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RAPIDCARE MEDICAL BILLING MANUAL

INDEX

Understanding Healthcare Industry In Us


Health Care In U.S.
Medical Emergency
Why you Need Health Insurance?
Types of Health Insurance
Types of Insurance Plans
Features of Different Insurance Plans
Types of Insurance
Understanding Health Insurance Terms

Medical Billing – An Introduction


Difference Between US And Indian Health Care Industry
Why Medical Billing Companies?
What is a Claim?
Brief Study About Medical Billers
Various Departments In An Indian Medical Billing
Scanning Department
Charge Entry Department
Cash Department
Accounts Receivable Department
Quality Department
Problems Faced By US Providers or Physicians
Work Flow Process In Medical Billing
Review of Department in Detail
Medical Coding
Coding System (ICD-9-CM & CPT )
Tools of the Trade
Coding Department Functions
Coding Guidelines
Essentials Of Accurate Coding
Patient Demographics
Work Flow Of Patient Demographic Entry
Patient Charges- An Overview
Work Flow Process For Charge Entry
Cash Posting
Work Flow For Cash Posting
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Accounts Receivable & Claims Analysis


Accounts Receivable - Calling
HIPAA

[Return]

Copyright 2003

@Manoj -Manipal Infocom

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Health Care in U.S.

Medical care in the United States is generally very high quality. The
government closely monitors medically oriented businesses and institutions.
Hospitals, clinics, medical schools, and pharmaceutical companies must
comply with government standards. Doctors, nurses and other medical
personnel must be licensed, and becoming a medical specialist frequently
entails fifteen years or more of rigorous schooling
and training. The high level of technology
available in the U.S. contributes to quality care,
and the average hospital contains millions of
dollars worth of state-of-the-art equipment.

Medical and health care is big business. Hospitals


and medical schools also spend substantial
amounts on research, knowing that new
techniques and discoveries will bring them prestige, patients, and money,
while benefiting many people. The result for consumers is ever improving
quality and effectiveness of medical care, but at the same time expensive
care.

When seeking any kind of medical assistance in the United States, there are
few free services, and most care is expensive. Unlike other countries, there is
little government sponsored health care here, except for those over 65 years
of age (Medicare), or for the poor (Medicaid). The insurance industry is a
major influence in the business of staying well or regaining one's good health.
Obtaining some type of health insurance coverage to protect you and your
family is very smart, but expect it to be a significant monthly expense.

Medical Emergency:

In an emergency, the first thing to remember is "911". This is the telephone


number to call from anywhere in the United States for immediate, skilled
medical attention. While it is wise to have other
important numbers regarding medical assistance (your
personal doctor, poison control center, etc.) near your
telephone, in a genuine emergency it is
imperative to dial 911 first. In such situations, time
is the most important factor in preventing damage or
even loss of life. The operator handling your "911" call
will immediately dispense the necessary help, both in
terms of sending an ambulance and in routing your call to a counselor who
will guide you through the situation until the ambulance arrives.

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Emergency medicine in the U.S. is very high quality. Ambulance attendants,


or paramedics, are highly trained in dealing with trauma and making split-
second decisions that save lives. And many hospitals are equipped with
trauma centers whose single purpose is handling
emergency situations, including emergency surgery. In
an emergency, you will begin to receive treatment
immediately and will be taken to the facility that can
best handle your situation, whether it be a trauma
center, a burn treatment center, a cardiac treatment center (heart attacks), a
children's hospital or a general hospital. If you are conscious, or if there is
family member or friend with you, you or they will be asked for the name of
your doctor, who will be summoned to the hospital to which you are taken.

Keep in mind that while emergency care here in the U.S. is excellent, it is
also expensive. There will be a fee for the ambulance, the emergency room,
any medications administered, the services of doctors involved, and any tests
or special procedures involved. While it is important never to hesitate when
there is a genuine emergency, these services are not intended for situations
where a call to your doctor or a visit to a walk-in clinic would be sufficient.

An additional note about "911": This number is also used in police


emergencies, and therefore is not limited to medical situations. Any time you
are in serious danger, witness an accident or a crime in progress, call this
number.

Why You Need Health Insurance?

The United States does not have socialized medical care. If you have no
health insurance coverage, you have to pay for health care out of your own
finances at the time of service. This can run into many thousands of dollars
for serious illnesses

You buy health insurance for the same reason you buy other kinds of
insurance: to protect yourself financially. With health insurance, you protect
yourself and your family in case you need medical care
that could be very expensive.

You cannot predict what your medical bills will be. In a


good year, your costs may be low. But if you become
ill, your bills could be very high. If you have insurance,
a third-party payer, not by you, covers many of your
costs. A third-party payer can be an insurance
company or, in some cases, it can be your employer.

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Many people in the United States are enrolled in some sort of managed care
plan. This is an organized way of both providing services and paying for
them. Different types of managed care plans work differently and include
preferred provider organizations (PPOs), health maintenance organizations
(HMOs), point-of-service (POS) plans and fee-for-service plans.

Individuals enrolled in health care plans pay a monthly or quarterly fee as


insurance for the time when they will need medical attention. At the time
when a service is provided, the health insurance organization pays part or the
entire fee, minimizing the amount you have to pay at the time you receive
the service.

The information presented here will help you choose a plan that is right for
you. If you are married or single, have children or no children, this
information will help you to find out how to choose a health insurance plan
that best meets your needs and your financial circumstances. Definitions of
the health insurance terms used are included in the section called
Understanding Health Insurance Terms.

What are the various types of Health Insurance Coverage’s?

The two main ways that people obtain health coverage are by paying into a
group or buying individual insurance.

Group Insurance Plans


Individual Insurance Plans

Group Insurance Plans

Most Americans get health insurance through their jobs or are covered
because a family member has insurance at work. This is called group
insurance. Group insurance is generally the least expensive kind. In many
cases, the employer pays part or all of the cost.

Some employers offer only one health insurance plan. Some offer a choice of
plans: a fee-for-service plan, a health maintenance organization (HMO), or a
preferred provider organization (PPO), for example. Employers with 25 or
more workers are required by Federal law to offer employees the chance to
enroll in an HMO.

What happens if you or your family member


leaves the job? You will lose your employer-
supported group coverage. It may be possible to
keep the same policy, but you will have to pay for
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it yourself. This will certainly cost you more than group coverage for the
same, or less, protection. A Federal law makes it possible for most people to
continue their group health coverage for a period of time. Called COBRA (for
the Consolidated Omnibus Budget Reconciliation Act of 1985), the law
requires that if you work for a business of 20 or more employees and leave
your job or are laid off, you can continue to get health coverage for at least
18 months. You will be charged a higher premium than when you were
working.

You also will be able to get insurance under COBRA if your spouse was
covered but now you are widowed or divorced. If you were covered under
your parents' group plan while you were in school, you can also continue in
the plan for up to 18 months under COBRA until you find a job that offers you
your own health insurance.

Not all employers offer health insurance. You might find this to be the case
with your job, especially if you work for a small business or work part-time. If
your employer does not offer health insurance, you might be able to get
group insurance through membership in a labor union, professional
association, club, or other organization.

Individual Insurance Plans

If your employer does not offer group insurance,


or if the insurance offered is very limited, you can
buy an individual policy. You can get fee-for-
service, HMO, or PPO protection. But you should
compare your options and shop carefully because
coverage and costs vary from company to company. Individual plans may not
offer benefits as broad as those in group plans

What Types of Insurance Plans Are There?

Managed Care: An Explanation

You will hear the term "managed care" quite a lot in the United States. It is a
way for insurers to help control costs. Managed care
influences how much health care you use. Almost all
plans have some sort of managed care program to help
control costs. For example, if you need to go to the
hospital, one form of managed care requires that you receive approval from
your insurance company before you are admitted to make sure that the

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hospitalization is needed. If you go to the hospital without this approval, you


may not be covered for the hospital bill.

Fee-for-Service Plans

This is the traditional kind of health care policy. Insurance companies pay
fees for the services provided to the insured people covered by the policy.
This type of health insurance offers the most choices of doctors and hospitals.
You can choose any doctor you wish and change doctors any time. You can
go to any hospital in any part of the country.

With fee-for-service, the insurer only pays for part of your doctor and hospital
bills. You pay a monthly fee, called a premium.

A certain amount of money each year, known as the deductible, is paid for by
you before the insurance payments begin. In a typical plan, the deductible
might be $250 for each person in your family, with a family deductible of
$500 when at least two people in the family have reached the individual
deductible. The deductible requirement applies each year of the policy. Also,
not all health expenses you have count toward your deductible. Only those
covered by the policy do. You need to check the insurance policy to find out
which ones are covered.

After you have paid your deductible amount for the year, you share the bill
with the insurance company. For example, you might pay 20 percent while
the insurer pays 80 percent. Your portion is called "coinsurance".

To receive payment for fee-for-service claims, you may have to fill out forms
and send them to your insurer. Sometimes your doctor's office will do this for
you. You also need to keep receipts for drugs and other medical costs. You
are responsible for keeping track of your own medical expenses.

There are limits as to how much an insurance company will pay for your claim
if both you and your spouse file for it under two different group insurance
plans. A coordination of benefit clause usually limits benefits under two plans
to no more than 100 percent of the claim.

Most fee-for-service plans have a "cap," the most you will have to pay for
medical bills in any one year. You reach the cap when your out-of-pocket
expenses (for your deductible and your coinsurance) total a certain amount.
It may be as low as $1,000 or as high as $5,000. The insurance company
then pays the full amount in excess of the cap for the items your policy says
it will cover. The cap does not include what you pay for your monthly
premium.

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Some services are limited or not covered at all. You need to check on
preventive health care coverage such as immunizations and well-child care.

There are two kinds of fee-for-service coverage: basic and major medical.
Basic protection pays toward the costs of a hospital room and care while you
are in the hospital. It covers some hospital services and supplies, such as x-
rays and prescribed medicine. Basic coverage also pays toward the cost of
surgery, whether it is performed in or out of the hospital, and for some doctor
visits. Major medical insurance takes over where your basic coverage leaves
off. It covers the cost of long, high-cost illnesses or injuries.

Some policies combine basic and major medical coverage into one plan. This
is sometimes called a "comprehensive plan." Check your policy to make sure
you have both kinds of protection.

Health Maintenance Organizations (HMOs)

Health maintenance organizations are prepaid health plans. As an HMO


member, you pay a monthly premium. In exchange, the HMO provides
comprehensive care for you and your family, including doctors' visits, hospital
stays, emergency care, surgery, laboratory (lab) tests, x-rays, and therapy.

The HMO arranges for this care either directly in its own group practice
and/or through doctors and other health care professionals under contract.
Usually, your choices of doctors and hospitals are limited to those that have
agreements with the HMO to provide care. However, exceptions are made in
emergencies or when medically necessary.

There may be a small co-payment for each


office visit, such as $5 for a doctor's visit or
$25 for hospital emergency room treatment.
Your total medical costs will likely be lower
and more predictable in an HMO than with fee-
for-service insurance.

Because HMOs receive a fixed fee for your


covered medical care, it is in their interest to
make sure you get basic health care for
problems before they become serious. HMOs
typically provide preventive care, such as office visits, immunizations, well-
baby checkups, mammograms, and physicals. The range of services covered
varies in HMOs, so it is important to compare available plans. Some services,
such as outpatient mental health care, often are provided only on a limited
basis.

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Many people like HMOs because they do not require claim forms for office
visits or hospital stays. Instead, members present a card, like a credit card,
at the doctor's office or hospital. However, in an HMO you may have to wait
longer for an appointment than you would with a fee-for-service plan.

In some HMOs, doctors are salaried and they all have offices in an HMO
building at one or more locations in your community as part of a prepaid
group practice. In others, independent groups of doctors contract with the
HMO to take care of patients. These are called individual practice associations
(IPAs) and they are made up of private physicians in private offices who
agree to care for HMO members. You select a doctor from a list of
participating physicians that make up the IPA network. If you are thinking of
switching into an IPA-type of HMO, ask your doctor if he or she participates in
the plan.

In almost all HMOs, you either are assigned or you choose one doctor to
serve as your primary care doctor. This doctor monitors your health and
provides most of your medical care, referring you to specialists and other
health care professionals as needed. You usually cannot see a specialist
without a referral from your primary care doctor who is expected to manage
the care you receive. This is one way that HMOs can limit your choice.

Point-of-Service Plans (POS)

Many HMOs offer an indemnity-type option known as a POS plan. The primary
care doctors in a POS plan usually make referrals to other providers in the
plan. But in a POS plan, members can refer themselves outside the plan and
still get some coverage.

If the doctor makes a referral out of the network, the plan pays all or most of
the bill. If you refer yourself to a provider outside the network and the service
is covered by the plan, you will have to pay coinsurance.

Preferred Provider Organizations (PPOs)

The preferred provider organization is a combination of traditional fee-for-


service and an HMO. Like an HMO, there are a limited number of doctors and
hospitals to choose from. When you use those providers (sometimes called
"preferred" providers, other times called "network" providers), most of your
medical bills are covered.

When you go to doctors in the PPO, you present a card


and do not have to fill out forms. Usually there is a
small co-payment for each visit. For some services, you
may have to pay a deductible and coinsurance.
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As with an HMO, a PPO requires that you choose a primary care doctor to
monitor your health care. Most PPOs cover preventive care. This usually
includes visits to the doctor, well-baby care, immunizations, and
mammograms.

In a PPO, you can use doctors who are not part of the plan and still receive
some coverage. At these times, you will pay a larger portion of the bill
yourself (and also fill out the claims forms). Some people like this option
because even if their doctor is not a part of the network, it means they do not
have to change doctors to join a PPO.

Features of different Insurance Plans:

Whether you're opting for traditional indemnity fee-for-service plans (FFS),


health maintenance organizations (HMOs), point of service plans (POS), and
preferred provider organizations (PPO). Each plan has its own features to
consider before making your choice.

FFS, Also Called Traditional Indemnity

FFS coverage offers flexibility in exchange for higher out-of-pocket expenses,


more paperwork, and higher premiums.

FFS advantages:

You may choose your own doctors and hospitals.

You may visit any specialist without getting permission from a primary
care physician.

FFS disadvantages:

There's typically a deductible (anywhere from $500 to $1,500) before the


insurance company starts paying claims, and then doctors are reimbursed
about 80 percent of the bill while you pick up the remaining 20 percent.

FFS plans pay only for "reasonable and customary" medical expenses. If
your doctor charges more than the average for your area, you will have to
pay the difference.

HMO

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HMOs are the least expensive, but also the least flexible of all the health
insurance plans. They are geared more toward members of a group seeking
health insurance.

HMO advantages:

They offer their customers low co-payments, minimal paperwork, and


coverage for many preventive-care and health-improvement programs.

HMO disadvantages:

You must choose a primary care physician, also known as a PCP.

HMOs require that you see only network doctors, or they won't pay.

You must get a referral from your PCP to see a specialist.

POS

POS plans are more flexible than HMOs, but they also require you to select a
PCP.

POS advantages:

Depending on your insurance company's rules, you may choose to visit a


doctor outside the network and still receive coverage — but the amount
covered will be substantially less than if you went to a physician within
your network.

These plans tend to offer more preventive care and well-being services,
such as workshops on smoking cessation and discounts to health clubs.

POS disadvantages:

You must choose a PCP.

While you may choose to see a physician outside the network, if you don't
receive permission from your PCP, you're likely to wind up submitting the
bills yourself and receiving only a nominal reimbursement — if any.

PPO

PPOs give policyholders a financial incentive — reasonable co-payments (also


called co-pays) — to stay within the group's network of practitioners.

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PPO advantages:

The standard co-payment is $10 for a routine office visit during regular
hours.

You may go to any specialist without permission, as long as the doctor


participates in the network.

PPO disadvantages:

If you see an out-of-network doctor, you may have to pay the entire bill
yourself, then submit it for reimbursement.

You may have to pay a deductible if you choose to go outside the network,
or pay the difference between what network doctors vs. out-of-network
doctors charge.

Types of Insurance

Medicare

Medicare is the federal (national) health insurance program for Americans age
65 and older and for certain disabled Americans. If you are eligible for Social
Security or Railroad Retirement benefits and are age 65, you and your spouse
automatically qualify for Medicare.

Medicare has two parts: hospital insurance, known as


Part A, and supplementary medical insurance, known
as Part B, which provides payments for doctors and
related services and supplies ordered by the doctor. If
you are eligible for Medicare, Part A is free, but you
must pay a premium for
Part B.

Medicare will pay for many of your health care expenses, but not all of them.
In particular, Medicare does not cover most nursing home care, long-term
care services in the home, or prescription drugs. There are also special rules
on when Medicare pays your bills that apply if you have employer group
health insurance coverage through your own job or the employment of a
spouse.

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Medicare usually operates on a fee-for-service basis.

Some people who are covered by Medicare buy private insurance, called
"Medigap" policies, to pay the medical bills that Medicare doesn't cover.
Some Medigap policies cover Medicare's deductibles; most pay the
coinsurance amount. Some also pay for health services not covered by
Medicare. There are 10 standard plans from which you can choose (some
States may have fewer than 10.) If you buy a Medigap policy, make sure you
do not purchase more than one.

Medicaid

The Medicaid Program provides medical assistance for certain individuals and
families with low incomes and resources. Medicaid eligibility is limited to
individuals who fall into specific categories. Although the Federal government
establishes general guidelines for the program, the Medicaid program
requirements are actually established by each State

Medicaid eligibility is limited to individuals who fall into specified categories.


The federal statute identifies over 25 different eligibility categories for which
federal funds are available. These categories can be classified in to five broad
coverage groups:

Children;

Pregnant Women;

Adults in Families with Dependent children;

Individuals with disabilities;

and individuals 65 or over

Disability Insurance

Disability insurance replaces income you lose if you have a long-term illness
or injury and cannot work. This is an important type of coverage for working-

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age people to consider. Disability insurance does not cover the cost of
rehabilitation if you are injured.

Some employers offer group disability insurance and this may be one of the
benefits where you work. Or you might be eligible for some government-
sponsored programs that provide disability benefits. Many different kinds of
individual policies are also available.

Workmen’s Compensation Insurance

This insurance policy protects the insured party from legal liabilities against
injury or death of any of his employees who is a "workman" as defined by the
Workmen's Compensation Act.

This insurance policy is necessary for every employer since it indemnifies him
against his legal liability as an "employer" towards accidental or fatal injuries
sustained by his work men during work.

On extra payment of premium, medical, surgical and hospitalization expenses


including transportation costs are also covered.

Liabilities that may arise owing to diseases mentioned in Section III (C) of
Workmen's Compensation Act during the course of employment are also
covered

Hospital Indemnity Insurance

This insurance offers limited coverage. It pays a fixed amount for each day,
up to a maximum number of days. You may use it for medical or other
expenses. Usually, the amount you receive will be less than the cost of a
hospital stay.

Some hospital indemnity policies will pay the specified daily amount even if
you have other health insurance. Others may coordinate benefits, so that the
money you receive does not equal more than 100 percent of the hospital bill.

Long-Term Care Insurance

Long-term care insurance is designed to cover the costs of nursing home


care, which can be several thousand dollars each month. Long-term care is
usually not covered by health insurance except in a very limited way.
Medicare covers very few long-term care expenses. There are many plans
and they vary in costs and services covered, each with its own limits

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Understanding Health Insurance Terms

Coinsurance

The amount you are required to pay for medical care in


a fee-for-service plan after you have met your
deductible. The coinsurance rate is usually expressed as
a percentage. For example, if the insurance company
pays 80 percent of the claim, you pay 20 percent.

Coordination of Benefits

A system to eliminate duplication of benefits when you


are covered under more than one group plan. Benefits
under the two plans usually are limited to no more than 100 percent of the
claim.

Co-payment

Another way of sharing medical costs. You pay a flat fee every time you
receive a medical service (for example, $5 for every visit to the doctor). The
insurance company pays the rest.

Covered Expenses

Most insurance plans, whether they are fee-for-service, HMOs, or PPOs, do


not pay for all services. Some may not pay for prescription drugs. Others may
not pay for mental health care. Covered services are those medical
procedures the insurer agrees to pay for. They are listed in the policy.

Customary Fee

Most insurance plans will pay only what they call a reasonable and customary
fee for a particular service. If your doctor charges $1,000 for a hernia repair
while most doctors in your area charge only $600, you will be billed for the
$400 difference. This is in addition to the deductible and coinsurance you
would be expected to pay.

Deductible
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The amount of money you must pay each year to cover your medical care
expenses before your insurance policy starts paying.

Exclusions

Specific conditions or circumstances for which the policy will not provide
benefits.

HMO (Health Maintenance Organization)

Prepaid health plans. You pay a monthly premium and the HMO covers your
doctors' visits, hospital stays, emergency care, surgery, checkups, lab tests,
x-rays, and therapy. You must use the doctors and hospitals designated by
the HMO.

Managed Care

Ways to manage costs, use, and quality of the health care system. All HMOs
and PPOs, and many fee-for-service plans, have managed care.

Maximum Out-of-Pocket Expenses

The most money you will be required pay a year for deductibles and
coinsurance. It is a stated dollar amount set by the insurance company, in
addition to regular premiums.

PPO (Preferred Provider Organization)

A combination of traditional fee-for-service and an HMO. When you use the


doctors and hospitals that are part of the PPO, you can have a larger part of
your medical bills covered. You can use other doctors, but at a higher cost.

Pre-existing Condition

A health problem that existed before the date your insurance became
effective.

Premium

The amount you or your employer pays in exchange for insurance coverage.

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Primary Care Doctor

Usually your first contact for health care. This is often


a family physician or internist, but some women use
their gynecologist. A primary care doctor monitors
your health and diagnoses and treats minor health
problems, and refers you to specialists if another level
of care is needed. In many plans, care by specialists is
only paid for if your are referred by your primary care
doctor. An HMO or a POS plan will provide you with a
list of doctors from which you will choose your primary care doctor (usually a
family physician, internists, obstetrician-gynecologist, or pediatrician). This
could mean you might have to choose a new primary care doctor if your
current one does not belong to the plan. PPOs allow members to use primary
care doctors outside the PPO network (at a higher cost). Indemnity plans
allow any doctor to be used.

Provider
Any person (doctor, nurse, dentist) or institution (hospital or clinic) that
provides medical care.

Third-Party Payer
Any payer for health care services other than you. This can be an insurance
company, an HMO, a PPO, or the Federal Government.

♫♫♫♫
MEDICAL BILLING – AN INTRODUCTION

What Is Medical Billing?

Medical billing is better described as full medical practice management and a


doctor's key to getting paid. Full medical practice management," meaning
that billing office handle all the bookkeeping and accounting functions for
their doctor-clients, including patient statements, recording payments,
preparing financial reports, and even consulting the physicians on issues such
as how to negotiate contracts with the growing number of managed care
companies such as HMOs and PPOs that are trying to reign in doctors' fees.
Medical billing involves preparation of medical bills on behalf of the doctor for
the treatments performed on the patients. The work also involves sending
the medical bills to the respective insurance company with whom the patient
is a beneficiary. The billing department also collects the money from the

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insurance company on behalf of the doctors. The insurance company pays for
the treatments billed by the billing office.

The Medical Billing industry is a subsidiary of the Health care industry.


Medical Billing is the financial-data management of a physician or a group of
physicians’ practices. This means maintaining all of the physician’s non-
medical records and keeping track of and collecting all money due to him.

What are the basic differences between US & Indian medical


payment collections?

To understand “Medical Billing”, it is important to first understand the


difference between medical payment collections in India as opposed to the
collections policies in the U.S. There are two basic differences

1. The first difference is that few people in India have a medical insurance
policy. They pay their medical fee out of their pockets immediately after their
visit to the doctor. On the other hand, a large percentage of the American
population had Medical Insurance Policies to cover their medical bills. In
addition, most physicians extend credit. In short, insurance companies pay
most medical bills, and they do this, at an extended period from the date of
treatment.

2. Even if a person has a medical insurance policy in India, and if his


policy covers his treatment, he has to pay the medical bill out of his pocket at
the time of his treatment. His insurance company then later reimburses him.
In the U.S, the patient undergoes his treatment, gives all relevant
information regarding his insurance policy or policies at the physician’s office
and leaves. According to American law, it is the physician’s responsibility to
collect the money from the government insurance programs. Most physicians
take the responsibility of collecting payments due from the private insurance
companies also as an added service to their patients.

The client of a Billing Office may be one physician, a group of physicians


working in the same hospital practicing different specialties (Ophthalmology,
Anesthesia, etc.) or a group of physicians practicing the same specialty.

Why Physicians go for Medical Billing Companies to do billing?

America has more than 3000 insurance companies, each with a number of
plans. This posed a problem to the physicians. Every insurance company
required the medical claims filed to them according to their own rules and
formats. Also, when physicians sent out claims to these insurance companies

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the explanation of the diagnosis and the treatment, necessary to every claim,
were voluminous and time consuming.

The forms and codes developed by Center for Medicare and Medicaid Services
(CMS – formerly known as HealthCare Financing Administration HCFA)
reduced the volume of the information to be transferred to the insurance
companies but the volume was still considerable and required skill and time.
The medical treatment performed still had to be encoded. These codes, with
the patients’ demographic information, still had to be entered into specific
medical billing software’s. This process was again time consuming and the
extra personnel and infrastructure meant extra costs. They could not handle
the volume and turned to specialist billing offices for assistance.

It was easier for a physician to source their non-medical, accounting work to


a billing office so that he could concentrate on his practice. Thus the medical
billing office became an intermediary between the physician and the
insurance companies.

The billing office collects information relevant to the patients’ treatment from
the physicians’ office. Using these codes and forms, the billing office bills the
insurance companies and patients on behalf of the physicians. Until recently,
medical billing was usually done by typing out and mailing claims to various
insurance companies. Now the objective of the medical billing industry is to
offer fast, efficient, and error-free claims processing using computers to log
and transmit claims to the insurance companies.

What is a Claim?

The insurance bills are sent out on claims. A claim is a request made to the
insurance company, by the billing office on behalf of the insured person or the
physician, for reimbursement of services rendered by the physician. A claim is
sent out on standardized forms that contain information regarding the
patient, his insurance coverage, the physician, the diagnosis and the
treatment. A claim is either mailed or electronically transmitted to an
insurance company.

In a small family practice or suburban clinic this task may be simple and
assigned to the medical assistant or nurse but in bigger practices and clinics
this is the medical biller's job! When a physician treats a patient, the doctor’s
office must file an insurance claim to get paid. This claim is usually filed on
paper and sent by mail. These paper claims are notoriously slow, often taking
60-90 days or more for the doctor to get paid.

Now, these claims can be processed electronically, saving healthcare


provider’s time and money. With electronic claims processing, payment time
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is drastically reduced to just 7 to 21 days on average. This dramatic


improvement in cash flow is exactly why medical billing is in such demand.
Physicians are constantly seeking remedies to their medical billing difficulties.

A brief study on working of Medical billers?

Medical billers and coders usually work forty regular office hours from Monday
through Friday on a desk in the billing office or billing department of the
professional healthcare office. They must know the different methods of
billing patients, understand various collection methods, ethical and legal
implications have a good working knowledge of medical terminology,
anatomy, medical billing and claims form completion, and coding.

They also must understand database management, spreadsheets, electronic


mail, and possess state-of-the-art word processing and accounting skills, be
proficient in bookkeeping, and be able to type at a speed of at least 45
words-per-minute.

The work area of medical billers and coders usually is in a separate area away
from the patients and public eye. However, even though they are not
involved in the actual process of doctors and healthcare professionals
providing medical care they need to possess excellent customer service skills
when it comes to making contact with clients, insurance companies, and often
patients. Medical billers must know how to explain charges, deal with
criticism, give and receive feedback, be assertive, and communicate
effectively without becoming confused as the person is asking questions.
Patients can quickly become frustrated when trying to deal with healthcare
providers and bills over the phone.

While an increasing amount of patient care is being funded through HMO


(Health Managed Organizations) related insurance, where the patient makes
a small co-payment at the time of service and the doctor bills the managed
care company for the balance, a number of patients still need to make
arrangements to pay for their medical services over a period of time. Part of
the medical biller and coder's job is to contact some of these patients from
time to time regarding a past due bill. Incoming calls from patients who have
questions regarding a bill are also directed to the medical biller's office. The
way s/he communicates over the phone can make or break business
relationships.

Other specialties closely related to the medical billing profession are:

Medical Coders/Coding Specialists


Patient Account Representatives

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Electronic Claims Processors


Billing Coordinators
Reimbursement Specialists
Claims Assistant Professionals
Medical Claims Analysts
Medical Claims Processors
Medical Claims Reviewers
Medical Collectors

What are the various departments in an Indian billing office?

Billing office is a link between the Doctor and the insurance company. The
billing office in India has four departments put together, they are:

Scanning Department
Charge Entry Department
Cash Department
Accounts receivable department
Quality Department

Scanning Department:

This department is responsible for collecting the data scanned from the US
billing office. The US office in turn receives the data from the physician’s
office, insurance companies, and patients. The data received in US is
scanned to back office in India. The data sent to us involves the details of
the patients and treatments taken at the hospitals. (Patient Demographic &
charge sheets). These data are handled by the charge entry department. The
second form of data is the data sent to us by the insurance companies. The
data contains the benefit paid to the respective patient’s by the insurance
companies and this data is handled by the cash department. The third form
of data is called the regular mails and this comes from the insurance
companies and this is handled by the accounts receivables.
The scanning department receives and allocates all the data received by them
to the respective departments.

Charge Entry Department:

This department is responsible for registering the patients in the system


before entering the charges. The demographic details of the patients are
received from the hospitals via scanning department.
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The registration details involves the patients name, address, social security
number, birth date, sex, rendering & referring doctors name, phone numbers,
insurance company details, employer details etc, and once these details are
entered into the system the treatment charges can be entered into the
particular patients account. Each type of ailment or disease has a unique
diagnosis code called ICD-9 code (International Classification of Diseases 9th
Edition Clinical Modification) and each type of ailment requires different
modes of treatment procedures. The procedures involved in the treatments
are noted by unique codes called the CPT (Current Procedural Terminology).
code (Procedure code)

The charge sheets notify the various treatments performed on a patient. The
charge entry department enters these procedures into the respective patient
account. These details are collected and entered by the billing office and the
copies of these claims are sent to the insurance companies. The mode of
sending the claims to the insurance companies can be by mail or by electronic
transmission. Insurance companies take on an average time period of 30
days to process the claims.

PD & charge entry is the first step of the billing process and an error here will
prompt errors in the subsequent steps. In some cases this error can be
discovered only after the claims reach the insurance carriers. This will result
in lost accounts receivables time. Hence utmost care should be taken while
entries are being made.

Cash Department:

This department is responsible for entering the cash details into a particular
account. The check and the explanation of benefits (EOB) are sent to us by
the insurance companies. Check contains the providers or group name,
amount paid and the insurance company’s name. EOB contains the detailed
description of the payments made for the type of procedures involved in the
treatment. In case of a denial, an EOB alone is sent and it explains which
charge has been denied and for what reason. EOB will be used to verify any
discrepancies from the expected payment.

When a claim has been processed and paid, the amount paid will have to be
applied to the amount charged for individual patient’s treatment in the
Medical billing software. This makes it possible for the billing office to track
the payments received from different angles. Some examples of how a billing
office would want to track the payments received are:

All insurance payments for a doctor or a group


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All patient payments for the doctor or group


Total payments made for all patients or any group of patients (grouped by
insurance company, date etc)
Payment made for any specific treatment for a patient
Payments made by an individual patient or insurance company
All payments made for one particular treatment that the physician
renders. (total revenue earned from heart operations alone for an
cardiologist)

Cash posting or the correct application of payments to their respective


charges in the medical billing software is very important as any wrong posting
may result in wrong accounting. If there are any mistakes in posting, the
reports that are run to assess a physician’s practice or judge the billing
office’s performance will be incorrect.

EOB’s are the only hard copy evidence the billing office has of the insurance
company receiving and processing the claims sent to them and so will have to
be filled carefully for future references.

Accounts Receivables Department :

This department has to check for the steady inflow of money from the
insurance company. The main motive of this department is to collect money
for all the treatments taken by the patients. Usually the turn around period
for the payment by the insurance company is 30 – 45 days. Once the limit is
exceeded AR department has to make an enquiry for the delay. There are
various reasons for the delay like:
Correct details may not have been provided to the insurance companies.
Claims were sent correctly but Insurance Company may not have received
the claims.
The checks issued might have been sent to the wrong address.
The insurance company may delay the payments if they have a backlog
and they would inform us by a letter that they have received the claims
and would be making the payments shortly.

AR department acts as a hub around which other departments have to


revolve. This department can gather & update lot of billing information,
which is required to settle a claim. There are instances where insurance
company does not make a 100% payment and we would have received a low
payment, in such case AR analyst have to work on such claims & settle the
claim.

The Medical billing software is capable of running reports that pull out claims
that are unpaid for greater than 30 days. These are calling aging reports and
show pending payments in slots such as 0 – 30 days, 31-60 days and 61-90
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days. Claims filed within the last 30 days will find themselves in the first slot
(0-30days). Claims, that are more than 30 days but less than 60 days old
will be found in the 31-60 days slot. A glance at this report will show the AR
personnel the claims that need to be followed up on with the insurance
company.

Claims will be followed up over the telephone or by written correspondence.


It would be necessary to find out why the claims are yet to be paid and what
needs to be done to have these claims paid. The billing office in coordination
with the physician’s office and the insurance carriers will correct the delay
and the denials. The same applies when patient billing statements are sent
out. The patient is given 3-4 weeks to pay the bill and if the payment is not
received with in that time, the billing office will follow up with the patient.

Communication is very important between the three departments. There will


be a number of circumstances where these departments will have to work
with each other to troubleshoot problem claims. Only good coordination
between these departments will assure correct and quick payments from both
the insurance companies and the patients.

Quality Department:

Quality in Health care business can be defined in two words first “


Accuracy “ (Defect free transaction) where in data captured in the software is
accurate with the information received, this will also enable the claim to be
paid within the given time period. Next comes “ Timely Response i.e., work
received has to be completed within the stipulated time period as agreed with
the client.

In the competitive world of Healthcare BPO Environment today, Quality


Process plays a vital role to ensure that a clean claim is being
transmitted/forwarded to the Insurance carrier. Quality check is done based
on General rules and specific rules given by the client from time to time.
Quality check is maintained in all departments of Medical Billing by laying
down rules for each department and thereby arresting the errors to minimum
level.

In the absence of correct checks and balances, companies can run the risk of
jeopardizing their relationship with customers through the inability to provide
continuously good service.

The project is initiated with formal identification of the Project Manager,


allocation of project resources, and overall establishment of the project
environment and preparation of Project Development and Quality Plan.

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Continuous Project monitoring is done through various levels of quality


reviews. The project manager ensures a smooth interaction with the
customer through e-mails, teleconferences and Weekly Progress Reports.

What are the problems faced by US providers or physicians?

Constantly US physicians face the problems of insurance coding & payment


reimbursement on their insurance claims. Optimizing reimbursement is like
trying to piece together a puzzle with a lot of pieces. Not only is there a lot of
complexity, but change is continuously occurring. There, are a number of
important factors, few are outlined below.

1. Providers are using invalid, obsolete or deleted codes while submitting


claims to respective insurance carriers.
2. The code and fees may be okay, but providers may be losing charge
information, missing super bill fees or billing insurance carriers wrongly or
irregularly.
3. The practice is not well informed about current coding and billing issues.
4. The practice doesn't have and/or doesn't follow written policies and
procedures, which support the billing, coding and collections processes.
5. Not participating in Medicare may allow providers to bill higher fees to
patients, but this may not be in the best interests of their practices.
6. Poor understanding of how insurance carriers work and ineffective
strategies and systems for dealing with them.
7. The practice is not using forms and documents, which are current.

In general, the basic tools needed by health care providers for optimizing
reimbursement are:

A thorough understanding of the billing process and related terminology.

Procedure coding and diagnostic expertise.

A well-designed super bill.

A fee schedule based on relative values.

Current and accurate forms and documents.

Current reference materials (such as code books).

Written policies and procedures covering billing guidelines.

What is the normal workflow process in Medical billing?

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The following brief outline would give the workflow process from the time a
patient is seen by a physician.

1. The doctor sees the patient. Demographics, super bills/charge sheets,


insurance verification data and a copy of the insurance card i.e. all the
information pertaining to the patient is sent to the Billing office.

2. Billing office scans the source documents and saves the image file to
an FTP site or on to their server under pre-determined directory paths.

3. Scanning department retrieves the files and prints them and ties up
with the control log for number of files and pages. (This process is absent if a
billing office opts for data entry thru electronic source documents)

4. Illegible /missing documents are identified and a mail is sent to the


Billing office for rescanning.

5. Documents are batched, numbered and sent to the appropriate


departments for action

6. Coding and pre-coding of the super bill/charge sheet and demographics


for insurance, doctors, modifiers, CPT and diagnosis are done wherever
required.

7. The claims data entry operator creates a charge, according to the


billing rules pertaining to the specific carriers and locations .All charges are
accomplished within the agreed turnaround time with the client.

8. Charges are checked for accuracy and again verified by audit


department for accuracy and compliance with rules.

9. Claims are filed and information sent to the Transmission department.

10. Transmission department prepares a list of claims that go out on paper


and through the electronic media. Once claims are transmitted electronically,
confirmation reports are obtained and filed after verification.
Paper claims are printed and attachments done, if necessary, stuffed into
envelopes and sent to the US for postage and mailing.

11. Transmission rejections are analyzed and appropriate corrective action


is taken.

12. Cash Application team receives the cash files and the deposit control
log is prepared. This helps to reconcile the deposits at the end of each month.
During cash application overpayments are immediately identified and
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necessary refund requests are generated for obtaining approvals. Also


underpayments/denials are highlighted for further research by the denied
claims team.

13. All denied the rejected/denied claims group, which will determine the
reason for denial, researches codes in the EOB’s or Explanation of Benefits
received and appropriate action is initiated for resolving the issue. This group
also researches the regular mail received from the insurance companies and
appropriate actions are taken on the refund request, newsletters, rejection
reports etc.

14. AR analysts are the key to any group. They record the processing time
of each insurance companies and identify all claims falling above the
processing time. Then the claims are researched for completeness and
accuracy and insurance carriers are called if required. AR analysts are
responsible for the cash collection and resolving all problems to enable the
account to have clean AR.

15. Insurance Calling team initiate calls to the insurance companies to


establish reasons for non-payment of the claims. All reasons are passed on to
the Analysts for resolution. Calling team works during the American Time
zones.

16. Patient calling team calls up the patients to confirm receipt of bill and
when they are going to pay. Based on client’s approvals budget plans and
discounts for immediate payments are also undertaken.
Below chart will clearly demonstrate the actual flow of medical billing
process. Process starts right from the stage of patient demographic entry at
the physician’s office by the patients.

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PD & Charges PD & Charges PD & Charges PD & Charges


from Facility I from Facility II from Facility III from Facility IV

PD & Charge sheets received from all All the Scanned documents are received,
four facilities are received, batched & checked with Scan logs and forwarded to
Scanned to Back Office respective entry departments

Patient Demographics and Charges Patient Demographics & Charges are


are entered as per rules coded in Coding Department

Entered demographics & Charges


are quality checked based on Entries are updated and Claims are
entry guidelines. filed to Insurance Carriers

Paper Claims are sent Claims are sent to


Claim to Insurance Insurance Carriers via
Electronic Claims
s Carriers via US Clearing house
Submission
Submi Mail
ssion
If a claim is still outstanding, calls
After 45 After 30
are placed to Insurance Carriers
Days Days
to check status of the claims

Claim Not
Claim Paid Low paid Claim Claim
In System
Claim Denied Pended

Claims needs to be
Cash resubmitted after proper Analyst needs to review each situation and
posting verification take appropriate actions to settle claims

If secondary or tertiary
Insurance available, submit Client Adjustment Other
claims Appeals Assistance actions
s

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If Claim needs to be
submitted in paper
RAPIDCARE MEDICAL BILLING MANUAL

If Claims needs to be
submitted electronically

MEDICAL CODING

What is Medical Coding?

Every Healthcare Provider that delivers a Service receives money for these
services by filing a claim with patient’s Health Insurance Carrier. This is also
referred as an encounter. An encounter is defined as “a face to face contact
between a healthcare professional and a eligible beneficiary.”

Codes exist for all types of encounters, services, tests, treatments, and
procedures provided in a Medical office, clinic or hospital. Even patient
complaints such as headaches, upset Stomach, etc have codes which consist
of a set of numbers and a combination of set of numbers. The Combination of
these codes tells the payer what was wrong with patient and what service
was performed. This makes it easier to handle these claims and identify the
provider on a predetermined basis.

Reason for the Visit /Encounter – Diagnosis Code


Service rendered - Procedure Code

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Coding Systems:

The two major coding systems are

International Classification of Diseases – Clinical Modification – 9th Revision


(ICD-9-CM)
Current Procedural Terminology (CPT)

CPT and ICD-9-CM are not the only coding systems. Here are few more
coding systems that are used to code a variety of coding information:

CDT-3 codes
ABC codes
SNOMED codes
NDC codes
Home Healthcare (saba) codes
DRG systems.

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ICD coding system:

ICD (International Classification of Disease) is a coding system


for which the first edition was published in 1900, and it is being revised at
approximately 10-year intervals. The most recent version is ICD-10, which
was published in 1992. WHO is responsible for its maintenance.

In US, the coding is still based on ICD-9-CM, which contains more detailed
codes.

ICD consists of a core classification of three-digit codes, which are the


minimum requirement for reporting the reason for the encounter. An optional
fourth digit provides an additional level of detail. At all levels, the numbers 0
to 7 are used for further detail, whereas the number 8 is reserved for all
other cases and the number 9 is reserved for unspecified coding.

The basic ICD is meant to be used for coding diagnostic terms, but ICD-9 as
well as ICD-10 also contains a set of expansions for other families of medical
terms. For instance, ICD-9also contains a list of codes starting with the letter
“V” for reasons for encounter or other factors that are related to someone’s
health status. A list of codes starting with the letter “E” is used to code
external causes of death. The nomenclature of the morphology of neoplasms
is coded by the “M” list.

The disease codes of both ICD-9 and ICD-10 are grouped into chapters. For
example, in ICD-9, infectious and parasitic diseases are coded with the three-
digit codes 001 to 139, and in ICD-10 the codes are renumbered and
extended as codes starting with the letters A or B; for tuberculosis the three-
digit codes 010 to 018 are used in ICD-9, and the codes A16 to A19 are used
in ICD-10. The four-digit levels and optional five-digit levels enable the
encoder to provide more detail. Table below gives examples of some codes in
the ICD-9 system.

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Example of a Four-Digit Code Level in ICD-9 and the Five-Digit Code Level as
Extended by the ICD-9-CM
Code Disease
001 - 139 Infectious and parasitic diseases
001 - 009 Infectious diseases of the digestive tract
003 Other Salmonella Infections
- 003.0 Salmonella gastroenteritis
- 003.1 Salmonella Septicemia
- 003.2 Localized Salmonella Infections
- 003.20 Localized Salmonella Infection,
Unspecified
- 003.21 Salmonella Meningitis
- 003.22 Salmonella Pneumonia
- 003.23 Salmonella Arthritis
- 003.24 Salmonella Osteomyelitis
003.29 Other Localized Salmonella
-
Infections
- 003.8 Other Specified Salmonella
Infections
- 003.9 Salmonella Infections,
Unspecified

The U.S. National Center for Health Statistics published a set of clinical
modifications to ICD-9, known as ICD-9-CM. It is fully compatible with ICD-9,
but it contains an extra level of detail where needed. In addition, ICD-9-CM
contains a volume III on medical procedures.

CPT Coding System:

Current Procedural Terminology (CPT), Fourth Edition, is a listing of


descriptive terms and identifying codes for reporting medical services and
procedures. The purpose of CPT is to provide a uniform language that
accurately describes medical, surgical, and diagnostic services, and thereby
serves as an effective means for reliable nationwide communication among
physicians, patients, and third parties.

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The American Medical Association (AMA) first developed and published CPT in
1966. The first edition helped encourage the use of standard terms and
descriptors to document procedures in the medical record; helped
communicate accurate information on procedures and services to agencies
concerned with insurance claims; provided the basis for a computer-oriented
system to evaluate operative procedures; and contributed basic information
for actuarial and statistical purposes.

The first edition of the CPT code book contained primarily surgical
procedures, with limited sections on medicine, radiology, and laboratory
procedures.

The second edition was published in 1970, and presented an expanded work
of terms and codes to designate diagnostic and therapeutic procedures in
surgery, medicine, and the specialties. At that time, five-digit coding was
introduced, replacing the former four-digit classification. Another significant
change was a listing of procedures relating to internal medicine.

In the mid- to late 1970s, the third and fourth editions of the CPT code were
introduced. The fourth edition, published in 1977, represented significant
updates in medical technology, and a procedure of periodic updating was
introduced to keep pace with the rapidly changing medical environment. In
1983, the CPT code was adopted as part of the HealthCare Common
Procedure Coding System (HCPCS) (Formerly called as HealthCare Financing
Administration's (HCFA) Common Procedure Coding System) . With this
adoption, HCFA mandated the use of HCPCS to report services for Part B of
the Medicare Program. In October 1986, CMS also required State Medicaid
agencies to use HCPCS in the Medicaid Management Information System. In
July 1987, as part of the Omnibus Budget Reconciliation Act, HCFA mandated
the use of CPT for reporting outpatient hospital surgical procedures. Today, in
addition to use in federal programs (Medicare and Medicaid), CPT is used
extensively throughout the United States as the preferred work of coding and
describing health care services

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Tools of the Trade:

CPT Book – Procedural Coding

Medical services provided by physicians are identified


using the AMA Current Procedure Terminology or CPT
codes. The AMA CPT book provides descriptors for
each of the 8,000 codes listed. Frequently there are
additional instructions for code use in each section of the book. These
CPT rules should be followed when choosing the correct code to
describe the service provided

ICD-9-CM - Medical Diagnosis Coding

The ICD-9-CM coding system contains three "volumes"


of coding information although the volumes come in
one book. Volume 1 contains the diagnosis codes that
every provider needs for billing. Volume 2 is an
alphabetical index of Volume 1. Outpatient diagnostic
or treatment centers, like physician offices, need only
Volumes 1 and 2. Thus, books that contain only
Volumes 1 and 2 are often referred to as physician, office, or
outpatient editions.

Volume 3 contains procedure codes, not diagnosis codes. Volume 3


codes are used for billing inpatient hospital stays in the DRG system so
books that contain Volume 3 are called hospital, payer, or inpatient
editions

HCPCS – CPT Level II codes

HCPCS Level II codes are used to bill


Medicare for supplies, materials, injections,
DME, rehab, and other services.

NCCI Manual

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National Correct Coding Initiative guide will help us


code our service for reimbursement in compliance
with CMS’s policies to prevent claim rejection, delays,
and audits.

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CODING DEPARTMENT FUNCTIONS:

Charge sheets that must be coded are, upon receipt by the billing account,
forwarded to the coding department for diagnosis and CPT coding.

Medical coders code the diagnosis description given in the charge sheets
according to established guidelines, using the ICD-9-CM (International
Classification of Diseases, Revision 9, Clinical Modification, and Volumes 1 &
2) diagnosis coding system and CPT/HCPCS codes according to the procedure
performed.. The published diagnosis/CPT coding rules under the ICD-9-
CM/CPT coding system are observed.

Codes are selected strictly based on documentation provided by the client,


and to the highest specificity as indicated in the submitted documents. When
documentation is insufficient or unclear, the charges are returned to the client
for clarifications.

Coding policies and guidelines, if any, established by the client, the coding
supervisor, or insurer are followed wherever applicable during the process of
coding.

When coders identify procedure coding or other errors in the charge


information given to them, such errors are corrected with an explanatory note
written on the concerned charge sheet. If the coding department decides that
the errors are of such a type that will require client authorization or
clarification, then such authorization or clarification is obtained from the client
by the concerned billing account.

When a coder finds that the information on the charge sheet is insufficient to
select the appropriate diagnosis or procedure code, the coder writes a note in
the charge sheet stating what additional information is needed to supply the
code.

When a given diagnosis code is not in the list of covered diagnosis codes
listed in the state Medicare carrier’s LMRP (Local Medical Review Policy), the
coder will code the diagnosis as documented and write “Not in LMRP” in the
charge sheet. A policy can be arrived on handling denials by the operation
team and client can be alerted on the same.

Coders, where ever possible, advise billing departments on the


appropriateness of the diagnosis codes and procedure codes documented in a
charge sheet, toward ensuring accurate health care claim submission. The
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clients are also informed of the same.

Coders should not alter codes or change information documented in the


charge sheet, or any other medical document, unless authorized by the client,
except when there are definite errors, such as typographical errors. No
attempt will be made to alter the procedure or diagnosis documented by the
physician or medical service provider. (See also point 6 above)

Upon completion of coding, the coded charge sheets are forwarded to the
charge entry department of the respective billing account.

The work of new coders who join the department will be fully audited before
file submission, until such time the coders gain the required level of accuracy.

A hundred percent audit of all coding work can be conducted during project
transition, until such time the coders gain the required experience and
accuracy levels.

Account specific coding policies, if applicable, will be documented

CODING GUIDELINES

1. Follow all coding principles outline in the “Essentials of Accurate


Coding,”

Use all codes necessary to completely code all diseases and procedures,
including underlying diseases.

Refer all medical records of patients treated for multiple trauma and
patients hospitalized over thirty days to the coding supervisor to verify
selection of principal diagnosis before abstracting.

E codes are used whenever appropriate to identify external codes.

2. Consult the following sources to identify all diagnoses and procedures


requiring coding and to increase the accuracy and specificity of coding.

Face Sheet-code diagnoses and complications appearing on the face


sheet.
Progress Notes-Scan to detect complications and/or secondary diagnoses
for which the patient was treated and/or procedures performed.
History and Physical-scan to identify any additional conditions; such as
history of cancer or a pacemaker in situ. These conditions should be
coded.
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Discharge Summary-read if available and compare listed diagnoses with


face sheet. Code diagnoses and procedures listed on discharge summary
but not specified on face sheet..
Operative Reports-scan to identify additional procedures requiring coding.
Consult previous medical records in patients admitted for follow-up of
neoplasm to determine the primary and secondary sites.
X-ray and laboratory-use reports as guides to identify diagnoses (e.g.
types of infections) or more detail (e.g. type of fractures).
Physician’s Orders-scan to detect treatment for unlisted diagnoses-the
administration of insulin, antibiotics, and sulfonamides may indicate
treatment of diabetes, respiratory or urinary infections which should be
confirmed by checking other medical record forms.

3. Code incomplete face sheets by reviewing the above items.

Record codes assigned in pencil on the fact sheet.


Request supervisor’s assistance if difficulty is encountered in identifying
codable data by scanning record.
Call physician for diagnostic information only if instructed to do so by
supervisor.

4. Exercise discretion in coding diagnostic conditions not identified on the


face sheet or discharge summary.

Query physician on the deficiency report if the coding question influences


Identification of most specific code..
Review all alcohol/drug abuse cases to confirm prior to coding.

5. Process special diagnostic coding situations as follows:

V codes are used to identify encounters for reasons other than illness or
injury. V codes are used as principal diagnoses for newborn admissions
(V30.0-V37.0), Chemotherapy session (V58.0), Radiotherapy session
(V58.1), Removal of fixation devices (V54.0), and Attention to Artificial
openings (V55). For inpatient coding, avoid the use of V codes as the
principal diagnosis where a diagnosis of a condition can be made.
V codes are used in outpatient coding when a person who is not currently
ill obtains health services for a specific purpose, such as, to act as a
donor, or when a circumstance influences the person’s health status but is
not in itself a current illness or injury. Patients receiving preoperative
evaluations receive a code from category V72.8.
Avoid using codes that lack specificity. These vague codes should not be
used if it is possible to obtain the information required to assign a more
specific code.

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Inpatient coding requires that signs and symptoms are coded when a
specific diagnosis cannot be made or when the etiology of a sign or
symptom is unknown. Do not code symptoms if the etiology is known and
the symptom is usually present with a specific disease process. Example:
Do not code convulsions with the diagnosis of epilepsy.
Outpatient coding requires that diagnoses documented as “probable,
suspected, questionable, rule out or working”, should not be coded. Code
the condition for that visit, i.e., signs or symptoms or abnormal test
results.
Chronic conditions may be coded as many times as the patient receives
treatment.
Code abnormal laboratory tests only when noted on the face sheet by the
attending physician.
When there are more diagnoses for a hospitalization, acute conditions take
precedence over chronic and at least one co morbid condition or
complication should be included in the diagnoses which may be submitted
to Medicare. All complications are reported for calculating severity of
illness.

6. Sequence diagnoses and procedures according to the “Guidelines for


Sequencing and Designating Principal Diagnosis and Principal Procedure
Codes.”

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ESSENTIALS OF ACCURATE CODING:

1. Identify all main terms or procedures included in the


diagnostic/procedural statements(s).
2. Locate each main term/procedure in the Alphabetical Index. A main
term may be followed by a series of terms in parentheses. The presence
or absence of these parenthetical terms in the diagnosis has no effect
upon the selection of the code listed for the main term.
3. Refer to any sub terms indented under the main term. These sub
terms for individual line entries and describe essential differences by site,
etiology or clinical type.
4. Follow cross-reference instructions if the needed code is not located
under the first main entry consulted.
5. Verify code selected from the Index in the Tabular List.
6. Read and be guided by any instructional terms in the Tabular List.
7. Fourth and fifth digit sub classification codes must be used where
provided.
8. Continue coding diagnostic and procedural statements until all of the
component elements are fully identified. This instruction applies even
when no “use” statement appears.
9. Use both codes when a specific condition is stated as both acute (or
subacute) and chronic and the Alphabetic Index provides unique codes at
the third, fourth, or fifth digit level.
10. The term hypertensive means “due to”, but the presence of
words such as “and or with hypertension” does not imply causality.
11. If the cause of a sign or symptom is specified in the diagnosis,
code the cause but do not assign a code for the sign or symptom.
12. For inpatient coding, when a diagnosis statement consists of a
symptom followed by comparative or contrasting diagnoses, assign codes
for the symptom as well as for the diagnoses. When coding outpatient
services, do not code diagnoses documented as “probable, suspected,
questionable, rule out or working diagnosis”. Code the condition
necessitating that visit, such as signs or symptoms, abnormal test, or
other reasons.
13. Do not confuse V codes, which provide for classifying the reason
for visit with procedure codes documenting the performance of a
procedure.

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14. V codes are found in the Alphabetic Index under references such
as Admission, Examination, History of, Problem, Observation, Status,
Screening, Aftercare, etc.
15. When an Endoscopic approach is utilized to accomplish another
procedure (such as biopsy, excision of lesion or removal of foreign body),
assign codes for both the Endoscopy and the procedure unless the code
books contain instructions to the contrary or the code identifies the
endoscopic/laparoscopic approach.
16. No procedure code is assigned if an incision was not made.
Code canceled surgeries to V64.1, V64.2 and V64.3. use code V64.1 if a
closed fracture reduction was attempted but not accomplished.
17. Consult the Alphabetical Index first to code neoplasm in order to
determine whether a specific histological type of neoplasm has been
assigned a specific code.
18. Do not assign the code for primary malignancy or unspecified
site if the primary site of the malignancy is no longer present. Instead,
identify the previous primary site by assigning the appropriate code in
category V10 “Personal history of malignant neoplasm.”
19. Cancer “metastatic from” a site should be interpreted as primary
of that site and cancer described as “metastatic to” a site should be
interpreted as secondary of that site.
20. Diagnostic statements expressed in terms of a malignant
neoplasm with “spread to...” or “extension to...” are to be coded as
primary site with metastases.
21. If no site is stated in the diagnosis but he morphologic types is
identified as metastatic, code as primary site unknown and also assign the
code for secondary neoplasm or unspecified site.
22. Code fractures as closed unless they are specified as open.
23. Code only the most severe degree of burn when different
degrees of burns occur at the same site.
24. Assign separate codes for multiple injuries unless the coding
books contain instructions to the contrary or sufficient information is not
available to assign separate codes.
25. Poisoning by drugs includes drugs given in error, suicide and
homicide, adverse effects of medicines taken in combination with alcohol,
or taking a prescribed drug in combination with self prescribed drugs.
26. Adverse reactions to correct substances properly administered
include: allergic reaction, hypersensitivity, intoxication, etc. The
poisoning codes 960-979 are never used to identify adverse reactions to
correct substances properly administered.
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27. Complications of medical and surgical care are located in the


Alphabetical; Index under Complication or the name of the condition.
28. The causes or residual illnesses or injuries are located in the
Alphabetical Index under Late Effect.
29. When the late effect of an illness or injury is coded in the main
classification, the E code assignment must also be one for late effect.

MEDICAL BILLING – PATIENT DEMOGRAPHICS

PATIENT DEMOGRAPHICS – AN OVERVIEW

What is Patient Demographics and what does it contain?

Patient Demographics sheet contains all the basic demographic information


about an individual or patient. Patient demographics include patient name,
date of birth, social security number (SSN) and sex. PD also contains
guarantors or emergency contact information, health insurance information.
Each piece of information is important because correct and quality entry of
such information will directly impact physician’s monthly revenue. This sheet
is also called as face sheet of a charge or claim.

A good patient demographic form is the key to obtaining accurate


information, which is required for claim submission. Providing as much
information as possible will reduce the insurance company’s need to contact
billing office. Avoiding unnecessary contact will reduce the costs of claims
processing and delay in payments. Obtaining all the required demographic
information will often determine how willing the patient is to complete the
form. If the request is firm and professional without being offensive, we have
great chances of getting the information’s which we need to settle a claim.

Ideally a patient’s insurance coverage should be verified before any service is


rendered with the common exception of emergency treatment. This policy
shouldn’t apply exclusively to new patients. Established patients may have
changed employers, gotten married or divorced or are no longer covered by

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the policy which was in effect during their last visit. Photocopy of insurance
cards is always a help.

How Patient demographics originate and reach us ?

Patient Demographic sheets also known as ‘Buck Slip’ are distributed to


patients when they visit physician’s office for treatment. Before the services
are rendered, front office staff ensures that the patient or some one in
patient’s family fills in patient demographic sheets. This process ensures that
all necessary patient’s demographic information is gathered accurately, which
would facilitate in timely reimbursement of physicians charges. In most of the
physician’s front office, copies of insurance identification card are also taken.
This is to ensure that all the information’s available in insurance identification
card are captured. Insurance ID card contains very valuable information,
which would be very helpful in settling the claim.

These patient demographics are batched together at physician’s office and


are forwarded to our office for patient demographics entry.

For our easy understanding now let us see each of the information found in
patient demographics. Information found in patient demographics have been
classified into five major headings.

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They are:

Patient Information
Patient employer information
Patient guarantor information
Physician information
Insurance information.

Patient Information

This segment in face sheet consists of basic demographic information.

They are:

Account #
Patient Name
Patient Sex
Patient Date of Birth
Marital Status
Patient Address
Patient phone number

Each patient record is assigned a patient account number. This is how a


patient is identified in the system. Before filing any claim we would need to
obtain clear, accurate information from the patients. A good patient
information sheet is the key to this aspect of claims submission. Let us now
see few more things about items listed below.

Account Number [Visit Number]: In case of a New Patient this field in


almost all the Medical Billing software’s is updated automatically. In cases
where it does not get updated automatically the billing office enters the
Medical Record Number/Account Number as on the Encounter Form submitted
by the Hospital/Provider.
In case of an Established Patient the Billing Office runs a query to search
for the patient record with the help of the Medical Record Number/Account
Number or using the Last Name or using the Date of Birth of the patient. If
the software has a Visit Number concept then a new visit with the same
Account number and the next visit number is created if not then the same
Account is edited with the new details as on the Encounter Form.
This number is for the internal purpose of the Billing Office and the
Hospitals. This field is usually in numeric format but may differ from software
to software. This number does not form part of the HCFA-1500 claim form.

Example:
Account #: 24584951, 3205215 …
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Account # and Visit #: 24584951-01, 24584951-02 …

Patient Name: This field is entered in the Last Name, First Name Middle
Initial format. However in some software’s this field is split as Last Name First
Name and Middle Initial fields. The patient name may also contain title
(Junior, Senior, I, II, III …) and suffix (M.D. …) this information also needs to
be entered along with the name. The title must be entered with the last name
and the suffix should be entered with the first name or after the middle initial.
The Name on the Encounter Form may not be given in above said format but
still it should be entered as per the Billing Software specifications. Checking
the spelling of patient name is a very important step. Simple errors such as
transposition of letters or misspelled names can result in denial or suspension
of the claim.
Patient name is printed in the 2nd field of the HCFA-1500 claim form in
Last Name, First Name Middle Initial format.

Example:
Patient Name: Jones, Brenda K; Brenda K Jones; Miller John Jr.;

Date of Birth: This field contains the Date of Birth of the patient. It is
entered in the MM/DD/YYYY or MMDDYYYY as per the Billing Software
specification.
This field is printed in the 3rd field of the HCFA-1500 claim form in MM DD
YY format. If Date of Birth detail is not available then generic DOB format
have to be entered i.e., 01/01/1901.

Example:
Date of Birth: 02/12/1979; 02/12/79; 02-Dec-1979 …

Sex: This field contains the Gender of the patients. i.e., M for Male, F for
Female, and U for Unknown when the gender of the patient is not specified on
the patient encounter Form.
This field is printed in the 3rd field of the HCFA-1500 claim form along
with the Date of the Birth.

Example:
Sex: Male; Female; M; F.

Social Security Number: This field contains a 9 digit number which is


allotted to the patient by the Social Security Administration. If SSN is missing
from patient encounter form then this field is usually left blank or any 9 digit
dummy number (000-00-0000/999-99-9999) is entered as per the Billing
Software specifications.

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This number is for the internal purpose of the Billing Office and the
Hospital. It is mainly helpful to follow-up with the patients or insurance on
their outstanding balances. This number does not appear on the HCFA-1500
claim form.

Example:
SSN: 245-19-0124; 245190124

About SSN

When did Social Security start?

The President Franklin Roosevelt signed the Social Security Act on August 14,
1935. Taxes were collected for the first time in January 1937 and the first
one-time, lump-sum payments were made that same month. Regular ongoing
monthly benefits started in January 1940.

What is
the
origin of
the term
‘Social

Security’?

Abraham Epstein in connection with his group, the American Association first
used the term in the U.S. for Social Security. Originally, the Social Security
Act of 1935 was named the Economic Security Act, but this title was changed
during Congressional consideration of the bill. Under the 1935 law, Social
Security only paid retirement benefits to the primary worker. A 1939 change
in the law added survivor’s benefits and benefits for the retiree's spouse and
children. In 1956 disability benefits were added.

Who assigns the SSNs and how many SSNs have been assigned?

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Social Security numbers are assigned by Social Security Administration. SSNs


were first issued in November 1936. By December 1, 2002 more than 418
million numbers had been assigned.

Is it true that Social Security was originally just a retirement


program?

Yes. Under the 1935 law, Social Security only paid retirement benefits to the
primary worker. A 1939 change in the law added survivor’s benefits and
benefits for the retiree's spouse and children. In 1956 disability benefits were
added.

Is Social Security just a program for the elderly and disabled?

Social Security is not just a program for the elderly and disabled. Survivors of
deceased workers and the families of retired or disabled workers also qualify
for benefits. In fact, about 3.8 million children are currently receiving such
benefits and 9 out of 10 would be eligible to receive benefits if a parent
retires, becomes disabled, or dies. They need a Social Security number (SSN)
before they can receive benefits.

The SSN is also needed for reasons not connected with Social Security
benefits. For example, to be claimed as a dependent on a tax return, to open
a bank account and buy Savings Bonds, your child needs an SSN.

Is there any significance to the numbers assigned in the Social


Security Number?

The digits in the Social Security number allow for the orderly assignment of
numbers. The number is divided into three parts: the area, group, and serial
numbers. The first three (3) digits (area) of a person's social security number
are determined by the ZIP Code of the mailing address shown on the
application for a social security number. Generally, numbers were assigned
beginning in the northeast and moving westward. So people on the east coast
have the lowest numbers and those on the west coast have the highest
numbers. The remaining six digits in the number are more or less randomly
assigned and were organized to facilitate the early manual bookkeeping
operations associated with the creation of Social Security in the 1930s.

Within each area, the group number (middle two (2) digits) range from 01 to
99 but are not assigned in consecutive order. For administrative reasons,
group numbers issued first consist of the Odd numbers from 01 through 09
and then Even numbers from 10 through 98, within each area number
allocated to a State. After all numbers in group 98 of a particular area have

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been issued, the Even Groups 02 through 08 are used, followed by Odd
Groups 11 through 99.

Within each group, the serial numbers (last four (4) digits) run consecutively
from 0001 through 9999.

Are Social Security Numbers re-assigned after a person dies?

SSA does not reissue SSNs after someone dies. When someone dies their
number is simply removed from the active files and is not reused. In theory,
the time might come someday when SSA would need to consider "recycling"
numbers in this way--but not for a long time to come. SSA does not have to
face reissuing numbers since the 9-digit Social Security number allows about
1 billion possible combinations, and to date SSA have issued a little over 400
million numbers.

How can one get a different Social Security number assigned to


himself?

Generally, an individual is assigned only one Social Security number (SSN),


which is used to record the individual’s earnings for future benefit purposes
and to keep track of benefits, paid under that number. However, under
certain circumstances, SSA may assign an individual a new (different) SSN.
When they assign a new number, the original number is not voided or
deleted. For integrity reasons, they cross-refer in the records all the numbers
assigned to the same individual.

SSA can assign new SSNs in the following situations, provided all of the
documentation requirements are met:

Sequential SSNs assigned to members of the same family


Certain scrambled earnings situations
Certain wrong number cases
Religious or cultural objection to certain numbers/digits in the SSN
Misuse by a third party of the number holder’s SSN and the number holder
has been disadvantaged by that particular misuse
Harassment, abuse or life endangerment situations (including domestic
violence)

To apply for a new (different) SSN, you need to complete Form SS-5
(Application for a Social Security Card)

You will also need to submit evidence age, identity, and U.S. citizenship or
lawful alien status. Form SS-5 explains what documents will satisfy these
requirements. You will also need to submit evidence to support your need for
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a new number.

If you are age 18 or over, you must submit your request for a new SSN in
person at your local Social Security office.

When did Social Security cards bear the legend "NOT FOR
IDENTIFICATION"?

The first Social Security cards were issued starting in 1936; they did not have
this legend. Beginning with the sixth design version of the card, issued
starting in 1946, SSA added a legend to the bottom of the card reading “FOR
SOCIAL SECURITY PURPOSES -- NOT FOR IDENTIFICATION”. This
legend was removed as part of the design changes for the 18th version of the
card, issued beginning in 1972. The legend has not been on any new cards
issued since 1972.

How to get a Social Security number for my baby?

The easiest way to apply for a baby's Social Security number (SSN) is at the
hospital. Both parents’ Social Security numbers are required when applying
for a baby’s SSN. When a parent requests a Social Security number (SSN) for
his/her newborn as part of the birth registration process in the hospital, the
State Vital Statistics Office forwards to the Social Security Administration
(SSA) data we need to assign an SSN to the child and issue a card. This is
known as the Enumeration at Birth (EAB) process. Once SSA receives the
data, the process of assigning the number and issuing the card is the same as
if the application were taken in a Social Security office.

In most States, the birth registration process is electronic. Hospitals submit


birth registration information through local registrars to the State, where the
information is entered into an automated database. In most States this
process is completed and EAB data is sent to the Social Security
Administration within 60 days of birth. EAB is a good service for most parents
who have no immediate need for their child's SSN because they do not have
to submit an application and evidentiary documents to a Social Security
office.

What types of Social Security cards does SSA issue?

SSA issues three types of Social Security cards depending on an individual's


citizen or non-citizen status and whether or not a non-citizen is authorized by
the Department of Homeland Security (DHS) to work in the United States.

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The first type of card shows the individual's name and Social Security number
only. This is the card most people have and reflects the fact that the holder
can work in the U.S. without restriction. SSA issues this card to:

- U.S. citizens, or

- Non-citizens who are lawfully admitted to the U.S. for permanent


residence, or who have permission from the Department of Homeland
Security (DHS) record to work permanently in the U.S., such as refugees,
asylees and citizens of Compact of Free Association countries.

The second type of card bears, in addition to the individual's name and Social
Security number, the legend, "NOT VALID FOR EMPLOYMENT". SSA issues
this card to non-citizens who:

- don't have DHS permission to work, but are receiving a federally-funded


benefit; or

- are legally in the U.S. and don't have DHS permission to work but, are
subject to a state or local law which requires him or her to provide a SSN
to get general assistance benefits or a State driver's license for which all
other requirements have been met.

The third type of card bears, in addition to the individual's name and Social
Security number, the legend, "VALID FOR WORK ONLY WITH INS (or
DHS) AUTHORIZATION". SSA issues this card to people who have DHS
permission to work temporarily in the U.S.

If you’re a non-citizen, SSA must verify your documents with DHS before
SSA issues a SSN card. SSA will issue the card within two days of
receiving verification from DHS. Most of the time, they can quickly verify
your documents online with DHS. If DHS can’t verify your documents
online, it may take several weeks or up to three months to respond to
Social Security's request.

Which Social Security numbers are invalid (impossible)?

An invalid (or impossible) Social Security number (SSN) is one which has not
yet been assigned.

The SSN is divided as follows: the area number (first three digits), group
number (fourth and fifth digits), and serial number (last four digits). To
determine if an SSN is invalid consider the following:

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No SSNs with an area number in the 800 or 900 series, or "000" area
number, have been assigned.

No SSNs with an area number above 728 have been assigned in the 700
series, except for 729 through 733 and 764 through 772.

No SSNs with a "00" group number or "0000" serial number have been
assigned.

No SSNs with an area number of "666" have been or will be assigned.

Is it legal to laminate your Social Security card?

SSA discourages the lamination of Social Security number (SSN) cards


because lamination would prevent detection of certain security features. To
deter potential fraud and misuse involving SSNs, SSA currently issues SSN
cards that are both counterfeit-resistant and tamper-resistant. (For example,
the card contains a marbleized light blue security tint on the front, with the
words "Social Security" in white; intaglio printing in some areas on the front
of the card; and yellow, pink, and blue planchets--small discs--on both sides).
SSA cannot guarantee the validity of a laminated card. You may, however,
cover the card with plastic or other material if the material could be removed
without damaging the card.

SSA would also recommend that as a security precaution, you carry your
Social Security card only when you expect to need it, for example, to show to
an employer or other third party.

Is there any charge for replacing a Social Security card?

Social Security does not charge a fee for either an original or replacement
Social Security card. A replacement card can be a duplicate card (one with
the same name and number) or a corrected card (one with different name but
the same number).

Can metal or plastic versions of Social Security cards be used?

The official verification of your Social Security number is the card issued by
the Social Security Administration. Third parties who request your Social
Security card as verification of your number will want to see the card SSA
issues. Although Social Security has no authority to prevent use of metal or
plastic replicas of Social Security cards, SSA considers them an unauthorized
use of the Social Security number and discourages their use.

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Can Social Security number be canceled?

No. When someone has applied for and been assigned a Social Security
number (SSN) based on a validly signed application, the Social Security
Administration (SSA) may not cancel or destroy that record. The Privacy Act
of 1974 authorizes agencies to maintain in their records any information
about an individual that is relevant and necessary to accomplish a purpose of
the agency that is required by law. SSA is required by law to establish and
maintain records of wages and self-employment income for each individual
whose work is covered under the program. The SSN is considered relevant
and necessary for that record keeping purpose. Consequently, valid SSNs are
permanently part of SSA's records.

Marital Status: This field contains the Marital Status of the patient. It is
usually entered as ‘S’ for Single, ‘M’ for Married, ‘D’ for Divorced, ‘W’ for
Widow/Widower, ‘X’ for Separated and ‘O’ for Others. It marital status is
missing from patient encounter form, we need to enter ‘O’ in the marital
status field.
This field is printed in the 8th field of the HCFA-1500 claim form.

Example:
Marital Status: Single; Married; Divorced; Widow …

Address: Patient’s address is split into 5 different fields. It is usually entered


as Address1 (PO Box#/Door#/Appt. #), Address2 (Street/Ave. /Blvd. Name),
City, State and ZIP code. This field can not be left blank. Patient address is
a important field to file a claim & send patient statement. Following are the
general abbreviations found in patient encounter forms:

Apt. # - Apartment number


Ave. - Avenue number
Blvd. - Boulevard
Ste. - Suite/Street
Dr. - Drive

This field is printed in the 5th field of the HCFA-1500 claim form.

Example:
Address: 1067 Orange Grove Blvd.
Apt. # 194
Los Angeles, CA 90001

Patient Phone Number: This field contains the contact number of the
patient including the area code. It contains a total of 10 digits (111-222-
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3333), the first 3 digits are the area code, and the next 7 digits are the phone
number of the patient. If the area code is not specified the phone number can
still be entered leaving the area code field blank or entering some dummy
number as per the Billing Software specifications.
This field is printed in the 5th field of the HCFA-1500 claim form along
with the address.

Example:
Phone Number: 626-843-2846; (626)357-5496 …

Patient Employer information

This segment in the face sheet contains employer information of the patient.
The entry person needs to enter this information if available in face sheet.
Employer information is a must for worker’s comp claims. Non-worker’s
comp claims do not require employer name to process claims but it is
advisable to update employer information during entry. Following
information’s are found in this segment

Employer Code
Employer Name
Employer Address & Phone #
Designation/Occupation
Contact Person

Employer Code: This field is used in most of the Billing Software’s to reduce
the time of PD entry. The Names and Addresses of the major Employers are
stored in the Employer database with a unique code assigned to each
employer. Hence it is enough to just enter the code and skip to the next
block.

Example:
Employer Code: IBM; A0012; MS024 …

Employer Name: This field contains the name of the patients Employer. If
the patient is a Student or Not Employed or Retired then it can be entered as
Student or Not employed or Retired in this field.
This field is printed in the 11b field of the HCFA-1500 claim form.

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Example:
Employer: Verizon Wireless; Microsoft Corp.; SUN Microsystems

Employer Address: The address of the patients Employer is split into 5


different fields. It is usually entered as Address1 (PO Box#/Door#/Apt.#),
Address2 (Street/Ave. /Blvd. Name), City, State and ZIP code.

Example:
Address: PO Box 1954
Los Angeles, CA 90001-1954

Employer Phone Number (Ext No.): This field contains the contact number
of the patients Employer including the area code. It contains a total of 10
digits (111-222-3333), the first 3 digits are the area code and the next 7
digits are the phone number of the patient. If the area code is not specified
the phone number can still be entered leaving the area code field blank or
entering some dummy number as per the Billing Software specifications.
Some software’s may also require you to enter the Extension number if given
on the encounter form.

Example:
818-245-7849 [5478]; (818)-245-7849 …

Patient Guarantor Information

This segment in face sheet consists of guarantor or emergency contact


information.
They are:

Guarantor Account #
Guarantor Name
Guarantor Address
Guarantor phone #
Guarantor/patient relationship
Guarantor employer & SSN

This block is mostly entered only in the case of the patient being a minor
or if the patient is not responsible for the payment. This information is for the
internal purpose of the Billing Office and the Hospitals for the purpose of

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Emergency Contact or follow-up of pending balances and hence does not form
part of the HCFA-1500 claim form.

Guarantor Account #: This field is used to enter the guarantor account #. If


the guarantor is already stored in the database then the stored information
can be pulled up using this number. This information is not part of the
encounter form. The account number of the guarantor is pulled using search
engine.

Example:
245818A; 6252315; 421154; …

Guarantor Name: This field is entered in the Last Name, First Name Middle
Initial format. However in some software’s this field is split as Last Name First
Name and Middle Initial fields. The guarantor name may also contain title
(Junior, Senior, I, II, III …) and suffix (M.D. …) this information also needs to
be entered along with the name. The title must be entered with the last name
and the suffix should be entered with the first name or after the middle initial.
The Name on the Encounter Form may not be given in above said format but
still it should be entered as per the Billing Software specifications.

Example:
Joseph Warowes Sr.; Warowes, Virginia E M.D …

Relationship: This field contains the relationship of the Guarantor with the
patient, such as Spouse, Parent, Others etc.

Example:
Relationship: Spouse; Parent; Grand Parent …

Address: The address of the Guarantor is split into 5 different fields. It is


usually entered as Address1 (PO Box#/Door#/Apt.#), Address2
(Street/Ave. /Blvd. Name), City, State and ZIP code.

Example:
102 West 35th Street
Heathsville, GA 65418

Phone Number: This field contains the contact number of the Guarantor
including the area code. It contains a total of 10 digits (111-222-3333), the
first 3 digits are the area code and the next 7 digits are the phone number of
the patient. If the area code is not specified the phone number can still be
entered leaving the area code field blank or entering some dummy number as
per the Billing Software specifications.

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Example:
(517)373-1820; 517-374-5857 …

Guarantor Employer: This field contains the guarantor’s employer


information. Basically the guarantor’s employer name, address, and contact
details are entered here.

Emergency Contact: This field is used to enter the Emergency Contact


details of the patients relative or next of kin. Contact information such as
Name, Address Phone # and relation to the patient are entered here.

Physician Information

This segment contains the following information.

Admitting physician code: The physician responsible for admission of a


patient to a hospital or other inpatient health facility. Some facilities have all
admitting decisions made by a single physician (typically a rotating
responsibility), called an admitting physician. All the information’s related to a
particular physician (Physician Name, UPIN, Federal Tax ID, License #,
Facility Address & Phone #) are stored using a unique code in the provider
database. Hence while selecting a physician codes the entry person should be
very careful to select the correct code after cross checking all the relevant
details. This field is optional; if the Admitting physician info is not given it can
be left blank.
This field does not form part of the HCFA-1500 claim form.

Example:
Adm. Phy.: Mileski MD, William

Attending or Rendering physician code: The physician rendering the


major portion of care or having primary responsibility for the care of the
patient's major condition or diagnosis. In other words the doctor or supplier
who actually renders the service (also referred to as a "rendering physician").
All the information’s related to a particular physician (Physician Name, UPIN,
Federal Tax ID, License #, Facility Address & Phone #) are stored using a
unique code in the provider database. Hence while selecting a physician codes

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the entry person should be very careful to select the correct code after cross
checking all the relevant details.
The Name of the rendering physician is printed in the 33 rd field along with
the Address and Phone #. The rendering physician’s Federal tax ID stored in
the database is automatically printed in the 25th field of the HCFA-1500 claim
form.

Example:
Att. Phy.: Pendridge MD, Dayton

Referring Physician/Primary Care physician code: The physician who


has sent the beneficiary to another physician or, in some cases to a supplier
(e.g., physical therapist, occupational therapist) for consultation and/or
treatment is called a referring Physician or Primary Care Physician (PCP). The
name of the facility may be reflected in this area if the patient has not
identified a unique physician, but has identified a facility. All the information’s
related to a particular physician (Physician Name, UPIN, Federal Tax ID,
License #, Facility Address & Phone #) are stored using a unique code in the
provider database. Hence while selecting a physician codes the entry person
should be very careful to select the correct code after cross checking all the
relevant details.
The name of the referring physician is printed in the 17th field and the
corresponding UPIN stored in the database is printed in the 17a field of the
HCFA-1500 claim form.

Insurance Information

This segment of face sheet contains all active insurance information of the
patient. This segment includes primary, secondary, and/or tertiary insurance
information. This segment is the most important field in patient
demographic sheet. Information found in this field should always be the
updated & correct one. If not, we would be submitting claims to incorrect
insurance. Entry persons should always match this information with copy of
insurance id cards. (if provided). This will reduce the risk of entering

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incorrect insurance information. Following information are found in this


segment

Insurance Code/Name
Effective Date
Subscribers Name
Relationship Code
Pre-Certification/Pre-Authorization
Referral Number
Primary Insurance Group #
Primary Insurance Policy #
Date of Injury/Accident
Claim Number

Sample Medicare Insurance Card copy:

Insurance Code/Name: This field is used to enter the insurance code or


name of the coverage that the patient has. The insurance code is assigned by
the Billing office for its internal purpose to reduce the PD entry time. Each
Insurance company’s name, billing address, contact person, etc… are
assigned a unique code. The entry person should be very careful while
selecting the insurance code and should always verify the billing address with
the given card copy or with the billing address given on the encounter form.
The Primary insurance name is printed in the 11c field and the Secondary
insurance name is printed in the 9d field of the HCFA-1500 claim form.

Example:
Insurance: Medicare, Medicaid, Blue Cross, Blue Shield …

Effective Date: This field contains the effective date of coverage. This date
should not be after the Date of Service. The date format is MMDDYYYY. This

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date is used for the internal purpose of the Billing office and Hospitals. This
does not form part of the HCFA-1500 claim form.

Example:
Eff. Date: 7-1-66; 07/01/1976; 07 01 66 …

Subscribers Name: This field contains the Subscribers name of the


insurance policy. If the patient is a dependant who is covered under someone
else’s policy then the name of the person who pays the premium is entered in
this field. If patient is the subscriber then we need to enter the patient name
itself. The name is entered in the Last Name, First Name MI format.
The Primary insurance subscribers name is printed in the 4 th field and the
Secondary insurance subscribers name is printed in the 9 th field of the HCFA-
1500 claim form.

Example:
Subscriber: John Q. Public; Public, John Q …

Relationship Code: This field contains the relationship of the subscriber to


the patient. The code is usually 1 – Self, 2 – Spouse, 3 – Parent, 4 – others
etc…
This field does not form part of the HCFA-1500 claim form.

Policy ID: This field contains the Policy number given by the insurance
company to the subscriber and the dependants of the policy. This does not
have any standard format across the insurance company but each insurance
company has a unique format such as for Medicare the policy number is given
as SSN + Alpha or Alphanumeric. The policy ID should be entered as given in
the scanned card copy or as mentioned on the Encounter form.
The Primary insurance ID is printed in the 11 th field and the Secondary
insurance ID is printed in the 9a field of the HCFA-1500 claim form.

Example:
Policy ID: 123-54-5478A; 215543251W1; 215-47-6491 …

Group ID: This field contains the Group ID as given by the insurance
company for the policy. Not all the insurance companies have the Group ID
hence if not given then this field can be left blank.
The Group ID is printed along with the Policy ID on the HCFA-1500 claim
form.

Pre-Auth. / Pre-Cert. Number: Review of "need" for inpatient care or other


care before admission. This refers to a decision made by the payer, Managed
Care Organization, or insurance company prior to admission. The payer
determines whether or not the payer will pay for the service. Most managed
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care plans require pre-cert. This is a method of controlling and monitoring


utilization by evaluating the need for service prior to the service being
rendered. The practice of reviewing claims for inpatient admission prior to the
patient entering the hospital in order to assure that the admission is
medically necessary. A method of monitoring and controlling utilization by
evaluating the need for medical service prior to it being performed. The
process of notification and approval of elective inpatient admission and
identified outpatient services before the service is rendered. An
administrative procedure whereby a health provider submits a treatment plan
to a third party before treatment is initiated. The third party usually reviews
the treatment plan, monitoring one or more of the following: patient's
eligibility, covered service, amounts payable, application of appropriate
deductibles, co-payment factors, and maximums. Under some programs, for
instance, pre-determination by the third party is required when covered
charges are expected to exceed a certain amount. This number should be
attached with the respective claim; otherwise the claim will be rejected.
There is no standard format for Auth and Pre-Cert. number across all the
insurance companies. Each insurance company has its own unique format of
Auth and Pre-Cert. numbers.
This field is printed in the 23rd field of the HCFA-1500 claim form.

Referral Number: A Referral number is provided by a PCP (Primary Care


Physician) when he refers a patient to a specialist. Without the Referral
number a patient cannot get a specialist’s service if he has a HMO plan.
This number is printed on the HCFA-1500 claim form or entered in the
attached documents as per the Insurance company requirements.

Date of Injury/Accident: This field is used to enter the Date of


Injury/Accident when the claim is filed to Work Comp/Auto Accident
insurance. This date is useful for the insurance companies to verify if the
coverage was active or not. This date is mentioned in the documents attached
while filing the claim.

Claim Number: This field is used to enter the Claim number for a particular
claim given by the Work Comp/Auto Accident insurance company. Failing to
mention this number on the claim form will result in the rejection of the
claim.
This is mentioned in the attached documents while submitting the claim.

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Work Flow Process for Patient Demographic Entry

Login into the system

Open the Entry Folder

Batch No
Found
?

Yes

Select a Batch for Entry

Enter the Data as in the


source Document

Any
Incomplet Yes
e/Missing
Info?
Enter the Issue in the
Problem Log
No

Cross Verify the PD


before Saving

No Batch
Complete
d?

Yes

Entry Process
Completed

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MEDICAL BILLING – PATIENT CHARGES

PATIENT CHARGES – AN OVERVIEW

What are Patient Charges and what does it contain?

Patient charge is nothing but the fees claimed by the physician who rendered
the services to the patient. Charges can be either based upon demographic
evaluation or a flat fee rate as prescribed by the physician’s office. Each piece
of information is important because correct and quality entry of such
information will directly impact physician’s monthly revenue. This sheet is
also called as face sheet of a charge or claim.

How Charge Sheets originate and reach us?

Once patient /spouse completes Pd sheet, patient is then referred to


physician in the appointed time. After preliminary investigation physician
provides the services required by the patient. In the super-bill, kind of
treatment is denoted by procedure code and diagnosis code denotes the
nature of illness for which services were administered.
Super bills or charge sheets contain information like Date of Service, Kind of
Service, Diagnosis Code, and Attending Doctor, Modifier details. Physician or
their assistant usually completes super bills. Coding specialists does
sometimes Coding of diagnosis & procedures.
Once Charge sheets are completed, they are batched with PD at physician’s
office and are forwarded to our office for charge entry. Mode of transfer of
data may vary from client to client. But most preferred mode is thru FTP.
Here patient demographics are scanned & captured as image file. These
image files are placed in FTP site. These image scan files are retrieved at our
office & charge entry begins.

For our easy understanding now let us see each of the information found in
patient charge sheet. Information found in patient charge sheet is 1.
Attending Physician 2. Referring Physician 3. Admit Date 4. Date of Service
5. Type of Service 6. Place of Service 7. Prior Authorization Number 8.
Modifiers 9. Procedure code 10. Diagnosis Code 11. # Of days/ units, 12.
Location Details 13. Physician Name, Address, Provider id

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Attending Physician: Attending physician is also referred as rendering


physician. A physician who renders the service to patients is called
attending or rendering physician. Each Rendering/Attending Physician of a
particular facility is assigned a unique code with the Name of the
Physician, Address of the Clinic/Facility, PIN (Provider Identification
Number), License number, Federal TaxID#.

The Rendering Physician Name, Address, and PIN are printed in the
33rd field and if the Address of the Facility where the service was
rendered differs from the Physicians location then that address is
printed in the 32nd field and the corresponding Federal Tax ID of the
Provider is printed in the 25th field of HCFA.

Referring Physician: Physician who refers patient to specialists is


called referring Physician or Primary Care Physician (PCP) information is
integral to continuity of care, reimbursement and community relations. In
simple words, the physician who has sent the beneficiary to another
physician or, in some cases to a supplier (e.g., physical therapist,
occupational therapist) for consultation and/or treatment is known as a
Referring Physician. Each Referring Physician Is allotted a unique code in
the Medical Billing software, which stores the Name of the Physician,
Address of the Clinic/Facility, UPIN (Unique Physician Identification
Number).
The Referring Physician Name is printed in the 17th field of the HCFA-1500
claim form. The UPIN, which is stored along with the code is printed in the
17a field of the HCFA-1500 claim form.

Admit Date: Admit date refers to the date in which patient was admitted
into the Hospital. For workers compensation Date OF Injury (DOI) is very
important for processing the claim. For the purpose of determining the
date of injury for an occupational disease, the date of injury shall be taken
to be the last date of injurious exposure to the hazards of such disease or
the date on which the employee first knew or reasonably should have
known of the condition and its relationship to the employee's employment,
whichever is the later.

Date of Service: DOS is the date in, which services were rendered to
patient by attending physician. In certain cases we have thru date of
service and also it will be in the single date format. Standard format for
entering DOS is mm/dd/yyyy. DOS must be greater than or equal to
admit date.

Type of Service: We need to input the type of service, which was


administered to patient. Broadly we have two digit TOS codes, which

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needs to be entered in block 24C.The type of service defines what type of


service it is like radiology, cardiology and etc.

6. Place of Service: Two digit place of service needs to be entered in


block 24b of HCFA which submitting claims to insurance carriers. POS can
be for inpatient, outpatient & ER. Health care that you get when you are
admitted to a hospital is an inpatient. Medical or surgical care that does
not include an overnight hospital stay is an outpatient. Care given for a
medical emergency when you believe that your health is in serious danger
when every second counts is an Emergency care. This field consists of the
place or the location where services were provided to the patient.
Location details are printed in block 32 of HCFA. Details like location
name, address are printed. Where services are rendered in patient’s
home & physician’s office location details in HCFA can be blank.

Preauthorization: An insurance plan requirement in which you or your


primary care physician must notify your insurance company in advance
about certain medical procedures (like outpatient surgery) in order for
those procedures to be considered a covered expense. Preauthorization
are of two types. 1) Requesting authorization of date of services that have
not been previously requested or the request was previously rejected. 2)
Requesting authorization for increase or decrease units for previously
approved dates of service. In other words, Preauthorization means
Insurance is notified in advance about specific procedures. This allows for
a review of medical necessity, efficiency, and quality of proposed care. It
is also an opportunity to inform patient/physician about benefits, including
length-of-stay guidelines and plan limitations. This will help to understand
the costs if patient receive the proposed care.

Procedure Code: Procedure codes are used to indicate the kind of


treatment or service was administered in-patient. Utmost care should be
given while entering the procedure code. We need to first know what kind
of procedure codes each insurance accepts to process claims. Healthcare
Common Procedure Coding System (HCPCS) is a coding system that is
composed of Level I codes (Current Procedural Terminology (CPT) codes),
Level II codes (national codes), and Level III codes (local codes). Level I
(CPT) codes are five digit numeric codes that describe procedures and
tests. CPT codes are developed and maintained by the AMA with annual
updates. Level II (national) codes are five digit alphanumeric codes that
describe pharmaceuticals, supplies, procedures, tests and services. Level
II codes are developed and maintained by CMS with quarterly updates.
Level III (local) codes are five digit alphanumeric codes that are being
phased out by the fiscal intermediaries.

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Examples of CPT codes:

85025 – CBC with automated differential

71020 – Chest x-ray 2 views

45378 – Colonoscopy

93501 – Right heart catheterization


In other words, this field contains the Code of the procedure done
(CPT/HCPCS Code). The purpose of CPT is to provide a uniform language
that accurately describes medical, surgical, and diagnostic services, and
thereby serves as an effective means for reliable nationwide
communication among physicians, patients, and third parties. All the
Procedure codes are stored in a Master database of the Medical Billing
software with the description of the code and the dollar amount. This
helps the charge entry person to cross verify the procedure before saving
the claim.
This field is printed in the 24d field and the corresponding dollar amount of
the procedure stored in the Medical Billing Software is printed in the 24f
field of the HCFA-1500 claim form

Modifiers: A modifier indicates that a service or procedure was altered


by specific circumstances, but not changed in its definition or code.
Modifiers are two digit numeric or alpha numeric codes that are appended
to the end of CPT/HCPCS codes. Modifiers may be used to indicate that:

A service or procedure has both a professional and technical


component

A service or procedure was performed by more than one physician

A service or procedure has been increased or reduced

Only part of a service was performed

An additional service was performed

A bilateral procedure was performed more than once

Unusual events occurred

This field is printed along with the CPT/HCPCS Code in 24d field of
the HCFA-1500 Claim Form.

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Modifiers that are currently approved for hospital outpatient use with CPT
codes as defined by the 2002 AMA CPT manual are:

Modifier Description
-25 Significant, separately identifiable evaluation and management
service by the same physician on the same day of the procedure
or other service
-50 Bilateral procedure
-76 Repeat procedure by same physician
-77 Repeat procedure by another physician

Modifiers that are currently approved for use with HCPCS Level II codes as
defined by the 2002 AMA CPT manual are:

Modifier Description
-LT Left side
-RT Right side

Diagnosis Code: Diagnosis code is used to indicate the health problem


that a patient have. The first of these codes is the ICD-9-CM diagnosis
code describing the principal diagnosis (i.e. the condition established after
study to be chiefly responsible for causing this hospitalization). The
remaining codes are the ICD-9-CM diagnosis codes corresponding to
additional conditions that coexisted at the time of admission, or developed
subsequently, and which had an effect on the treatment received or the
length of stay. Medicare requires physicians to include a complete
diagnosis code (or codes) on each claim submitted for payment. The first
of these codes is the ICD-9-CM (International Classification of Diseases
Ninth Revision Clinical Modification) diagnosis code describing the principal
diagnosis (i.e. the condition established after study to be chiefly
responsible for causing this hospitalization). A Maximum of 4 diagnosis
codes can be printed on the HCFA-1500 claim form.
This field is printed in the 21st field of the HCFA-1500 claim form.

Number of days/Units: This field contains the length of service performed.


We need to enter number of days or units. This field is most commonly used
for multiple visits, units of supplies, anesthesia minutes or oxygen volume. If
only one service was performed the numerical 1 should be entered.

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Billed Amount: It is the amount charged by a provider for a specific service.


In other words it is the total charge value of the claim. The billed amount for
a specific procedure code is based on the provider.

Work Flow Process for Charge Entry

Process begins with retrieve batch


files

Sort & Arrange files in order and


assign batch numbers.

Update Charge Control Logs

Batched files to be forwarded for


coding if required

Check whether patient already exists


in system. If yes, verify all the
demographic information.

Check whether charge already exist


in system to avoid duplicate

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If the charge Yes


Update in Client log for
details already
clarification.
exists

NO
Post co pay amount to patient
account if specified.

Start entering the charges to the


respective patient

After Quality Check


Complete the file & send the file for update Client Charge
Quality Check. log and process
ends.

MEDICAL BILLING – CASH POSTING

What is Cash Posting?

Cash posting is a process by which the payments received from insurance


companies, patients and other entities, towards settlement of claims, applied
to the respective claims / patient accounts or other accounts in the billing
system. Cash team receives the cash files (Check copy and EOB) and applies
the payments in the billing software against the appropriate patient account.
During cash posting, overpayments are immediately identified and necessary
refund requests are generated for obtaining approvals. Also
underpayments/denials are informed to the Analysts.

How the cash is generated, received and posted?

The charges submitted to the insurance will be processed payment is made


according to the fee schedule. The insurance pays the cash through checks,
which is deposited in the specified banks date-wise. Each check has its own
unique number and date on which the check was issued. The Billing Office in
U.S, who in turn groups the amount together and sends to the billing office

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here, receives the checks along with the claim details. The details, which are
received with the checks are known as the EOB (Explanation of Benefits).

The Billing office in U.S scans the Checks and EOB details to the Billing Office
here. The Billing Office here receives the scanned documents as files. The
cash poster who gives the file reference numbers based on the date on which
the file was received then collects the received files. Then the cash poster
matches the checks with the EOB details. This process is termed as file
sorting or Check matching. Now the file had been sorted and the details are
posted in the Software, which is called as the Cash Posting.

Electronic Posting:

Cash posting can be done either manually or electronically. During


manual posting the above said methods are carried on whereas in case
of electronic posting the amounts deposited in the bank gets
transmitted electronically to the billing office here. The transmitted
details are known as Electronic File Transfer i.e. EFT’s. The cash poster
receives this Eft’s with the insurance reference number. Then the Cash
poster retrieves the transmitted details and starts posting the cash
electronically. In this posting the amounts that are allotted to the
claims get identified by the software itself and the respective amounts
are posted, for which the detailed EOB’S will be received later.

Once the posting is over the amount posted in the software is tallied with the
amount received. Then a detailed report containing the claim and its posting
details are taken which is helpful for any future references.
General Terms associated with Cash posting and their definitions:

Claim:

Forms submitted for payment of physician services, other medical


services and supplies provided to Insurance beneficiaries. It is an itemized
statement of healthcare services and their costs provided by hospital,
physician's office or other healthcare facility. A charge when filed to insurance
becomes a claim.

Insurance Claim number:

It is the number given by the insurance to the claim in order to


identify the claim in case of reference. Some insurance companies address
the claim with the help of the claim number. It can be of the combination of
any numeric values along with the alphabetical values. It is insurance specific
and no general format is there for this.

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For Example: - 12345ABXCQ78.

EOB:

It is defined as Explanation of Benefits. This contains the claim


details, the amount paid by the insurance, co-pay / co-insurance amount and
write-off amount. It also contains the patient name, patient address, patient
account number, SSN, insurance name, insurance address, insurance contact
numbers and it’s customer care numbers (if any). If insurance does not pay
the claim then the reason for which the claim was not paid i.e. the denial
reason is also mentioned in EOB. In simple words it can be defined as the
detailed explanation of the benefits provided by the insurance for the claim.

For Example: -

EOMB (Explanation of Medicare Benefits) contains a statement detailing


the amount of benefits paid or denied for services under the Medicare
program.

Billed amount:

It is the amount charged for each service performed by the


provider. In other words it is the total charge value of the claim. The billed amount
for a specific procedure code is based on the provider. It may vary from place to
place. It is not common across all the states.

Allowed amount:

The maximum reimbursement the member's health policy allows for a


specific service. It is the maximum dollar amount assigned for a procedure
based on various pricing mechanisms. Allowed amounts are generally based
on the rate specified by the insurance. This amount may be:

-A fee negotiated with participating providers.


-An allowance established by law.
-An amount set on a Fee Schedule of Allowance.

For Example: -

If the billed amount is $100.00 and the insurance allows $80.00 then the
allowed amount is $80.00 and the balance $20.00 is the write-off amount.

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Formula: -

Allowed amount = Amount paid + co-pay / co-insurance + Deductible - Billed


amount.

Paid amount:

It is the amount, which the insurance originally pays to the claim. It is


the balance of allowed amount – co-pay / co-insurance – deductible – write-
off. The paid amount may be either in full i.e. Full charged amount getting
paid or in partial i.e. only a certain percentage of the total charged amount
getting paid.

For Example:-

If the billed amount is $100.00 and the insurance allows $80.00 but the
payment amount is $60.00. Here $60.00 is the actual amount paid for the
claim.

Formula: -

Paid amount = Allowed amount – (Co-pay / Co-insurance + Deductible)

Co-pay:

The fixed dollar amount that patient’s policy requires to pay as patient
share of the cost of certain services each time when a service is rendered. It
is only patient responsibility, which the patient has to pay out of his pocket.
Usually it is paid during the time of the visit. It generally ranges from $5.00
to $25.00. The amount depends upon the visit / plan. Co-pay’s are usually
associated with the HMO plan. The co-pay amount is usually specified in the
insurance card copy.

Co-insurance:

It is the portion or percentage of the costs of covered services that


patient is required to pay for each medical service received. It also includes
the balance of some specified amount allotted by the primary insurance,
which is to be paid either by the patient or the secondary insurance.

For Example: -

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If the billed amount is $100.00 and the insurance allows @80%. The payment
amount is $60.00 then the remaining $20.00 is the co-insurance amount.

Formula: -

Co-insurance = Allowed amount – Paid amount – Write-off amount.

Deductible:

The amount patient has to pay for health care, before the health plan
begins to pay. It is the annual amount payable by the beneficiary for covered
services before Insurance makes reimbursement. There is a deductible for
each benefit period - usually a year. Deductibles can change every year. It is
mostly patient responsibility and very rarely another payor pays this amount.

Posting Reference Number:

This is the number, which is given by the operator to the claims


posted in order to keep track of the payment posted details. This is
generally given in a specified format as per the client requirement.

For Example: -

01.3651.123103 here the 01 refers to the serial number, 3651 refers to


the batch number and 123103 refer to the date and the year on which we
received the file.

Offset:

This is a kind of an adjustment, which is made by the insurance


when excess payments and wrong payments are made. If insurance pays to a
claim more than the specified amount or pays incorrectly it asks for a refund
or adjusts / offsets the payment against the payment of another claim. This is
called as Offset.

For example: -

Let the total billed amount of two claims is $100.00 each and the specified
payment for this is $80.00. The insurance pays $90.00 for the first claim.
Here $10.00 is paid in excess. Now while making payment for the second
claim the insurance pays $70.00 and sets $10.00 as offset. Now the
insurance payment becomes normal, as the excess payment had been
adjusted off.

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Refund:

This is the process of returning back the excess money paid by the
insurance / patient on request. If payment is received in excess than the
specified amount, insurance / patient request for a refund. The process of
Refund is usually done as per the client specifications.

For example:-

Let the total billed amount of a claim be $100.00 and the specified payment
for this is $80.00. The insurance pays $90.00 for the claim. Here $10.00 is
paid in excess. Now the insurance requests for a refund of $10.00, which will
be done as per the client specifications.

Adjustment:

An adjustment is an amount which had been adjusted / written off


for some reason and may be recoverable. It can be an additional payment or
correction of records on a previously processed claim. It is the recoverable
debt but cannot be specified as a certain recoverable amount. Adjustments
can be to any amount. It can be a specific percentage of the total value of the
claim or even the total claim value. It is generally based on the client
requirements. One specific type of adjustment is the write-off.

For Example:-

Let the billed amount of a claim be $100.00 and the charge be an incorrect
one. In this case the whole of $100.00 is adjusted off and a new charge with
correct details is keyed in.

Write-Off:- It is an amount which cannot be recovered at all. This


adjustment is usually done when the insurance payments are made. It is the
balance of what the insurance have allowed on a particular charge i.e. Total
Billed amount – Allowed amount. The main difference between an adjustment
and write-off is that Adjustment may be recovered whereas write-off cannot
be recovered at all.

For Example: -

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If the billed amount is $100.00 and the insurance allowed amount is $80.00.
The payment amount is $80.00 then the remaining $20.00 is the write-off
amount.

Denial:

Denial is the technical term used for the non-payment of a claim


by the insurance. The insurance usually pays the claim if the details
presented to them are sufficient enough for payment. If there is any lack of
information then the insurance quotes a reason for which the claim is not
considered for payment, which is known to be the denial reason. These
reasons are also received in the EOB. Some insurance like Medicare follow a
general set of denial codes which is uniform across all the states. But some
commercial insurance follow their own set of reasons and codes for the
denials, which will be clearly mentioned in the EOB.

For Example: -

If the claim has gone to the insurance without the patient date of birth then
the insurance will not pay the claim stating a denial reason code to it.

Balance Billing:

It is the difference between the billed amount and the amount


approved by insurance. Once the claim payment had been made
by the primary insurance and if there is any balance pending for
the claim then the balance is either sent to the secondary payor
or to the patient.

If the patient is enrolled with the secondary payor then the balance is billed
to it. Generally for secondary billing the claim must be submitted along with
the primary payor’s EOB. Only then the secondary payor will pay for the
claim. In secondary billing primary payor EOB is the most important
document. Some insurance like Medicare automatically transfers the pending
balance to the secondary payor if the patient has any. This procedure is
termed as Crossover, which reduces the work of the billing office.

If the patient is not enrolled with the secondary payor then the balance is
billed to the patient. Patient billing cannot be done at all the cases. For
certain cases we need the client’s approval for patient billing. Periodic patient
statements are sent to the patient in order to intimate the balance which is
pending from patient.

Capitation Payment: -

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Specified amount paid periodically to the provider for a group of


specified health services, regardless of quantity rendered. This is a
method of payment in which the provider is paid a fixed amount for
each person served no matter what the actual number or nature of
services delivered. The cost of providing an individual with a specific
set of services over a set period of time, usually a month or a year. It
is a payment system where managed care plans pay the health care
providers a fixed amount to care for a patient over a given period.
Providers are not reimbursed for services that exceed the allotted
amount. The rate may be fixed for all members or it can be adjusted
for the age and gender of the member.

Now let us see the diagrammatic representation of the cash posting process:

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Workflow for Cash Posting


Retrieve Cash files

Sort and match the checks to


the EOB’s.

Enter batch# for files

Create Cash log for internal


purpose

Enter details in a Log Based on


client Specifications.

Search whether the received


amount had been already posted
or not to avoid duplication.

If the Cash Verify the Check details.


details If it’s same, specify it in
already the client specification
exists log.

YES
Post the amount in the software.

NO
Verify whether the amount
received and the amount
posted equals.

Complete the file and take a


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MEDICAL BILLING – ACCOUNTS RECEIVABLES &


CLAIMS ANALYSIS

ACCOUNTS RECEIVABLES AND CLAIMS ANALYSIS PROCESS- AN


OVERVIEW

What is Account Receivables?

Receivables are defined as amounts due and expected to be collected by


billing / provider’s office for the services provided to individuals. In Medical
Billing, receivables are handled by Account Receivables Department. Account
Analyst plays a crucial role in identifying and resolving issues which helps to
reduce or clear receivables.

What is the purpose of Claims review & AR Analysis?

The purpose of claim analysis is to identify and resolve medical claims billing
and reimbursement issues toward maximizing collections and minimizing
accounts receivables. It helps to ensure timely, accurate and final settlement
of health insurance claims and patient bills by insurers or patients as
appropriate. The scope of claim analysis is applicable to all health insurance
claims and patient bills that have not been fully and finally settled by liable
party or parties comprising health insurers, patients and others. It is the
responsibility of the Accounts Receivables Analyst to ensure that AR is under
control & acceptable by industry standards.

What is the scope of AR Department?

AR Department has to ensure steady inflow of money from the insurance


company. The main motive of this department is to collect money for all the
treatments taken by the patients in a timely fashion. Usually the turn around
period for the payment by the insurance company is 30 – 45 days. Once the
limit is exceeded AR department has to make an enquiry for the delay. There
are various reasons for the delay like:
Correct details may not have been provided to the insurance companies.
Claims were sent correctly but Insurance Company may not have received
the claims.
The checks issued might have been sent to the wrong address.

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The insurance company may delay the payments if they have a backlog
and they would inform us by a letter that they have received the claims
and would be making the payments shortly.

AR department acts as a hub around which other departments revolve. This


department can gather & update lot of billing information, which is required
to settle a claim. Account analyst uses various reports available in billing
software to identify claims, which have not been settled.

The Medical billing software is capable of running reports that pull out claims
that are unpaid for greater than 30 days. These are called aging reports and
these reports show pending payments in slots such as 0 – 30 days, 31-60
days and 61-90 days. Claims filed within the last 30 days will find
themselves in the first slot (0-30days). Claims, that are more than 30 days
but less than 60 days old will be found in the 31-60 days slot. A glance at
this report will show the AR personnel the claims that need to be followed up
on with the insurance company.

Claims will be followed up over the telephone or by written correspondence.


It would be necessary to find out why the claims are yet to be paid and what
needs to be done to have these claims paid. The billing office in coordination
with the physician’s office and the insurance carriers will correct the delay
and denials. The same applies when patient billing statements are sent out.
The patient is given 3-4 weeks to pay the bill and if the payment is not
received with in that time, the billing office will follow up with the patient

What is the process of AR analysis?

Step one: Report Execution

At the beginning of each month AR analyst runs an Aged Insurance Report on


billing system using required parameters and identifies claims that are unpaid
or inappropriately paid. This report provides a list of outstanding claims
pending against each insurance carrier.

Step two: Identification of Account Receivables

From the above report, the analyst selects claims that remain unpaid beyond
30-45 days from the date of filing. The number of days depend on whether
the claims were sent on paper (paper claims) or were transmitted
electronically (electronic claims). The number of days depends on the
average turnaround time for the claims to get settled, i.e., from the date of
filing of the claim to the date of receipt of payment for the claim.

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Step three: Identification of the problem - Review

The analyst then reviews patient account ledgers pertaining to the unpaid
claims to analyze why the claims are still outstanding. Analyst reviews
patient ledger from all billing angle for possible violation of billing rule.

Following are some of the situations the analyst may encounter & suggested
remedial actions:

If the analyst detects a charge entry, cash posting or claim submission error,
he/she informs the concerned department. The error is corrected and claim
resubmitted, if necessary.

If the claim has been prepared and submitted correctly according to known
rules and guidelines, and the usual turnaround time has passed, the analyst
either calls insurance carrier or requests AR caller to call insurance carrier. A
note is also made to AR caller indicating the type of information that needs to
be obtained from representatives of the insurance company or payer.

When claims are underpaid or denied, the analyst establishes the reasons for
the denial or low payment by reviewing the explanations of benefits
pertaining to the claim, carrier rejection reports, carrier billing guidelines, or
initiating a work order to AR Calling to seek clarifications from the insurance
company.

Claim denials or underpayments due to billing errors committed by staff


are segregated and the concerned staff instructed to take corrective action.

When claims are denied due to lack of documentation or additional


information, the analyst requests for such additional documentation from the
provider or billing office, and follows up with the insurance through the AR
callers.

When the analyst is dissatisfied with the adjudication of a claim he/she may
appeal with insurance for a review, with supporting documentation obtained
from the provider office. The analyst will have to follow the appeals process
and if there is a telephonic appeal facility, analyst should explore the same to
appeal. A copy of the patient ledger and copies of the relevant EOB should be
available with analyst while executing telephonic appeal.

If there is no telephonic appeal facility, then the analyst must an appeal


on paper following the insurance company’s appeals process.

Step Four: Identification of the problem – Calling

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If the claim has been prepared and submitted correctly as per insurance
requirements, and usual turnaround time has passed, call needs to be placed
with respective insurance carriers to ascertain the status of outstanding
claim.

Analyst or AR Caller obtains the required information from the insurance


company and documents the results of the call in the patient notes section of
patient account. Based on the call notes, appropriate steps needs to be
initiated to settle outstanding claims.

Examples of the kind of situations that the analyst may come across and the
action initiated are given below:

The AR night caller may have documented in patient notes that according to
the insurance representatives the claim is not in their system, meaning they
don’t have a record of the claim. The AR analyst may now check the claim
address and review transmission reports to find out if the claim failed to
reach the carrier due to a bad address or a transmission error. If the address
in the system is incorrect, the analyst first finds out the number of claims that
have been affected due to the wrong address. Or if there was a transmission
error, how many claims were affected.

Caller patient notes reveal that claims have been denied. Then analyst
initiates appropriate action based on the reason for denial as documented in
patient notes.

The insurance carrier may state that the claim has been settled. In such
cases, the AR caller obtains the payment date and checks details from the
carrier and documents them in patient notes. The analyst follows up with the
cash department on whether such a payment has been received. If the check
the carrier says has been issued has not been received and posted within two
weeks from the day of payment, he/she may prepare a report (depending on
the policy established by the client) on such missing checks and sends it to
the client.

An issue may need feedback from client for proper resolution. If so, the
analyst sends a report to the client detailing the issue and seeking
clarifications.

Step Five: Identification or Execution of Corrective Action

Once issues or problems have been identified the AR analyst initiates action to
resolve them. Issues may be forwarded to one or more departments, or to the

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client, depending on the nature of the issue. Complete resolution of an issue may
require inputs or actions from more than one department.

Analysts issue forward’s request to the concerned departments for issue


resolution. Issues that require inputs or actions from the client are forwarded to
the client. For instance,
to clarify claim issues, check on status of claims or obtain carrier billing
information, the analyst issues work orders to AR Callers.
A corrected claim that must be resubmitted is forwarded to the claims
department.
Write-offs, adjustments and actions to resolve overpayments request’s are
initiated to the cash department, while charge entry errors are corrected by the
charge department.

Step Six: Identification of Uncollectible AR

Details of outstanding claim balances that the analyst considers uncollectible,


and which may thus have to be written-off, are forwarded to the client for
decision making. Details of outstanding claims, where collections efforts have
fail due to non-cooperation or lack of response from payers or liable parties, are
also forwarded to the client. Such accounts may be moved to a collection
account. A collection agency then resumes the collection activity.

What are the tools used by an AR Analyst in Claim Analysis Process?

AR analysts uses the following tools, reports and documents to identify and
investigate issues that are affecting cash flow and preventing timely and
accurate reimbursement of claims by payers. One or more, and sometimes
all, of the following tools, source documents and resources are required for
complete and effective AR analysis:

Patient Account Ledger


Explanation of Benefits (EOB)
Regular Mail or Correspondences
AR calling
System Reports like
AR Reports
Custom Reports
Financial Reports
Electronic Transmission Reports

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The extent to which the above mentioned tools and resources are used will
depend on the account receivables situation in the accounts. The AR analyst
measures the success of collection efforts by computing the current and past AR
and collection’s in the specialty and account he/she is handling, comparing it
against industry standards, wherever available. The analyst investigates the
reasons for any rise in AR or any fall in collections using the tools and documents
mentioned above. The objective is to minimize AR and maximize the collection
rate.

ACCOUNTS RECEIVABLES - CALLING

Medical accounts receivable include accounting for medical or health-related


services. It involves following up with entities such as Insurance carriers,
Physicians, Hospitals and patients for information required to resolve the
pending accounts at the earliest. Calling is a support media for A/R Analyst to
close an outstanding account. Calling is done on accounts which are
outstanding for more than 40 days and for which no correspondence has been
obtained.

SCOPE:
Calls to be made to the following entities by an AR representative:
Insurance carriers
Hospitals
Physicians office
Patients

Insurance carriers:

Calls are made to insurance carriers for the following reasons :

Patient eligibility verification:


Calls are made to the insurance carrier to confirm on the eligibility of the
insured, the type of insurance the subscriber has with the respective
insurance and/or the benefits that are covered by the insurance.

Provider enrollment department:

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Calls are made to the insurance carrier to confirm on the provider enrollment
details. To check as to whether the provider is participating with the
insurance and/or to enroll the provider with the insurance carrier.

Claim status:
Calls are made to insurance company to enquire about the status of a claim
that has already been filed to them for which there has been no
correspondence from the insurance company for over 40 days.

HOSPITALS:
Calls are made to the hospitals to check on the pre-authorization, pre-
certification, to confirm on medical records and also to check on patient’s
coverage information in case a contact cannot be established with the patient.

PHYSICIAN’S OFFICE:
Calls are made to the physician’s office/PCP office to obtain and confirm on
the referrals, to confirm on the patient’s coverage information incase a
contact cannot be established with the patient.

PATIENTS:
Calls are made to the patient to confirm on the insurance policy details, to
obtain and confirm on the patient’s other insurance details or to inform the
patient about their responsibility that is due from them to the doctor.

UNDER WHOSE NAME DO WE CALL CARRIERS & PATIENT’S?

Calls are made to patients and insurance companies, hospitals, physician’s


office under the client’s name. Thus the carriers and patients would have no
way of knowing that they are being called from an outside firm, but rather
the clients in house collections department.

WHO RECEIVES THE PAYMENT COLLECTED BY THE AR


REPRESENTATIVE?

The accounts receivables would be managed under the client’s name,


therefore the payments would be made directly to the client account as
specified.

CALLING – CLASSIFICATION:

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Inbound:
Calls that the office receives from patients, insurance carriers etc are termed
as inbound.

Patients call the billing office to check on the payments and on clarifications
when statements are sent to them periodically.

Insurance carriers call the billing office when a message is left for them to
call us back and/or for clarifications on claims that have been filed with
them.

Outbound:

Calls that our office makes to the insurance carriers, patients, hospitals,
provider’s office etc are termed as outbound.

Calls are made to insurance carriers to check on patient eligibility, provider


enrollment details and/or to check the status of the claim that is filed.

Calls are made to the patient to follow-up on the payments, to confirm if the
statements sent have been received by them and also to check on their
insurance coverage information

Calls are made to the hospitals, provider’s office to check on the authorization
details.
ABBREVIATIONS TO UPDATE PATIENT NOTES:
Cld : Called.
TT : Talked to.
CPT : Current Procedural Terminology.
Dnd : Denied.
DOS : Date Of Service.
PCP : Primary Care Physician.
Auth# : Authorization number.
POS : Place Of Service.
EOB : Explanation of Benefits.
EOMB : Explanation of Medicare Benefits.
Chk : Check.
Pt : Patient.
Proc : Procedure code.
Clm : Claim.
Diag : Diagnosis.
Ins : Insurance
Pd : Paid
Amt : Amount
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NIS : Not in system


SCRIPT ON HOW TO CALL INSURANCE FOR STATUS OF A CLAIM:

Sample 1

Good morning, this is ……… calling from ………………. (name of the physicians
office) to check the status of the claim. ( if the rep asks for the provider/ tax
id #)…… The Dr’s provider/tax id# is ………… . The patient’s ID# id ……………….,
the patients name is ………………. And the DOS is ………………. For a billed
amount of ……………… .( If the claim has been paid, ensure all the check
points for a paid claim is verified and confirmed.) Thank you for your kind
assistance. Have a great day.

Sample 2

Good morning, this is ……… calling from ………………. (name of the physicians
office) to check the status of the claim. ( if the rep asks for the provider/ tax
id #)…… The Dr’s provider/tax id# is ………… . The patient’s ID# id ……………….,
the patients name is ………………. And the DOS is ………………. For a billed
amount of ……………… .
( If the claim has been denied, ensure all the check points for a denied claim
are verified and the reason for the denial is obtained).
Thank you for your kind assistance. Have a great day.

Sample format to update Notes.

Called Insurance…………. . TT …………….. . She said that the DOS ………….. for
the billed amount………….. paid …………. On …………. Chk# is ………………… bulk
chk in the amount of………..
Claim processed on…………. The copay is…….. the co-insurance is ………. And
the patient responsibility is …………. The chk was mailed out to …………….
(address) and the chk is still ………. (out-standing).

The AR Process is completed only when the necessary action is


taken only after the call is made and have the claim
reprocessed and convert pending claims to receipts/cash. It is
also to be noted that when ever a new update pertaining to
claims processing is received, the information should be shared
with the other department so that the speed of the collection is
increased and the denials are reduced.

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COMMON PHONETICS

A As in Apple
B As in Boy
C As in California
D As in David
E As in Edward
F As in Frank
G As in Girl
H As in Henry
I As in Indiana
J As in Jack
K As in Kite
L As in Larry
M As in Mary
N As in Nancy
O As in Orange
P As in Peter
Q As in Queen
R As in Robert
S As in Sam
T As in Tom
U As in Umbrella
V As in Victory
W As in Whisky
X As in X ray
Y As in Yellow
Z (zee) As in Zebra

HIPAA

The purpose of this document is to assist Medical Billing personnel to


understand and plan for the implementation of the HIPAA requirements. The
personnel must familiarize themselves with the final HIPAA rules

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What is HIPAA?

HIPAA is the federal Health Insurance Portability and Accountability Act of


1996. The primary goal of the law was to make it easier for people
to keep health insurance, protect the confidentiality and security
of healthcare information, and help the healthcare industry
control administrative costs.

HIPAA is divided into five titles or sections. Each title addresses a


unique aspect of health insurance reform. Title I is portability and it
has been fully implemented. Portability allows individuals to carry
their health insurance from one job to another so that they do not
have a lapse in coverage. It also restricts health plans from
requiring pre-existing conditions on individuals who switch from one health
plan to another.

Title II is called Administrative Simplification and it will have the greatest


impact on providers. It is designed to:
Combat health care fraud and abuse;
Guarantee security and privacy of health information;
Establish standards for health information and transactions; and
Reduce the cost of health care by standardizing the way the industry
communicates information.

The remaining titles are:


Title III – Tax-Related Health Provisions
Title IV – Application and Enforcement of Group Health Plan Requirements
Title V – Revenue Offsets

What is administrative
simplification?
Administrative Simplification is the establishment of a set
of standards for receiving, transmitting and maintaining
healthcare information and ensuring the privacy and
security of individual identifiable information. HIPAA
establishes standards for electronic health care
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transactions, national code sets, and unique identifiers for providers, health
plans, employers and individuals.

The HIPAA electronic data requirements are meant to encourage the


healthcare industry to move the handling and transmission of patient
information from manual to electronic systems in order to improve security,
lower costs, and lower the error rate.

Why Standardize
Electronic Transactions?

Standardization has been very effective in


many industries. Anywhere in America you can plug
in a US manufactured toaster and it will work
because a standard voltage was established for small
appliances. However, if you take the toaster to
Poland, it will only work if you use a special
converter. If you go to Sudan you will have to use
still another converter. The electronic claims process
in the United States is like the worldwide electric industry, no standardization.
When administrative simplification has been implemented, providers will be
able to submit an electronic claim in the same format to any healthcare plan.
What are the Specific
Provisions of Administrative
Simplifications?

Transaction and Code Sets: HIPAA mandates the development and use of
standardized transactions for the electronic exchange of data. In addition, the
use of standardized national codes sets to identify medical conditions,
treatments, providers, individuals, and procedures are required. These
regulations have been finalized and implementation is mandated for October
16, 2002, however approved extensions are available until October 16, 2003.

Implementation Guides for HIPAA Standard Transactions are defined and


numbered as follows:

Health care claims or coordination of benefits - Transaction Code 837

Payment & remittance advice - Transaction code 835


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Health claim status - Transaction code 276/277

Plan enrollment – Transaction code 834

Plan eligibility – Transaction code 270/271

Privacy: Provides for the protection of individually identifiable health


information that is transmitted or maintained in any form or medium.

These regulations have been finalized and implementation is mandated for


April 14, 2003.

The privacy rule will affect the day-to-day business operations of all
organizations that provide medical care and maintain personal health
information.

Security Standards: Security Standards are designed to


protect health care information as it is being stored and
exchanged. It also includes provisions to verify the
identity of those sending and receiving health care
information electronically. The security rule has not been
finalized, however, some of the security standards will be
implemented as part of the privacy rule.

How do the HIPAA Standards


Affect Paper Transactions?
The HIPAA legislation does not require providers to discontinue submitting
paper claims. However, HIPAA may require changes to several aspects of
paper billing, such as changes to codes and required data elements.

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Who Must Comply?


HIPAA requires the following entities to comply:

Health Care Providers: Any provider of medical or other health services, who
bills or is paid for healthcare in the normal course of business. Health care
includes preventive, diagnostic, therapeutic, rehabilitative, maintenance, or
palliative care, and counseling, service, assessment, or procedure with
respect to the physical or mental condition, or functional status of an
individual.

Health Care Clearinghouse: Entities that process or facilitate the processing


of health information received from other entities. It includes groups such as
physician and hospital billing services.

Health Plans: Includes individual or group plans that provide or pay the cost
of medical care and includes both the Medicare and Medicaid programs

What Does the Privacy


Rule Require?
Providers will be required to:

Guarantee patient privacy rights by:


Giving patients clear, written explanations of how the provider may use
and disclose their health information;
Ensuring patients can see and get copies of their records, and request
amendments;
Making a history of non-routine disclosures accessible to patients;
Obtaining patient consent before sharing their information for treatment,
payment, and health care operations;
Obtaining patient authorization for non-routine disclosures and most non-
health care purposes; and,
Allowing patients to request restrictions on the uses and disclosures of
their information.

Adopt written privacy procedures, to include:


Who has access to protected information,
How it will be used within the agency, and
When the information may be disclosed;

Ensure that business associates protect the privacy of health


information;
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Train employees in the provider’s privacy procedures; and,

Designate a privacy officer who is responsible for ensuring the


privacy procedures are followed.

What Should Providers be


Doing?
Assess impact of Transaction Code sets:

Evaluate current business processes to determine what needs to be done to


ensure timely compliance. Specific attention should be addressed to:
How claims are submitted
How patient records are maintained, released and communicated
How patient consent and authorization forms are maintained
How referrals are given or received

+ Assigned Security Responsibility:

The rule requires providers to assign security responsibility to a specific


individual or organization and document that assignment. This responsibility
includes the management and supervision of:

1. The use of security measures to protect data.


2. The conduct of the personnel in relation to the protection of data.

This assignment is important to provide organizational focus, indicate the


importance of security and pinpoint responsibility.

+ Media Controls:

The Billing office must develop formal, documented policies and procedures
that govern the receipt and removal of hardware and software (such as
diskettes, tapes, and computers). These policies are important to ensure that
media containing personal health information is protected and that those
persons who are responsible for hardware/software maintenance are aware of
their responsibilities under HIPAA. These controls include the following
mandatory implementation features:

Controlled access to media

Accountability (tracking mechanism)

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Data backup

Data storage

Disposal

+ Physical Access Controls:

The Billing Company must document formal policies and procedures for
limiting physical access, while ensuring that properly authorized personnel
can work freely. These controls include the following mandatory
implementation features:

Disaster recovery

Emergency mode operation

Equipment control (in and out of facility)

A facility security plan

Procedures for verifying access authorizations prior to physical access

Maintenance records

Need-to-know procedures for personnel access

Sign-in for visitors and escorts, if appropriate

Testing and revision

+ Policy/Guidelines on Workstation Use:

The organization must have a policy on workstation use. These documented


instructions must delineate the proper functions to be performed (i.e., logging
off before leaving a terminal unattended). This is crucial so that employees
understand the manner in which workstations must be used to maximize the
security of health information.

What are the penalties for


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Accreditation
Accrediting organizations may require compliance in future
HHS has the final responsibility for determining civil violations
and imposing penalties
Civil money penalties
$100 for each violation of a standard
Maximum of $25,000 per year
Per identical requirement or prohibition

For each offense of

Wrongful disclosures
Fined not more than $50,000
Imprisoned not more than one year

False pretenses
Fined not more than $100,000
Imprisoned not more than 5 years

Intent to sell, transfer or use


Fined not more than $250,000
Imprisoned not more than 10 years

###

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