© 2009 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill Career Education Computers in the Medical Office Chapter 1: The Medical Office Billing Process

1-2 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. The Billing Process  The key to the financial health of a medical practice is billing for services and collecting payments  The billing process consists of ten steps

1-3 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. The Billing Process 1.Preregister patients 2.Establish financial responsibility 3.Check in patients 4.Check out patients 5.Review coding compliance

1-4 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. The Billing Process 6.Check billing compliance 7.Prepare and transmit claims 8.Monitor payer adjudication 9.Generate patient statements 10.Follow up payments and collections

1-5 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Preregister Patients  The billing cycle begins when a patient requests an appointment  Obtain information from patient including name, address, telephone, reason for visit, and insurance coverage

1-6 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Establish Financial Responsibility for Visit  Determine whether the physician participates in the patient’s insurance plan  Explain financial responsibility to patient

1-7 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Types of Medical Insurance  Most patients are covered by some type of health insurance plan  These plans can include:  Government plans  Private payer plans

1-8 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Government Plans  Medicare  Medicaid  TRICARE  CHAMPVA  Workers’ Compensation

1-9 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Private Payer Plans  Fee-for-service  Preferred provider organization (PPO)  Health maintenance organization (HMO)  Consumer-driven health plan (CDHP)

1-10 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Private Payer Plans  Fee-for-service  Policyholder is reimbursed for covered medical expenses

1-11 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Private Payer Plans  Preferred Provider Organization (PPO)  Managed care network of health care providers who contract to provide services to members at discounted fees  Patient may be treated by a provider outside the network at a higher fee

1-12 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Private Payer Plans  Health maintenance organization (HMO)  Managed care network of health care providers who contract to provide services to members of an insurance plan in exchange payment from the plan  Providers receive fixed payments at regular intervals from the plan

1-13 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Private Payer Plans  Consumer-driven health plan (CDHP)  Low premium/high deductible plan combined with a pretax savings account to cover out-of-pocket expenses  Members have access to informational tools, such as plan-sponsored websites, to help make educated health-care decisions

1-14 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Check In Patients  Patient completes a patient information form, which contains personal, employment, and insurance information required to collect payment for services  Photocopy patient’s insurance identification card  Collect any payment or copayment that is due

1-15 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Check Out Patients  Record procedure and diagnosis  Collect any payment or copayment that is due  Schedule follow-up appointment

1-16 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Recording Diagnoses and Procedures  Diagnostic and procedural codes for treatment of a patient are recorded on an encounter form

1-17 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Recording Diagnoses  Diagnosis codes provide health plans with specific information about a patient’s illness, signs, and symptoms  Diagnosis codes are listed in ICD-9-CM International Classification of Diseases

1-18 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Recording Procedures  Procedure codes specifies which procedures and tests were performed  Procedure codes are listed in CPT-Current Procedural Terminology

1-19 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Review Coding Compliance  Coding compliance  American Medical Association  American Hospital Association  Medical necessity

1-20 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Check Billing Compliance  Physician’s standard fee schedule  Discounted contracts with third-party payers  Determining whether code is billable

1-21 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Prepare and Transmit Claims  When patients receive services from a healthcare provider, the fees are paid by health insurance plans and/or patients  To obtain payment from an insurance plan, a claim must be filed

1-22 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Prepare and Transmit Claims  Claims contain information about the patient, the procedures and diagnoses, and the provider  Information required to create claim found on patient information form and encounter form

1-23 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Monitor Payer Adjudication  The process of claim review by the payer is known as adjudication  Results of the review are sent to the physician in a remittance advice (RA, transfer of the money) or explanation of benefits (EOB)

1-24 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Monitor Payer Adjudication  Remittance advice reviewed for accuracy  All procedures on claim included on RA  Unpaid charges are explained  Codes match those on the claim  Payment for each procedure is as expected

1-25 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Monitor Payer Adjudication  If no problems are found, the payment or adjustment is recorded in the practice management program  If a problem is found, a review of the claim is requested

1-26 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Generate Patient Statements  Once payments from insurance plans are recorded, statements are printed and mailed to patients  Statements list the balance on the account that is owed by the patient

1-27 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Follow Up Patient Payments and Handle Collections  The accounting cycle is the flow of financial transactions in a business  A number of reports are created on a daily basis to monitor the financial activity in the practice  Monthly and annual reports also provide important data on the financial health of the practice

1-28 McGraw-Hill Career Education © 2009 by The McGraw-Hill Companies, Inc. All rights reserved. Follow Up Patient Payments and Handle Collections  Follow up with patients who have outstanding balances  Follow up on insurance claims not paid in a timely manner