CHAPTER © 2012 The McGraw-Hill Companies, Inc. All rights reserved. 8 Health Care Claim Preparation and Transmission

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. Learning Outcomes When you finish this chapter, you will be able to: 8.1Distinguish between the electronic claim transaction and the paper claim form. 8.2Discuss the content of the patient information section of the CMS-1500 claim. 8.3Compare billing provider, pay-to provider, rendering provider, and referring provider. 8.4Discuss the content of the physician or supplier information section of the CMS-1500 claim. 8.5Compare required and situational (required if applicable) data elements on the HIPAA 837 claim. 8-2

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. Learning Outcomes (Continued) When you finish this chapter, you will be able to: 8.6Identify the five sections of the HIPAA 837 claim transaction and discuss the data elements that complete it. 8.7Explain how claim attachments and credit-debit transactions are handled. 8.8Define a clean claim. 8.9Identify the three major methods of electronic claim transmission. 8-3

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. Key Terms administrative code set billing provider carrier block claim attachment claim control number claim filing indicator code claim frequency code (claim submission reason code) claim scrubber clean claim 8-4 CMS-1500 CMS-1500 (08/05) condition code data element destination payer HIPAA X Health Care Claim or Equivalent Encounter Information HIPAA X12 276/277 Health Care Status Inquiry/Response

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. Key Terms (Continued) individual relationship code legacy number line item control number National Uniform Claim Committee (NUCC) other ID number outside laboratory pay-to provider place of service (POS) code qualifier 8-5 rendering provider required data element responsible party service line information situational data element taxonomy code

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. 8.1 Introduction to Health Care Claims 8-6 The HIPAA-mandated electronic transaction for claims is the HIPAA X Health Care Claim or Equivalent Encounter Information— used to send a claim to primary and secondary payers –The electronic HIPAA claim is based on the CMS- 1500, which is a paper claim form

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. 8.1 Introduction to Health Care Claims (Continued) 8-7 National Uniform Claim Committee (NUCC)– organization responsible for claim content –CMS-1500 (08/05)—current paper claim approved by the NUCC Legacy number—provider’s identification number issued prior to the National Provider Identification system

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. 8.2 Completing the CMS-1500 Claim: Patient Information Section 8-8 The CMS-1500 claim has a carrier block and thirty-three Item Numbers (INs) Carrier block—data entry area in the upper right of the CMS-1500 Condition code—two-digit numeric or alphanumeric codes used to report a special condition or unique circumstance

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. 8.2 Completing the CMS-1500 Claim: Patient Information Section (Continued) 8-9 The upper portion of the CMS-1500 claim form (Item Numbers 1-13): –Lists demographic information about the patient and specific information about the patient’s insurance coverage –Information is entered based on the patient information form, insurance card, and payer verification data

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. 8.3 Types of Providers 8-10 It may be necessary to identify four different types of provider: 1.Pay-to provider—person or organization that will be paid for services on a HIPAA claim 2.Rendering provider—term used to identify an alternative physician or professional who provides the procedure on a claim 3.Billing provider—person or organization sending a HIPAA claim 4.Referring provider

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. 8.4 Completing the CMS-1500 Claim: Physician/Supplier Information Section 8-11 This part identifies the health care provider, describes the services performed, and gives the payer additional information to process the claim Other ID number—additional provider identification number Qualifier—two-digit code for a type of provider identification number other than the NPI Outside laboratory—purchased laboratory services

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. 8.4 Completing the CMS-1500 Claim: Physician/Supplier Information Section (Cont.) 8-12 Service line information—information about services being reported Place of service (POS) code—administrative code indicating where medical services were provided Taxonomy code—administrative code set used to report a physician’s specialty Administrative code set—required codes for various data elements

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. 8.4 Completing the CMS-1500 Claim: Physician/Supplier Information Section (Cont.) 8-13 The lower portion of the CMS-1500 claim form (Item Numbers 14-33): –Contains information about the provider or supplier and the patient’s condition, including the diagnoses, procedures, and charges –Information is entered based on the encounter form

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. 8.5 The HIPAA 837 Claim 8-14 Data element—smallest unit of information in a HIPAA transaction –Example: a patient’s name –Required data element—information that must be supplied on an electronic claim –Situational data element—information that must be on a claim in conjunction with certain other data elements

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. 8.6 Completing the HIPAA 837 Claim 8-15 The five sections of the HIPAA 837 claim transaction include: –Provider information –Subscriber information –Payer information –Claim information –Service line information

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. 8.6 Completing the HIPAA 837 Claim (Continued) 8-16 Responsible party—other person or entity who will pay a patient’s charges Claim filing indicator code—administrative code that identifies the type of health plan Individual relationship code—administrative code specifying the patient’s relationship to the subscriber Destination payer—health plan receiving a HIPAA claim

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. 8.6 Completing the HIPAA 837 Claim (Continued) 8-17 Claim control number—unique number assigned to a claim by the sender Claim frequency code (or claim submission reason code)—administrative code that identifies the claim as original, replacement, or void/cancel action Line item control number—unique number assigned to each service line item reported

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. 8.7 Handling Claim Attachments and Credit-Debit Transactions 8-18 Claim attachment—additional data in printed or electronic format sent to support a claim –Examples include lab results, specialty consultation notes, and discharge notes Patient credit-debit transactions are carefully processed and recorded by the practice –The amount charged is reported to the patient once billed

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. 8.8 Checking Claims Before Transmission 8-19 Claims are carefully reviewed before transmission Clean claim—claim accepted by a health plan for adjudication –Properly completed and contains all the necessary information HIPAA X12 276/277 Health Care Claim Status Inquiry/Response—electronic format used to ask payers about claims

© 2012 The McGraw-Hill Companies, Inc. All rights reserved. 8.9 Clearinghouses and Claim Transmission 8-20 Practices handle the transmission of electronic claims with three major methods: 1.In the direct transmission approach, providers and payers exchange transactions directly 2.The majority of providers use clearinghouses to send and receive data in correct EDI format 3.Some payers offer online direct data entry (DDE) to providers, which involves using an Internet-based service into which employees key the standard data elements Claim scrubber—software that checks claims to permit error correction