Survey of Medical Insurance pp ch07

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  • Teaching Notes:   Have students define all key terms as an assignment. Then, in class, ask each student to define one key term aloud.   Optional assignment: Have students do an Internet search of one key term and write a short paragraph describing what they learned about that term from looking at a few websites.
  • Teaching Notes:   Have students define all key terms as an assignment. Then, in class, ask each student to define one key term aloud.   Optional assignment: Have students do an Internet search of one key term and write a short paragraph describing what they learned about that term from looking at a few websites.
  • Teaching Notes:   Have students define all key terms as an assignment. Then, in class, ask each student to define one key term aloud.   Optional assignment: Have students do an Internet search of one key term and write a short paragraph describing what they learned about that term from looking at a few websites.
  • Learning Outcome: 7.1 Explain the importance of properly linking diagnoses and procedures on health care claims. Page: 236 Teaching Notes:   Have your students explain the importance of accurate code linkage in their own words.
  • Learning Outcome: 7.2 Describe the use and format of Medicare’s Correct Coding Initiative (CCI) edits and medically unlikely edits (MUEs). Pages: 236-241 Teaching Notes:   Ask your students to identify the bases for the coding policies of the CCI. (Coding conventions in CPT; Medicare’s national and local coverage and payment policies; national medical societies’ coding guidelines; Medicare’s analysis of standard medical and surgical practice.)
  • Learning Outcome: 7.2 Describe the use and format of Medicare’s Correct Coding Initiative (CCI) edits and medically unlikely edits (MUEs). Pages: 236-241 Teaching Notes:   Ask your students to explain CCI mutually exclusive code (MEC) edits in their own words.
  • Learning Outcome: 7.2 Describe the use and format of Medicare’s Correct Coding Initiative (CCI) edits and medically unlikely edits (MUEs). Pages: 236-241 Teaching Notes:   Direct your students to look at the most recent edition of the OIG Work Plan. (http://oig.hhs.gov/publications/workplan.asp)
  • Learning Outcome: 7.3 Discuss types of coding and billing errors. Pages: 242-243 Teaching Notes:   Provide your students with some examples of claims that would be rejected or downcoded by payers, and have them identify why.
  • Learning Outcome: 7.3 Discuss types of coding and billing errors. Pages: 242-243 Teaching Notes:   Have your students explain the difference between upcoding and downcoding.
  • Learning Outcome: 7.4 Explain major strategies that help ensure compliant billing. Pages: 243-247 Teaching Notes:   Have your students debate the priorities of the different strategies for compliance.
  • Learning Outcome: 7.4 Explain major strategies that help ensure compliant billing. Pages: 243-247 Teaching Notes:   Have your students debate the risks and rewards of offering professional courtesy.
  • Learning Outcome: 7.5 Discuss the use of audit tools to verify code selection. Pages: 247-252 Teaching Notes:   Discuss the items that the RAC initiative looks for when performing an audit. (Obvious “black and white” coding errors; medically unnecessary treatment or wrong setting of care where information in the medical record does not support the claim; multiple or excessive number of units billed.)
  • Learning Outcome: 7.5 Discuss the use of audit tools to verify code selection. Pages: 247-252 Teaching Notes:   Ask your students to distinguish between the four different types of audits listed here.
  • Learning Outcome: 7.6 Describe the fee schedules that physicians create for their services. Pages: 253-254 Teaching Notes:   Have your students explain the reason(s) why they think physicians establish a list of their usual fees for the procedures and services they frequently perform.
  • Learning Outcome: 7.7 Compare the usual, customary, and reasonable (UCR) and the resource-based relative value scale (RBRVS) methods of determining the fees that insurance carriers pay for providers’ services. Pages: 255-257 Teaching Notes:   Have your students assess the merits of the three factors that resource-based fee structure are built on. (See the three factors on this slide.)
  • Learning Outcome: 7.7 Compare the usual, customary, and reasonable (UCR) and the resource-based relative value scale (RBRVS) methods of determining the fees that insurance carriers pay for providers’ services. Pages: 255-257 Teaching Notes:   Have your students debate the possible advantages and disadvantages of using the UCR method to structure fees.
  • Learning Outcome: 7.7 Compare the usual, customary, and reasonable (UCR) and the resource-based relative value scale (RBRVS) methods of determining the fees that insurance carriers pay for providers’ services. Pages: 255-257 Teaching Notes:   Provide your students with examples of calculating a RVU. (See the Example on page 255 for a reference.)
  • Learning Outcome: 7.7 Compare the usual, customary, and reasonable (UCR) and the resource-based relative value scale (RBRVS) methods of determining the fees that insurance carriers pay for providers’ services. Pages: 255-257 Teaching Notes:   Ask your students to identify the three parts to an RBRVS fee. ((1) The nationally uniform RVU; (2) A geographic adjustment factor; (3) A nationally uniform conversion factor.)
  • Learning Outcome: 7.8 Describe the steps used to calculate RBRVS payments under the Medicare Fee Schedule. Pages: 257-258 Teaching Notes:   Go over the example of calculating a Medicare payment (Figure 7.7) with your students.
  • Learning Outcome: 7.8 Describe the steps used to calculate RBRVS payments under the Medicare Fee Schedule. Pages: 257-258 Teaching Notes:   Supply new information for your students to use to calculate a Medicare payment. (Use Figure 7.7 as a reference to create a scenario.)
  • Learning Outcome: 7.9 Discuss the calculation of payments for participating and nonparticipating providers, and describe how balance billing regulations affect the charges that are due from patients. Pages: 258-261 Teaching Notes:   Have your students identify three things that will affect whether a provider actually receives the allowed charge or not. ((1) The provider’s usual charge for the procedure or service; (2) The provider’s status in the particular plan or program; (3) The payer’s billing rules.) Go over the example of calculating an allowed charge. (Example is on page 259.)
  • Learning Outcome: 7.9 Discuss the calculation of payments for participating and nonparticipating providers, and describe how balance billing regulations affect the charges that are due from patients. Pages: 258-261 Teaching Notes:   Have students explain the concept of balance billing in their own words.
  • Learning Outcome: 7.10 Differentiate between billing for covered versus noncovered services under a capitation schedule. Pages: 261-263 Teaching Notes:   Have your students debate the advantages and disadvantages of operating under a capitation system.

Transcript

  • 1. 7 Visit Charges and Compliant Billing
  • 2. Learning Outcomes
    • When you finish this chapter, you will be able to:
    • 7.1 Explain the importance of properly linking diagnoses and procedures on health care claims.
    • 7.2 Describe the use and format of Medicare’s Correct Coding Initiative (CCI) edits and medically unlikely edits (MUEs).
    • 7.3 Discuss types of coding and billing errors.
    • 7.4 Explain major strategies that help ensure compliant billing.
    7-2
  • 3. Learning Outcomes (Continued)
    • When you finish this chapter, you will be able to:
    • 7.5 Discuss the use of audit tools to verify code selection.
    • 7.6 Describe the fee schedules that physicians create for their services.
    • 7.7 Compare the usual, customary, and reasonable (UCR) and the resource-based relative value scale (RBRVS) methods of determining the fees that insurance carriers pay for providers’ services.
    • 7.8 Describe the steps used to calculate RBRVS payments under the Medicare Fee Schedule.
    7-3
  • 4. Learning Outcomes (Continued)
    • When you finish this chapter, you will be able to:
    • 7.9 Discuss the calculation of payments for participating and nonparticipating providers, and describe how balance billing regulations affect the charges that are due from patients.
    • 7.10 Differentiate between billing for covered versus noncovered services under a capitation schedule.
    7-4
  • 5. Key Terms
    • advisory opinion
    • allowed charge
    • assumption coding
    • audit
    • balance billing
    • capitation rate (cap rate)
    • CCI column 1/column 2 code pair edit
    • CCI modifier indicator
    • CCI mutually exclusive code (MEC) edit
    7-5
    • charge-based fee structure
    • code linkage
    • computer-assisted coding (CAC)
    • conversion factor
    • Correct Coding Initiative (CCI)
    • documentation template
    • downcoding
    • edits
  • 6. Key Terms (Continued)
    • excluded parties
    • external audit
    • geographic practice cost index (GPCI)
    • internal audit
    • job reference aid
    • medically unlikely edits (MUEs)
    • Medicare Physician Fee Schedule (MPFS)
    • OIG Work Plan
    • professional courtesy
    7-6
    • prospective audit
    • provider withhold
    • Recovery Audit Contractor (RAC)
    • relative value scale (RVS)
    • relative value unit (RVU)
    • resource-based fee structure
    • resource-based relative value scale (RBRVS)
    • retrospective audit
  • 7. Key Terms (Continued)
    • truncated coding
    • upcoding
    • usual, customary, and reasonable (UCR)
    • usual fee
    • write off
    7-7
  • 8. 7.1 Compliant Billing
    • Diagnoses and procedures must be correctly linked on health care claims so payers can analyze the connection and determine the medical necessity of charges
    • Code linkage— connection between a service and a patient’s condition or illness
    7-8
  • 9. 7.2 Knowledge of Billing Rules
    • To prepare correct claims, it is important to know payers’ billing rules as stated in patients’ medical insurance policies and participation contracts
    • Correct Coding Initiative (CCI)— computerized Medicare system that prevents overpayment
      • CCI edits— code combinations used by computers in the Medicare system to check claims
    • CCI column 1/column 2 code pair edit– Medicare code edit where CPT codes in column 2 will not be paid if reported in the same way as the column 1 code
    7-9
  • 10. 7.2 Knowledge of Billing Rules (Continued)
    • CCI mutually exclusive code (MEC) edit— both services represented by MEC codes that could not have been done during one encounter
    • CCI modifier indicator— number showing if the use of a modifier can bypass a CCI edit
    • Medically unlikely edits (MUEs)— units of service edits used to lower the Medicare fee-for-service paid claims error rate
    7-10
  • 11. 7.2 Knowledge of Billing Rules (Continued)
    • OIG Work Plan— OIG’s annual list of planned projects
    • Advisory opinion— opinion issued by CMS or the OIG that becomes legal advice
    • Excluded parties— individuals or companies not permitted to participate in federal health care programs
    7-11
  • 12. 7.3 Compliance Errors
    • Claims are rejected or downcoded because of:
      • Medical necessity errors
      • Coding errors
      • Errors related to billing
    • Truncated coding— diagnoses not coded at the highest level of specificity
    • Assumption coding— reporting undocumented services the coder assumes have been provided due to the nature of the case or condition
    7-12
  • 13. 7.3 Compliance Errors (Continued)
    • Upcoding— use of a procedure code that provides a higher payment
    • Downcoding— payer’s review and reduction of a procedure code
    7-13
  • 14. 7.4 Strategies for Compliance
    • Major strategies to ensure compliant billing:
      • Carefully define bundled codes and know global periods
      • Benchmark the practice’s E/M codes with national averages
      • Keep up to date through ongoing coding and billing education
      • Be clear on professional courtesy and discounts to uninsured/low-income patients
      • Maintain compliant job reference aids and documentation templates
      • Audit the billing process
    7-14
  • 15. 7.4 Strategies for Compliance (Continued)
    • Professional courtesy— providing free services to other physicians
    • Job reference aid— list of a practice’s frequently reported procedures and diagnoses
    • Computer-assisted coding (CAC)— allows a software program to assist in assigning codes
    • Documentation template— form used to prompt a physician to document a complete review of systems (ROS) and a treatment’s medical necessity
    7-15
  • 16. 7.5 Audits
    • Monitoring the coding and billing process is done to ensure adherence to established policies and procedures
    • An important compliance activity involves audits
      • An audit is a formal examination or review
      • Recovery Audit Contractor (RAC)— program designed to audit Medicare claims
    7-16
  • 17. 7.5 Audits (Continued)
    • External audit— audit conducted by an outside organization
    • Internal audit— self-audit conducted by a staff member or consultant
    • Prospective audit— internal audit of claims conducted before transmission
    • Retrospective audit— internal audit conducted after claims are processed and RAs have been received
    7-17
  • 18. 7.6 Physician Fees
    • Physicians set their fee schedules in relation to the fees that other providers charge for similar services
    • Usual fee— normal fee charged by a provider
    7-18
  • 19. 7.7 Payer Fee Schedules
    • Payers use two main methods to establish the rates they pay providers
      • Charge-based fee structure— fees based on typically charged amounts
      • Resource-based fee structure— fee structures built by comparing three factors:
        • (1) how difficult it is for the provider to do the procedure,
        • (2) how much office overhead the procedure involves, and
        • (3) the relative risk that the procedure presents to the patient and to the provider
    7-19
  • 20. 7.7 Payer Fee Schedules (Continued)
    • Payers that use a charge-based fee structure also analyze charges using one of the national databases
      • Usual, customary, and reasonable (UCR)— setting fees by comparing usual fees, customary fees, and reasonable fees
      • Relative value scale (RVS) —system of assigning unit values to medical services based on their required skill and time
    7-20
  • 21. 7.7 Payer Fee Schedules (Continued)
    • The relative value system can be used to assign a relative value, known as the relative value unit
      • Relative value unit (RVU)— factor assigned to a medical service based on the relative skill and required time
    • Conversion factor —amount used to multiply a relative value unit to arrive at a charge
    7-21
  • 22. 7.7 Payer Fee Schedules (Continued)
    • Resource-based relative value scale (RBRVS)— relative value scale for establishing Medicare charges
      • Geographic practice cost index (GPCI)— Medicare factor used to adjust providers’ fees in a particular geographic area
    7-22
  • 23. 7.8 Calculating RBRVS Payments
    • Each part of the RBRVS—the relative values, the GPCI, and the conversion factor—is updated each year by CMS
    • Medicare Physician Fee Schedule (MPFS)— the RBRVS-based allowed fees
    7-23
  • 24. 7.8 Calculating RBRVS Payments (Continued)
    • The following steps are used to calculate the RBRVS payments under the MPFS:
      • Determine the procedure code for the service
      • Use the MPFS to find three RVUs—work, practice expense, and malpractice—for the procedure
      • Use the Medicare GPCI list to find the three geographic practice cost indices
      • Multiply each RVU by its GPCI to calculate the adjusted value
      • Add the three adjusted totals, and multiply the sum by the annual conversion factor to determine the payment
    7-24
  • 25. 7.9 Fee-Based Payment Methods
    • In addition to setting various fee schedules, payers use one of three main methods to pay providers:
      • 1. Allowed charges
      • 2. Contracted fee schedule
      • 3. Capitation
    • Allowed charge— maximum charge a plan pays for a service or procedure
    7-25
  • 26. 7.9 Fee-Based Payment Methods (Continued)
    • Balance billing— collecting the difference between a provider’s usual fee and a payer’s lower allowed charge
    • Write off— to deduct an amount from a patient’s account
    7-26
  • 27. 7.10 Capitation
    • The capitation rate (or cap rate ) is the periodic prepayment to a provider for specified services to each plan member
      • Health plan sets a capitation rate that pays for all contracted services to enrolled members for a given period
    • Provider withhold— amount withheld from a provider’s payment by an MCO
    7-27