BILLING, REIMBURSEMENT, AND COLLECTIONS

1. BILLING, REIMBURSEMENT, AND COLLECTIONS Chapter 9

2. Billing, Reimbursement,and Collections • Learning Objectives • Compute charges for medical services and create patient statements based on the patient encounter form and the physician's fee schedule. • Explain the process of completing and transmitting insurance claims. • Discuss the advantages of using electronic claims. • Describe the different types of billing options used by medical practices for billing patients. • Discuss the procedures and options available for collecting delinquent accounts. Chapter 9

3. Clearinghouse CMS-1500 claim form Collection agency Collection at the time of service Cycle billing Dependent Electronic claims EOB ERA Fee adjustment Fee schedule Guarantor Monthly billing Patient information form Patient statement Terminated account Third-party liability Write-off Key Terms Chapter 9

4. Patient Encounter Form • Facilitates billing process • Used to record details of each patient encounter for billing and insurance • Includes • Patient information • Date • Diagnosis for current visit • Procedure information • Financial information Chapter 9

5. Patient Encounter Form (cont’d) • Usually preprinted with common diagnoses/procedures • New form attached to medical record for each visit • Physician fills in form as visit/procedures progress • Form is returned to administrative medical assistant for use in billing Chapter 9

6. Fee Schedule • Lists the usual procedures performed in the office and corresponding charges • There may be more than one fee schedule, depending on insurance plan participation • Administrative medical assistant must be familiar with office policy regarding financial arrangements for payment Chapter 9

7. Patient Statements • All transaction data stored in patient ledger • Statement shows • Services rendered • Charges • Payments made • Balance owed • Statement is sent to patient or guarantor Chapter 9

8. Computerized Billing • Used to print patient statements and blank patient encounter forms • Also used to produce reports such as • Day sheets • Monthly reports • Aging reports • Departmental income • Physician income • Procedure code usage Chapter 9

9. Insurance Claims • Most practices complete the insurance form for the patient • Form captures both clinical and financial information • Transmitted to patient’s insurance carrier • Partial or full reimbursement Chapter 9

10. The CMS-1500 Claim Form • Most common paper claim form • Prepared by medical insurance specialist • Data is collected from • Patient information form • Patient encounter form • Transmitted via mail Chapter 9

11. The HIPAA Claim Form • Standard format for electronic claims • Accepted by government and private carriers • Prepared on computer by medical insurance specialist • Transmitted via a modem to insurance company • Faster and easier to track Chapter 9

12. Third-Party Payers • Insurance carriers • Review claim for accuracy and completeness • Evaluate treatment received • Decide what benefits are due to the insured • Carrier may • Pay the claim • Deny the claim • Pay less than the full amount Chapter 9

13. ERA/EOB • ERA is electronic • EOB is paper • Explains reimbursement decision • Amount of benefit • Benefits paid to • Paid on behalf of • How determined • May include check or record of EFT Chapter 9

14. ERA/EOB (cont’d) • Administrative medical assistant checks report against original claim • Files with patient’s financial records • Updates patient’s ledger • Deposits check or records EFT Chapter 9

15. Patient Billing • After insurance claim process has been completed • Patient may be billed for amounts not fully reimbursed by the carrier • Administrative medical assistant acts as go-between for carrier and patient Chapter 9

16. Completing the Claim Form • Verify insurance information • Use phone, fax, or Web to verify coverage • Accuracy of data • Contract numbers • Patient’s identification information • Insured’s information • Secondary carriers, if any • Illness or injury related to work or accident • Diagnosis codes • Procedure codes and charges • Provider information Chapter 9

17. Computerized billing and claims Most practices use software programs, such as NDCMediSoft, to store information about patients and insurance plans Using Computers to Create Claims • The stored information is called a database • Claims created by billing programs may be printed or submitted electronically Chapter 9

18. Electronic claims Transmitted via modem Receive immediate feedback Faster reimbursement Greater accuracy Less expensive Paper claims Sent through mail Must be keyed or scanned by insurance company into its computer system Possibility of errors Electronic vs. Paper Claims Chapter 9

19. Clearinghouses • Service bureau • Acts as an intermediary between provider and payer • Reformats data from provider to a form accepted by the payer Chapter 9

20. Follow-up • ERA/EOB checked • Procedures listed on ERA/EOB match claim • Unpaid charges explained • Codes on ERA/EOB match claim • Payment listed for each procedure is correct Chapter 9

21. Follow-up (cont’d) • Tracer • Contains basic billing information and asks carrier about status • Paper or electronic • Some providers automatically rebill after 30 days Chapter 9

22. Follow-up (cont’d) • Denied or late claims • Unclear denial or incorrect payment should be followed up to determine cause • Carrier asks for more information to process claim • Claims investigated for preexisting conditions Chapter 9

23. Follow-up (cont’d) • Provider resubmits claims on own • Mistake in billing • Claim overlooked • Insurance carrier asks for resubmission • Incorrect codes have been submitted • Information is incomplete or missing • Charges do not total properly • Appeal process Chapter 9

24. Patient Payments • Cash flow • Payment methods • Collection at the time of service • Monthly billing • Fixed weekly or monthly payments • Bill health insurance carriers • Cash-only basis Chapter 9

25. Cash Payments • Each payment is entered in • Patient’s ledger • Daily record • Payments given to assistant, not physician • Receipt must be given • Safeguard money • Endorse checks for deposit only • Daily bank deposits Chapter 9

26. Patient Statements • Monthly billing • Bills sent once a month • Timed near end of month to coincide with patient’s other bills • Cycle billing • Avoids once-a-month billing workload • Stabilizes cash flow • Accounts divided into equal groups • Each group billed on a different date Chapter 9

27. Payment Plansand Adjustments • Payment plans • Patients unable to pay bill in one lump sum • Agreement in writing • Fee adjustment • Write-offs—PAR provider not permitted to bill for difference between amount charged and amount reimbursed • Physician may choose to reduce or cancel a bill • Written evidence; don’t delete transactions Chapter 9

28. Health Insurance • Provides payment for a portion of medical expenses • Participating (PAR) providers usually file claims for patients • Patients responsible for copayments • Non-participating (nonPAR) providers expect payment at time of service • Receipt given to patient for payment • Patient may file claim Chapter 9

29. Third-Party Liability • Person other than patient is responsible for charges • Assistant must obtain verification from third party • Must be in writing; can not be oral • Guarantor • Person who is the policyholder for the patient • Dependent children Chapter 9

30. Collections • Effective communication with patients is first step in collections process • Notify patient in advance of probable costs not covered by insurance plans • Have patient agree in writing to pay for noncovered services • Advance Notice for Noncovered Services • Make payment arrangements before services are performed Chapter 9

31. Collections (cont’d) • Collection ratio • At least 1/3 of the outstanding accounts should be collected each day • Aging accounts • Status: 30, 60, or 90 days past due • Laws regulating collections • Fair Debt Collection Practices Act of 1977 • Telephone Consumer Protection Act of 1991 Chapter 9

32. Collections (cont’d) • Collection methods • Office policies • Federal laws and state laws • Telephone • Letter • Terminated accounts • Physician may terminate the relationship due to lack of payment • Collection agencies Chapter 9

33. Collections (cont’d) • Statute of Limitations • Set by each state • Truth in Lending Act of 1960 • For payment plans over 4 payments in length, with finance charges • Regulation Z requires a disclosure form to be completed and signed by practice manager and patient Chapter 9

34. Collections (cont’d) • Uncollectable accounts • All collection attempts have been exhausted • Would cost more to continue collection attempts than the amount due • Written off as bad debt Chapter 9

35. Quiz • Collections are made on current bills. (T/F) False, collections are begun after the bill is more than 30 days overdue. • An appeal is a formal method of asking for reconsideration of a denied claim. (T/F) True, the appeal is done in writing. • The ERA/EOB is submitted to the insurance carrier as part of the claim. (T/F) False, the insurance carrier uses ERA/EOB to inform the patient/provider of the status of claims. Chapter 9

36. Critical Thinking • List some advantages of electronic claims. Advantages of electronic claims: lower costs, reduced rejection, greater accuracy, faster payment, access to status reports. Chapter 9