Chapter 4

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Chapter 4

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

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