Module 2

Medical Billing

1
Brief Outline
 Health Care
Medical Billing
 Entities
 Revenue Cycle
 Roles and Functions

2
 Chapter 1
Overview Of Health Care
1. MEDICAL BILLING 2. INSURANCE 3. TERMINOLOGY

3
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).

4
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.

5
 BASICS OF
MEDICAL BILLING
&
REVENUE CYCLE MANAGEMENT

6
Basics of Medical Billing
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

7
Basics of Medical Billing
Revenue Cycle
1. Patient’s Visit 6. Claim Submission 7. Acknowledgements (999 EDI Standard)
•Patient visits doctor’s office after scheduling an Claims can be submitted in two different ways: Electronic: Status of claim’s acceptance or rejection
appointment through phone or web portal •Electronic Submission: based on the defined criteria.
•Signs the day sheet (if required) and pays the co- •837 EDI Standard •Rejection can happen at three levels:
pay (if applicable) •Direct - Govt. Payers •First Level (Clearing House)
•Doctor’s office collects patient and insurance •Indirect - Commercial Payers (through Clearing •Second Level (Commercial Payer)
information on a demography form Houses) •Direct Level (Govt. Payers)
•They also verify patient’s eligibility and their •Paper Submission: •Account Manager resolves the rejections and
benefits, as well as if the service requires a referral resubmits the claims.
•CMS-1500 Form
or prior authorization from insurance company
•NF3 or C4 Form •Paper: Printed Confirmation.

2. Patient’s Meeting with a Doctor 5. Detecting Errors in Claims 8. Payment Posting and Denial Management
•Doctor examines patient according to their •The billing service provider performs validation •After the settlement of claims, payer sends
medical condition(s) and performs the relevant testing based on the pre-set rules in the system to Electronic Remittance Advice (834) or Explanation
diagnostic and/or medical procedure for detect any billing or coding errors before actual of Benefits (Paper). Account Manager then
treatment submission performs:
•Post-diagnosis and treatment, doctor document’ •Account managers corrects the detected errors •Payment posting
diagnosis codes (ICD) and treatment codes (CPT) •Denial management through appropriate
•Claims are passed through the testing again and if
on a superbill or directly in Electronic Health corrective measures, for claims/services that are
they comply with the pre-set rules, they are ready
Record (HER) denied for payment
for submission
•Patient collects doctor’s prescription or notes (if •Patient or secondary payer billing (if exists) for
any) and leaves after examination left-over payment by primary payers (copay, co-
insurance, deductible)

3. Processing of Superbill for Claim Entry 4. Entry of Claims and Patient’s Demographic
•Doctor’s office sends patient’s diagnosis and Information 9. Follow-Up: Follow-up Activities of Account
treatment related documents to billing service
• Account Manager enters patient’s demographic and
Manager include:
provider. The documents include: insurance details in the practice management software •Following –up with payers for pending/unpaid
•Day sheet • Account manager creates claims from superbills, in the claims (accounts receivable)
•Demography form software
•Reduction in aged claims and improvement in DAR
•Superbills • Claims are reconciled against the daysheet to ensure all
through:
necessary details have been entered in the system with
•Documents are sent through: accuracy and integrity •Payer’s web portal
•FTP • If required by doctors, then a work confirmation receipt is •IVR or live call (if required) for denial
•E-Bridge also sent to them. confirmation, or re-consideration of claims.
•Email

8
Basics of Medical Billing
Video – Doctor’s Office Visit
\\filesrv1\Training Videos\Shahrukh Jamil\Training Data\OPS training material\Level 01

9
Basics Medical Billing
Roles and Functions
 Demographic entry: To enter patient information in the practice management
system as you receive it on the demographic form
 Charge capture: To create claims in the practice management software from
superbills timely and with 100% accuracy
 Payment Posting: Ensure posting of payments received via remittance advices
and or patient payments are applied with 100% accuracy
 Denial management: To take corrective actions on the denials in order to get
the reimbursement in the next payment cycle
 Accounts Receivables Follow Up: To regularly follow up and communicate
with insurance payers on the due claims
 Appeals and correspondence: To work on correspondence/letters sent by
insurance carriers and to appeal on incorrectly denied claims
 Communication with client and their staff: Communicate periodically with
clients via telephone or according to defined channel

10
FAQs
 What is a typical Revenue Cycle?
 What are basic roles and functions of medical billing process?

11
INSURANCE

12
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

13
Insurance
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 spread across a large group of people and the healthy people help pay
for the sick

14
PUBLIC INSURANCE

15
Public Insurance Programs
 Public health insurance plans are plans provided by the
government for low-income individuals or families, the
elderly, and other individuals that qualify for special
subsidies.
 The primary public health programs in the US are
Medicare, Medicaid, and Tricare

16
MEDICARE

17
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

18
Enrollment in Medicare
 Most people become eligible for Medicare when they turn
65
 Their Medicare enrollment steps will differ depending on
whether or not people are collecting retirement benefits
when they enter their Initial Enrollment Period (IEP) – i.e.
three months before, the month of, and the three months
following their 65th birthday
 If people are receiving Social Security retirement benefits
or Railroad Retirement benefits, they should be
automatically enrolled in both Medicare Part A and Part B
 If people are not receiving Social Security retirement
benefits or Railroad Retirement benefits, they will need to
actively enroll in Medicare

19
Medicare Enrollment Period – IEP Example
For example, let’s say a person turns 65 in June. The
following chart to determines when they can enroll in
Medicare and when their coverage would start

People can enroll anytime in Coverage starts

March June 1st

April June 1st
May June 1st
June July 1st
July September 1st
August November 1st
September December 1st

20
Medicare Enrollment Period
 Special Enrollment Period (SEP)
 SEPs are periods of time outside of normal enrollment periods, triggered by
specific circumstances
 SEP lets people delay enrollment in Part B without penalty if they were
covered by insurance based on their or their spouse’s current work (job-
based insurance) when they first become eligible for Medicare
 They can enroll in Medicare without penalty for up to eight months after
they lose their group health coverage or they (or their spouse) stop
working, whichever comes first
 General Enrollment Period (GEP)
 If people do not enroll in Medicare when they originally become eligible for
it (either during their IEP or an SEP), they can sign up during the GEP.
 The GEP takes place January 1 through March 31 each year, with coverage
starting July 1. People may incur a Part B late enrollment penalty and
face gaps in coverage if they sign up during the GEP

21
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.

22
Medicare Basics
Original Medicare (Part A & Part B)
 Part A and Part B refer to Original Medicare
 For people registered in Original Medicare, the government pays directly
for the health care services they receive. Additionally, enrolling in Original
Medicare means:
People will receive a red, white, and blue Medicare card to show to
their providers
Most doctors in the country take their insurance
Medicare limits how much people can be charged if they
visit participating and non-participating providers, but it does not
limit how much they can be charged if they visit providers who opt
out of Medicare
Patients see a specialist without prior authorization
Patients are responsible for Original Medicare cost-sharing, which
may include premiums, deductibles, and coinsurances
Patients are eligible to enroll in a Medigap policy, which can help
reduce their out-of-pocket costs. Medigap policy is
supplement Insurance that helps fill "gaps" in Original Medicare and is
sold by private companies

23
Medicare Basics
Medicare Advantage Plans (Part C)
 Part C is the part of Medicare that allows private health insurance companies
to provide Medicare benefits
 These Medicare private health plans, such as HMOs and PPOs, contract with
the federal government and are known as Medicare Advantage Plans
 People can choose to get Medicare coverage through a Medicare Advantage
Plan instead of through Original Medicare
 Medicare Advantage Plans must offer, at minimum, the same benefits as
Original Medicare (those covered under Parts A and B) but can do so with
different rules, costs, and coverage restrictions
 People can also typically get Part D as part of their Medicare Advantage benefits
package (MAPD).
 Many different kinds of Medicare Advantage Plans are available. People may
pay a monthly premium for this coverage, in addition to their Part B premium
 People will not use the red, white, and blue card when they go to the doctor or
hospital. Instead, they will use the membership card issued by their private
plan.
 People can also use the card at the pharmacy if their health plan has
Medicare prescription drug coverage (Part D)

24
Medicare Basics
Medicare Part D
 Medicare’s prescription drug benefit (Part D) is the part of Medicare
that provides outpatient drug coverage
 Part D is provided only through private insurance companies that have
contracts with the federal government—it is never provided directly by
the government (unlike Original Medicare)
 If people want to get Part D coverage, they have to choose and enroll in
a private Medicare prescription drug plan (PDP) or a Medicare
Advantage Plan with drug coverage (MAPD).
 Enrollment is optional and only allowed during approved enrollment
periods. Typically, people should sign up for Part D when they first
become eligible to enroll in Medicare
 The cost of Medicare Part D-covered drugs may change throughout the
year, based on different phases.

25
Medicare Basics
Medicare Part D Coverage Phases
Deductible Period
 People will pay the full negotiated price for covered prescription drugs until till they
meet their deductible limit. After that the plan will begin to cover the cost of their
drugs.
 Deductibles can vary from plan to plan, but can never be higher than $445 in 2021.
Some plans have no deductible
Initial Coverage Period (ICP)
 After people meet their deductible, the plan will partially pay for their covered
prescription drugs while people will pay a copayment or coinsurance.
 The duration of ICP depends on a person’s drug costs and their plan’s benefit
structure. For most plans in 2021, the initial coverage period ends after a person has
accumulated $4,130 in total drug costs
Coverage Gap
 After a person’s total drug costs reach a certain amount ($4,130 for most plans),
they enter the coverage gap, also known as the donut hole (a phase when total
drug cost reaches a certain limit).
 The donut hole closed for all drugs in 2020. It means that when a person will enter
the coverage gap they will be responsible for 25% of the cost of their drugs

26
Medicare Basics
Medicare Part D Coverage Phases
Donut Hole Example:
 if a drug’s total cost is $100 and a person pays their plan’s $20 copay during
the initial coverage period, they will be responsible for paying $25 (25% of
$100) during the coverage gap
 In all Part D plans, after a person has paid $6,550 in 2021 in out-of-pocket
costs for covered drugs, they leave the donut hole and reach catastrophic
coverage

Catastrophic Coverage
 During this period, people pay significantly lower copays or coinsurance for
their covered drugs for the remainder of the year. The out-of-pocket costs
that help people reach catastrophic coverage include:
 Their deductible,
 What they paid during the initial coverage period
 Almost the full cost of brand-name drugs purchased during the coverage gap
 Amounts paid by others, including family members, most charities, and other
persons on person’s behalf

27
Original Medicare Vs. Medicare Advantage Plans

 In Original Medicare, patients are covered to go to nearly all doctors

and hospitals in the country.
 Medicare Advantage Plans, usually have network restrictions,
meaning that patients will be more limited in their access to doctors
and hospitals.
 Medicare Advantage Plans can also provide additional benefits that
Original Medicare does not cover, such as routine vision or dental
care.
 If people have health coverage from a union or current or former
employer when they become eligible for Medicare, they may
automatically be enrolled in a Medicare Advantage Plan that their
employers sponsor
 People who enroll in a Medicare Advantage Plan, also have
Medicare. This means that they will still owe a monthly Part B
and/or Part A premium.
 Each Medicare Advantage Plan must provide all Part A and Part B
services covered by Original Medicare, but can do so with different
rules, costs, and restrictions that can affect how and when you
receive care.

28
Changes in Medicare Coverage in 2020 & Beyond

 The Part D donut hole: The Medicare Part D donut hole/coverage gap is
the phase of Part D coverage after a person’s initial coverage period
 A person enters the donut hole when their total drug costs—including what
they and their insurance plan have paid for their drugs—reaches a certain
limit
 In 2021, that limit is $4,130. While in the coverage gap, people are
responsible for a percentage of the cost of their drugs

29
Video – What is Medicare
 https://www.youtube.com/watch?v=Bcs6se5ONY4

30
Video – What is covered in Medicare
Parts A, B, C, D
 https://www.youtube.com/watch?v=4lnDj0DivDE

31
Medicare Card

32
Medicare - FAQ

 What is Medicare?
 What are Medicare Enrollment Periods?
 What is the difference between Original Medicare and Medicare Advantage
Plus?

33
MEDICAID

34
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
Medicaid Eligibility and Enrollment
 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.

36
Medicaid Benefits
There are two general types of Medicaid coverage
 "Community Medicaid" helps people who have little or no medical insurance.
 “Medicaid nursing home coverage” pays all of the costs of nursing homes for those
who are eligible except that the recipient pays most of his/her income toward the
nursing home costs, usually keeping only $66.00 a month for expenses other than the
nursing home
 Some states operate a program known as the Health Insurance Premium Payment
Program (HIPP). This program allows a Medicaid recipient to have private health
insurance paid for by Medicaid
 Dental Services: The Social Security program under Medicaid covers dental services.
They are optional for people older than 21 years but required for people eligible for
Medicaid and younger than 21. Minimum services include pain relief, restoration of
teeth and maintenance for dental health.
 Early and Periodic Screening, Diagnostic and Treatment (EPSDT) is a mandatory
Medicaid program for children that focuses on prevention, early diagnosis and
treatment of medical conditions.
 Oral screenings are not required for EPSDT recipients, and they do not suffice as a
direct dental referral. If a condition requiring treatment is discovered during an oral
screening, the state is responsible for paying for this service, regardless of whether or
not it is covered on that particular Medicaid plan

37
Medical Care Covered by Medicaid
Every state’s Medicaid program covers basic medical care to
the same extent that Medicare Part A and Part B do. This
includes:
 Inpatient hospital care
 Inpatient short-term skilled nursing or rehabilitation facility
care
 Doctor services
 Outpatient hospital or clinic care
 Laboratory and X-ray services
 Short-term home health care (provided by a home health
care agency)
 Ambulance service
 Prescription drugs for people not covered by Medicare

38
Medical Care Covered by Medicaid
State Medicaid programs may choose to cover optional medical services.
If a state Medicaid program covers an optional medical service, the
patient may be charged a small co-payment.
 The optional coverage offered and the copayments for each optional
service vary from state to state but may include:
Eye examinations and glasses
Hearing tests and hearing aids
Dental care
Preventive screenings
Physical therapy (beyond what is offered under Medicare)
Non-emergency transportation to and from medical treatment
Some prescription drugs not covered by Medicare
Some nonprescription drugs, including certain vitamins
Chiropractic care

39
Video on Medicaid
Medicaid Defined:
https://www.youtube.com/watch?v=W--leU1yz0Q

Difference between Medicare and Medicaid :

https://www.youtube.com/watch?v=5dDj37x7ToA

40
Medicaid Card
 Labelling to be done

41
Medicaid - FAQ
 What is Medicaid?
 What is the difference between Medicaid and Medicare?
 What medical benefits are provided by Medicaid?

42
TRICARE

43
Insurance
Public/Government Health Insurance Payers
 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

44
Public/Government Health Insurance Payers
Tricare
 Tricare has various insurance programs for active-duty and retired
officers, such as:
Tricare Prime
Tricare Select
Tricare Pharmacy
Tricare for Guard and Reserve
Tricare Overseas

45
Tricare - FAQ

 What is Tricare?
 In what ways it is different from other public insurance services?

46
PRIVATE INSURANCE

47
Private Insurance
 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

48
Insurance Premium
 A health insurance premium is an upfront payment made on behalf of an
individual or family in order to keep their health insurance policy active.
 Premiums are typically paid monthly when purchased on the individual
market.
 Individuals who receive insurance through their employer usually pay their
portion of the premium through payroll deductions.
 In addition to the premium, consumers may have to pay out-of-pocket
costs—deductibles, co-pays, and coinsurance—when they seek medical
care.
 Plans with a higher premium will generally have lower out-of-pocket
expenses than other plans from the same insurer.
 High-deductible plans with a lower monthly premium may end up being
less expensive overall if a person or their covered dependents require
relatively little medical care
 Those 65 and older generally pay much lower premiums through Medicare
than they would on policies sold on the individual market

49
Private & Commercial
Insurance Companies

50
Private/Commercial Health Insurance Payers
Blue Cross Blue Shield (BCBS)
 Blue Cross Blue Shield Association is an Association of 36 independent,
community-based, United States health insurance companies, providing health
insurance in the United States to more than 106 million people
 Blue Cross Blue Shield Association owns and manages the Blue Cross and Blue
Shield trademarks and names in more than 170 countries around the world. The
Association also grants licenses to independent companies to use the
trademarks and names in exclusive geographic areas.
 Blue Cross Blue Shield insurers offer some form of health insurance coverage in
every U.S. state. They also act as administrators of Medicare in many states or
regions of the United States
 The Blue Cross Blue Shield Federal Employee Program (FEP) is a nationwide
option under the Federal Employees Health Benefits Program (FEHB) for U.S.
federal government employees and retirees.
 FEP enrolls over half of the federal workforce, with over 5.4 million members
(federal government employees, dependents and retirees), making it the largest
insurer of federal employees and the largest single health plan group in the
world

51
Private/Commercial Health Insurance Payers
Blue Cross Blue Shield
 Blue Cross provides coverage for hospital services and Blue Shield covers
physicians' services
 BCBS companies operate in every U.S. state, the District of Columbia and
Puerto Rico
 Of the 36 BCBS companies, the largest is the publicly-traded Anthem,
which stretches across 14 states
 Horizon Blue Cross Blue Shield of New Jersey, headquartered in Newark,
New Jersey, is the only licensed Blue Cross and Blue Shield Association
plan in New Jersey, providing health insurance coverage to over 3.2
million people throughout all of New Jersey

52
Private/Commercial Health Insurance Payers
Blue Cross Blue Shield
 Blue Cross provides coverage for hospital services and Blue
Shield covers physicians' services
 BCBS companies operate in every U.S. state, the District of Columbia
and Puerto Rico
 Of the 36 BCBS companies, the largest is the publicly-traded Anthem,
which stretches across 14 states

53
BCBS - FAQ

 What service are provided by the Blue Cross Blue Shield and to
whom?
 How many companies are there is BCBS Association?

54
Private/Commercial Health Insurance Payers
Cigna
 Cigna is an American worldwide health services organization. Its
insurance subsidiaries are major providers of medical, dental,
disability, life, accident insurance and related products & services,
the majority of which are offered through employers and other
groups (e.g. governmental and non-governmental organizations,
unions and associations)

55
 Private/Commercial Health Insurance Payers
Cigna ID Card PCP (Primary Care Provider)

1. If a third party administers services in conjunction with Cigna,

1. Precertification requirements may be shown as either
the card will show multiple logos and contact details.
“Inpatient Admission” or “Inpatient Admission and
2. Cigna Health and Life Assurance Company
Outpatient Procedures”.
3. Effective Date of Coverage
2. Submit claims to the claim submission address shown on the
4. ID Number for all claims and inquiries
card
5. Name of patient’s primary care provider
3. Call the customer service numbers indicated on the card
6. Employer name
7. Client specific network logo
8. ID cards with Cigna Care Network logo, indicate the patient’s
liability varies based on the provider’s Cigna Care designation
status
9. Network Savings Program network
10. Collect any copayment at the time of service
11. For patients with coinsurance, submit claims to Cigna or its
designee and receive EOP (explanation of payment)

56
 Private/Commercial Health Insurance Payers
Cigna
 Cigna: Example cards 2020

Copyrights © 2020 MTBC. All rights reserved 57

Insurance
Private/Commercial Health Insurance Payers
 United Healthcare: UnitedHealth Group Inc. is an American for-profit
managed health care company based in Minnetonka, Minnesota. It is sixth
in the United States on the Fortune 500. UnitedHealth Group offers health
care products and insurance services.

58
Insurance
Private/Commercial Health Insurance Payers
 Aetna: Aetna Inc. is an American managed health care
company, which sells traditional and consumer directed
health care insurance plans and related services, such as
medical, pharmaceutical, dental, behavioral health, long-
term care, and disability plans

59
COST SHARING

60
Insurance
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

61
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

62
How Copay Works
 Copay fees vary among insurers but typically are $25 or less. For
example, an insurance plan with copays may require the insured
to pay $25 per doctor visit or $10 per prescription.
 If there is a copay option, it may include different fees for
physician visits, emergency room visits, specialists' visits, and
other medical services
 Insurance providers often charge higher copays for appointments
with out-of-network providers
 Out-of-network means that a doctor or physician does not have a
contract with patient’s health insurance plan provider. Some
health plans, such as an HMO plan, will not cover care from out-
of-network providers at all, except in an emergency
 Copay amounts may change annually

63
How Copays Affect Insurance Premiums?
 A premium is an amount paid for an insurance policy.
 In most cases, plans with relatively high premiums are likely
to have low co-pays, while plans with low premiums are
more likely to have high co-pays

64
Copay

Green Arrow = Patient’s Copay

65
Video on Copay

 https://www.youtube.com/watch?v=ORvqiGntVOo

66
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

67
Deductible

Green Arrow = Patient’s Deductible

68
Video on Deductible
 https://www.youtube.com/watch?v=hcMDaMhJanM

69
How Copays and Deductible Affect Each Other
A deductible is an amount an insured party pays out-of-
pocket before an insurance company pays a claim

Example:
If a patient has a $5,000 deductible, they spend the
entirety of their medical expenses until they reach that
$5,000 limit. From that point onwards, their insurance
company covers the costs, less their copay or coinsurance
costs

70
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.

71
How Coinsurance Works
 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.

72
Coinsurance : Example

 Assume a patient takes out a health insurance policy

with an 80/20 coinsurance provision and a $1,000
deductible.
 Unfortunately, the patient requires outpatient surgery
early in the year that costs $5,500. Since the patient has
not yet met their deductible, they must pay the first
$1,000 of the bill. After meeting their $1,000 deductible,
they are then only responsible for 20% of the remaining
$4,500, i.e. $900. Their insurance company will cover
80%, the remaining balance

73
Coinsurance

After deductible paid, insurance company pays the rest.

Shown as yellow arrow along with the green arrow

74
Video on Coinsurance

 https://www.youtube.com/watch?v=47tkrN-YQqs

75
How Copays and Coinsurance Work Together?

 Coinsurance is another out-of-pocket expense many health

insurance policyholders pay
 Rather than being a fixed fee amount as with copays,
coinsurance is a percentage of the total visit cost
 In some cases, health insurance policyholders pay both a
copay and coinsurance for the same medical appointment
 For example, imagine a patient receives a filling from a
dentist. Patient’s insurer charges a $20 co-pay for every
dental appointment, and it levies a 20% coinsurance fee for
fillings. If the dentist costs $200, patient pays $20 copay and
$40 coinsurance for a total of $60 for the appointment

76
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

77
How out-of-pocket maximum works
 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.

78
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-of-
pocket maximum.
 Now, her health plan will begin to pay 100% of her costs for covered care
for the rest of the plan year.
79
Out-of-Pocket Maximum - Video

 https://www.youtube.com/watch?v=l6_Sbd9PI1E

80
How Insurance Cost Sharing Works
Let’s assume you have a health plan with $1000 deductible,
20% coinsurance and $6,000 out-of-pocket maximum
$6,000
$1000 20% Out-of-pocket
Deductible Coinsurance Maximum
If You Incur a $50,000 Medical Bill

Deductible
If you incur a $50,000 medical bill, you will first
You Pay Insurance Pays need to pay your $1000 deductible. That would
leave you with &5000 left before you reach your
$ 1000 $0 $6000 out-of-pocket maximum

$5000 Coinsurance
With 20% coinsurance you will pay $1000 for
every $4000 paid by your insurance company.
That means for the next $25,000 in covered
$20,000 medical expenses, you would pay $5000 and your
insurance company would pay $20,000

Out-of-Pocket Maximum
Once you have paid your $1000 in deductible and
$5000 in coinsurance, you have reached your
$24,000 $6000 out-of-pocket maximum. Altogether, with
this $50,000 medical bill, you will have paid $6000
and your insurer will have paid the remaining
$44,000.

Total Total
6000 44000

81
 HMO Vs PPO

Copyrights © 2020 MTBC. All rights reserved 82

Common Types of Health Plan

 Health Maintenance Organizations (HMOs)

 Preferred Provider Organizations (PPOs)

83
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

84
HMO - Video
 https://www.youtube.com/watch?v=hGapUl3q9eA

85
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-of-
network providers

86
PPO - Video
 https://www.youtube.com/watch?v=kXgTmYgAfoA

87
Insurance
Health Maintenance Organization (HMO) versus Preferred Provider
Organization (PPO)

HMO Services / Types PPO

A plan that offers referral-free
A plan that covers care provided by
access to any physician a patient
a group of physicians in network
Definition wants to see, in or outside their
with predictable copays and out of
network, with benefits of single
pocket maximums
carrier administration
Yes. Lower Premium Yes. Higher
Lower Out of Pocket Higher
No. (including emergencies) Out of Network Coverage Yes. At a higher cost
Limited (usually no coverage other
than preventive and basic Procedures Covered Wide range
procedures
Yes PCP No
Yes Referral Required No
Required Prior Authorization Not usually required

88
Referral versus Prior Authorization
Referral Difference Prior Authorization
Referral is a recommendation to a patient from
Prior or pre-authorization (also known as pre-
Primary Care Physician (PCP) to receive medical
Definition certification) is an approval for certain medical
services from another health care provider or
treatments before the treatment is provided
medical specialist

To ensure medical necessity and appropriateness of

Purpose of referral is consultation.
care for certain medical, surgical or behavioral health
Referral is done for a health care service that the
Purpose services.
referring source (PCP) believes is necessary but
To determine/confirm whether the medical service
he/she is not prepared or qualified to provide
being offered is covered under patient’s health plan

Physician submits authorization/precertification

PCP will refer a patient to another medical requests, by telephone, fax or email.
Issuer
specialist or a healthcare service provider If approved, an authorization number is issued by
patient’s insurance

The specialist examines Mr. Smith’s medical condition

and decides on the type of procedure needed to get
Mr. Smith has a hand surgery and requires some
Mr. Smith’s hand back to full functionality
additional medical treatment that his PCP does
(formability). The specialist, after deciding the best
not specialize in providing. He, therefore, must
Illustration treatment/procedure to provide, may need to obtain
get a referral from his PCP to another medical
prior approval/authorization from Mr. Smith’s
specialist for the treatment and relevant medical
insurance provider before initiating the procedure as
services covered by his health plan
certain medical treatments/procedures are required to
be pre-approved by the insurance provider

89
FAQs
 What is HMO and PPO
 What is the difference between Referral and Preauthorization?

90
 TERMINOLOGIES,
ABBREVIATIONS, &
ACRONYMS

91
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

92
 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.

93
 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

94
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 CMS-
1500'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.

95
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.

96
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.

97
Key Terms, Acronyms - FAQ
 Explain the following:
DOS
EOB
CPT
ICD
ERA
EFT
Maximum Out-of-Pocket
In patient
Out Patient
Day Sheet
Coinsurance
Copay
Deductible

98
 Chapter 2
Billing Process
1. DOCUMENTATION 2. RECEIVING OF BILLS CLAIM SUBMISSION

99
 DOCUMENTATION
1. DAY SHEET 2. DEMOGRAPHIC FORM 3. SUPERBILL

100
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.

101
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.

102
Sign-in Sheet – Example (MTBC)

103
Demographic Form
 What is a 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.

104
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

105
Demographic Form (Registration Information)
1. Patient’s Personal Information i.e. patient’s name, gender, date of birth,
email & mailing address, contact number(s), social security number (SSN)
and marital status.
2. Financial Guarantor: A financial guarantor is the person who is responsible
to pay the balance amount of the bill, on Patient’s behalf

106
Demography Form (Registration Information)
3. Insurance Detail: It has insurance coverage detail including name, policy
number and address both for primary and secondary insurance coverage.
4. Patient Authorization: It is an acknowledgement by the patient that
authorizes the doctor to share patient’s health information for
submission of billing claims

107
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

108
Information on 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 (if available).

109
Superbill - Example

110
Superbill - Example

111
Superbill - Video
 https://www.youtube.com/watch?v=FksrxrqJtro

112
FAQs

 What is the purpose of demographic form?

 What is superbill?
 What key information is available on superbill?

113
CPT CODES

114
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)”
 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
Government agencies can use CPT codes to track the prevalence and value of
certain procedures, and hospitals may use CPT codes to evaluate the
efficiency and abilities of individuals or divisions within their facility

115
CPT Codes - Format
 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.

 i.e. 99215, 3008FCPT, should correlate with diagnosis code(s).

116
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

Copyrights © 2020 MTBC. All rights reserved 117

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

118
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

119
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.”

120
ICD-10-CM CODES

121
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

122
ICD-10-CM Codes
 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.
 The US version of ICD-10, created by the Centers for Medicare & Medicaid Services (CMS)
and the National Center for Health Statistics (NCHS), consists of two medical code sets—
ICD-10-CM and ICD-10-PCS.
 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.
 While CPT® codes depict the services provided to the patient, ICD-10-CM codes depict
the patient’s diagnoses that justify the services rendered as medically necessary.

123
ICD-10-CM Codes
 The number of ICD-10 codes currently in effect, is 72,184 (ICD-9-CM had
13,000 diagnosis codes).
 ICD-10-CM Illustrates the increased level of detail available to represent real-
world clinical practice and medical technology advances
 It helps in provision of essential data of disease patterns and outbreaks of
disease, and to help illuminate characteristics and circumstances of
individuals so affected
 Providers and payers can use ICD-10 diagnosis codes to track information
about patients’ conditions and the types and number of treatments patients
receive. They can gather and analyze code utilization to:
Measure the safety and efficacy of patient care
Determine the health status and risk factors of defined populations
Improve and monitor providers’ performances
Assess healthcare costs
Investigate and prevent coding and billing abuses

124
Structure of ICD-10-CM Codes
 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.
 Some examples of ICD-10 codes and the conditions they represent, are:
G10 (Huntington's disease)
K26.1 (Acute duodenal ulcer with perforation)
A37.81 (Whooping cough due to other Bordetella species with pneumonia)
I25.111 (Atherosclerotic heart disease of native coronary artery with angina
pectoris with documented spasm)
M80.021G (Age-related osteoporosis with current pathological fracture,
right humerus; subsequent encounter for fracture with delayed healing)
 With each additional character, the ICD-10 code depicts greater diagnostic
information. Diagnoses must always be coded to the highest level of specificity
available in the ICD-10 code set
 For instance, N04 should not be coded for a patient diagnosed with nephrotic
syndrome with minor glomerular abnormality. The finding of minor glomerular
abnormality calls for an additional digit and would be coded as N04.0.

125
Structure of ICD-10-CM Codes
 ICD-10 codes consist of 3 to 7 alpha-numeric characters
 Codes longer than 3 characters always have decimal point

126
Navigating ICD-10-CM Code
To understand ICD-10-Code, two sets of lists are required:
 The Alphabetical Index of diagnostic terms (plus their corresponding ICD-10
codes)
It lists thousands of “main terms” alphabetically. Under each of those
main terms, there is often a sublist of more-detailed terms—for instance,
“Cataract” has a sublist of 84 terms.
The Alphabetical Index doesn’t include coding instructions, which are in
the Tabular List.
 The Tabular List of ICD-10 codes (plus their descriptors):
It is organized alphanumerically from A00.0 to Z99.89
It is divided into chapters based on body part or condition

127
Steps to Identify ICD-10-CM Code
Step 1: Search the Alphabetical Index for a diagnostic term. After identifying the
term, note its ICD-10 code.
Step 2: Check the Tabular List. Before you use the ICD-10 code that you found in
the Alphabetical Index, it is important to check that code in the Tabular List to
see if there are special instructions.
Step 3: Read the code’s instructions. The code’s entry in the Tabular List provides
all the diagnosis code requirements.
Step 4: If it is an injury or trauma, add a seventh character. Use one of the
following:
A to indicate the initial encounter for the problem
D for a subsequent encounter
S for sequela (arising from another condition)

128
Example – Identifying ICD-10-CM Code
Situation
 Patient is 44-year-old Caucasian male. Self reported height and weight 1.8m and 80 kg. No
notable medical history.
 Patient presents with a red rash around the nose and labial folds. Some yellowish-reddish
pimples. Patient complains of itching and flaking skin. Patient says rash emerged two
months ago but then subsided. Diagnosed patient with seborrheic dermatitis and
prescribed a topical antifungal medication.
Code Identification
 First abstract the information in the doctor’s report. The patient shows one very specific
symptom (a rash on the face). The doctor makes a positive diagnosis: seborrheic dermatitis
 Look this up in the alphabetic index, or turn to the section in the tabular index for diseases
of the skin or subcutaneous tissue: L00-L99. From there look for dermatitis and eczema
and find L21: “seborrheic dermatitis.”
 Underneath that category there are four subcategories. Select the one that best describes
the condition diagnosed by the physician, which in this case would be L21.9, “Seborrheic
dermatitis, unspecified.”
 “unspecified” is used because the other codes for seborrheic dermatitis pertain either to
infants or describe an “other” seborrheic dermatitis. In this case, “unspecified” is our best
option

129
Example – Identifying ICD-10-CM Code
The tree looks like as:
L00-L99 – DISEASES OF THE SKIN AND SUBCUTANEOUS TISSUE
L21 – Seborrheic Dermatitis
 L21.0 – Seborrhea capitis
 L21.1 – Seborrheic infantile dermatitis
 L21.8 – Other seborrheic dermatitis
 L21.9 – Seborrheic dermatitis, unspecified

130
ICD-10-CM Codes - Video
 https://www.youtube.com/watch?v=ZPDgtDDTc8k

131
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

132
Modifiers - Example
 For a chest X-Ray taken in a hospital, the hospital would bill the code 71045-TC,
indicating that the hospital is billing only for the technical component.
 The radiologist at the hospital who interprets the x-ray, would also bill the code
71045-26, indicating that he/she interpreted the x-ray and wrote a report with
reference to the findings.

Technical Component:
71045-TC

Professional Component:
71045-26

133
FAQs
 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. 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. While
CPT® codes depict the services provided to the patient, ICD-10-CM
codes depict the patient’s diagnoses that justify the services rendered
as medically necessary.

134
 BILLING
1. RECEIVING OF BILLS BY MTBC
2. PREPARATION OF BILLS/CLAIMS BY 3. CONFIRMATION TO DOCTOR

135
Preparation of Bills
 At the end of each working day, doctor's staff sends all the documents,
listed below, to the office of billing service provider for the preparation of
bills/claims and initiation of revenue cycle activity:

Day sheet
Demographic form
Superbill
Explanation of benefits
Letters and other correspondence from insurances
Patient payment details
Medical notes (if required)
Any other relevant information required by the billing service provider

136
Work Receiving
 Channels
FTP
E-Bridge
Mail
Storage
 Daily work confirmation
 Electronic Claims
EHR
Interface

137
File Transfer Protocol (FTP)
 FTP is a standard network protocol used to transfer files between computers
on a network. An FTP server offers access to a directory and users connect to
these servers with an FTP client (software) on specified configuration to
download and upload the files

138
e-Bridge
 Web-cloud based document management tool which allows to upload, store
and retrieve documents online.
 e-Bridge gives the ability to access the files through a web browser and it
requires a user name and password to download and upload the files or
documents

139
Mail

 The mail or post is a system for physically

transporting postcards, letters, documents
and parcels.
 The documents are put in an envelope and
addressed to the billing office.
 International postal and courier services are
used for the purpose

140
Storage
 Documents are received and stored in the following
sequence at a secure location on a server
Year > Month > Client Folder> Date

141
Electronic Claims
Electronic Health Record (EHR)
 It is a systematized collection of electronically stored health
information including medical history and clinical data of the
patients
Interface
 An interface is a pathway established on international
standards (HL7) for transfer of clinical data between software
applications
Workflow
 Doctor or staff create the claims in MTBC or third party EHR
and are further received in MTBC system through sync/import
process

142
Daily Work Confirmation
 Confirmation of work refers to confirming the receipt of work sent by the
provider's office on a particular day. It is an acknowledgement to providers that the
billing work sent by their office has been received
A typical work confirmation includes:
Number of files received
Count of Superbills
Types of bill (Hospital or Office)
Count of EOB pages
Patient payment pages

143
Claim Submission
 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:

144
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

145
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

146
Paper Submission Process
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.

147
Paper Submission

148
Claim Acknowledgment (999 (Brief) 277CA (Detailed)
 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.

149
Claim Acknowledgment (999 (Brief) 277CA (Detailed)

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

150
Claim Acknowledgment (999 (Brief) 277CA (Detailed):

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

151
Case Study
 Two cases, one each on acceptance and rejection of
claim will be discussed with the trainees

152
FAQs
 What is the medical submission process?
 When and where can a claim be rejected?

Copyrights © 2020 MTBC. All rights reserved 153

 Payment Process
1. Remittance Advice (RA) 2. Denial Management 3. Patient Billing
4. Follow Up 5. Appeal Drafting

154
 REMITTANCE ADVICE (RA)
1. EXPLANATION OF BENEFITS (EOB) 2. ELECTRONIC REMITTANCE ADVICE (ERA)

155
Remittance Advice (RA)
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

156
157
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.

158
159
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

160
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

161
Electronic Remittance Advice
 Insurance Information
 Name & Address of the payer.
 Provider Information
 Name and NPI of the Provider.
 Provider's (Payee) Address.
 DOS, CPT, Units
 ICN: Internal control number
 Claim number:
 Check/EFT Number
 Payment method: Check/ACH
 Patient Name
 Policy Number
 RARC (Remittance Advice Remark Codes)
 CARC (Claim Adjustment Reason Codes)

162
163
FAQs

 What be included in the ERA?

 What is the difference between an SRA and ERA?

164
DENIAL MANAGEMENT

165
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.

166
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

167
Example ERA (Electronic Remittance Advice)

168
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

169
Example ERA (Electronic Remittance Advice)

170
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

171
Example ERA (Electronic Remittance Advice)

172
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.

173
Example ERA (Electronic Remittance Advice)

174
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

175
Example ERA (Electronic Remittance Advice)

176
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

177
Example ERA (Electronic Remittance advice)

178
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 Action
 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

179
Example ERA (Electronic Remittance advice)

180
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

181
Example

182
CO29 - The time limit for filing has expired
Reason
 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
LF Indicators
 Proof of Eligibility Unknown or Unavailable
 Litigation
 Authorization Delays
 Delay in Certifying Provider
 Delay in Supplying Billing Forms
 Delay in Delivery of Custom-made Appliances
 Third Party Processing Delay
 Delay in Eligibility Determination
 Original Claim Rejected or Denied Due to a Reason unrelated to the Billing Limitation Rules
 Administration Delay in the Prior Approval Process

183
Example EOB (Explanation of Benefits)

184
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

185
Example ERA (Electronic Remittance advice)

186
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
 Verify if the claim is submitted to correct payer
 Check patient’s eligibility through real time or obtain through insurance website to
make sure information submitted is correct and there is no mismatch
 Is case of any conflict, correct the information and resubmit claim
 If all seems correct, one should generate call for insurance to review the claim

187
Example ERA (Electronic Remittance advice)

188
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

189
Example

190
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

191
Example ERA (Electronic Remittance advice)

192
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

193
Example

194
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.

195
Example ERA (Electronic Remittance advice)

196
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.

197
Example ERA (Electronic Remittance advice)

198
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.

199
Example EOB (Explanation of Benefits)

200
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.

201
Example ERA (Electronic Remittance advice)

202
Payment adjusted because `'New Patient' qualifications were not met

Reason

 New patient code is billed for an established patient

Suggested Action

 Submit the claims with established patient visit

203
Example

204
FAQs

 What are 5 key reasons for claim denial?

205
PATIENT BILLING

206
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.

207
 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.

208
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.

209
Standard Patient Billing Cycle
Day 01
 Billing offices follow the 100 days’
• Patient Statement
standard patient billing cycle.
However, doctor may choose time and
30th Day
frequency for sending statements or
• 1st Call for Balance Reminder
balance reminder calls
 Movement of balance to collections is 50th Day
specifically a provider’s decision • 2nd Call for Balance Reminder

70th Day
• 3rd Call for Balance Reminder

100th Day
• Dormant

Collection Deptt.
• Recovery for payment of an overdue balance

210
FAQs

 When is a patient’s bill referred to collections?

211
FOLLOW UP

212
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.

213
Insurance-wise Aging

214
Follow Up Steps
 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

215
Example

216
Follow-Up Strategy

Follow-up steps with hierarchy

217
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

218
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.

Copyrights © 2020 MTBC. All rights reserved 219

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

Copyrights © 2020 MTBC. All rights reserved 220

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.

221
FAQs

 What are the actions we can take to follow-up on

pending payment?

222
APPEAL DRAFTING

223
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.

224
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.

225
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

226
Appeal Drafting Guidelines
Incorporate evidence with right paperwork:

 To dispute a denial based on the necessity of a service or the need to provide

it as a distinct service, it should be accompanied by supportive references,
published reimbursement policies by an insurance, referrals, prescriptions
from the doctor and any relevant information such as medical history that
may help the claim get approved the second time around

227
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.
228
Appeal Drafting Guidelines

Stay organized by maintaining the logs:

 All the details of conversations with insurance, should be

documented

 Important points, such as name and the job title of the person
spoken to, date of conversation, call reference number, should
be noted down

 If an appeal was submitted, the “document control number”

should also be obtained

 This information will help to quickly access all the necessary

information for follow up call with insurance

229
Example

230
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.

231
 Terminologies and Provisions
in Medical Specialties
1. IDENTIFICATION NUMBERS 2. BILING PROVISIONS
3. MEDICAL SPECAILTY 4. PAYMENT TERMINOLOGY

232
IDENTIFICATION NUMBERS

233
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

234
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

235
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
236
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.

237
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.

238
State License Number

 A medical license is an occupational license that permits a

person to legally practice medicine.

 In the United States, medical licenses are granted by individual

states.

 Example: MA64146

239
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

240
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.

241
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

242
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

243
BILLING PROVISIONS

244
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

245
“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

246
“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.

247
 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

Copyrights © 2020 MTBC. All rights reserved 248

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

249
 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

Copyrights © 2020 MTBC. All rights reserved 250

Billing Provisions - FAQs

 What does Locum tenens mean?

 What medical services are provided by Locum Tenens
Physicians?

Copyrights © 2020 MTBC. All rights reserved 251

PAYMENT TERMINOLOGY

252
Capitation
 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

253
Capitation Sample

Copyrights © 2020 MTBC. All rights reserved 254

Capitation Posting

Copyrights © 2020 MTBC. All rights reserved 255

 Capitation: Claim Submission Response
 CO24 – Payment for charges adjusted. Charges are covered under a capitation
agreement/managed care plan.

Reasons
 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

Copyrights © 2020 MTBC. All rights reserved 256

 Overpayment

 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

Copyrights © 2020 MTBC. All rights reserved 257

Insurance overpayment

In this scenario, insurance payment or adjustment in a

claim turns out to be more than the claim’s charged
amount due to one of the below reasons;

 Multiple submissions or multiple insurances processed

the claim as primary
 Processing error
 Duplicate claim entered

Copyrights © 2020 MTBC. All rights reserved 258

 Patient Overpayment

 When a patient paid more than their actual liability it will be an

overpaid claim at patient end.

 Reasons
Multiple payments from patient for same claim/date of
service.
Patient paid more than his/her responsibility.

Copyrights © 2020 MTBC. All rights reserved 259

Payment Terminology - FAQ
 What is Capitation?
 What is Capitation List?

260
Thank You

261