equipment, recreational or off road vehicles,
mopeds or motor cycles (PIP coverage is available on motorcycle policies). It won't cover intentional injuries to the insured
person or if the person is injured in organized racing activities or committing a felony.
6.Workers Compensation
Workers' compensation systems (colloquially known as workers' comp
in North American English or compo in Australian English) provides compensation for employees who are injured in the course
of employment. While schemes differ between jurisdictions, provision can be made for weekly payments in lieu of wages, compensation
for economic loss (past and future), reimbursement or payment of medical and like expenses, general damages for pain and suffering
and benefits payable to the dependents of workers killed during employment. Cash benefits are established by state formulas
with maximum benefit level. The benefits are administered on a state level, primarily by the state department of labor.
These laws are usually a feature
of highly developed industrial societies, implemented after long and hard fought struggles by trade unions. Supporters of
such schemes believe they improve working conditions and provide an economic safety net for employees. Conversely, these schemes
are often criticised for removing or restricting workers' common law rights in order to reduce governments' or insurance companies'
financial liability.
7. Tricare
TRICARE is the name of the Department
of Defense’s managed health care program for active duty military, active duty service families, retirees and their
families, and other beneficiaries. Under TRICARE, you’ll generally have three options for health care:
• TRICARE Prime
• TRICARE Extra
• TRICARE Standard (formerly called CHAMPUS) Here’s a look at each of the three
options:
TRICARE Prime
This is a voluntary health maintenance
organization (HMO)-type option. If you decide to get your health care through TRICARE Prime, active duty members and their
dependents have no enrollment fee. Retirees pay an annual enrollment fee and normally enroll for one year at a time. You should
receive a TRICARE Prime handbook specific to your region when you enroll. This TRICARE handbook does not go into regional
details on TRICARE Prime.
Also, you can “split”
your family’s enrollment—that is, you can have different family members enrolled in TRICARE Prime in different
TRICARE regions, at no additional cost. Or you can have some of your family in TRICARE Prime and other family members in the
other programs. Your TRICARE Prime enrollment is “portable”—you can take it with you if you move from one
TRICARE region to another, without having to disenroll in one region and reenroll in another, except
when moving to and from an overseas assignment. You will need to notify your new TRICARE Managed Care Support Contractor (MCSC)
upon arriving at your new location. Your new TRICARE MCSC will contact your former MCSC to ensure that your enrollment is
properly transferre transferred.
Normally, you’ll receive your
care from military providers in an MTF or from the TRICARE Prime network of civilian providers. An advantage of being enrolled
in TRICARE Prime is the policy directed access standards for TRICARE appointments. They are as follows:
– Urgent care 24 hours
– Routine appointment 7 days
– Routine specialty care 30 days
– Wellness, health promotion 30 days
TRICARE Extra
- Extra can be used by any TRICARE-eligible
beneficiary, who is not active duty, not otherwise enrolled in Prime, and not eligible for TRICARE for Life.
- Extra goes into effect whenever
a Standard beneficiary chooses to make an appointment with a TRICARE network provider. Extra, like Standard, requires no enrollment
and involves no enrollment fee.
- Extra is essentially an option
for TRICARE Standard beneficiaries who want to save on out-of-pocket expenses by making an appointment with a TRICARE Prime
network provider (doctor, nurse practitioner, lab, etc.).
- The appointment with the in-network
provider will cost 5% less than it would with a doctor who is a TRICARE authorized or participating provider.
- Also, the Extra option-user
can expect that the network provider will file all claims forms for him. (The Standard beneficiary might have claims filed
for him, but the non-network provider can decide to file on his behalf or not, on a case by case basis.)
- When using the Extra option,
the Standard beneficiary must meet the same requirements to satisfy a deductible and pay a cost share for treatment.
- Under TRICARE Extra, because
there is no enrollment, there is no Extra identification card. Your valid uniformed services ID card serves as proof of your
eligibility to receive health care coverage from any TRICARE Prime provider.
Your uniformed services ID card is,
in effect, your insurance card, and you should have it with you whenever you seek medical care. It is your proof of eligibility
and it should always be kept current-that is, you should check the expiration date and have it renewed before it expires,
and you should make sure that all your personal information is correct and up to date in the Defense Enrollment Eligibility
Reporting System (DEERS).
TRICARE Standard
No enrollment: TRICARE Standard is the basic TRICARE health care program, offering comprehensive
health care coverage, for people not enrolled in TRICARE Prime. (Active duty service members (ADSM) must take action to enroll
in Prime, and many other beneficiaries choose to enroll in Prime also.) Standard does not require enrollment.
Fee-for-service flexibility: Standard is a fee-for-service
plan that gives beneficiaries the option to see any TRICARE-certified/authorized provider (doctor, nurse-practitioner, lab,
clinic, etc.). Standard offers the greatest flexibility in choosing a provider, but it will also involve greater out-of-pocket
expenses for you, the patient. You also may be required to file your own claims.
Costs: Standard requires that you satisfy a yearly deductible
before TRICARE cost sharing begins, and you will be required to pay co-payments or cost shares for outpatient care, medications,
and inpatient care.
Procedures and Diagnoses
What are the most frequent procedures and diagnoses? The four
most common inpatient procedures pertain to labor, delivery, and childbirth; but nearly two-fifths of hospital inpatients
have no procedure listed during their hospital stay. The four most common diagnoses are liveborn, coronary atherosclerosis,
pneumonia, and congestive heart failure.
Most Common Diagnoses and Procedures in U.S. Community Hospitals, 1996
Insurance Claim Processing
Infosys
Claim Payment
Report Generation
Essential Office
Forms
Patient Demographic Form and Completion
-
Insurance Cards
- Insurance Verification Form and Verification Procedures
- Superbill
- Daysheet
Insurance Verification Process
The Superbill/Encounter Document
Calculating Copayments & Deductibles
The Basics of the CMS 1500 Form
Billing Tips
CPT (Current Procedural Technology) Coding
- Definition
- Proper Usage
- Resource & Reference
Material
CPT Coding is a numeric system of codes that simplifies
the many services patients receive, whether cognitive, material or procedural
ICD (International Classification of Disease) Coding
- Definition
- Proper Usage
- Resource & Reference
ICD codes were originally developed to classify and
code mortality data, such as from death certificates. In its expanded "clinical modification" (ICD-CM), it has come to be
used for morbidity (illness and disease) data in a broad range of settings, such as inpatient
and outpatient clinic records, physician offices, and other surveys
The Time-Line of an Insurance Claim
The Collection of Claim Data
-
Patient Demographics
- Guarantor Information & Handling
- Insurance
Coverage Information
- Patient Condition Information
- Patient Treatment Information
- Clinic Billing Information
Claim Information Data Entry
Claim Submission
- Paper Claims
- Electronic Claims
- Secondary Claims
- Claims Attachments
Receiving & Posting Payments
- Full Payment
- Partial Payment
- Deductible
Basic Components of Billing Applications
