Issues and Trends in HBI Ch 6
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  • Teaching Notes: <br />  Suggest to students that they review the key terms in this chapter prior to reading the chapter or hearing the lecture. This will enhance their understanding of the material. <br />   <br />
  • Learning Outcome: 6.1 Explain the importance of code linkage on healthcare claims. <br /> Teaching Notes: <br />   <br /> Ask students to explain the importance of accurate code linkage. <br /> Discuss strategies on how appropriate code linkage can be verified and what documents can be examined. <br />
  • Learning Outcome: 6.2 Describe the use and format of Medicare’s Correct Coding Initiative (CCI) edits and medically unlikely edits (MUEs). <br /> Teaching Notes: <br />   <br /> Ask students to examine and discuss the basis 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; and Medicare’s analysis of standard medical and surgical practice). <br />
  • Learning Outcome: 6.2 Describe the use and format of Medicare’s Correct Coding Initiative (CCI) edits and medically unlikely edits (MUEs). <br /> Teaching Notes: <br />   <br /> Ask students to describe CCI mutually exclusive code (MEC) edits in their own words. <br /> Discuss how MUEs affect the provider and what action can the be taken to prevent these edits. <br />
  • Learning Outcome: 6.2 Describe the use and format of Medicare’s Correct Coding Initiative (CCI) edits and medically unlikely edits (MUEs). <br /> Teaching Notes: <br />   <br /> Examine and discuss with students the most recent edition of the OIG Work Plan <br /> (visit: http://oig.hhs.gov/publications/workplan.asp). <br /> Discuss the differences between advisory opinion and excluded parties. <br />
  • Learning Outcome: 6.3 Discuss types of coding and billing errors. <br /> Teaching Notes: <br />   <br /> Ask students to provide examples of common reasons why claims are rejected. <br /> Discuss why assumption coding can result in rejected claims. <br />
  • Learning Outcome: 6.3 Discuss types of coding and billing errors. <br /> Teaching Notes: <br />   <br /> Ask students to explain the difference between upcoding and downcoding, providing examples of each. <br /> Identify and discuss three reasons why some procedures are downcoded. <br />
  • Learning Outcome: 6.4 Explain major strategies that help ensure compliant billing. <br /> Teaching Notes: <br />   <br /> Discuss with students strategies to ensure billing compliance. <br /> Ask students to provide examples of professional courtesy and when it is appropriate. <br /> Optional Assignment: <br /> Ask students to research the CMS website at www.cms.gov and describe any job aids and templates that are available. <br />
  • Learning Outcome: 6.4 Explain major strategies that help ensure compliant billing. <br /> Teaching Notes: <br />   <br /> Ask students to discuss the risks and rewards of offering professional courtesy. <br /> Discuss how CAC and documentation templates help improve accuracy. <br />
  • Learning Outcome: 6.5 Discuss the use of audit tools to verify code selection. <br /> Teaching Notes: <br />   <br /> Discuss the items that the RAC initiative looks for when performing an audit <br /> (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; and multiple or excessive number of units billed). <br /> Discuss how feedback from audits can be used to improve accuracy. <br /> Optional Assignment: <br /> Ask students to research RAC at the CMS website at www.cms.gov and describe how it improves healthcare. <br />
  • Learning Outcome: 6.5 Discuss the use of audit tools to verify code selection. <br /> Teaching Notes: <br />   <br /> Ask students to describe the differences between all four types of audits listed here. <br /> Discuss how prospective audits can help catch billing errors and ask students to think about the issues involved with performing internal audits. <br />
  • Learning Outcome: 6.6 Describe the fee schedules that physicians create for their services. <br /> Teaching Notes: <br />   <br /> Ask students to discuss why providers establish a list of usual fees for common procedures. <br />
  • Learning Outcome: 6.6 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. <br /> Teaching Notes: <br />  The charge-based method is based on the fees that providers of similar training and experience have charged for similar services. <br /> The resource-based method compares three factors: 1) the difficulty of the procedure, 2) the amount of overhead involved, and 3) the amount of relative risk involved. <br />
  • Learning Outcome: 6.6 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. <br /> Teaching Notes: <br />  The charge-based fee structure creates a schedule known as UCR. <br /> In an RVS, each procedure in a group of related procedures is assigned a relative value based on the complexity of related procedures. <br /> . <br />
  • Learning Outcome: 6.6 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. <br /> Teaching Notes: <br />   <br /> Provide students with examples of calculating a RVU (see the example on page 255 for a reference). <br /> The nationally uniform conversion factor is a dollar amount used to multiply the relative values to produce the full Medicare allowable rate for a given service. <br />
  • Learning Outcome: 6.6 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. <br /> Teaching Notes: <br />   <br /> Ask students to identify the three parts of an RBRVS fee (the nationally uniform RVU, a geographic adjustment factor, and a nationally uniform conversion factor). <br />
  • Learning Outcome: 6.8 Describe the steps used to calculate RBRVS payments under the Medicare Fee Schedule. <br /> Teaching Notes: <br />   <br /> Provide an example of the steps used to calculate RBRVS payments under the Medicare Fee Schedule, then ask your students to discuss the advantages of operating under a standardized conversion factor. <br /> Examine the Medicare Physician Fee Schedule with your students discuss strategies to ensure accurate billing. <br />
  • Learning Outcome: 6.8 Describe the steps used to calculate RBRVS payments under the Medicare Fee Schedule. <br /> Teaching Notes: <br />   <br /> Refer to Figure 6.6 as a reference and create a scenario that provides an example of how to calculate a Medicare payment. <br />
  • Learning Outcome: 6.9 Discuss the calculation of payments for participating and nonparticipating providers, and describe how balance billing regulations affect the charges that are due from patients. <br /> Teaching Notes: <br />  Providers must evaluate participation in health plans. <br /> They must decide whether to participate in a health plan based on the financial arrangements that are offered. <br /> Most practices participate in a number of PPOs and other plans. Practices also very often participate in Medicare. <br />
  • Learning Outcome: 6.9 Discuss the calculation of payments for participating and nonparticipating providers, and describe how balance billing regulations affect the charges that are due from patients. <br /> Teaching Notes: <br />  Note that payer contracts stipulate whether the PAR provider is allowed to balance bill patients. <br />
  • Learning Outcome: 6.10 Differentiate between billing for covered versus noncovered services under a capitation schedule. <br /> Teaching Notes: <br />   <br /> Ask students to define capitation and provide examples of the most common forms of capitation services. <br /> Ask students to discuss the advantages and disadvantages of operating under a capitation system. <br />
  • Learning Outcome: 6.11 Outline the process of patient checkout. <br /> Teaching Notes: <br />  Time-of-service payments are fees collected from the patient before he/she leaves the office. <br /> These up-front collections are important to maintain cash flow. <br />
  • Learning Outcome: 6.11 Outline the process of patient checkout. <br /> Teaching Notes:  <br /> Ask students to describe how cash, checks, and credit card payments are collected at the time of service. <br /> Ask students to discuss why it is important to collect fees at the time of service. <br />
  • Learning Outcome: 6.11 Outline the process of patient checkout. <br /> Teaching Notes: <br /> Ask students to describe what information is included in the walkout receipt. <br /> Ask students to provide examples of how the patient can use the walkout receipt for reimbursement. <br />

Issues and Trends in HBI Ch 6 Issues and Trends in HBI Ch 6 Presentation Transcript

  • CHAPTER 6 Visit Charges and Compliant Billing © 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
  • Learning Outcomes 6-2 When you finish this chapter, you will be able to: 6.1 Explain the importance of code linkage on healthcare claims. 6.2 Describe the use and format of Medicare’s Correct Coding Initiative (CCI) edits and medically unlikely edits (MUEs). 6.3 Discuss types of coding and billing errors. 6.4 Appraise major strategies that help ensure compliant billing.
  • Learning Outcomes (continued) When you finish this chapter, you will be able to: 6.5 Discuss the use of audit tools to verify code selection. 6.6 Describe the fee schedules that physicians create for their services. 6.7 Compare the methods for setting payer fee schedules. 6.8 Calculate RBRVS payments under the Medicare Fee Schedule. 6-3
  • Learning Outcomes (continued) When you finish this chapter, you will be able to: 6.9 Compare the calculation of payments for participating and nonparticipating providers, and describe how balance billing regulations affect the charges that are due from patients. 6.10 Differentiate between billing for covered versus noncovered services under a capitation schedule. 6.11 Outline the process of patient checkout. 6-4
  • 6-5 Key Terms • • • • • • • • • adjustment advisory opinion allowed charge assumption coding audit balance billing bundled payment capitation rate (cap rate) CCI column 1/column 2 code pair edit • CCI modifier indicator • CCI mutually exclusive code (MEC) edit • charge-based fee structure • code linkage • computer-assisted coding (CAC) • conversion factor • Correct Coding Initiative (CCI) • documentation template • downcoding • edits
  • 6-6 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 • 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
  • Key Terms (continued) • truncated coding • upcoding • usual, customary, and reasonable (UCR) • usual fee • walkout receipt • write off 6-7
  • 6.1 Compliant Billing • Diagnoses and procedures must be correctly linked on healthcare 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 6-8
  • 6.2 Knowledge of Billing Rules 6-9 • 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
  • 6.2 Knowledge of Billing Rules (continued) 6-10 • 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-forservice paid claims error rate
  • 6.2 Knowledge of Billing Rules (continued) 6-11 • 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 healthcare programs
  • 6.3 Compliance Errors 6-12 • 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
  • 6.3 Compliance Errors (continued) • Upcoding—use of a procedure code that provides a higher payment • Downcoding—payer’s review and reduction of a procedure code 6-13
  • 6.4 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 – Use modifiers appropriately – Be clear on professional courtesy and discounts to uninsured/low-income patients – Maintain compliant job reference aids and documentation templates 6-14
  • 6.4 Strategies for Compliance (continued) 6-15 • 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
  • 6.5 Audits 6-16 • 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
  • 6.5 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 6-17
  • 6.6 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 6-18
  • 6.7 Payer Fee Schedules 6-19 • 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
  • 6.7 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 6-20
  • 6.7 Payer Fee Schedules (continued) 6-21 • 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
  • 6.7 Payer Fee Schedules (continued) 6-22 • 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
  • 6.8 Calculating RBRVS Payments 6-23 • 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
  • 6.8 Calculating RBRVS Payments (continued) 6-24 • 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
  • 6.9 Fee-Based Payment Methods 6-25 • 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 • Bundled payment – method by which an entire episode of care is paid for by a predetermined single payment
  • 6.9 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 6-26
  • 6.10 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 6-27
  • 6.11 Collecting TOS Payments and Checking Out Patients • Financial transactions after patients’ visits – Charges – amount of bill for services performed by provider – Payments – monies received from health plans and patients – Adjustments – changes to a patient’s account 6-28
  • 6.11 Collecting TOS Payments and Checking Out Patients • Payment methods – Cash – Check – Credit or debit card – must follow Payment Card Industry Data Security Standards 6-29
  • 6.11 Collecting TOS Payments and Checking Out Patients • Walkout Receipt – Summarizes services and charges as well as any payments made – Patient can use walkout receipt to report charges to their insurance company 6-30
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