Medical Billing Training

By: Bilal Imtiaz

Manager Training
Overview Of Health Care
 Medical billing
 Insurances
 Terminology
Healthcare in United States
• The United States does not have a universal healthcare program, unlike other advanced industrialized
countries.
• Health care facilities are largely owned and operated by private sector businesses. 58% of US community
hospitals are non-profit, 21% are government owned, and 21% are for-profit.
• In 2018, 57 percent (2,937) of the 5,198 short-term acute care hospitals in the U.S. were nonprofit; 25
percent (1,296) were for-profit; and 19 percent (965) were public (state or local government–owned). In
addition, there were 209 federal government hospitals.
• United States spent $3.6 trillion on health, or $11,172 per person in 2018. The National Health Expenditure
Accounts (NHEA – CMS) reported that the health spending in 2018 was 17.7% share of National Gross
Domestic Product (GDP).
• According to the U.S. Census Bureau, The uninsured rate and number of uninsured increased from 2017
(7.9 percent or 25.6 million).
Healthcare in United States
• In 2019, 8.0 percent of people, or 26.1 million, did not have health insurance at any point during the year,
according to the CPS ASEC. The percentage of people with health insurance coverage was 92.0 percent. The
uninsured rate and number in 2018 was 8.5% and 27.5 million respectively.
• Healthcare coverage is provided through a combination of private health insurance and public health
coverage. In 2019, Private health insurance coverage (68.0%) was more prevalent than public coverage
(32.0%)
• In 2019, the percentage of people with employer-provided coverage was slightly higher than in 2018, i.e.
from 55.2 percent in 2018 to 55.4 percent in 2019.
• The percentage of people with Medicaid coverage at the time of interview decreased to 19.8 percent in
2019, down from 20.5 percent in 2018.
• Between 2018 and 2019, the percentage of people without health insurance coverage decreased in one
state and increased in 19 states.
• All states and the District of Columbia had a lower uninsured rate in 2019 than in 2010.
Type of medical billing

 In House billing
 Outsource billing

In House billing is when a physician or a Group uses the billing software in their own clinic/Hospital and
entered demographics, Claims, insurance or other and submit and follow up is done by their own personals.

Outsource billing an outside organization prepares medical claims on the doctor’s behalf. Cash flow
is much better when proper billing is performed.
Revenue cycle management
Entities
• Going to the doctor may seem like a one-to-one interaction, but in reality it’s part of a large, complex
system of information and payment. Insured patient may only have direct interaction with one entity i.e.
healthcare provider, however, this check-up is actually part of a three-party system.
• The first party is the patient.
• The second party is the healthcare provider. The term ‘provider’ includes hospital, physicians, physical
therapists, emergency rooms, outpatient facilities, and any other place where medical services are
performed
• The third party is the insurance or payer
• The entire procedure involved in this is known as the billing cycle sometimes referred to as Revenue Cycle
Management. It involves managing claims, payments and account receivables
Revenue cycle
 Terminologies,
abbreviations, &
acronyms
Acronyms
• AMA: American Medical Association
• CMS: Centers for Medicare and Medicaid Services. Federal agency which administers Medicare, Medicaid, and other health
programs, in addition to implementing HIPPA. Formerly known as the HCFA (Health Care Financing Administration).
• CPT: Current Procedural Terminology. The 5 digit code assigned to a procedure performed by a physician
• DME: Durable Medical Equipment - Medical supplies such as wheelchairs, oxygen, catheter, glucose monitors, crutches,
walkers, etc.
• DOS: Date of Service: Date when health care services were provided.
• Dx: Abbreviation for diagnosis code
• EOB: Explanation of Benefits
• ERA: Electronic Remittance Advice
• E/M: Evaluation and Management section of the CPT codes. These are the CPT codes 99201 thru 99499 most used by
physicians to access (or evaluate) a patients treatment needs.
• ICD: International Classification of Diseases
• NPI: National Provider Identifier
• DOB: Date of Birth
Acronyms
• POS: Place of Service. Used on medical insurance claims, such as the CMS 1500 block 24B. A two digit code which defines where the
procedure was performed. For example, 11 is for the doctor’s office, 12 is for home, 21 is for inpatient hospital, etc.
• COB: Coordination of Benefits. When a patient is covered by more than one insurance plan. One insurance carrier is designated as the
primary carrier and the other as secondary.
• MSP: Medicare Secondary Payer
• EDI: Electronic Data Interchange. It is the electronic interchange of business information using a standardized format; a process which
allows one company to send information to another company electronically instead of paper.
• EFT: Electronic Funds Transfer. An electronic transfer of money. This allows funds to be transferred, credited, or debited to a bank
account, eliminating the need for paper checks.
• MRN: Medical Record Number. A unique number assigned to patient’s record, by the provider or health care facility, to identify
patient’s medical record when required.
• PCP: Primary Care Physician. The physician who provides initial care and coordinates additional care if necessary.
• PEC: Pre-existing Condition. A medical condition that is diagnosed or treated in a certain period of time just before a patient’s effective
date of insurance coverage. A Pre-existing condition may not be covered for a certain amount of time, as defined in the insurance
terms. It is typically from 6 to 12 months.
• SSN: Social Security Number. This is a unique 9-digit number assigned by the government to all the citizens of the USA.
Acronyms
• AOB: Assignment of Benefits
• DME: Durable Medical Equipment
• BCBS: Blue Cross Blue Shield
• EMR: Electronic Medical Record
• SOF: Signature on File
• ATD: Applied To Deductible: This is the amount of the charges, determined by the patients insurance plan, the patient owes the provider.
• PHI: Protected Health Information
Key Terms
• CMS 1500: Medical claim form established by CMS to submit paper claims to Medicare and Medicaid. Most commercial insurance
carriers also require paper claims be submitted on CMS1500's. The form is distinguished by it's red ink.
• Fee Schedule: Cost associated with each CPT treatment billing code for a providers treatment or services.
• Inpatient: Hospital stay of more than one day (24 hours).
• Premium: The sum a person pays to an insurance company on a regular (usually monthly or yearly) basis to receive health
insurance.
• Medigap: Medicare supplemental health insurance for Medicare beneficiaries which may include payment of Medicare
deductibles, co-insurance and balance bills, or other services not covered by Medicare.
• Aging: Refers to the unpaid insurance claims that are due past 30 days. Most medical billing software's have the ability to
generate a separate report for insurance aging and patient aging. These reports typically list balances by 30, 60, 90, and 120 day
increments.
• Beneficiary: Person or persons covered by the health insurance plan and eligible to receive benefits.
• Maximum Out of Pocket: The maximum amount the insured is responsible for paying for eligible health plan expenses. When this
maximum limit is reached, the insurance typically then pays 100% of eligible expenses.
• Network Provider: Health care provider who is contracted with an insurance provider to provide care at a negotiated cost.
Key Terms
• Clean Claim: Medical billing term for a complete submitted insurance claim that has all the necessary correct information without
any omissions or mistakes that allows it to be processed and paid promptly.
• Clearing House: Acts as an intermediary between billing service provider and insurance companies. It provided electronic/paper
claim submission and patient billing and eligibility services.
• Capitation: An arrangement between a healthcare provider and an insurance payer that pays the provider a fixed sum for every
patient they take on. Capitated arrangements typically occur within HMOs
• Outpatient: Typically treatment in a physicians office, clinic, or day surgery facility lasting less than one day.
• Patient Responsibility: The amount a patient is responsible for paying that is not covered by the insurance plan.
• Scrubbing: A process by which insurance claims are checked for errors before being sent to an insurance company for final
processing. Providers scrub claims in an attempt to reduce the number of denied or rejected claims.
• Self Pay: Payment made at the time of service by the patient.
• Subscriber: Medical billing term to describe the employee for group policies. For individual policies the subscriber describes the
policyholder.
Key Terms
• Co-Insurance: Percentage or amount defined in the insurance plan for which the patient is responsible.
• Contractual Adjustment: The amount of charges a provider or hospital agrees to write off and not charge the patient
per the contract terms with the insurance company.
• Co-Pay: Amount paid by patient at each visit as defined by the insured plan.
• Credentialing: This is an application process for a provider to participate with an insurance carrier. Many carriers now
request credentialing through CAQH. The CAQH credentialing process is a universal system now accepted by insurance
company networks.
• CAQH: Council for Affordable Quality Healthcare
• Day Sheet: Summary of daily patient treatments, charges, and payments received.
• Deductible: Amount patient must pay before insurance coverage begins.
• Group Name: Name of the group or insurance plan that insures the patient.
• Group Number: Number assigned by insurance company to identify the group under which a patient is insured.
• Guarantor: A responsible party and/or insured party who is not a patient.
• Hospice : Inpatient, outpatient, or home healthcare for terminally ill patients.
Insurances
How it works
• Health care in the United States can be very expensive. A single doctor’s office visit may cost several
hundred dollars and an average three-day hospital stay can run tens of thousands of dollars (or even
more) depending on the type of care provided
• Health insurance offers a way to reduce such costs to more reasonable amounts.
• The consumer pays an up front premium to a health insurance company and that payment allows the
consumer to avail medical services as per the insurance plan that they have enrolled for
• There are many different types of health insurance plans in the U.S. and many different rules and
arrangements regarding care
• Public insurance programs are funded by government which collect money through taxes
• Private insurers collect money in the form of premiums, paid by individuals or their employers then use
that pool of money to pay the claims when a customer gets sick
• Health coverage reduces your risk of financial disaster because your health costs are sp
Types of insurance
Health Insurance:
Health insurance is a type of insurance coverage that pays for medical, surgical and sometimes dental
expenses incurred by the insured. Health insurance can reimburse the insured for expenses incurred from
illness or injury, or pay the care provider directly.

Worker’s Compensation:
Worker’s Compensation is a system of compensation for work-related injuries or death, paid for by
employer’s compensation insurance contributions. Worker Compensation system are established by laws in
each state.

No Fault/Auto Insurance:
No-fault insurance is a type of coverage in which someone involved in a car accident is covered for damages
including payment of medical bills and lost wages, no matter who caused the accident.
Insurance
• Health insurance protects people from high, unexpected costs. According to estimates, the average cost of a 3-day
hospital stay is $30,000, or the cost of fixing a broken leg can be up to $7,500.
• Health insurance provides people with a much needed financial backup at times of medical emergencies.
• Health insurance can reimburse the insured for expenses incurred from illness or injury, or pay the care provider
directly.
• Medical insurance can be provided by both the government and private companies. Hence there are public insurance
plans and private insurance plans, such as,

Public Insurance Programs:

• Medicare
• Medicaid
• Tricare

Private Insurance Companies:

• Blue Cross Blue Shield
• Cigna
• United Healthcare
• Aetna
Medicare
What is Medicare
• Medicare is the federal government program that provides health care coverage (health
insurance) if a person is 65+, under 65 and receiving Social Security Disability Insurance (SSDI) for
a certain amount of time, or under 65 and with End-Stage Renal Disease (ESRD)
• The Centers for Medicare & Medicaid Services (CMS) is the federal agency that runs Medicare.
• The program is funded in part by Social Security and Medicare taxes citizens pay on their income,
in part through premiums that people with Medicare pay, and in part by the federal budget.
Medicare Basics
Medicare is divided into four Parts: A, B, C and D
• Part A covers hospital (inpatient, formally admitted only), skilled nursing (only after being
formally admitted to a hospital for three days and not for custodial care), and hospice
(compassionate care for people in the last phases of incurable disease) services.
• Part B covers outpatient services including some providers' services while inpatient at a hospital,
outpatient hospital charges, most provider office visits even if the office is "in a hospital", and
most professionally administered prescription drugs.
• Part C is an alternative called Managed Medicare or Medicare Advantage which allows patients
to choose health plans with at least the same service coverage as Parts A and B (and most often
more), often the benefits of Part D, and always an annual out-of-pocket spend limit which A and
B lack. A beneficiary must enroll in Parts A and B first before signing up for Part C
• Part D covers mostly self-administered prescription drugs.
Medicare Card
Medicaid
What is Medicaid
• Medicaid is a public insurance program that provides health coverage to low-income families and
individuals, including children, parents, pregnant women, seniors, and people with disabilities.
• It was created in 1965 and is funded jointly by the federal government and the states.
• Each state operates its own Medicaid program within federal guidelines.
• It is available only to individuals and families who meet specific criteria based on income. It is only
available to U.S. citizens, permanent residents, or legal immigrants.
• Medicaid covers doctor visits, hospital stays, long-term medical care, custodial care, and other
health-related costs.
• As of May 2020, approximately 66.8 million people were covered by Medicaid
What is Medicaid
• Medicaid coverage is broken down into four groups: adults under 65 years of age, seniors aged 65
years or older, children, and people with disabilities
• Eligibility is determined on income in relation to the Federal Poverty Level (FPL).
• The FPL is used to determine whether a family or individual's income allows them to qualify for
federal benefits.
• If an individual's income is less than 100% to 200% of the FPL, and they are either disabled, a child,
pregnant, or elderly, there will be a program available for them. If their income is less than 138% of
the FPL, then there may be a program available for them.
• The income taken into consideration on determining eligibility is an individual's modified adjusted
gross income (MAGI). This is taxable income plus certain deductions, such as Social Security
benefits and tax exempt interest.
Medicaid Card
Tricare
What is Tricare
• Tricare: Tricare is a government managed health insurance program for military members, their
dependents, retirees, and survivors. It is offered to:

 Military members and their families

 National Guard/Reserve members and their families

 War Survivors

 Some former spouses

 Medal of Honor recipients and their families

Tricare Card
Private Insurances
What is Tricare
• Private health insurance refers to plans provided by private companies, and are often provided by
an employer or other organization with which the policyholder is affiliated.
• It can be purchased on a group basis or by individual consumers.
• A majority of Americans receive their health coverage through private health insurance plans.

• Employer Sponsored: Insurance plan is provided to employees (as part of group insurance), by
their employers as a benefit of employment. The employer pays the premium to insurance
companies.
• Individual Health Insurance: These insurance plans are individually purchased by people for
themselves and their families. The costs of these plans may vary greatly, depending on what kind
of plan is chosen but overall, individual health insurance plans tend to cost less than group
insurance plans.
Private/Commercial Health Insurance Payers
• Blue Cross Blue Shield Association
• Cigna
• Aetna
• United healthcare
Cost sharing
Cost Sharing in Medical Insurance
Copay: It is a set price patient pays when they visit the doctor, and is a small portion of the total bill.
Copays vary by policy and can change if patient sees a specialist instead of regular doctor or seeks
treatment out of their provider network
Deductible: It is the amount of patient’s medical costs that they have to pay before their health
insurance begins to pay, this amount may vary between different plans
Coinsurance: Some plans have coinsurance which is the way in which patient and health insurer share
the costs of the care after patient meets their deductible.
Maximum out of pocket: It is the maximum a patient could be responsible for paying for, during the
insurance plan year for covered expenses
What is Copay
• A copay is a fixed out-of-pocket amount paid by an insured for covered services. It is a standard
part of many health insurance plans. Insurance providers often charge co-pays for services such as
doctor visits or prescription drugs.
• Copays are a specified dollar amount rather than a percentage of the bill, and they usually paid at
the time of service.
• Not all medical services ask you for a copay. For example, some insurance companies do not
require a copay for annual physicals.
• Insurance providers often charge higher copays for appointments with out-of-network providers.
• Copay amounts may change annually.
• Insurance providers often charge higher copays for appointments with out-of-network providers.
How it works
What is Deductible?
• A deductible is the amount patient pays each year for most eligible medical services or
medications before their health plan begins to share in the cost of covered services.
• Not all costs count toward patient’s deductible. Monthly premiums don’t count toward their
deductible.
• Money they spend on preventive care, like for an annual check-up with their primary care
physician, may not count because insurers already cover all or most of those costs.
• For example, if a patient has a $2,000 yearly deductible, they will need to pay the first $2,000
of their total eligible medical costs before their plan helps to pay
How it works
What is Coinsurance?
• Coinsurance is the amount, generally stated as a fixed percentage, an insured must pay
against a claim after the deductible is satisfied.
• In health insurance, a coinsurance facility is similar to a copayment provision, except copays
require the insured to pay a set dollar amount at the time of the service.
• One of the most common coinsurance breakdowns is the 80/20 split.
• Under the terms of an 80/20 coinsurance plan, the insured is responsible for 20% of medical
costs, while the insurer pays the remaining 80%.
• However, these terms only apply after the insured has reached the terms' deductible amount.
How it works
Out of Pocket Maximum
• An out-of-pocket maximum is a cap, or limit, on the amount of money patient has to pay for
covered health care services in a plan year.
• If patient meets that limit, their health plan will pay 100% of all covered health care costs for
the rest of the plan year.
• Some health insurance plans call this an out-of-pocket limit.
• A plan year is the 12 months between the date patient’s coverage is effective and the date
their coverage ends.
• Costs you pay for covered health care services count toward your out-of-pocket maximum.
• This may include costs that go toward your plan deductible and your coinsurance.
• It may also include any copays you owe when you visit doctors.
Out-of-pocket maximum - Example
• Jane Q. has a health plan with a $2,500 deductible, 20% coinsurance, and a $4,000 out-of-pocket
maximum.
• At the start of her plan year she has an unexpected illness. She sees her regular doctor and a number
of specialists. She goes through a lot of medical tests.
• She receives medical bills totaling $2,500 and pays these costs. This meets her deductible. Since she
pays this money out of her own pocket, it also counts toward her out-of-pocket maximum.
• She continues to see specialists regularly and has to have another round of tests.
• She pays 20% coinsurance as her share of these medical costs, while her health plan pays the other
80%. Her bills amount to $1,500. This also counts toward the out-of-pocket max.
• At this point, Jane has spent a total of $4,000 and has met her out-ofpocket maximum.
• Now, her health plan will begin to pay 100% of her costs for covered care for the rest of the plan year.
Types of insurance plans
Types of insurance plans

• Health Maintenance Organizations (HMOs).

• Preferred Provider Organizations (PPOs).

• Point-of-service (POS)

• Exclusive Provider Organization (EPO)

Health Maintenance Organization (HMO)

An HMO delivers all health services through a network of healthcare providers and
facilities. With an HMO, patients may have:
• The least freedom to choose their health care providers.
• The least amount of paperwork compared to other plans.
• A primary care doctor to manage their care and refer them to specialists when they
need one so the care is covered by the health plan.
• Most HMOs will require a referral before a patient can see a specialist.
Preferred Provider Organization (PPO)

With a PPO, patients may have:

• A moderate amount of freedom to choose their health care providers - more than an
HMO; they do not have to get a referral from a primary care doctor to see a specialist
• Higher out-of-pocket costs if they see out-of-network doctors vs. in-network providers
• More paperwork than with other plans if they see out-ofnetwork providers
Point-of-service (POS)

• POS plans combine features of an HMO and a PPO Plan.

• With a POS health plan, you have more choices than with an HMO.
• But with a POS plan you have the choice to use doctors, hospitals, and other providers
that are not in your health plan’s network.
• However, you will have to pay more for using out-of-network providers.
Exclusive provider organization (EPO)

• EPO stands for “Exclusive Provider Organization” plan.

• As a member of an EPO, you can use the doctors and hospitals within the EPO network, but
cannot go outside the network for care. There are no out of network benefits.
• In an EPO Plan you don’t need to get a referral to see a specialist. You want to receive a
much lower negotiated costs with an EPO plan than you would with an HMO or PPO plan.
Comparison
HMO vs PPO
Documentation
 Day sheet
 Demographic form
 Superbill
Sign-in Sheet (Day Sheet)

• What is sign in sheet?

Sign-in sheet is an important part of office documentation which keeps a record of number of
patients who visited the office on a particular day.
• Why it is used?
Sign-in sheet is used by the front desk staff of most doctor offices to have a record that how many
patients visited the doctor for treatment on a particular date. It is also a proof that the patient was
in the office on a particular date to avoid a disgruntled patient’s claim that he was billed for
services rendered on a day he was not in the doctor's office. It helps to compare the number of
super bills received with the number of patients mentioned on the sign-in sheet in order to track
any missing super bill.
Sign-in Sheet (Day Sheet)

Information on the Sign-in Sheet:

• Patient’s name
• Type of patient: New or Established
• Time of check in: Time when patient arrives at the office.
• Any change(s) in the demographics like insurance, address or phone number etc.
• Payment: Amount of Copay or any other due balance paid by the patient.
• Signature: Patient's handwritten signature as a proof of the patient's presence.
Demographic Form

• A form used by healthcare facilities to collect personal attributes of a patient for the purpose of
patient registration and identification. Demographic form is also called as: Registration form or
face sheet.
• Demographic form is used when:

 A new patient visits for an initial consultation

 When an existing patient has any changes in the demographic information

In any of the above cases, patient fills the form with the information and hands over back to front
desk staff after completion.
Demographic Form

What information is given on the Demographic Form?

Form consists of different sections of information required for patient registration including:
• Demographics
• Financial Guarantor Details
• Insurance Details
• Patient Authorization
Superbill

• A Superbill is an itemized form used by healthcare providers to reflect diseases, disorders,

injuries, other medical conditions and medical, surgical, and diagnostic services rendered on a
patient.
• It is the main data source for creation of healthcare claims which are transmitted to insurance
payers for reimbursements.
• Superbill is also known as an encounter form, charge slip.
• Although superbill format is not unified and it varies depending on healthcare provider
specialty, type of rendered services and additional requirements (if any) but every format
contains a set of obligatory attributes including:
Superbill

• Rendering Provider: Name of the provider who attended and rendered the service(s)

• Ordering/referring provider: Referring or physician who referred the patient

• Location: Name of the location where the healthcare facility is located

• Facility: Name of the healthcare facility

• Patient's Name: Patient who received the services

• Date Of Birth: Patient's date of birth (D.O.B)

• Account Number: Account number assigned to patient's account (if applicable)

• Insurance information: Patient's insurance information including primary, secondary or tertiary.

Medical coding
 CPT codes
 ICD/ diagnosis codes
 Modifiers
CPT codes
CPT codes:
• Current Procedural Terminology (CPT) is a set of codes maintained by the American Medical
Association, and are used to describe tests, surgeries, evaluations, and any other medical
procedure performed by a healthcare provider on a patient.
• CPT codes tell the insurance payer what procedures the healthcare provider would like to be
reimbursed for.
• They work in tandem with ICD codes to create a full picture of the medical process for the
payer.

“This patient arrived with these symptoms (represented by the ICD code)
and we performed these procedures (represented by the CPT code)”
CPT codes:
• Code set has been designed to communicate uniform information about medical services and
procedures among physicians, coders, patients, clearing houses and payers for administrative,
financial, and analytical purposes.
• CPT codes are also used to track important health data and measure performance and
efficiency
• CPT codes are reported in conjunction with ICD-10 codes to health insurance companies for
reimbursement of charges for services rendered by a healthcare provider.
• Five digit alpha-numeric or numeric codes, depending on which category the CPT code is in.
CPT Codes - Categories
CPT codes are divided into three Categories:

• Category I is the most common and widely used set of codes within CPT. It describes most of
the procedures performed by healthcare providers in inpatient and outpatient offices and
hospitals.
• Category II codes are supplemental tracking codes used primarily for performance
management.
• Category III codes are temporary codes that describe emerging and experimental technologies,
services, and procedures.
CPT Codes – Category I
• Category I CPT codes are divided into six large sections based on which field of health care they
directly pertain to. CPT codes are mostly grouped and listed numerically.

• Evaluation and Management: 99201 - 99499

• Anesthesiology: 00100 – 01999; 99100 - 99140
• Surgery: 10021 - 69990
• Radiology: 70010 - 79999
• Pathology and Laboratory: 80047 - 89398
• Medicine: 90281 – 99199; 99500 – 99607

• Within each of these code fields, there are subfields that correspond to how that topic applies
to a particular field of healthcare.
• For instance, the Surgery section is organized by what part of the human body the surgery
would be performed on
CPT Codes – Category II
• These codes are five character-long, alphanumeric codes that provide additional information to
the Category I codes. These codes are formatted to have four digits, followed by the character F.
• These codes are optional, but can provide important information that can be used in performance
management and future patient care.
• These codes are not required for correct coding and may not be used as a substitute for Category I
codes.
• They do not have values assigned on the Medicare physician fee schedule. However, they may be
very beneficial to a practice, because they allow internal monitoring of performance, patient
compliance, and outcomes
CPT Codes – Category III
• Category III codes are designated as temporary codes.
• Even though the codes are considered temporary, they are an integral and important part of
the system.
• Category III codes allow data collection for [emerging technologies, services, procedures, and
service paradigms].
• Use of unlisted codes does not offer the opportunity for the collection of specific data. If a
Category III code is available, this code must be reported instead of a Category I unlisted code.”
• The CPT Category III codes have five characters. The first four characters are numeric (the
sequence number assigned by the AMA); the last character is “T.”
ICD/ diagnosis codes
ICD-10-CM Codes
• ICD stands for International Classifications of Diseases. Its full official name is International
Statistical Classification of Diseases and Related Health Problems. ICD-10 is a medical
classification list (10th revision) by World Health Organization (WHO).
• The list contains alpha-numeric codes for diseases, disorders, signs and symptoms, abnormal
findings, complaints, social circumstances, injuries and other related health conditions
attributed to human beings.
• Physicians and other healthcare providers use ICD-10-CM (Clinical Modification) to classify and
code all diagnoses recorded in combination with medical care.
• ICD-10-CM diagnosis codes are used in all healthcare settings - inpatient, outpatient,
psychiatric, long term care, etc. - to tell the story of why the patient is being seen. We use these
codes to prove that the services provided by the doctor were medically necessary.
ICD-10-CM Codes
• ICD-10-PCS stands for the “International Classification of Diseases, Tenth Revision, Procedure Coding System”.
As indicated by its name, ICD-10-PCS is a procedural classification system of medical codes. It is used in
hospital settings to report inpatient procedures.
• ICD-10-CM stands for the “International Classification of Diseases, Tenth Revision, Clinical Modification” and
used for medical claim reporting in all healthcare settings.
• ICD-10-CM is a standardized classification system of diagnosis codes that represent conditions and diseases,
related health problems, abnormal findings, signs and symptoms, injuries, external causes of injuries and
diseases, and social circumstances.
• For a medical provider to receive reimbursement for medical services, ICD-10-CM codes are required to be
submitted to the payer.
• ICD-10-CM codes consist of three to seven characters. Every code begins with an alpha character, which is
indicative of the chapter to which the code is classified. The second and third characters are numbers. The
fourth, fifth, sixth, and seventh characters can be numbers or letters.
Structure of ICD-10-CM Codes
Modifiers
Modifiers
• Modifiers are two characters, numeric or alpha-numeric, that are reported with a CPT code, when
appropriate. Most of the modifiers are numeric, but there are a few alphanumeric modifiers also.
• Modifiers provide the means by which the physician can “flag” a service that has been altered by
some special circumstance(s) without changing the basic CPT code description.
• Modifiers provide additional (and essential) information needed to process a claim. It may
describe whether multiple procedures were performed, why that procedure was necessary, where
the procedure was performed on the body, how many surgeons worked on the patient, and lots of
other information that may be critical to a claim’s status with the insurance payer
• The CPT book defines a Modifier as the “means to report or indicate that a service or procedure
that has been performed has been altered by some specific circumstance but not changed in its
definition or code.”
Common Modifiers in Medical Billing:
Modifier 24 – Modifier 24 is appended to unrelated evaluation or management (Unrelated E/M) service offered
during the post-operative period of a major surgery performed within 90 days by the same physician. This
modifier cannot be used to bill for procedures.
Modifier 25 – Modifier 25 is very commonly used in Pediatrics. It is appended to all E/M services performed on
the same day as another major surgery by the same physician.
Modifier 26 – Modifier 26 is used to bill the professional component when a service has both professional &
technical components. Such components are observed in radiology services where the physicians note on the
scans is considered as the professional component whereas the machinery used is counted as a technical
component.
Modifier 27 – Modifier 27 is used when a patient is offered multiple E/M service at various outpatient facilities
such as the emergency department, pharmacy, primary care clinics on the same day, by the same or different
physician
Modifier 51 – Modifier 51 is used to bill for multiple procedures or surgeries offered by the same provider
during the same surgical session. Diagnostic imaging services provided during the surgical session is also
included
Modifier 59 – Modifier 59 is used to denote distinct procedural services i.e., services or procedures which are
different or impartial from the rest of the non-evaluation & management services performed on the same day
Modifier 76 – Modifier 76 is used to report repeat procedure performed on the same day by the same physician
and is also consequent to the original procedure
Documentation
 Day sheet
 Demographic form
 Superbill
Sign-in Sheet (Day Sheet)
• What is sign in sheet?
Sign-in sheet is an important part of office documentation which keeps a record of number of
patients who visited the office on a particular day.
• Why it is used?
Sign-in sheet is used by the front desk staff of most doctor offices to have a record that how many
patients visited the doctor for treatment on a particular date.
It is also a proof that the patient was in the office on a particular date to avoid a disgruntled patient’s
claim that he was billed for services rendered on a day he was not in the doctor's office.
It helps to compare the number of superbills received with the number of patients mentioned on the
sign-in sheet in order to track any missing superbill.
Sign-in Sheet (Day Sheet)
Information on the Sign-in Sheet:
• Patient’s name
• Type of patient: New or Established
• Time of check in: Time when patient arrives at the office.
• Any change(s) in the demographics like insurance, address or phone number etc.
• Payment: Amount of Copay or any other due balance paid by the patient.
• Signature: Patient's handwritten signature as a proof of the patient's presence.
Sample Sign-in Sheet
Demographic Form
• A form used by healthcare facilities to collect personal attributes of a
patient for the purpose of patient registration and identification.
Demographic form is also called as: Registration form or face sheet.
• Demographic form is used when:
> A new patient visits for an initial consultation
> When an existing patient has any changes in the demographic information

In any of the above cases, patient fills the form with the information and
hands over back to front desk staff after completion.
Demographic Form
What information is given on the Demographic Form?
Form consists of different sections of information required for patient registration including:
• Demographics
• Financial Guarantor Details
• Insurance Details
• Patient Authorization
Sample Demographic Form
Superbill
• A Superbill is an itemized form used by healthcare providers to reflect diseases, disorders, injuries,
other medical conditions and medical, surgical, and diagnostic services rendered on a patient.
• It is the main data source for creation of healthcare claims which are transmitted to insurance
payers for reimbursements.
• Superbill is also known as an encounter form, charge slip.
• Although superbill format is not unified and it varies depending on healthcare provider specialty,
type of rendered services and additional requirements (if any) but every format contains a set of
obligatory attributes including:
 Provider Information
 Patient Information
 Visit information
 Additional information
Sample Superbill
Sample Superbill
Claim Submission
Superbill
• Claim submission refers to charge posting (transmission of claims to payers for payment).
• It is done through 837 standard electronically and with claim forms in paper submission according
to the following process.
• Following is the flow chart of the claim submission process:
Electronic Submission
Direct Submission
 Claims are directly submitted by the billing company, using their submitter number, to a payer
 Direct submission is mainly done to the government payers i.e. Medicare, Medicaid, Railroad
Medicare and Tricare.
Indirect Submission
 Claims are first submitted to a clearing house which then forwards the claim to respective
payers, after performing first level testing of claims.
 Indirect claim submission is made to commercial payers through a clearing house, that acts as
an intermediary.
Paper Submission
Claims are dispatched to payers via postal services.
 Paper claim is sent if the payer doesn’t accept claim electronically or the claim has an attachment
i.e. an appeal or medical notes.
 Mailing address is crucial in paper submission. If the corresponding address is incorrect then
paper claim will be returned to sender.
 Claim information is printed on an appropriate form (CMS-1500 (mostly), UB-04, C4 or NF3)
according to payer’s requirement.
Paper Submission
Paper submission involves the following process:
 Claims are segregated based on the documents/attachments or signatures authentication on the
claim form i.e. CMS-1500.
 Clearing House: Paper submission is majorly done through clearing house. It includes, routine
claims without an attachment, claims with an attachment i.e. explanation of benefits from
primary insurance, appeal, medical history or any other correspondence.
 Self Submission: In this process, claims are mailed out by the billing office itself to intended payers
requiring signature authentication by the designated official.
Claim Acknowledgment
 On receipt of electronic claim submission, payers and clearing houses perform initial testing
based on the set rules and procedures before claims are accepted for processing.
 After the initial assessment, we receive an acknowledgement as an acceptance or rejection
of a claim.
 Acceptance is received for those claims which have passed the first level testing and got
accepted for adjudication and settlement, however, it doesn’t guarantee any payment.
 But, if the claim doesn’t pass through, it gets rejected and requires a corrective action
according to provided reason.
Claim Acknowledgment
First Level Rejections:
 Upon receipt of an indirectly submitted claim, clearing house performs first level testing for errors
like missing information or invalid policy formats as per payer’s requirements.
 If an error is detected, claim gets rejected by the clearing house. Claims rejected at this stage are
the first level rejections. First level rejections are reported back to billing company with errors for
corrective action.
Second Level Rejections:
 After the claims are accepted by clearing house, they’re further transmitted to respective payer
who performs second level testing to filter error-free claims according to set rules in their system.
 At this stage if any claim doesn’t fulfill their requirement, it gets rejected, called second level
rejections.
Claim Acknowledgment
First Level Rejections:
 Upon receipt of an indirectly submitted claim, clearing house performs first level testing for errors
like missing information or invalid policy formats as per payer’s requirements.
 If an error is detected, claim gets rejected by the clearing house. Claims rejected at this stage are
the first level rejections. First level rejections are reported back to billing company with errors for
corrective action.
Second Level Rejections:
 After the claims are accepted by clearing house, they’re further transmitted to respective payer
who performs second level testing to filter error-free claims according to set rules in their system.
 At this stage if any claim doesn’t fulfill their requirement, it gets rejected, called second level
rejections.
Claim Acknowledgment
Direct Rejections:
 These rejections are received from a direct payer if the claim doesn’t comply with their set rules in their
scrubbing system.
 These direct payers mainly are governmental payers i.e. Medicare, Medicaid, Railroad Medicare and
Tricare.
Corrective Actions:
 Rejected claims at each level are fixed by taking corrective actions according to reported errors and
then are resubmitted via required submission mode (direct or indirect) for adjudication and acceptance.
 On resubmission if claim still doesn’t fulfill requirements at each level, it will be rejected again and
reported back.
 It is imperative to take necessary corrective action before resubmission, resubmission without the
action will cause rejection again
 Payment Process
 Remittance Advice (RA)
 Denial Management
 Patient Billing
 Follow Up
 Appeal Drafting
Claim Acknowledgment

A Remittance Advice (RA) is a document supplied by the insurance payer that provides explanation on:
 Payments
 Adjustments
 Uncovered charges
 Deductibles, co-pays and coinsurance
 Denials
Types of Remittance Advice (RA)
Standard Remittance Advice (SRA): An RA that is received in paper format also referred to as explanation
of benefits (EOB)
 EOBs are received in mail at healthcare facility and are then sent to billing service providers for
payment posting and denial management.
 Payment is posted manually from EOBs.

Electronic Remittance Advice (ERA): An RA that is received in an electronic format, and its a digital
version of an explanation of benefits (EOB).

Although the information that the two formats provide is similar, the ERA offers administrative efficiencies
not available in an SRA.
 Convenient alternative to paper reports.
 Electronic payment posting
 Posting; saves time and effort
 Reduces manual posting errors as happen while posting EOBs
 Increases efficiency and saves administrative costs

The industry standard for sending ERA data is the 835 5010 (EDI). These files are used by practices,
facilities and billing companies to auto-post claim payments.
Electronic Remittance Advice

Remittance Advice should include some or all of the following information:

 Billed Amount: It is the Amount charged for each service performed by the provider and collectively
the total charge value of the claim. The billed amount for a specific procedure code is based on the
provider's fee schedule.
 Allowed Amount: It is the maximum reimbursement the member's health policy allows for a specific
service and 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:
 Fee negotiated with participating providers
 An allowance established by law
 An amount set on a Fee Schedule of Allowance
Electronic Remittance Advice

 Paid Amount: the dollar amount paid by the payer.

 Patient Responsibility Amount: the amount of money that is the responsibility of the
patient which represents the patient copay, coinsurance, and deductible amounts.
 Discount Amount: the dollar value of the primary payer discount or contractual adjustment
 Adjudication Date: the date the claim was adjudicated and/or paid
 Name & Address of the payer
 Patient Name
 Name, NPI # of the Provider and Payee's address
 DOS, CPT(s), Units
Denial Management
Denial Management

 Denial is refusal/rejection of something requested, needed or claimed.

 In medical billing, denial is a refusal of an insurance company to pay for health care
service(s) rendered by a health care professional.
 Denial management refers to, taking corrective action and preventive measures are
established to avoid future occurrence.
CO16 – Claim/service lacks information which is needed for adjudication.

Reasons
 The CO16 remark code is an alert regarding missing or incomplete information that is required in order to process the claim.
 Drug name and dosage may be missing
 Additional information is required for benefit determination
 Office notes/clinical documentation requested for claim consideration
 Referring/rendering physician information may be missing
 More specific/corrected billing/coding is required
 Missing appropriate modifier, diagnosis or procedure
 Insurance need information from patient for claim processing
Suggested Action(s)
 See the explanation of additional remark code(s) on the ERA under the code 16 for further information that what type of
information is requested for claim processing.
 If the additional remark code(s) is not provided, one should call insurance to get the information needed to resubmit the claim
 Provide/attach/append/rectify claim information accordingly and re-file claim
CO18 – Duplicate Claim/Service

Reasons
The charges submitted to insurance for processing have already been considered. This denial informs
the duplicate billing, previously considered for the patient.
Reason that may cause duplicate claim are;
 If more than one claim is submitted for the same health care procedure, for the same date of service, the
subsequent claim(s) will be denied as duplicate claim
 Service denied because payment already made for same/similar procedure within set time frame
 The service was billed twice but performed only once
 The service was performed more than once by the same provider, or group of providers, on the same day
 The service was performed by another provider, and payment has already been made to that provider
 The claim was re-submitted noticing no response from insurance or without corrected claim indicator
Suggested Action(s)
 Never simply resubmit a denied claim citing the reason, duplicate claim; because it will just get denied again
with same reason
 Before resubmitting a claim, check claim status for previous submission to see original denial
 Fix the claim and resubmit with the correct information or appeal the original decision with additional
information
 Ensure appropriate modifiers are appended to claim lines if applicable, and resubmit the claim
 Make sure to apply “corrected claim” indicator while resubmitting a modified/corrected claim
CO4 - The procedure code is inconsistent with the modifier used
or a required modifier is missing
Reasons:
 Procedure code and modifier mismatch
 The reported modifier is not appropriate to describe the performed services.
 Insurance requires additional information (Modifier) to process the claim
Suggested actions:
 One should review patient’s account/claims to see if the submitted information is correct
 Determine (from CCI edit/coding team) which of the modifier is actually describing the performed
services
 Ensure necessary, appropriate modifiers are appended in the claim
 Resubmit the claim with appropriate modifier
CO22 - Payment adjusted because this care may be covered by another payer per
coordination of benefits
Coordination of benefits (COB): When a patient is covered by more than one
insurance plans, then patient has to determine which insurance plan has the primary
payment responsibility and which plan will act as secondary.
Reasons
 Patient has other insurance which covers the services as primary payer
 Patient has not updated the COB information
 Missing primary insurance EOB/payment information
Suggested Actions
 Verify plan’s eligibility and consult COB section to confirm primary insurance
 Ensure that the correct primary insurance for the patient has been billed
 In case of missing primary payment information, talk to EDI/submission team to make sure it was sent in/with
respective segment-loop/HCFA form or resubmit with primary EOB
 If COB information is not updated by the patient, then bill the patient with rejection type: 19 - Insurance needs
COB information from patient
CO119 - Benefit maximum for this time period has been reached

Lifetime Maximum: An insurance contract with the patient, which bounds the amount that can be paid
in the policy period, each insurance policy has a lifetime maximum.
Reasons
 Patient’s annual benefits for the services billed has been exhausted
 Maximum benefits crossed for a specified service
 Insurance has paid the maximum amount according to aggregate limit and cannot pay more amount
Suggested Action
 One should review patient’s account/claims to see if the submitted information is correct
 Bill to patient
B7 - This provider was not certified/eligible to be paid for this procedure/service
on this date of service

Reasons:
 Claim’s date of service is prior to the provider’s Medicare effective date or after his/her termination Date
 Procedure code is beyond the scope of the provider’s Clinical Laboratory Improvement Amendment
(CLIA) certification, or the laboratory service is missing a required modifier
 Provider was ineligible to perform the submitted services
 Provider may no longer be participating or in contract for billed procedure(s)
Suggested Actions:
• Verify the date of service, if it is incorrect, resubmit claim with correction
• If the date of service is correct, view enrollment information through the Internet-based Provider
Enrollment, Chain and Ownership System (PECOS) and confirm provider’s Medicare effective date
• If provider was not certified/effective on the date of service, then claim needs an adjustment
• If the submitted procedure is being paid previously, then initiate the call for reprocessing
• Inform New Account Setup Department (NASD) and provider with the detail received from insurance
for any rectification/correction
CO27 - Expenses incurred after coverage terminated

Reasons:
 Termination of insurance coverage prior to receiving the services
 The date of service is subsequent to the termination of coverage
Suggested Actions:
 Verify that the claim was created in correct patient’s account
 Compare patient’s credentials from insurance card/information we’ve with the credentials that are
submitted to insurance
 Check the patient's eligibility for current and previous service dates;
 If patient has active coverage on the visit date, then generate a call with reprocessing request
 If patient didn’t have coverage at the time the services were performed, then patient should be
billed with reason insurance coverage lapsed/did not exist
B15 - Payment adjusted because this procedure/service is not paid separately

Reasons:
 Service is not performed along with other services billed
 Procedure is mutually exclusive to another procedure on claim
 Service is not separately payable and is considered component of procedure(s) rendered on the same date for the same
patient by the same doctor
 Same/similar service was recently billed for this condition
 Charges are included in global fee of primary charges
 Multiple, simultaneous services are submitted to insurance
 Billed services may not be paid separately, additional information (Modifier/Medical notes) required for claim processing
Suggested Actions:
 Check the NCCI edits through Encoder Pro to ensure that most comprehensive codes are billed and to determine, if the
submitted service is bundled with another service or is component of other procedure performed on the same date.
 If it is a separate/distinct service, appropriate modifier is used to denote as a separate service for reimbursement
 Medical notes may also support to prove the Medical Necessity
CO29 - The time limit for filing has expired

Reasons:
 Charges are submitted after the defined filing limit by the payer
Suggested Actions:
 Once denied post LF-Late Filing entry in claim
 An appeal within the appeal filing limit accompanying supporting documentation is prepared and
filed to insurance by our Appeal Team as a re-determination to consider the claim for payment
 If denied erroneously resubmit with proof of submission or get it reprocessed through reopening line
 A claim that has reached its filing limit should be submitted with appropriate LF indicator in first
submission to prevent late filling denial
CO50 - These are non-covered services because this is not deemed
a medical necessity by the payer

Reasons:
 The insurance company has doubts about the patient’s medical history or current condition and they need more
information for claim processing
 The performed services doesn’t appear to be medically necessary for the patient
 The diagnosis code may be insufficient to support medical necessity according to billing guidelines
 The procedure code(s) billed is incompatible with the diagnosis code(s)
 Appropriate modifier or documentation is missing on the claim
Suggested Actions:
 One should check that the diagnosis and procedures are appropriate according to NCCI edits
 Consult Coding Team and provide/attach/append claim information according to their feedback and re-file claim
 If the insurance just needs medical notes, the office should be requested to provide medical notes for
resubmission with the correspondence
CO31 - Claim denied as patient cannot be identified as our insured
Reasons:
 Subscriber or patient's name is spelled incorrectly
 Subscriber or patient's date of birth on the claim doesn't match the date of birth in the health insurance
plan's system
 Subscriber/policy number is incomplete or invalid
 Subscriber’s group number is missing or invalid
Suggested Actions:
 Subscriber or patient's name is spelled incorrectly
 Subscriber or patient's date of birth on the claim doesn't match the date of birth in the health insurance
plan's system
 Subscriber/policy number is incomplete or invalid
 Subscriber’s group number is missing or invalid
CO252 - An attachment/other documentation is required to adjudicate
this claim/service

Reasons:
 Insurance requires medical notes or any other documentation which is necessary to process the claim
 Insurance need Primary insurance’s explanation of benefits for claim processing

Suggested Actions:
 One should review patient’s account/claims to see if the submitted information is correct
 To further clarify which information is required, insurance call can be helpful
 Attach/provide requested information/documentation and resubmit the claim
CO109 - Claim not covered by this payer/contractor. You must send
the claim to the correct payer/contractor
Reasons:
 Patient is enrolled in Medicare advantage plan
 Claim is submitted to the insurance company that is not patient's primary insurance
 In case of secondary insurance primary EOB is required

Suggested Actions:
 Review patient’s account / claims to see if the submitted information is correct
 Verify the patient’s eligibility for correct payer confirmation
 In case of MCR, submit the claim to Medicare advantage plan as primary insurance, Medicare Eligibility provides
Medicare Advantage Plan information, update and resubmit the claim
 Check scanning, insurance information is received and may be missing
 Consult with provider for confirmation of insurance information
 If correct insurance information is not confirmed, bill to patient with the rejection type 16 - covered by another payer
CO204 - This service/equipment/drug is not covered under the
patient current benefit plan
Reasons:
 The patient may not be eligible for benefits on the date of service
 Services denied because patient plan doesn’t support the services
 Performed service has been lapsed / removed from benefit plan and is no longer billable
 Multiple, simultaneous services are submitted to insurance
Suggested Actions:
 Review patient’s account / claims to see if the submitted information is correct
 Check the NCCI edits to ensure that the procedure-modifier combination billed on the claim is valid
 For inappropriate billed services get confirmation from the provider for rectification / correction
 Bundled or sub-component of services should be adjusted with the approval of provider
 Need to bill the patient if the services are not covered under patient plan
Payment Adjusted for Absence of Pre-certification / Authorization
Reasons:
 Pre-certification/authorization is not submitted/missing
 The authorization has either insufficient or zero units remaining for the service(s) billed.

Suggested Actions:
 Please ensure that valid authorization is on file and submitted
 Contact provider to confirm if PA was obtained.
Payment denied /reduced for Absence of, or Exceeded Referral

Reasons:
 Referral# is missing
 Referral is not attached with claim form
 Submitted referral is not valid

Suggested Actions:
 One should first review patient’s account/documents to see if the referral was received, then
resubmit the claim.
 In case of absence, contact provider to confirm if they have obtained one or not, if the referral
was never obtained, then the claim will not be paid by carrier.
Non-covered Services - Pre-existing condition

Pre-existing condition: A medical condition diagnosed prior to the effective date of the health plan
Reasons:
 Pre-existing condition questionnaire is requested from provider
 Missing pre-existing condition information from patient

Suggested Actions:
 Fill in the pre-existing condition questionnaire received from insurance
 Resubmit claim with medical notes as supported documentation
 If insurance has denied after review of submitted information, one may bill patient with rejection
type; 15- Pre-Existing Condition after provider consent.
Payment is included in the allowance for another service/procedure
Reasons:
 Service is not separately payable and is considered component of procedure(s) rendered on the same date for
the same patient by the same doctor
 The cost of care within the post-op period of a major/minor procedure is bundled into the global surgery package
Suggested Actions:
 If service(s) is component of other procedure/service performed on the same date, use rejection type: 12 –
Inclusive in other procedure and adjust it with adjustment reason adjusted as bundled code.
 Contrary to above append modifier 59 and re-file claim.
 Evaluation and management (E/M) services related to the surgery, and conducted during the post-op period
should be adjusted. Rejection type: GF – Global Fee and adjustment reason; adjusted as covered in Global Fee.
 Evaluation and management (E/M) services un-related to the surgery (DX code must be different from surgery).
Append modifier 24 and resubmit claim for processing.
Payment adjusted because `'New Patient' qualifications were not met

Reasons:
 New patient code is billed for an established patient

Suggested Actions:
 Submit the claims with established patient visit
Patient billing
Patient Billing

 Patient billing is the process in which patients are notified to pay for their portion
 Patients are responsible to make payment for certain costs out of their pocket such as;
Deductibles, Coinsurance, Co-payment and cost for service(s) that aren't covered by the plan
indicated as patient’s portion.
Patient Billing

Statement/Invoice:
Patient statement is used to notify a patient listing the amount he/she owes. Patient statement displays not
only patient charges but also the payments, adjustments and write-offs totaling final balance.

Balance Reminder Call (BRC):

Subsequent to patient statement, patients are also notified through balance reminder call (BRC) to remind
them of their due balance.
Patient Billing

Dormant Balance
 Dormant is a state of rest or inactivity. If the balance remains unpaid for a certain defined time period, it is
referred as dormant balance.
 Doctor may decide either to write off the balance or to move to collection.

Collection
 Collection is the activity to recover payment for the overdue bill.
Follow up
Follow up

 Accounts receivable or A/R is a term used to

denote money owed to a practice for the billed
services. Payments due from patients and payers
are considered A/R.
 Insurance companies use stall tactics to delay
payment and it is inevitable to manage the A/R
ensuring that the practices are getting paid
correctly and in a timely manner.
 An increase in A/R from one A/R bucket to next or
higher is a sign that monies are not being
collected timely. Lack of follow up portends cash
flow troubles and causes client complaints.
Insurance-wise Aging
Follow up

 First step of follow up is to find out the reason why the claim is pending
 Check the current status of the claim through available resources i.e. web portal, interactive voice
response (IVR), fax or live call
 Web Portal is an efficient source of follow up which is an online to find out eligibility, benefits and
claim status. It requires a user name and password that is used to log in to the portal
 Interactive voice response (IVR) is a technology that allows a computer to interact with humans
through the use of voice input via phone keypad. It also facilitates to check eligibility and claim
status
 Live call should be last option to be used for follow up activity. However, telephonic appeals and
claim review require interaction with a live representative
 Fax option may be used to request status of a claim or to request a copy of an EOB
Follow-Up Strategy

Follow-up steps with hierarchy

Processed with
Paid in full Not on file Denied
patient’s portion

Bill to patient if
Bill secondary ins
Post payment secondary insurance Rebill claim Denial managment
If it exist doesn’t exist
Paid Claim

 For a paid claim, if paid date is current then one should wait for some time to receive ERA/EOB
 If paid date is older, then get the complete detail including check/EFT number and post the
payment according to doctor office instructions
Claim Processed with Patient Portion

 If claim is processed with any patient liability, then;

 Bill to secondary payer (if exists)
 Bill to patient in absence of secondary insurance plan.
Not On File

 If a claim is found “not on file”, it was submitted electronically

 Check EMC# of submitted carrier is correct
 Verify acceptance/rejection of claim
 If it is rejected, fix the claim according to reason of rejection
 On receipt of acceptance verify payer information and further follow up with insurance referring
to received acceptance.

 If it was a paper submission:

 Verify mailing address of to see it was submitted on the correct address
 Look up in returned mail to find out the reason of returned claim
 Lastly, resubmit only if you don’t find any evidence in the above verification
Denied

 If claim is found to be denied, then perform analysis to determine:

 The denial reason
 The root cause of the denial
 The impact of denial (payer level, account level and No. of effected claims)
 The Course of action to deal with the denial
 Appropriate action on the effected claim(s)
 Necessary action steps or define a procedure to avoid the occurrence of the specific
denial in future.
Appeal drafting
What is an Appeal

 An appeal is the action one can take if one disagrees with a coverage or payment decision made
by insurance.
 One has the right to appeal on a claim that is initially submitted with incorrect information
containing data-entry error like wrong date of service or on inappropriately paid or denied claims
such as late filing, prior authorization and vice versa for review and reprocessing.
Appeal Drafting Guidelines

Identify and understand why the claim was denied:

 First find out if claim needs to be appealed. See denial reason(s) on explanation of benefits
(EOB) or electronic remittance advice (ERA) to determine if this can be appealed
 If it is still not clear why the claim was denied, contact insurance company and ask the
reason of denial
 If it has been determined that an appeal has to be filed, then adopt the appropriate
method of appeal.
 Some denials may be requested for review based on a telephone conversation.
 For some, a written appeal can be filed as per the appeal filing guidelines accompanying
supporting documentation in order for the claim to be reconsidered for processing.
Appeal Drafting Guidelines

Write to the insurance company, following their guidelines:

 An effective appeal is more than a letter demanding payment; it is an argument supported by
evidence.
 Examine the insurance company’s reasoning for denial
 Make a list of the reason(s) that one disagrees with the insurance’s decision
 It is important to use appropriate appeal forms according to State and insurance as some insurance
plans require to use their own forms for appeals
 Begin appeal letter from salutation, then give the reference - patient, date of service and the claim
number.
 Describe the service for which payment was denied. Keep the focus on writing the reason for
review and possible reimbursements
Appeal Drafting Guidelines
Appeal correspondence/submission:
 It is important to file/submit the appeal to right corresponding address. Mostly payers have a designated
address (physical and postal) for sending appeals. This information may be included on the patient’s insurance
card. One can also communicate with the insurance to obtain the correspondence details
 If there is no response from insurance in a reasonable time, the status of initial appeal must be checked first
before appealing on same claim

Follow up with the insurance company:

 Once an appeal is submitted, it’s important to follow up in 30 days by calling the insurance as some insurance
companies will allow claims to suffer for months if no one follows up.
 Calls must be made at regular intervals if there is no reply from the insurance company. If the company
doesn’t receive an appeal, the appeal should be faxed followed by confirming whether or not they have
received the fax.
Appeal Forms

 Most of the payers accept the online appeals submitted through their web portal. One can check
online if the respective payer accepts online appeals.
 One can also obtain appeal forms from web portal.
 One can also call at help line of the payer to find out appeal process.
Identification numbers
National Provider identifier (NPI)

 The NPI is a 10- digit, numeric identifier.

 It is unique identification number for covered health care providers.
 The NPI must be used in lieu of provider identifiers in the HIPAA standards
transactions.
 National Plan and Provider Enumeration System (NPPES) issues providers and
practices with NPI numbers after registration.
 E.g. 1234567890
Tax Payer Identification Number (TIN)

 TIN is the 9-digit number issued by the Internal Revenue Service (IRS) to
companies and organizations for income tax purpose or to start business.
 TIN is also used to hire employees and if it is used for employment purposes or
to record the taxes of the employees, then it is called EIN (Employer
Identification Number).
 E.g. 123456789
Taxonomy Code

 Taxonomy codes are administrative codes set for identifying the provider type
and area of specialization for health care providers.
 Each taxonomy code is a unique ten character alphanumeric code that enables
providers to identify their specialty at the claim level. Taxonomy codes are
assigned at both the individual provider and organizational provider level.
 Examples:
 Gastroenterology - 207RG0100X
 Cardiovascular Disease - 207RC0000X
 Pulmonary Disease - 207RP1001X
 Sports Medicine - 207RS0010X
Provider Transaction Access Number (PTAN)

 A PTAN is a Medicare-only number issued to providers by MACs upon

enrollment with Medicare.
 When a MAC approves enrollment and issues an approval letter, the letter will
contain the PTAN assigned to the provider.
Provider Identification Number (PIN)

 The Provider Identification Number (PIN) is the additional validation of an

enrolled provider’s identity that is used when a provider conducts business
transactions with payers.
Submitter ID

 Submitter ID number is a unique value that identifies any organization

 It is assigned by the payers while signing up for services
 Tax identification number of an organization is usually used as Submitter ID
 Submitter id helps payers to identify the submitter while claims transmission and to return
reports
EMC Number

 Electronic Media Claims (EMC) number identifies any insurance payer

 It is used to submit claims to insurance companies electronically
 EMC Number is a unique id; each payer has its own EMC number for accepting
claims electronically by the billing companies
 It is also called 837 payer id.
Clinical Laboratory Improvement Amendments (CLIA)
 CLIA defines and establishes quality standards to regulate all laboratory testing and to ensure the quality
testing
 CLIA requires clinical laboratories and practices to be certificated before they can accept samples for
diagnostic laboratory testing
 A certificate with CLIA number is issued by CLIA Agency to a laboratory or practice subject to
establishment of defined standards
 Simple laboratory examinations and procedures that have an insignificant risk of an erroneous result are
called CLIA waived tests (defined by Food and Drug Administration)
 Modifier QW is reported for waived tests/services
 All other laboratory services are subject to CLIA
 To bill a lab test procedure, CLIA number, such as 31D0945716 for instance, should be reported with claim
National Drug Code (NDC) number

 NDC is a unique 10-11 digit, 3-segment numeric identifier assigned to each

medicine intended for human use in the United States.
 The NDC is found on the drug container (i.e., vial, bottle, or tube).
 NDC number is reported on a claim along with immunizations i.e. injections or
vaccines.
 3 segments include
 Labeler code - A labeler is any manufacturer
 Product code - it identifies a specific strength, dosage form, and formulation
 Package code – It identifies package and size, such as 13533- 603-20
Billing provisions
Healthcare Provider Classification

 Attending physician: A physician M.D. or D.O. who has completed residency and practices
medicine in a clinic or hospital. Attending physician is also known as rendering or treating provider
 Billing physician: A physician whose name is used on the claim and payments are also issued to
that provider
 Referring physician: A physician (usually primary care physician) who refers the patient to another
physician or specialist for specialized treatment
 Supervising Physician: A general physician who supervises services which are performed by a
Nurse Practitioner or Physician Assistant under his/her supervision
 Nursing Practitioner (NP) or Physician Assistant (PA): A practitioner or assistant who is qualified
to treat certain medical conditions under the supervision of a licensed doctor M.D. or D.O or D.P.M
“Incident To” Provision

In “Incident To” provision of Medicare, services are submitted under the physician’s NPI but are actually
performed by Non-Physician practitioners such as; Nurse Practitioners (NP), Physician Assistants (PA),
Registered Nurses or other qualified technicians
 It is only applicable in an office setting. There is no “incident to” billing in a facility under Part B
 Physician (MD) must be physically present in the office suite and immediately available while the
service is being provided. However, it is not required for physician to be in the same room
 It applies to services that are commonly provided in a physician's office such as minor surgeries,
diagnostic tests, injections, infusions, and other types of care that is routinely provided in an office
setting
 Diagnoses and treatment plan must first be established by the physician
 It is inappropriate to report services under this provision rendered for a new patient visit, a new
course of treatment, a new problem, or in the case of a significant change in an established condition
“Incident To” Provision - Protocol

Billing Protocol
 Non Physician Practitioners, “Physician Assistant” or “Nurse Practitioner” will be
selected “Attending Physician”.
 Physician (MD) will be selected as “Billing” and “Supervising” Physician.
 There are no modifiers that signify a service was provided “Incident To”.

Payment:
 Payment is made at the 100% of the Medicare Physician Fee Schedule.
General Supervision

 If “Incident To” requirements are not met, the service must be billed under the Non-Physician
Practitioner’s own NPI, it is known as “General Supervision”
Billing Protocol:
 “Physician Assistant” or “Nurse Practitioner” will be selected as “Attending” and “Billing”
Physician
 “Supervising Physician” is not required in General Supervision
Payment:
 In General Supervision, the Nurse Practitioner is paid for covered services at 85% of the Medicare
Physician Fee Schedule
Locum Tenens

 Locum (short for the Latin phrase locum tenens) is a person who temporarily fulfills the duties of
another person
 Locum Tenens in medical, is a term used for a doctor that works as an independent contractor on
a temporary basis to fill a position of another physician who is unavailable due to illness, vacation
or pregnancy
 Locum tenens physicians do not have regular practices of their own, but provide services
temporarily to hospitals, medical clinics or move from one practice to another as needed
 A locum tenens physician is allowed to contract with only one physician at a time and cannot
provide services for multiple physicians
 Regular physician must not be practicing medicine elsewhere
 Contract cannot exceed more than 60 days
Locum Tenens

Billing Protocol
 Locum Tenens physician examines new or established patients in absence of regular physician,
establishes diagnosis and treatment plan on initial and subsequent/follow up visit(s)
 Regular physician will be selected as “Attending” and “Billing” Physician
 Q6 Modifier is appended to signify that service is furnished by a locum tenens physician

Payment
 As the regular physician is reported as “Billing Physician” and payment is issued to regular
physician, locum tenens physician is paid by the regular physician on per day or similar
fee-for-time basis
Capitation
Locum Tenens

 Capitation is a flat monthly fee that is paid to a provider by the healthcare insurance at the
start of each month for the delivery of healthcare services to each patient on the capitation list
 Capitation list is a list of patients prepared by healthcare insurance against which provider is
paid the monthly capitation
 Not every patient has to be seen each month for the provider to receive this fee
 Capitation payments are used by managed care organizations to control health care costs
 The actual amount of money paid is determined by the ranges of services that are provided,
the number of patients involved, and the period of time during which the services are provided
Capitation Sample
Capitation: Claim Submission Response

 CO24 – Payment for charges adjusted. Charges are covered under a capitation agreement/managed care
plan.
Reason
Above denial is received when: Patient is enrolled in Medicare advantage plan or Medicaid manage care
plan / Service is covered by a managed care plan Provider is in capitation agreement with insurance
company and already been paid through a capitation agreement.
Suggested Action
 In case of Medicare and Medicaid, check eligibility information from real time or through insurance
website to obtain advantage or managed care plan information Update Medicare advantage or managed
care plan information and re-file claim Check either your practice/provider is in capitation agreement
with payer, if yes adjust the claim with adjustment code 24, if no, generate call for reprocessing
Overpayment
Overpayments

 If the sum of payment & adjustment gets greater than the claim's charged or billed
amount, it creates an
overpayment/adjustment in a claim. The over payment in the claim is quoted as negative
value and that claim is called a negative balance claim or an overpaid claim.
 Types of an overpayment
 Insurance overpayment
 Patient overpayment
 Human error
Thank you