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Chapter 4
Chapter 4
Chapter 4
Chapter 4
Chapter 4
Chapter 4
Chapter 4
Chapter 4
Chapter 4
Chapter 4
Chapter 4
Chapter 4
Chapter 4
Chapter 4
Chapter 4
Chapter 4
Chapter 4
Chapter 4
Chapter 4
Chapter 4
Chapter 4
Chapter 4
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Chapter 4


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  • 1. Life Cycle of an Insurance Claim Chapter 4
  • 2. Processing an Insurance Claim
    • CMS-1500 claim is used to report professional and technical services.
    • Information from the Superbill, patient record, or chart is then transferred to the CMS-1500 claim.
  • 3. Accepting Assignment
    • When provider agrees to what the insurance company allows and or approves as payment
    • Patient is responsible for copayment and coinsurance amounts.
    • “ Signature on File” can be used as a substitute for patient’s signature, as long as real signature is on file.
  • 4. Assignment of Benefits
    • Patient or insured authorizes the payer to reimburse the provider directly.
  • 5. Accounts Receivable Management
    • Assists providers in the collection of appropriate reimbursement for services rendered
  • 6. Managing New Patients
    • Office policies and procedures (paying copayments, appointment rescheduling)
    • Determine whether appropriate office has been contacted
    • Patient must complete a patient registration form upon arrival.
    • Make photocopy (front and back) of patient’s insurance card
    • Contact payer
    • Verify information with patient or subscriber.
  • 7. Primary versus Secondary Insurance
    • Primary insurance is plan that is responsible for payment of a claim first.
    • After payment by primary insurer, secondary is billed.
    • Children of divorced parents
    • Child living with both parents, if both have insurance
  • 8. Primary versus Secondary Insurance
    • Create a new medical record for the patient.
    • Generate patient’s encounter form.
    • Encounter form is a financial record that documents treated diagnoses and servic es.
  • 9. Managing Established Patients
    • Schedule a return appointment when patient is checking out or when patient calls office.
    • Verify all registration information.
    • Collect copayment.
    • Encounter form needs to be generated for patient’s current visit.
  • 10. Managing Office Insurance Finances
    • CPT and HCPCS Level II (national) codes are assigned to procedures.
    • Enter charges for services and/or procedures.
    • Post charges to patient’s account .
  • 11. Life Cycle of an Insurance Claim
  • 12. Claims Submission
    • Electronic or manual transmission of claims data to insurance payers or clearinghouses
      • Public or private entity that processes or facilitates the processing of nonstandard data elements into standard data elements
      • Convert standard transactions (e.g., electronic remittance advice) received from payers to nonstandard formats
  • 13. Electronic Claims Submission
    • Electronic Date Interchange – EDI
      • Computer-to-computer transfer of data between providers and third-party payers (or providers and health care clearinghouses) in a data format agreed upon by sending and receiving parties
  • 14. Claims Attachments
    • Medical evaluation for payment
    • Past payment audit or review
    • Quality control to ensure access to care and quality of care
  • 15. Claims Processing
    • Sorting claims upon submission to collect and verify information about the patient and provider
  • 16. Claims Adjudication
    • Claim is compared to payer edits and patient’s health plan benefits to verify
    • Common data file is an abstract of all recent claims filed on each patient.
    • Allowed charge is the maximum amount an insurer will pay for a service.
  • 17. Claims Adjudication
    • Deductible is total amount of covered medical expenses a policyholder must pay each year out of pocket before the insurance company is obligated to pay any benefits.
    • Coinsurance is the percentage that patient pays for covered services after the deductible has been met and the copayment has been paid .
  • 18. Payment of a Claim
    • Once adjudication is complete, claim is paid or denied:
      • EOB is sent to patient/policyholder.
      • Remittance advice is sent to provider.
    • Prompt payment laws provide specific timeframes in which claims must be paid .
  • 19. Maintaining Claim Files
    • CMS requires claims and copies of attachments to be kept for six years.
    • Open claims
    • Closed claims
    • Remittance advice files
    • Unassigned claims
  • 20. Tracking Claims Submissions
    • Effective claims tracking requires the following activities
    • Noncovered service rejections
    • Rejections for errors
    • Noncovered service rejections
    • Rejections for errors
  • 21. Appealing Denied Claims
    • Remittance advice indicates that the payment was denied for reasons other than a processing error.
  • 22. Credit and Collections
    • Delinquent claims and prevention.
    • Verify health insurance cards.
    • Determine each patient’s coverage.
    • Electronically submit a clean claim.
    • Contact payer to verify received claim.
    • Review records to determine if claim is paid, denied, or pending.
    • Submit supporting documents