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HEALTH CARE CLAIM PREPARATION AND TRANSMISSION

HEALTH CARE CLAIM PREPARATION AND TRANSMISSION. Chapter 6. Health Care Claim Preparation and Transmission. Learning Objectives Describe the process of using medical billing programs to prepare health care claims.

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HEALTH CARE CLAIM PREPARATION AND TRANSMISSION

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  1. HEALTH CARECLAIMPREPARATION AND TRANSMISSION Chapter 6

  2. Health Care ClaimPreparation and Transmission • Learning Objectives • Describe the process of using medical billing programsto prepare health care claims. • Briefly describe the information contained inthe five major sectionsof the HIPAA claim. • Discuss the importance and use of claim control numbersandline item control numbers. • Identify the three major methodsof electronic claim transmission. Chapter 6

  3. Audit-edit claim response Billing provider Birthday rule Claim attachment Claim control number CMS-1500 claim form Coordination of benefits (COB) Database Data element Destination payer Edit Electronic data interchange (EDI) HIPAA claim HIPAA Electronic Health Care Transaction andCode Sets (TCS) HIPAA Security Rule Key Terms Chapter 6

  4. Line item control number National Patient ID National Payer ID National Provider Identifier (NPI) Password Pay-to provider Place of service (POS) code Primary insurance Secondary insurance Referring physician Rendering provider Subscriber Taxonomy code Transactions Verification report Key Terms (cont’d) Chapter 6

  5. Claim Preparation Using Medical Billing Programs • Computerized billing and claims • Most medical practices use software programsto prepare claims • The program’s databases are set up with data about: • Physicians • Diagnosis and Procedure Codes • Fee Schedules • Insurance Carriers (payers) Chapter 6

  6. Claim Preparation Using Medical Billing Programs(cont’d) • To prepare a claim, a medical insurance specialist: • Recordsthe patient’s information, including primary insurance plan • Records the services, charges, and paymentsbased on the patient’s encounter form • Creates and transmitsthe claims to the appropriate payer Chapter 6

  7. RecordingPatients’ Information • Patient Information Forms • Data from new orupdatedforms is entered into program • New records are created for new patients • When a patient is covered by more than one Group Plan, the Medical Insurance Specialist must determine which plan is primaryand which issecondary. Chapter 6

  8. RecordingPatient’s Information • Primary Insurance (Payer) is a Health Plan that pays benefits first when a patient is covered by more than one Group Plan. • Secondary Insurance (Payer)is a Health Plan that pays benefits after the Primary Plan, when a patient is covered by more than one Group Plan. Chapter 6

  9. RecordingPatient’s Information • Dependent Child(ren) – the primary plan is determined by the Birthday Rule. • The Rule states that the parent whose day of birth is earlier in the calendar year is Primary. Chapter 6

  10. Coordination of Benefits • Coordination of Benefits (COB) is a provision which establishes the order in which insurance plans pay claims when an individual has coverage under more than one plan. • The insurance industry has developed a consistent and orderly way to determine which plan pays its full benefits and which plan pays a reduced amount (if any), which when added together equal more than a single plan's benefit, but not more than the total amount of the allowable charges incurred. • It is intended that individuals do notprofit when having coverage under more than one plan, and that Members and/or providers receive the appropriate amount of reimbursement for medical services. Chapter 6

  11. Coordination of Benefits • Coordination of Benefits (COB) applies when: • Both spouses cover their family through their employers • Both spouses are covered by the same insurance carrier but work for different employers. • Member is Federal Medicare eligible • Member is retired from one job and actively employed elsewhere • Member is injured in an automobile accident • Member is injured on the job • The primary subscriber has more than one employer Chapter 6

  12. Coordination of Benefits • The following criteria is used to determine the order of benefits: • The subscriber's active employee plan is primary over their spouse's coverage • Active employee coverage is primary over inactive (or retiree) employee coverage • If the Member has two policies that are both active, the policy that has been active the longest is primary. Chapter 6

  13. Coordination of BenefitsBirthday Rule • Birthday Rule: When a dependent child is covered under both parents' health plans, the plan of the parent whose birthday falls earlier in the calendar year pays first. • When a newborn is covered for the first 31 days (enrolled or not enrolled), the plan of the parent whose birthday falls earlier in the calendar year pays first. Chapter 6

  14. Coordination of BenefitsBirthday Rule • Only the month and the day are considered,not the parents' years of birth. FOR EXAMPLE: • If the mother's birthday month is March and the father's birthday month is June, then the mother's health plan is primary • If both parents have the same birthday, then the plan which covered the parent longer is primary over the plan which covered the parent for a shorter time. Chapter 6

  15. Coordination of Benefits • The Provider is responsible for supplying information about the Secondary Insurance & coverage to the Primary Payer • The Providers must also include this information in the Insurance Claim Form. Chapter 6

  16. Coordination of Benefits– (cont.) • When the RA (remittance advice) is received the Medical Insurance Specialist prepares another Claim Form for the Secondary Plan. The claim reports: • The Amount the first Insurance Policy paid • The Patient Balance, if any • After both carriers have made payments, any unpaid bills are submitted to the patient (depending on deductible, coinsurance, PAR, non-PAR, etc) Chapter 6

  17. Recording Services,Charges,& Payments for Patients’ Encounter • Patient’s Encounter Form • DiagnosisandProcedure Codes • Charges for Services and Procedures • PatientPaymentInformation • Patient’s Insurance Coveragefor visit is selected • Patient’s Providerfor visit is entered into the system Chapter 6

  18. Creating & Transmitting Claims To Payers • Electronic Claim Files • Medical insurance specialist instructs program to create claimsfor appropriate payer • Program draws on databases tocreate claim files • Filesmay then be printed, butmost are submittedelectronicallyto payer Chapter 6

  19. Accuracy & Security IssuesMedical Billing Programs • The Major Databases in Billing Programs are: • Provider – The provider database has information about the physician(s), medical office, the practice name, phone number, etc. • Patient/Guarantor – The database where each patient information form is stored, such as name, address, phone, birth date, social security number, etc. Chapter 6

  20. Accuracy & Security IssuesMedical Billing Programs • The Major Databases in Billing Programs are: • Insurance Carrier – This database contains the names, addresses,plan types, and other data about the major health plans used by the practice’s patients. • Diagnosis Codes – This database contain the ICD-9 Codes that indicate the reason a service is provided. • The Codes stored are those most frequently used by the Practice. Chapter 6

  21. Accuracy & Security IssuesMedical Billing Programs • The Major Databases in Billing Programs are: • Procedure Codes – The Procedure Code database contains the data needed to create charges. • The CPT Codes most often used by the practice are selected for this database. • Transactions – This database stores information about each patient’s visit, charges and the related diagnoses and procedures, as well as received and outstanding payments. Chapter 6

  22. Data Entry in Computer Billing • Tips for accurate Data Entry • Do not use prefixesfor names (avoid Mr., Ms., etc.) • Do notuse special characters(hyphens, commas, etc.) • Use only valid datain all fields (avoid words such as same) • Enter the required number of charactersfor each data element, but do not worry about the format—most programs reformat data correctly Chapter 6

  23. Data Security • HIPAA Security Rule • Sets standards for protecting PHIwhen it is maintained or transmitted electronically • PHI:Protected Health Information • Office’s Database files contain PHI Chapter 6

  24. Data Security • Security Measures in a Medical Office • Access control and passwords • Users are given IDs & Passwords that will permit them to use the files that they have been granted access. • Backup Files • The process of copying files to another medium so that they will be preserved in case the originals are not longer available. • Security policy • A Process must be in place to train staff on protecting PHI when electronically stored and/or sent. Chapter 6

  25. Types of Claims • HIPAA (Health Insurance Portability & Accountability Act of 1996) Claim • Electronic transaction called the837 claim • Paper Claim • CMS-1500 claim form (formerly the HCFA-1500claim form) Chapter 6

  26. Types of Claims(cont’d) • HIPAA claim • Follows requirements of the HIPAA Electronic Health Care Transaction and Code Sets(TCS) • Must be sent as an electronic file with required format • CMSmandates use of this form for all Medicare claims • Required or preferred by most other payers as well • Paper Claim • May be used for Medicare claims byvery small practices only • Still accepted by most payers Chapter 6

  27. Preparing HIPAA Claims • The HIPAA Claim has Five Major Sections 1Provider information 2 Subscriber and patient information 3 Payer information 4 Claim details 5 Services Chapter 6

  28. Provider Information • Includes Addresses and NPIs (National Providers Identifier)of: • Billing provider—organization or persontransmitting the claim to payer • May be the medical practice or an outside organization(billing service or clearinghouse hired by the practice) • Pay-to provider—organization or person receiving payment • If billing provider and pay-to provider are the same, not necessary to report pay-to provider Chapter 6

  29. Provider Information (cont’d) NPI • National Provider Identifier • Ten-digit number • PIN (Provider Identification Number • UPIN (Unique Provider Identification Number) • Recent HIPAA rule: • Until assigned,tax identification numberorother identifiercan be used in place ofNPI Chapter 6

  30. Taxonomy Code • Taxonomy Code – is a ten-digit number that stands for a physician’s medical specialty. • Example: • 207NP0225X for Pediatric Dermatology Chapter 6

  31. Subscriber/Patient Information • Subscriber • Policyholder or Guarantor • May be thepatient,but if not, patient information also required • Data Elements: • Subscriber’s name, health plan number, policy number and plan name, claim filing indicator code (shows type of plan, such as HMO) Chapter 6

  32. Subscriber/Patient Information (cont’d) • Relationship to Patient • If the subscriber is the patient, select“self” • When the subscriber and patient are different, selectthe correct relationship from list of options • Software stores corresponding code Chapter 6

  33. Subscriber/Patient Information (cont’d) • Patient Information • Data Elements: • Name, address, gender, date of birth, primary identifier(such as a health plan member ID—to be replaced soon by National Patient ID under HIPAA) • Possibly secondary identifier (such as SSN) Chapter 6

  34. Payer Information • Destination payer • Payer receiving the claim • Data Elements: • Payer’s name and ID (to be replaced with National Payer ID when legislated) • Assignment-of-benefits code Chapter 6

  35. Claim Information • Details of the claim • Data elements: • Claim control number, for tracking • Assigned by the medical insurance specialist • Maximum of 20 characters; can incorporate account number but should not be the same • Total charges and patient payment, if any • Place of service (POS) code; diagnosis codes • Rendering or referring provider data, if any Chapter 6

  36. Service Line Information • Service Line Information – List the Services performed for patient • Each service is listed onseparate line • Data elementsfor each service: • Line item control number, for tracking payments from insurance carrier • Date of service • Procedure code • Diagnosis code links • Charge Chapter 6

  37. TransmittingHIPAA Claims • Electronic Data Interchange (EDI) • HIPAA requires particular format for transmission • Called X12transmission • Patients’PHImust be secure and private, when claims are sent • Claim Attachments • HIPAA electronic standard underway • At present, may be paper or electronic Chapter 6

  38. Methods ofSending Claims • Three Major methods for sending electronic claims • Clearinghouse • Direct Transmission • Direct Data Entry (DDE) • Most medical offices use Clearinghouses for HIPAA EDI Format Chapter 6

  39. Methods ofSending Claims (cont’d) • Clearinghouse • Acts as an intermediary between provider and payer • Reformats data from providerto a formaccepted by the payer • Charges feefor service • Performs edits • Checks claim for missing or incorrect data • Createsaudit/edit report for provider • Lists errors and sends claim back for correction (dirty claims) Chapter 6

  40. Methods ofSending Claims • Three Major methods for sending electronic claims – Cont. • Direct Transmission - Provider & Payer receive payment directly. • Direct Data Entry (DDE) - Office uses the Internet-based Service connected to the payer where data elements are keyed. Chapter 6

  41. PreparingPaper Claims • CMS-1500 (HCFA-1500) claim form • Paper claim containing 33 form locators • Form locators 1-13 • Patient and patient’sinsurance coverage • Form locators 14-33 • Provider and transactionsdata (diagnoses, procedures,charges) • Claim is printed and sentto payer Chapter 6

  42. Matching 837 NPI POS code CMS-1500 Paper claim form Ten-digit number Another name for the HIPAA claim A number that shows where a patient received services Quiz Chapter 6

  43. Critical Thinking • Name one advantage and one disadvantageof electronic claims. Advantagessuch as: lower costs, reduced rejection,faster payment,access to status reports. Disadvantagessuch as: initial expense,security, disruption due to power failure or equipment problems, unable to include attachments. Chapter 6

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