From Registration to Accounts Receivable – The Whole Can of Worms 2007 UBO/UBU Conference 1 Briefing:MSA Denials Management Date: 20 March 2007 Time:

2007 UBO/UBU Conference From Registration to Accounts Receivable 2 Objectives To answer the following questions: What issues affect payment – Why did I get that denial or reduced payment? How to identify issues – What does that reason for denial or reduction really mean? How to appeal these issues – How do I respond to that denial or reduction?

2007 UBO/UBU Conference From Registration to Accounts Receivable 3 Objectives Although most of the time the patient is ultimately responsible for the cost of the services provided, having complete information on the plan you are billing will help you get maximum reimbursement Is your claim form filled out correctly (clean)? – Patient demographics – Policy information – Revenue codes – Admission type code – Release of information/assignment of benefits

2007 UBO/UBU Conference From Registration to Accounts Receivable 4 Plan Types Plan Type Affects If and How You Get Paid Private health insurance – Traditional indemnity plans are now often called fee-for-service plans – PPO – Preferred Provider Organizations – POS – Point-of-Service plans – HMO – Health Maintenance Organizations Other types of health insurance – Hospital Indemnity Insurance – Workers’ Compensation – Medicaid – Medigap Plans – Medicare Part A, Part B, Part C, Part D

2007 UBO/UBU Conference From Registration to Accounts Receivable 5 Benefits Policy benefits affect if and how you get paid Benefit – Amount payable by the insurance company to a claimant, assignee, or beneficiary when the insured suffers a loss: – In-Network vs. Out-of-Network, PPO vs. Non-PPO, etc. Deductible Co-payment Co-insurance Out-of-pocket expense Allowed Amount, Usual and Customary, or Reasonable and Customary Pre-authorization requirements Concurrent or Utilization Review requirements Filing deadline

2007 UBO/UBU Conference From Registration to Accounts Receivable 6 Causes for Denials Examples of reduced payments/denials Out-of-Network/Non-PPO/Non-Par co-insurance, co-pay, deductible Pre-certification penalty/denial Amount billed not allowed in full – Prevailing rate, Fee schedule, etc. – Discount Filing deadline not met Inpatient Professional fees not filed on a CMS 1500 Payment made to the patient instead of the MTF

2007 UBO/UBU Conference From Registration to Accounts Receivable 7 Scenario 1 Scenario 1 – Commercial UB-92* – Revenue code: 540; description: Ambulance, HCPCS: A0429, Units: 36 mins, Total: $ EOB – Billed charges: $ – Ineligible amount $57.75 – Amount paid: $57.75 – Ineligible amount reason: $ above discount % *Obsolete as of 30 March 2007; replaced by UB-04 —Continued—

2007 UBO/UBU Conference From Registration to Accounts Receivable 8 Scenario 1 Analysis: – Pick-up and Destination Modifiers should have been used with HCPCS code. For example: SH – Picked up at scene of accident/acute event, transported to hospital, but this is not the reason for the reduced payment – Reason is as stated, discount applied Action: – Send appeal letter explaining DoD ambulance billing methodology and discounts are not acceptable Scenario 1

2007 UBO/UBU Conference From Registration to Accounts Receivable 9 Scenario 2 – Commercial UB-92 – Revenue Code 540, Description Ambulance, HCPCS A0427, Units 62 mins, Total $ EOB – Total Charges: $ – Allowed Amount: $ – Amount Paid: $ – Comments: Payment made to patient Scenario 2 —Continued—

2007 UBO/UBU Conference From Registration to Accounts Receivable 10 Scenario 2 Analysis: – Pick-up and Destination Modifiers should have been used with HCPCS code – Release of Information field 52, and Assignment of Benefits field 53, were not filled in – possible cause of patient being paid vs. the MTF Action: – Request payment from the patient or send appeal letter to insurance company explaining their obligation to pay the United States Scenario 2

2007 UBO/UBU Conference From Registration to Accounts Receivable 11 Scenario 3 – Commercial UB-92 – Date of Services: 11/21/03 – Date of Bill: 09/30/04 EOB – EOB dated 12/01/04 – Charges not allowed, claim denied – Reason: “Time limit for filing claims has expired” Scenario 3 —Continued—

2007 UBO/UBU Conference From Registration to Accounts Receivable 12 Scenario 3 Analysis: – Filing deadline not documented – Follow-up not performed between billing date and date of EOB Action: – Find out what the filing deadline is – If deadline met, send appeal letter explaining deadline met – If deadline not met, send letter requesting claim be accepted as meeting the filing deadline since the UBO was not aware of the debt, or the insurance coverage until the date the claim was filed Scenario 3

2007 UBO/UBU Conference From Registration to Accounts Receivable 13 Scenario 4 – Commercial (FEHBP) UB-92 – Rev Code 100 All-Inclusive Hospital charges: $44, – Rev Code 960 Pro fees: $1, – Rev Code 001 Total charges: $45, EOB – Semi/Pr room allowed: $13,226.09, Paid $11, (90%), Patient’s portion: $1, – Hospital Other allowed: $30,860.87, Paid $27, (90%), Patient’s portion: $3, – Amount denied: $1, – Reason: Procedure (CPT/HCPC/Revenue) code is invalid; provider of service should supply current code(s) Scenario 4 —Continued—

2007 UBO/UBU Conference From Registration to Accounts Receivable 14 Scenario 4 Analysis: – Reason really means they expect professional fees to be billed on a CMS 1500 – Charges broken down based on benefit plan. “When the non- PPO hospital bills a flat rate, we prorate the charges to determine how to pay them as follows: 30% room and board, and 70% other charges. In this case it does not matter since the hospital charges were paid at PPO 90% – Benefits: PPO – 0 DED, 90% Co-Insurance Non-PPO- $300 Co-Pay, 70% Co-Insurance Action: – Send appeal letter explaining that this was an emergency admission, transfer was not requested, both hospital and professional charges are included in ASA/DRG, we are not authorized to itemized inpatient bills and PPO benefits should apply to the reprocess/payment of the professional fees Scenario 4

2007 UBO/UBU Conference From Registration to Accounts Receivable 15 Scenario 5 – Workers’ Compensation I&R mailed to patient. Patient sent I&R to WC carrier – – Emergency Dept visit: $ – RT – Apply forearm splint: $50.17 EOB – – ER Visit: Amount Reduced $368.75, Amount Paid $71.83 – RT – Splint: Amount Reduced $0.00, Amount Paid $50.17 – Reason for reduction: Per WC rule 203 – In all claims, any health service provider whose fee is reduced to conform to the fee schedule and who disputes that fee, shall, in the first instance, request a peer review of the charges and may thereafter request mediation conferencing or an evidentiary hearing with the board Scenario 5 —Continued—

2007 UBO/UBU Conference From Registration to Accounts Receivable 16 Scenario 5 Analysis: – Payer assumed that charges for were professional only. Obtained GA WC rule 203 Action: – Request Peer Review based on GA requirements – Explain that our Emergency Room E/M charges includes both institutional and professional fees and that we cannot accept a reduced allowance – Forward a copy of ER medical record and appropriate CY Rate Package Scenario 5

2007 UBO/UBU Conference From Registration to Accounts Receivable 17 Scenario 6 – Workers’ Compensation UB-92 – DRG 144 – Other Circulatory System Diagnosis W/CC – Number of Days – 3 – Rev Code 100 All-Inclusive Hospital Charges: $16, – Rev Code 960 Pro Fees: $1, – Rev Code 001 Total Charges: $18, EOB – Billed: $18, – Amount Allowed/Paid: $3, – Reason for reduced payment: Charges exceed WC State Fee Schedule or maximum allowable amount Scenario 6 —Continued—

2007 UBO/UBU Conference From Registration to Accounts Receivable 18 Scenario 6 Analysis: – Charges reduced based on State Fee Schedule Action: – Send appeal letter to carrier explaining how our DRGs are grouped, how our RWPs and ASAs are established, and how the charges are calculated based on RWP x ASA, and we expect our charges to be allowed in full Scenario 6

2007 UBO/UBU Conference From Registration to Accounts Receivable 19 Scenario 7 – Medicare/Medicare Supplement UB-92 – DRG 482 – Tracheostomy for face, mouth & neck – Number of Inpatient Days – 9 – Rev Code 101 – All Inclusive Hospital Charges: $31, (IAR) EOB – Medicare – Allowed: $19,440.53, Part A DeD: $912, Interest: $73.10, Total Paid: $18, EOB – Medicare Supplement – Paid: $ Part A DeD Scenario 7 —Continued—

2007 UBO/UBU Conference From Registration to Accounts Receivable 20 Scenario 7 Analysis: – Hospital and professional charges not separated on bill – Medicare did allow charges in full Action: – Send corrected bill along with appeal letter to Medicare explaining how our DRGs are grouped, how our RWPs and ASAs are established, and how the charges are calculated based on RWP x ASA. Medicare is billed based on the Interagency Rate ASA, and we expect our charges to be allowed in full Scenario 7

2007 UBO/UBU Conference From Registration to Accounts Receivable 21 Scenario 8 – Medicaid UB-92 – DRG 266 – Skin Graft &/Or Debrid Except Skin Ulcer or Cellulitis W/O CC – Number of Inpatient Days – 2 – Rev Code 120 – R&B Semiprivate: $17, – Diagnosis (1 st /2 nd ) 7092, 5289, Procedures 866, 8684, 2759 EOB – DRG 284 – Minor Skin Disorders W/O CC – Diagnosis: 7092, Procedures: Not listed – Allowed/Paid Charges: $2, – Reduced charges reason: This is the maximum payment for an inpatient stay according to your facility’s reimbursement methodology Scenario 8 —Continued—

2007 UBO/UBU Conference From Registration to Accounts Receivable 22 Scenario 8 Analysis: – Rev Code 100 and 960 should be used instead of 120 – Procedure codes not listed on EOB – Medicaid reduced allowed charges Action: – Send appeal letter to Medicaid requesting procedure codes be considered and that RCs 100 & 960 should be considered instead of 120 – Explain how our DRGs are grouped, how our RWPs and ASAs are established, how the charges are calculated based on RWP x ASA, and that we expect our charges to be allowed in full Scenario 8

2007 UBO/UBU Conference From Registration to Accounts Receivable 23 Scenario 9 – Medicaid UB-92 – RC 636, Normal Saline Solution, J7030, 1: $0.10 – RC 510, Place Needle in vein, J7030, 1: $33.60 – RC 450, Emergency Dept Visit, 99283, 1: $ – RC 250, Ondansetron HCL Inj, J2405, 1: $3.73 – RC 250, Motrin, AF , 120: $9.20 – RC 301, Basic Metabolic Panel, 80048, 1: $13.59 – RC 301, BL Smear w/Diff WBC..., 85007, 1: $5.53 – RC 301, Complete CBS w/Diff WBC, 85025, 1: $12.47 EOB – No charges allowed or paid – Reason: Medicaid Provider number is missing or invalid Individual Provider MAID number is required Scenario 9 —Continued—

2007 UBO/UBU Conference From Registration to Accounts Receivable 24 Scenario 9 Analysis: – Medicaid coverage is from a different state than the treating MTF. Medicaid card included a Web site link; Web site provided provider manual states that emergency care provided out of the service area is covered – & are components of Correct RC is 305 vs. 301 – J7030 – correct RC is 258 or 263 instead of 636 – – correct RC is 450 instead of 510 – J2405 – correct RC is 636 instead of 250 – Should be using RC description on UB, not the HCPCS/CPT – Motrin – Dispensed drug – Complete drug name and strength, # dispensed, Amount, NDC#, Rx #, and Days Supply should have been used instead of just the MTF prescription number Action: – Correct bill and send along with appeal letter explaining circumstance and that per the provider manual, emergency out- of-service-area care is covered Scenario 9

2007 UBO/UBU Conference From Registration to Accounts Receivable 25 Summary You now should be able to: – Identify what issues affect payment – Identify and understand why a payment was not received in full – Determine how to respond to less than expected reimbursement

2007 UBO/UBU Conference From Registration to Accounts Receivable 26 Q&A Questions?

2007 UBO/UBU Conference From Registration to Accounts Receivable 27 Quiz Does using the correct revenue codes affect how or if a claim gets paid? Are Usual and Customary reductions or discounts acceptable on MSA insurance claims? Are Inpatient Professional fees required to be billed on the CMS 1500? Are Out-of-Network benefit payments acceptable?

2007 UBO/UBU Conference From Registration to Accounts Receivable 28 Contact Information Some appeal letters are available on the Army PAD Website: Appeal letters also available upon request to presenter

2007 UBO/UBU Conference From Registration to Accounts Receivable 29 Additional Information Traditional indemnity plans, which are now often called fee-for- service plans: Traditional insurance that pays providers on a fee-for service basis. Some times called 80/20 plans. Fee for service pays for each encounter. It does not have preferred provider networks or many cost containment features. With an Indemnity plan, an insured can be treated by the physician of their choice. PPO - Preferred Provider Organizations: A health care delivery system that contracts with providers of medical care to provide services at discounted fees to members. Most PPO plans are point of service plans, in that they will pay a higher percentage for care provided by providers in the network. PPO plans are a combination of traditional fee-for-service and an HMO. BCBS FEP is a Fee for Service Plan with a Preferred Provider Organization. POS - Point-Of-Service plans: Managed care plans that give the insured the option of seeing providers within the plan’s network and paying the co-payment amount only, or seeing providers out of the network and with indemnity policy type reimbursement.

2007 UBO/UBU Conference From Registration to Accounts Receivable 30 Additional Information HMO - Health Maintenance Organizations HMO: Most traditional type of managed care plan. Like other types of managed care, HMOs are organizations that both finance health care (provide insurance) and provide the care by collecting fees in advance. EPO – Exclusive Provider Organization: Coverage under the health plan is strictly limited to providers approved by the health plan and are participating in the provider network. Hospital Indemnity Insurance: Offers limited coverage. It pays a fixed amount for each day, up to a maximum number of days. Usually, the amount paid is less than the cost of a hospital stay. Some hospital indemnity policies will pay the specified daily amount even if there is other health insurance. Workers’ Compensation: Provides benefits for occupational injuries or disease suffered by an employee, regardless of fault. The benefits include payment of medical services and lost wages. Exclusive remedy for the coverage of work related injuries by the employer. All states have workers compensation laws that require most employers to provide workers' compensation benefits to employees who have job-related injury or an occupational disease. Employers can meet their legal obligation to injured employees by buying workers compensation insurance or by self-insuring.

2007 UBO/UBU Conference From Registration to Accounts Receivable 31 Additional Information Medicaid: National health insurance program in the United States for low-income persons. Medigap Plans: Medicare Supplement Insurance sold by private insurance companies to fill “gaps” in Original Medicare Plan coverage. Except in Massachusetts, Minnesota, and Wisconsin, all Medigap policies must be one of 12 standardized Medigap policies labeled Medigap Plan A through Plan L. Medigap policies only work with the Original Medicare Plan. Standardized MediGap plans also may be known as Medicare Select plans. Medicare PART A: Inpatient portion of benefits under the Medicare Program, covering beneficiaries for inpatient hospital, home health, hospice, and limited skilled nursing facility services. Beneficiaries are responsible for deductibles and co-payments. Part A services are financed by the Medicare HI Trust Fund, which consists of Medicare tax payments.

2007 UBO/UBU Conference From Registration to Accounts Receivable 32 Additional Information Medicare PART B: Outpatient benefits of Medicare. Part B covers physician services, medical supplies, and other outpatient treatment. Beneficiaries are responsible for monthly premiums, co-payments, deductibles, and balance billing. Part B services are financed by a combination of enrollee premiums and general tax revenues. Medicare PART C: Medicare Advantage Plan: A type of Medicare plan offered by a private company that contracts with Medicare to provide Medicare Part A and Part B benefits. Medicare Advantage Plans are HMOs, PPOs, Private Fee-for-Service Plans, or Medicare Medical Savings Account Plans. Medicare services are covered through a Advantage plan are not paid for under the Original Medicare Plan. Some Medicare Advantage Plans offer prescription drug coverage. Medicare PART D: Medicare Prescription Drug Coverage. Offered by insurance companies and other private companies approved by Medicare.

2007 UBO/UBU Conference From Registration to Accounts Receivable 33 Additional Information Benefit: Amount payable by the insurance company to a claimant, assignee, or beneficiary when the insured suffers a loss. Out-Of-Network, Out-Of Plan, Non-PPO, Non-Par: Refers to physicians, hospitals or other health care providers who are considered nonparticipants in an insurance plan (usually an HMO or PPO). Depending on an individual's health insurance plan, expenses incurred by services provided by out-of-plan health professionals may not be covered, or covered only in part by an individual's insurance company. Deductible: A set dollar amount which must be satisfied within a specific time frame before the health plan begins making payments on claims Deductibles are primarily applied to surgeries, visits to out of network physicians, lab, x-ray, and hospitalizations. Health plans usually offer a calendar year deductible which means that a patient has 365 days as of January 1st to meet and satisfy their deductible. This amount resets at the beginning of a new year.

2007 UBO/UBU Conference From Registration to Accounts Receivable 34 Additional Information Co-payment: A specified dollar amount the patient must pay per occurrence. Office visits are usually $15-$25.00, ER $50-$75.00 and Inpatient Per Day Copays average $100-$200 per day for a specified number of days. Co-Insurance: A percentage the patient is responsible for on a given insurance claim Most insurance companies pay a percentage of a claim, such as 80/20. In this case, the insurance company pays 80% and the "co-insurance" of 20% is the patient's responsibility. Out-Of-Pocket Expense: The amount the patient must pay themselves and not paid for by the insurance plan. Using an 80/20 example, whereby the 20% is the patient's coinsurance and 80% is the insurance payment. The 20% is also termed the patient's out of pocket expense which is the amount not paid for, but it is a covered expense. Plans have a limitation to the amount a patient is responsible for out of their own pocket on a yearly basis. After the "Out of Pocket Maximum" the health plan will then cover services at 100% of the allowable charge.

2007 UBO/UBU Conference From Registration to Accounts Receivable 35 Additional Information Pre-authorization requirements: Review of "need" for inpatient care or other care before admission. This refers to a decision made by the payer, MCO or insurance company prior to admission. The payer determines whether or not the payer will pay for the service. Most managed care plans require pre-cert. Concurrent or Utilization Review requirements: Review of a procedure or hospital admission done by a health care professional (usually a nurse) other than the one providing the care, during the same time frame that the care is provided. Usually conducted during a hospital confinement to determine the appropriateness of hospital confinement and the medical necessity for continued stay. Filing Deadline: A medical claim must be submitted within the time frame given by the insurance company or the claim will be denied. Allowed Amount: The amount of the billed charge the insurance company deems is payable by the plan. Usual and Customary or Reasonable and Customary: A reduction in the payment of benefits on a claim which is justified by the insurance company as "the going rate" to be paid in that geographical area. Fee Schedule: A list of CPT codes and dollar amounts an insurance company will pay for a particular medical service.

2007 UBO/UBU Conference From Registration to Accounts Receivable 36 Additional Information Pre-authorization requirements: Review of "need" for inpatient care or other care before admission. This refers to a decision made by the payer, MCO or insurance company prior to admission. The payer determines whether or not the payer will pay for the service. Most managed care plans require pre-cert. Concurrent or Utilization Review requirements: Review of a procedure or hospital admission done by a health care professional (usually a nurse) other than the one providing the care, during the same time frame that the care is provided. Usually conducted during a hospital confinement to determine the appropriateness of hospital confinement and the medical necessity for continued stay. Filing Deadline: A medical claim must be submitted within the time frame given by the insurance company or the claim will be denied. Allowed Amount: The amount of the billed charge the insurance company deems is payable by the plan. Usual and Customary or Reasonable and Customary: A reduction in the payment of benefits on a claim which is justified by the insurance company as "the going rate" to be paid in that geographical area. Fee Schedule: A list of CPT codes and dollar amounts an insurance company will pay for a particular medical service.

2007 UBO/UBU Conference From Registration to Accounts Receivable 37 Additional Information Policy information: – FL 58, 60, 61, 62, 65 of UB-92 & UB-04 – FL 1a, 11, 11b, 11c, of CMS 1500 Revenue code – Inpatient All-inclusive Hospital: 100, 101 (Some Blues) 200, 210, 249 (Some Blues) – Inpatient Pro Fees – 960 – Emergency Room – 450 Admission type code – 1-Emergency, 2 Urgent, 5 Trauma Center, 9 Not available. – FL 19 of UB-92, FL 14 of UB-04 Release of information/assignment of benefits – FL 52 & 53 of UB-92 & UB-04 – FL 12, 13, 27 of CMS1500