CHAPTER 18: Medical Insurance Claims Lesson 1: Insurance Claim Forms

Lesson Objectives Upon completion of lesson, students should be able to … Define, spell and use key terms. Define and discuss various health insurance forms.

Key Terms Firewall Claims Administrator Forms: Centers for Medicare and Medicaid Services (CMS) CMS 1500 CMS 1450 (UB-04) DD 2642 Breach of Confidentiality Assignment of benefits Birthday rule Primary vs. Secondary Clean Claim Dirty Claim Invalid Claim Denied Claim Clearinghouse Par Nonpar Write-off

Purpose of Health Insurance Claim Form Report pt procedures and services to insurance carrier Help standardize reporting Improve communication between medical facility and insurance carrier 4

3 Main Elements to Improve Communication Process Use of correct health insurance claim form Use of incorrect form may cause claim to be rejected causing delayed or no payment Accuracy of information provided in health insurance claim form Submission of health insurance claim form to correct insurance carrier

Types of Health Insurance Claim Forms CMS-1500 Most common health insurance claim form Used to file claims for physician services Submitted to insurance carrier electronically or by standard mail CMS-1450(UB-04) Used to report services related to hospitalization 6

Submitting Medicare Claim Covered benefits change Keeping up-to-date important for accurate claims submission Critical to know: Coverage Benefit period CMS-1500 used for Medicare claims Claims to Medicare can be sent electronically or by standard mail 7

Submitting Medicaid Claim Claim submission varies from state to state Typically pts must qualify for benefits monthly. Eligibility not automatic. Preauthorization required for some services Critical to verify pt eligibility at each visit 8

Submitting Medicaid Claim Crossover claim filed on pts with Medicare and Medicaid Claims submitted on CMS-1500 Claims can be sent electronically or by standard mail 9

Submitting TRICARE Claim DD Form 2642: Form completed and sent by pt or family member Payment sent to pt who is responsible to then pay provider CMS-1500: Form completed and sent by physician’s office Payment is sent directly to provider’s office CMS 1450 Form completed and sent by hospital Payment is sent directly to hospital 10

Submitting Workers’ Comp Claim Claim form depends on state and insurance carriers in that state Typically CMS-1500 accepted Important for MA to call and verify what form must be used for claims submission Pt does not pay for procedures and services provided by workers’ comp Employer ultimately responsible 11

Chapter 18:Medical Insurance Claims Lesson 2: Types of Claims

Methods to Submitting Claims No matter method same information provided Method dependent on insurance carrier Two methods used today: Faxing or mailing paper claim Submitting claim electronically 13

Critical Thinking Question Why might medical office choose to file paper claims rather than electronic claims?

Paper Claims Claims completed manually Problems with this method often include errors, leading to more claims being rejected or time loss for resubmission of claims Errors in paper claims include: Omission of information Typographical errors Incorrect mathematical calculations 15

Advantages of Paper Claims Basic costs are minimal Materials needed for paper claims: Claim forms Coding books 16

Disadvantages of Paper Claims Costs to complete paper claim process can be costly These costs include costs for: Time required to complete form Higher chance of errors Storage space Postage Copies of claim forms 17

Requirements of Paper Claims All claims must be on original claim form Claim must be legible Dark ink must be used Capital letters used when appropriate Punctuation, decimals, dollar signs are never used Use of correction tape unacceptable No use of adhesive tape, staples, and paper clips Documentation must be placed in same envelope as paper claim 18

Electronic Claims Claims sent directly to insurance carrier or clearinghouse All medical offices who were not considered small Institutional organizations < 25 FT or Physician’s offices with < 10 FT Mandated to submit electronic claims since October, 2003 19

Clearinghouse Independent entity that reviews claims and submits them to insurance companies Charges for services provided Eliminates need for specific software required by different carriers Checks claim for accuracy, thereby reducing incidences of claim rejection

Advantages of Electronic Claims Increases speed of claims processing by both insurance carrier and provider Decreases turnaround time in processing Provides capability for direct electronic deposit of payments in provider account Saves money on postage and labor costs for provider 21

Disadvantages of Electronic Claims Initial start-up expenses: Internet service provider Computer Software Training of those who will be using system Printer Backup or storage devices Computer down times 22

Three Ways Claims are Transmitted Sent directly to payer via EDI (electronic data interchange) Transmitted through clearinghouse DDE (direct data entry)

Statuses of Claim Clean claims: Dirty claims: Invalid claims: Form is completed without any errors or omissions and submitted on time Dirty claims: Form is incorrect because of missing data or errors, causing claim to be rejected Invalid claims: Form is complete but has some type of incorrect information

Statuses of Claim Denied claims: Procedure or services not covered by insurance policy Patient has not met his/her deductible. Ineligible procedures or services can also cause claim to be denied.

Chapter 18: Medical Insurance Claims Lesson 3: CMS-1500

Materials Needed to Complete CMS-1500 Pt’s medical record Pt’s ledger card Superbill CMS-1500 Black ink pen Computer with printer or typewriter 27

Superbill Contains: Pt’s name Diagnoses Treatments Space for claim information 28

Superbill Usage: Originally created to allow pts to file own claims Accepted by some insurance companies as claim form Provides detailed information on services received 29

Information Needed to Complete CMS-1500 Name of insured’s insurance company Insured’s name Insured’s ID#, DOB Insured’s address Telephone # of insured CPT Codes ICD codes 30

Reading CMS-1500 Boxes (Blocks) 1-13: Boxes (Blocks) 14-33: Pt data (DEMOGRAPHICS) Boxes (Blocks) 14-33: Provider information Information on services provided to pt Reason for services 31

Completion of CMS-1500: Boxes 1-8 32

Completion of CMS-1500: Boxes 9-13 33

Completion of CMS-1500: Boxes 14-23 34

CMS-1500: Box 24 Box 24: 24A – 8-digit date of when services for present condition have been received. 24B – Place of service 2 digit code. 24C – Leave blank. 24D – CPT/HCPCS code and modifier. 24E – Diagnosis code. 24F – Charges for service. 24G – Number of days or units of service. 24H-24j – Leave blank. HCPCS Healthcare Common Procedure Coding System Two Levels (Level I CPT) 35

Completion of CMS-1500: Box 24 A-J 36

Completion of CMS-1500: Boxes 25-33 37

Confidentiality and CMS-1500 Information must remain confidential Release of information must be signed by pt Signed standard release form may be used Form placed in pt file (not medical chart) 38

Assignment of Benefits Allowed by Medicare and other carriers One time form signed by pt Provides authorization for pt information to be released Once signed, usage of SIGNATURE ON FILE (SOF) can be used Form must be permanently kept in pt’s file 39

Participating Providers Physicians or medical facilities who choose to join insurance company due to incentives offered by carrier Providers accept insurance carrier’s set dollar amounts for services rendered Payments made directly to providers Providers join by completing form and being assigned number 40

Participating vs. Nonparticipating Providers Advantage: Payment sent directly to practice, typically in timely manner Disadvantage: Reimbursement might be at less desirable rate leading to write-offs 41

Birthday Rule Used to determine which parent’s insurance plan is primary Only used for parents who are legally married Primary plan held by parent whose birthday falls first in year If parents have birthday on same day, parent who has had coverage longest would hold primary plan Primary plan of divorced parents determined by court 42

Prior to Submitting Claim Check for accuracy on claim form If paper claim, make copy for pt’s file Enter data on insurance claims log Send completed CMS-1500 with required documentation to insurance carrier 43

18 Chapter 18: Medical Insurance Claims Lesson 4: Claims Security and Tracking Claims

Critical Thinking Question Can confidentiality of patient information be guaranteed?

Maintaining Confidentiality of Patient Information Responsibility of all health care workers Breach of confidentiality occurs when information provided to individuals who have not been authorized to receive it 46

How to Keep Patient Information Secure Ensure information only provided to approved individuals Limit access to patient information in work areas Create work areas where confidential information can be discussed privately Follow rules established by HIPAA 47

Documentation of Permission Authorization for Release of Medical Information Block 12 on CMS-1500 Release form created by medical practice 48

Ensuring Electronic Data Firewalls critical Update each year 49

Insurance Claims Log Used to track claim forms Can be done manually or electronically Data entered when claim form is completed Information on log: Patient’s name Date of service Insurance carrier Date of claim submission Amount of claim submitted 50

Most Common Reasons for Claim Rejection Missing or incorrect information Missing or incorrect patient registration information (name, address, insurance number) Missing or incorrect name of referring physician Missing or incorrect diagnosis code Overlapping, incorrect, or duplicate dates of service 51

Most Common Reasons for Claim Rejection Incorrect place of service Invalid, missing, or incorrect procedure code Incorrect or missing number of days or units Incorrect or missing modifier 52

Resubmitting Claims Information must be corrected and resubmitted Use of patient data and other resources important for accuracy Accuracy on claims critical! Time limits for re-filing must be met! 53

Ways to Minimize Number of Rejected Claims Review claim for accuracy prior to submitting it Pay close attention to detail Keep current reference materials, books and equipment readily available and use them Limit distractions that can occur in medical office Have specific time of day to focus solely on claims processing Have another medical office staff member review each claim 54

Questions? Applied Practice Completing CMS1500 Finish all competencies Finish all homework NO LATE ASSIGNMENTS ACCEPTED! Review for Final Exam 55