4. 4
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).
5. 5
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.
7. 7
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
8. 8
Basics of Medical Billing
Revenue Cycle
1. Patient’s Visit
•Patient visits doctor’s office after schedulingan
appointmentthrough phoneor web portal
•Signs the day sheet (if required) and pays the co-
pay(if applicable)
•Doctor’s office collects patient and insurance
informationon a demographyform
•They also verify patient’s eligibility and their
benefits, as well as if the service requires a referral
or prior authorization from insurancecompany
6. Claim Submission
Claims can be submitted in two differentways:
•Electronic Submission:
•837 EDI Standard
•Direct - Govt. Payers
•Indirect - CommercialPayers (through Clearing
Houses)
•Paper Submission:
•CMS-1500 Form
•NF3 or C4 Form
7. Acknowledgements (999 EDI Standard)
Electronic: Status of claim’s acceptance or rejection
based on the defined criteria.
•Rejection can happen at three levels:
•First Level (ClearingHouse)
•Second Level (CommercialPayer)
•Direct Level (Govt. Payers)
•AccountManager resolves the rejections and
resubmits theclaims.
•Paper: Printed Confirmation.
2. Patient’s Meeting with a Doctor
•Doctor examinespatientaccording to their
medicalcondition(s)and performs the relevant
diagnostic and/ormedical procedurefor
treatment
•Post-diagnosis and treatment, doctor document’
diagnosis codes (ICD) and treatmentcodes (CPT)
on a superbillor directly in Electronic Health
Record (HER)
•Patient collects doctor’s prescription or notes (if
any) and leaves after examination
5. Detecting Errors in Claims
•The billingservice provider performsvalidation
testing based on the pre-set rules in the system to
detect any billing or coding errors beforeactual
submission
•Accountmanagers corrects the detected errors
•Claims are passed through the testing again and if
they comply with the pre-set rules, they are ready
for submission
8. Payment Posting and Denial Management
•After the settlement ofclaims, payer sends
Electronic Remittance Advice (834) or Explanation
of Benefits (Paper). Account Manager then
performs:
•Paymentposting
•Denialmanagementthrough appropriate
corrective measures,for claims/services thatare
denied for payment
•Patient or secondarypayer billing (ifexists) for
left-over paymentby primarypayers (copay,co-
insurance,deductible)
3. Processing of Superbill for Claim Entry
•Doctor’s office sends patient’s diagnosis and
treatmentrelated documents to billing service
provider.Thedocuments include:
•Daysheet
•Demography form
•Superbills
•Documents are sentthrough:
•FTP
•E-Bridge
•Email
4. Entry of Claims and Patient’s Demographic
Information
• Account Manager enters patient’s demographic and
insurance details in the practice management software
• Account manager creates claims from superbills, in the
software
• Claims are reconciled against the daysheet to ensure all
necessary details have been entered in the system with
accuracy and integrity
• If required by doctors, then a work confirmation receipt is
also sent to them.
9. Follow-Up: Follow-up Activities of Account
Manager include:
•Following–up with payers for pending/unpaid
claims (accounts receivable)
•Reduction in aged claims and improvementin DAR
through:
•Payer’s web portal
•IVR or live call (if required) for denial
confirmation,or re-considerationof claims.
9. 9
Basics of Medical Billing
Video – Doctor’s Office Visit
filesrv1Training VideosShahrukh JamilTraining DataOPS training materialLevel 01
10. 10
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
11. 11
FAQs
What is a typical Revenue Cycle?
What are basic roles and functions of medical billing process?
13. 13
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
14. 14
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
16. 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
18. 18
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
19. 19
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
20. 20
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
21. 21
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
22. 22
Medicare Basics
Medicare is divided into four Parts: A, B, C and D
Part A covers hospital (inpatient, formallyadmitted 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 prescriptiondrugs.
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.
23. 23
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
24. 24
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)
25. 25
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.
26. 26
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
27. 27
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
28. 28
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.
29. 29
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
30. 30
Video – What is Medicare
https://www.youtube.com/watch?v=Bcs6se5ONY4
31. 31
Video – What is covered in Medicare
Parts A, B, C, D
https://www.youtube.com/watch?v=4lnDj0DivDE
33. 33
Medicare - FAQ
What is Medicare?
What are Medicare Enrollment Periods?
What is the difference between Original Medicare and Medicare Advantage
Plus?
35. 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
36. 36
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.
37. 37
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
38. 38
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
39. 39
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-emergencytransportation to and from medical treatment
Some prescriptiondrugs not covered by Medicare
Some nonprescription drugs, including certain vitamins
Chiropractic care
40. 40
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
44. 44
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
NationalGuard/Reserve members and their families
War Survivors
Some former spouses
Medal of Honor recipients and their families
45. 45
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
46. 46
Tricare - FAQ
What is Tricare?
In what ways it is different from other public insurance services?
48. 48
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
49. 49
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
51. 51
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
52. 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
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
53. 53
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
54. 54
BCBS - FAQ
What service are provided by the Blue Cross Blue Shield and to
whom?
How many companies are there is BCBS Association?
55. 55
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)
56. 56
Private/Commercial Health Insurance Payers
Cigna ID Card PCP (Primary Care Provider)
1. If a third party administers services in conjunction with Cigna,
the card willshow multiple logos and contact details.
2. Cigna Health and Life Assurance Company
3. Effective Date of Coverage
4. ID Number for all claims and inquiries
5. Name of patient’s primary careprovider
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)
1. Precertification requirements may be shown as either
“Inpatient Admission” or “Inpatient Admission and
Outpatient Procedures”.
2. Submit claims to the claim submission address shown on the
card
3. Call the customer service numbers indicated on the card
59. 58
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.
60. 59
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
62. 61
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
63. 62
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
64. 63
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
65. 64
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
68. 67
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
71. 70
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
72. 71
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.
73. 72
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.
74. 73
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
77. 76
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
78. 77
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
79. 78
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.
80. 79
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.
82. 81
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
Total
6000
Total
44000
If You Incur a $50,000 Medical Bill
$1000
Deductible
20%
Coinsurance
$6,000
Out-of-pocket
Maximum
You Pay Insurance Pays
$ 1000 $0
Deductible
If you incur a $50,000 medical bill, you will first
need to pay your $1000 deductible. That would
leave you with &5000 left before you reach your
$6000 out-of-pocketmaximum
$20,000
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
medical expenses, you would pay $5000 and your
insurance company would pay $20,000
$24,000
Out-of-Pocket Maximum
Once you have paid your $1000 in deductible and
$5000 in coinsurance, you have reached your
$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.
86. 83
Common Types of Health Plan
Health Maintenance Organizations (HMOs)
Preferred Provider Organizations (PPOs)
87. 84
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
89. 86
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
91. 88
Insurance
Health Maintenance Organization (HMO) versus Preferred Provider
Organization (PPO)
HMO Services / Types PPO
A plan that covers care provided by
a group of physicians in network
with predictable copays and out of
pocket maximums
Definition
A plan that offers referral-free
access to any physician a patient
wants to see, in or outside their
network, with benefits of single
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
Procedures Covered Wide range
Yes PCP No
Yes Referral Required No
Required Prior Authorization Not usually required
92. 89
Referral versus Prior Authorization
Referral Difference PriorAuthorization
Referral is a recommendation to a patient from
Primary Care Physician (PCP) to receive medical
services from another health care provider or
medical specialist
Definition
Prior or pre-authorization (also known as pre-
certification) is an approval for certain medical
treatments before the treatment is provided
Purpose of referralis consultation.
Referral is done for a health care service that the
referring source (PCP) believes is necessary but
he/she is not prepared or qualified to provide
Purpose
Toensure medical necessity and appropriateness of
care for certain medical, surgical or behavioral health
services.
Todetermine/confirm whether the medical service
being offered is covered under patient’s health plan
PCP will refer a patient to another medical
specialist or a healthcare service provider
Issuer
Physician submitsauthorization/precertification
requests, by telephone, fax or email.
If approved, an authorization number is issued by
patient’s insurance
Mr. Smith has a hand surgery and requires some
additional medical treatment that his PCP does
not specialize in providing. He, therefore, must
get a referral from his PCP to another medical
specialist for the treatment and relevant medical
services covered by his health plan
Illustration
The specialist examines Mr.Smith’s medical condition
and decides on the type of procedure needed to get
Mr. Smith’s hand back to full functionality
(formability). The specialist, after deciding the best
treatment/procedure to provide, may need to obtain
prior approval/authorization from Mr.Smith’s
insurance provider before initiating the procedure as
certain medical treatments/procedures arerequiredto
be pre-approved by the insurance provider
93. 90
FAQs
What is HMO and PPO
What is the difference between Referral and Preauthorization?
95. 92
Acronyms
AMA: American Medical Association
CMS: Centers for Medicare and Medicaid Services. Federal agency which administersMedicare,
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: Abbreviationfor diagnosis code
EOB: Explanationof Benefits
ERA: Electronic Remittance Advice
E/M: Evaluation and Managementsection of the CPT codes. These are the CPT codes 99201 thru 99499
most used by physicians to access (or evaluate) a patientstreatmentneeds.
ICD: International Classification of Diseases
NPI: National Provider Identifier
DOB: Date of Birth
96. 93
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 informationusing a
standardized format; a process which allows one company tosend informationto another company
electronicallyinstead 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 effectivedate 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 typicallyfrom 6 to 12 months.
SSN: Social Security Number. This is a unique 9-digit number assigned by the governmentto all the citizens
of the USA.
97. 94
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
98. 95
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.
99. 96
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.
100. 97
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.
101. 98
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
104. 101
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.
105. 102
Sign-in Sheet (Day Sheet)
Informationon 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.
107. 104
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.
108. 105
Demographic Form
What informationis 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
109. 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
110. 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
111. 108
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
112. 109
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).
118. 115
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
119. 116
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).
121. 118
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 correspondto
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
122. 119
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
123. 120
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.”
125. 122
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
126. 123
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.
127. 124
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
128. 125
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.
129. 126
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
130. 127
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
131. 128
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)
132. 129
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 topicalantifungal 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
133. 130
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
135. 132
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
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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
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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.
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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
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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
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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
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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
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Storage
Documents are received and stored in the following
sequence at a secure location on a server
Year > Month > Client Folder> Date
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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
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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
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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:
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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
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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
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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.
