Life of a Claim Life of a Claim provides an overview of the Medicare claims processing. This training module was developed and approved by the Centers.

Life of a Claim Life of a Claim provides an overview of the Medicare claims processing. This training module was developed and approved by the Centers for Medicare & Medicaid Services (CMS), the federal agency that administers Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and the Federally-facilitated Health Insurance Marketplace. The information in this module was correct as of July The CMS National Training Program provides this as an informational resource for our partners. It’s not a legal document or intended for press purposes. The press can contact the CMS Press Office at Official Medicare Program legal guidance is contained in the relevant statutes, regulations, and rulings.

Session Topics Who are people with Medicare?
Who are Medicare providers? Who processes Medicare claims? What are the Medicare Fee-for-Service (FFS) claims processing systems? How are Medicare FFS claims submitted? What are rejects and denials? What are Remittance Advices (RA) and Medicare Summary Notices (MSN)? A Day in the Life of a Claim - How does a claim process? During this session we will go over the following topics: Who are people with Medicare? Who are Medicare providers? Who processes Medicare claims? What are the Medicare Fee-for-Service (FFS) claims processing systems? How are Medicare FFS claims submitted? What are rejects and denials? What are Remittance Advices (RA) and Medicare Summary Notices (MSN)? A Day in the Life of a Claim—How does a claim process?

Who Qualifies for Medicare?
People aged 65 and over who are entitled to Medicare People of all ages with End Stage Renal Disease (ESRD) People of all ages who have been disabled for a least 2 years Who Qualifies for Medicare? People aged 65 and over who are entitled to Medicare People of all ages with End Stage Renal Disease (ESRD) People of all ages who have been disabled for a least 2 years

Who are Medicare providers?
Providers are a primary stakeholder for claims processing, and are divided into 3 categories: Institutional Providers Includes hospitals, hospital outpatient departments, hospices, home health agencies, and rural health clinics, as well as other types. These providers may be paid from either the Part A or the Part B Trusts. Physician and Non-Physician Practitioners Includes physicians, therapists, nurse practitioners, physician assistants, etc. These providers are paid from the Part B Trust. Suppliers/Others Includes labs, ambulance, Independent Diagnostic Testing Facility and Durable Medical Equipment, Prosthetics, Orthotics, & Supplies (DMEPOS) suppliers. These suppliers are paid from the Part B Trust. Providers are a primary stakeholder for claims processing, and are divided into 3 categories: Institutional Providers: Includes hospitals, hospital outpatient departments, hospices, home health agencies, and rural health clinics, as well as other types. These providers may be paid from either the Part A or the Part B Trusts. Physician and Non-Physician Practitioners: Includes physicians, therapists, nurse practitioners, physician assistants, etc. These providers are paid from the Part B Trust. Suppliers/Others: Includes labs, ambulance, Independent Diagnostic Testing Facility and Durable Medical Equipment, Prosthetics, Orthotics, & Supplies (DMEPOS) suppliers. These suppliers are paid from the Part B Trust.

Who Processes Medicare claims?
Medicare Fee-for-Service claims are processed by contractors known as Medicare Administrative Contractors, or MAC’s. There are 2 type of MAC’s: Parts A & B Medicare Administrative Contractor (A/B MAC) A health insurance company selected by a competitive process by CMS Processes claims for both institutional and non-institutional providers Answer beneficiary and provider questions Make payments for covered Medicare Services Durable Medical Equipment (DME) Regional MAC A health insurance company that is selected by a competitive process by CMS. Also known as “DME MACs.” Make payment to durable medical equipment suppliers. The DME MACs use the VMS shared system to process claims. Medicare Fee-for-Service (FFS) claims are processed by contractors known as Medicare Administrative Contractors, or MAC’s. There are 2 type of MAC’s Parts A & B Medicare Administrative Contractor (A/B MAC) A health insurance company selected by a competitive process by CMS to process Medicare FFS claims, answer beneficiary and provider questions, and make payments for covered Medicare Services. Each MAC processes claims for both institutional and non-institutional providers for a given geographical area known as a jurisdiction. Also known as “A/B MACs.” A/B MACs use both the FISS and MCS Shared Systems to process claims. Contractors/Downloads/A-B-Jurisdiction-Map-July-2013.pdf Durable Medical Equipment (DME) Regional MAC A health insurance company that is selected by a competitive process by CMS to make payment to durable medical equipment suppliers. Also known as “DME MACs.” The DME MACs use the VMS shared system to process claims. Contractors/Downloads/DME-MAC-Jurisdiction-Map-2013.pdf

Medicare Administrative Contractors “The Hub of the Medicare FFS Program”
Within the Medicare Fee-for-Service (FFS) operating environment, the Medicare Administrative Contractor (MAC) is the central point of contact for providers of health care services. The establishment and monitoring of the MAC’s relationships with a number of other function specific CMS contractors is critical to the integrity of the MAC contract administration. Functional contractors play an essential role. Call Center Operations (CCO) – The CCO responds to inquiries from the Centers for Medicare & Medicaid Services’ (CMS's) customer service population. The Contractor supports multi-channel operations that receive and respond to inquiries, providing information and services through various channels including telephone, mail, , TDD/TTY, fax, and web chat. The CCO fields inquiries for CMS programs such as Medicare, the Medicare Modernization Act (MMA), the Health Insurance Marketplace, and other relevant programs. Virtual Data Center (VDC) – A data center serves as a platform for claims processing software systems for Medicare claims. Traditionally, the Medicare contractors either operated their own data centers or contracted out for these services. As part of CMS’ contracting reform initiative, CMS reduced the number of data centers from more than one dozen separate smaller centers to two large VDCs. CMS manages these contracts. CMS migrated the entire FFS claims processing workload to the VDCs by March 2014. Healthcare Integrated General Ledger and Account System (HIGLAS) – HIGLAS is the general ledger accounting system that replaced the former cash accounting systems used by Medicare Fiscal Intermediaries and carriers. All MACs now utilize the HIGLAS system to account for Medicare benefit payments, except for Durable Medical Equipment (DME) MACs. Benefit Coordination and Recovery Center (BCRC) – The BCRC will perform liability insurance (including self-insurance), no-fault insurance, and workers' compensation (Non-Group Health Plan) recovery case work. Zone Program Integrity Contractors (ZPICs) – The ZPICs perform functions to ensure the integrity of the Medicare Program. Most MACs will interact with one ZPIC to handle fraud and abuse issues within their jurisdictions. Qualified Independent Contractors (QICs) – The QICs are responsible for conducting the second level of appeals of Medicare claims. The MAC is responsible for handling the first level of appeals. There are 6 QIC jurisdictions: Part A East, Part A West, Part B North, Part B South, DME Jurisdiction and one Administrative QIC. Quality Improvement Organization (QIO) – CMS contracts with one organization in each state, as well as the District of Columbia, Puerto Rico, and the U.S. Virgin Islands to serve as that state/jurisdiction's Quality Improvement Organization (QIO) contractor. QIOs are staffed by professionals, mostly doctors and other health care professionals, who are trained to review medical care and help beneficiaries with complaints about the quality of care and to implement improvements in the quality of care available throughout the spectrum of care. Recovery Auditor (RAs) – The RAs are responsible for reviewing paid Medicare claims to identify improper Medicare payments that may have been made to healthcare providers and that were not detected through existing program integrity efforts.

A/B MAC Jurisdictions

DME MAC Jurisdictions D Noridian A NHIC B NGS C CGS

Home Health & Hospice MAC

What are the Medicare FFS Claims Processing Systems?
System Name Function Fiscal Intermediary Shared System (FISS) This claims processing system is used by MACs to adjudicate all institutional claims, including claims from hospitals, hospital outpatient departments, home health agencies, skilled nursing facilities, and hospices. Multi-Carrier System (MCS) This claims processing system is used by MACs to adjudicate non- institutional claims, including physician/non-physician practitioner claims, laboratory claims, therapy claims, IDTF claims, and ambulance claims. VIPS Medicare System (VMS) This claims processing system is used by DME MACs to adjudicate supplier, DMEPOS, and select prescription drug claims. Common Working File (CWF) This Medicare FFS system for approving claims, storing beneficiary eligibility, and transmitting data to National Claims History (NCH). All FFS claims process through CWF. This is also the repository for the beneficiary data received nightly from the Social Security Administration. The A/B and DME MACs use a combination of 4 systems to process Medicare FFS claims. These systems are called “Shared Systems” because they are shared by the MACs: Fiscal Intermediary Shared System (FISS) – This claims processing system is used by MACs to adjudicate all institutional claims, including claims from hospitals, hospital outpatient departments, home health agencies, skilled nursing facilities, and hospices. Multi-Carrier System (MCS) – This claims processing system is used by MACs to adjudicate non-institutional claims, including physician/non-physician practitioner claims, laboratory claims, therapy claims, IDTF claims, and ambulance claims. VIPS Medicare System (VMS) – This claims processing system is used by DME MACs to adjudicate supplier, DMEPOS, and select prescription drug claims. Common Working File (CWF) – This Medicare FFS system for approving claims, storing beneficiary eligibility, and transmitting data to National Claims History. All FFS claims process through CWF. This is also the repository for the beneficiary data received nightly from the Social Security Administration.

What are the Medicare FFS Claims Processing Systems?
FISS MCS VMS CWF A data center serves as a platform for claims processing software systems for Medicare claims. Traditionally, the Medicare contractors either operated their own data centers or contracted out for these services. As part of CMS’ contracting reform initiative, CMS reduced the number of data centers from more than one dozen separate smaller centers to two large Virtual Data Centers (VDC). CMS manages these contracts. CMS migrated the entire FFS claims processing workload to the VDCs by March 2014.

How are Medicare FFS Claims Submitted?
837i – Institutional electronic claims 837p – Professional (non-institutional) electronic claims CMS-1500 Professional/Non-Institutional paper claims UB-04 [CMS-1450] – Institutional paper claims 1490s – Patient’s Request for Medical Payment (for beneficiaries who wish to file their own claim) Medicare claims are submitted in 837i – Institutional electronic claims 837p – Professional (non-institutional) electronic claims CMS-1500 Professional/Non-Institutional paper claims UB-04 [CMS-1450] – Institutional paper claims 1490s – Patient’s Request for Medical Payment (for beneficiaries who wish to file their own claim)

Claim Filing Timeframe
Medicare regulations at 42 CFR define the timely filing period for Medicare Fee-for- Service claims In general, claims must be filed to the appropriate Medicare claims processing contractor no later than 12 months, or one calendar year, after the date the services were furnished Determination that a claim was not filed timely is not subject to appeal Medicare regulations at 42 CFR define the timely filing period for Medicare Fee-for-Service claims In general, claims must be filed to the appropriate Medicare claims processing contractor no later than 12 months, or one calendar year, after the date the services were furnished Determination that a claim was not filed timely is not subject to appeal

Determining Start Date of Timely Filing Period—Date of Service
In general, the start date for determining the 12-month timely filing period is the date of service or “From” date on the claim. For institutional claims that include span dates of service (i.e., a “From” and “Through” date span on the claim), the “Through” date on the claim is used for determining the date of service for claims filing timeliness. For professional claims submitted by physicians and other suppliers that include span dates of service, the line item “From” date is used for determining the date of service for claims filing timeliness. If a line item “From” date is not timely but the “To” date is timely, contractors must split the line item and deny the untimely services as not timely filed. Claims having a date of service on February 29 must be filed by February 28 of the following year to be considered timely filed. In general, the start date for determining the 12-month timely filing period is the date of service or “From” date on the claim. For institutional claims (Form CMS-1450, the UB-04 and now the 837 I or its paper equivalent) that include span dates of service (i.e., a “From” and “Through” date span on the claim), the “Through” date on the claim is used for determining the date of service for claims filing timeliness. Certain claims for services require the reporting of a line item date of service. For professional claims (Form CMS-1500 and 837-P) submitted by physicians and other suppliers that include span dates of service, the line item “From” date is used for determining the date of service for claims filing timeliness. (This includes DME supplies and rental items.) If a line item “From” date is not timely but the “To” date is timely, contractors must split the line item and deny the untimely services as not timely filed. Claims having a date of service on February 29 must be filed by February 28 of the following year to be considered timely filed. What constitutes a claim is defined below.

Determination of Untimely Filing and Resulting Actions
Medicare denies a claim for untimely filing if the receipt date applied to the claim exceeds 12 months or one calendar year from the date the services were Determination that a claim was not filed timely is not subject to appeal. Where the beneficiary request for payment was filed timely the provider is responsible for not filing a timely claim May not charge the beneficiary for the services except deductible and/or coinsurance Medicare denies a claim for untimely filing if the receipt date applied to the claim exceeds 12 months or one calendar year from the date the services were furnished (i.e., generally, the “From” date, with the exception of the “Through” date for institutional claims that have span dates of services, as specified in §70.1). When a claim is denied for having been filed after the timely filing period, such denial does not constitute an “initial determination”. As such, the determination that a claim was not filed timely is not subject to appeal. Where the beneficiary request for payment was filed timely (or would have been filed the request timely had the provider taken action to obtain a request from the patient whom the provider knew or had reason to believe might be a beneficiary) but the provider is responsible for not filing a timely claim, the provider may not charge the beneficiary for the services except for such deductible and/or coinsurance amounts as would have been appropriate if Medicare payment had been made. In appropriate cases, such claims should be processed because of the spell-of-illness implications and/or in order to record the days, visits, cash and blood deductibles. The beneficiary is charged utilization days, if applicable for the type of services received.

Exceptions Allowing Extension of Time Limit
Administrative error Retroactive Medicare entitlement Retroactive Medicare entitlement involving State Medicaid Agencies Retroactive disenrollment from a Medicare Advantage plan or Program of All-inclusive Care of the Elderly provider organization Medicare regulations at 42 C.F.R. §424.44(b) allow for the following exceptions to the one calendar year time limit for filing Fee-for-Service claims: Administrative error, if failure to meet the filing deadline was caused by error or misrepresentation of an employee, Medicare contractor, or agent of the Department that was performing Medicare functions and acting within the scope of its authority (See ). Retroactive Medicare entitlement, where a beneficiary receives notification of Medicare entitlement retroactive to or before the date the service was furnished. For example, at the time services were furnished the beneficiary was not entitled to Medicare. However, after the timely filing period has expired, the beneficiary subsequently receives notification of Medicare entitlement effective retroactively to or before the date of the furnished service (See ). Retroactive Medicare entitlement involving State Medicaid Agencies, where a State Medicaid Agency recoups payment from a provider or supplier 6 months or more after the date the service was furnished to a dually eligible beneficiary. For example, at the time the service was furnished the beneficiary was only entitled to Medicaid and not to Medicare. Subsequently, the beneficiary receives notification of Medicare entitlement effective retroactively to or before the date of the furnished service. The State Medicaid Agency recoups its money from the provider or supplier and the provider or supplier cannot submit the claim to Medicare, because the timely filing limit has expired (See ). Retroactive disenrollment from a Medicare Advantage (MA) plan or Program of All-inclusive Care of the Elderly (PACE) provider organization, where a beneficiary was enrolled in an MA plan or PACE provider organization, but later was disenrolled from the MA plan or PACE provider organization retroactive to or before the date the service was furnished, and the MA plan or PACE provider organization recoups it payment from a provider or supplier 6 months or more after the date the service was furnished

Definition of a Claim for Payment
Conditions that must be satisfied in order for a provider submission to be considered a claim: It must be filed with the appropriate Medicare contractor It must be filed on the prescribed form It must be filed in accordance with all pertinent CMS instructions Medicare regulations at 42 CFR describe basic conditions for Medicare payment. These regulations at paragraphs (5) and (6) define a claim for payment as a request for payment from a provider, supplier, or beneficiary, and the provider, supplier, or beneficiary requesting payment must furnish the appropriate Medicare contractor with sufficient information to determine the amount of payment. Institutional claims are in all cases filings by the provider and issues of assigned or non-assigned claims do not apply. Medicare regulations at 42 CFR describe the basic requirements for all claims. Specifically, 42 CFR (a) (1) states, “A claim must be filed with the appropriate intermediary or carrier on a form prescribed by CMS in accordance with CMS instructions.” Therefore, this regulation sets out 3 distinct conditions that must be satisfied in order for a provider submission to be considered a claim It must be filed with the appropriate Medicare contractor It must be filed on the prescribed form It must be filed in accordance with all pertinent CMS instructions. The sections below define each of these conditions in greater detail.

Formats for Submitting Claims to Medicare
Claims must submitted to Medicare electronically Unless certain exceptions are met Paper Claims The law allows for exceptions for which a provider, or other claim submitter, is permitted to send his/her claims to Medicare on paper The Administrative Simplification Compliance Act (ASCA) requires that claims be submitted to Medicare electronically unless certain exceptions are met. In addition, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires that the Secretary of Health and Human Services adopt standards for conducting certain health care transactions electronically, among them claims and remittance advices. Therefore, claims sent to Medicare must be sent on HIPAA-standard health care claim transactions unless certain exceptions are met. Paper Claims The ASCA law allows for there to be exceptions for which a provider, or other claim submitter, is permitted to send his/her claims to Medicare on paper.

Jurisdiction of Requests for Payment A/B MAC
The A/B MAC have jurisdiction for the following: All Part A services (hospital, Skilled Nursing Facility, Home Health Agency, and hospice); Most Part B services from providers that furnish Part A services; and Part B facility services from: Comprehensive outpatient rehabilitation facilities, Renal; Dialysis Facilities, Rural Health Clinics, Religious Nonmedical Institutions, Outpatient Physical Therapy Centers Federally Qualified Health Centers, and Community Mental Health Centers The AB MACs have jurisdiction for the following: All Part A services (hospital, Skilled Nursing Facility, Home Health Agency, and hospice); Most Part B services from providers that furnish Part A services; and Part B facility services from Comprehensive outpatient rehabilitation facilities, Renal, Dialysis Facilities, Rural Health Clinics, Religious Nonmedical Institutions, Outpatient Physical Therapy Centers, Federally Qualified Health Centers, and Community Mental Health Centers. The RHHIs have jurisdiction for HHA and Hospice claims. Regional RHC FIs have jurisdiction for claims from freestanding RHCs.

Jurisdiction of Requests for Payment A/B MAC—continued
Physicians Other individual practitioners Groups of physicians or practitioners Labs not part of a hospital Ambulance claims submitted by ambulance companies under their own Medicare number (hospitals may operate ambulances as part of the hospital and bill the intermediary Ambulatory surgical centers Independent diagnostic testing facilities Physicians Other individual practitioners Groups of physicians or practitioners Labs not part of a hospital Ambulance claims submitted by ambulance companies under their own Medicare number (hospitals may operate ambulances as part of the hospital and bill the intermediary (FI)) Ambulatory surgical centers (ASCs) Independent diagnostic testing facilities (IDTFs)

Jurisdiction of Requests for Payment DME MACs
Durable Medical Equipment Medicare Administrative Contractors (DME MACs) have jurisdiction for claims from the following: Non-implantable durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) (including home use) Suppliers of enteral and parenteral products other than to inpatients covered under Part A Oral drugs billed by pharmacies Durable Medical Equipment Medicare Administrative Contractors (DME MACs) have jurisdiction for claims from the following: Nonimplantable durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) (including home use) Suppliers of enteral and parenteral products other than to inpatients covered under Part A Oral drugs billed by pharmacies Method II home dialysis (for dates of service prior to January 1, 2011). Note: Please refer to Section for information regarding the elimination of Method II home dialysis for dates of service on and after January 1, 2011.

Beneficiary Services Outside United States—Emergency Hospital Admissions
Generally, payment is made for emergency inpatient hospital services in qualified Canadian or Mexican hospitals in the following circumstances: The beneficiary is in the U.S. when an emergency occurs, and a Canadian or Mexican hospital is closer to, or more accessible than the nearest adequately equipped U.S. hospital that can provide emergency services, or The emergency occurred in Canada while the beneficiary is traveling between Alaska and another state and a Canadian hospital is closer to, or more accessible than the nearest U.S. hospital Generally, payment is made for emergency inpatient hospital services in qualified Canadian or Mexican hospitals in the following circumstances: A person with Medicare is in the United States when an emergency occurs, and a Canadian or Mexican hospital is closer to, or more accessible from, the site of the emergency than the nearest adequately equipped United States hospital that can provide emergency services, or The emergency occurred in Canada while the beneficiary is traveling between Alaska and another state without unreasonable delay and by the most direct route, and a Canadian hospital is closer to, or more accessible from, the site of the emergency than the nearest United States hospital. For this purpose, an emergency occurring within the Canadian inland waterway between the states of Washington and Alaska is considered to have occurred in Canada. The term “United States” means the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, Northern Mariana Islands, American Samoa and, for purposes of services furnished on a ship, the territorial waters adjoining the land areas of the U.S. A hospital that is not physically situated in one of the above jurisdictions is considered to be outside the United States, even if it is owned or operated by the United States Government.

Claims for Beneficiaries in State or Local Custody Under a Penal Authority continued
Medicare program does not pay for services If the beneficiary has no legal obligation to pay for the services and no other person or organization has a legal obligation to provide pay for that service If services are paid for directly or indirectly by a governmental entity “Payment may be made only if the following conditions are met: State or local law requires the individual to repay the cost of medical services while in custody The state or local government entity enforces the requirement to pay by billing all such individuals, whether or not covered by Medicare or any other health insurance, and by pursuing the collection of the amounts they owe in the same way and with the same vigor that it pursues the collection of other debts Under Section 1862(a)(2) of the Social Security Act (“the Act”), the Medicare program does not pay for services If the beneficiary has no legal obligation to pay for the services and no other person or organization has a legal obligation to provide or pay for that service. Also, under Section 1862(a)(3) of the Act, if services are paid for directly or indirectly by a governmental entity, Medicare does not pay for the services. These provisions are implemented by regulations 42 C.F.R.§411.4, 411.6, and 411.8, respectively. “Payment may be made for services furnished to individuals or groups of individuals who are in the custody of the police or other penal authorities or in the custody of a government agency under a penal statute only if the following conditions are met: State or local law requires those individuals or groups of individuals to repay the cost of medical services they receive while in custody. The State or local government entity enforces the requirement to pay by billing all such individuals, whether or not covered by Medicare or any other health insurance, and by pursuing the collection of the amounts they owe in the same way and with the same vigor that it pursues the collection of other debts.”

Claims for Beneficiaries in State or Local Custody Under a Penal Authority
Individuals who are in custody include, but are not limited to: Under arrest Incarcerated Imprisoned Escaped from confinement Under supervised release On medical furlough Required to reside in mental health facilities Required to reside in halfway houses Required to live under home detention Confined completely or partially in any way under a penal statute or rule Individuals on parole, probation, bail, or supervised release may be “in custody” The regulation at 42 CFR §411.4(b) states: “Individuals who are in custody include, but are not limited to, individuals who are Under arrest Incarcerated Imprisoned Escaped from confinement Under supervised release On medical furlough Required to reside in mental health facilities Required to reside in halfway houses Required to live under home detention Confined completely or partially in any way under a penal statute or rule Moreover, 72 FR states further that the “…definition of “custody” is in accordance with how custody is defined by Federal courts for purposes of the habeas corpus protections of the Constitution. For example, the term “custody” is not limited solely to physical confinement. (Sanders v. Freeman, 221F.3d 846, (6PthP Cir ).) Individuals on parole, probation, bail, or supervised release may be “in custody.”

“Rejects” Versus “Denials”
Returned on the “front end” Due to missing or incorrect information Prior to claims adjudication Afford no appeal rights Require the claim to be resubmitted Denials Adjudicated claims Fail to meet payment criteria: Statutory requirements Medical necessity criteria Beneficiary eligibility Frequency limitations Afford appeal rights Lets review the differences between a rejected or denial claim: Rejects Returned on the “front end” Due to missing or incorrect information Prior to claims adjudication Afford no appeal rights Require the claim to be resubmitted Denials Adjudicated claims Fail to meet payment criteria: Statutory requirements Medical necessity criteria Beneficiary eligibility Frequency limitations Afford appeal rights

Remittance Advices (RA) and Medicare Summary Notices (MSN)
Sent to the provider/supplier after adjudicating the claim Contains a reason code and one or more remark code Medicare Summary Notice Sent to the beneficiary after adjudicating the claim Contains one or more messages to explain the payment or denial of the item or service Medicare providers and beneficiaries receive two different notifications: Remittance Advices (RA) and Medicare Summary Notices (MSN)—Lets review the difference between the two: Remittance Advice Sent to the provider/supplier after adjudicating the claim Contains a reason code and one or more remark code Medicare Summary Notice Sent to the beneficiary after adjudicating the claim Contains one or more message to explain the payment or denial of the item or service

Medicare Fee-for-Service
A Day in the Life of a Claim

Medicare Claim System

Medicare FFS Claims Payment @ 40,000 Feet
Service MACs FISS/MCS/VMS MSN/RA 2 3 4 5 6 1 7 8 VDC CWF VMS HIGLAS NCH IDR CCW $

Step 1—Service received
Beneficiary receives a service (e.g., hospital visit, flu shot) Service provider submits claim Note 98% electronic 2% paper

Step 2—Claim Submitted to MAC
Medicare FFS Claims Medicare Administrative Contractors (MACs) Initial claim edits Claim is in a valid format Submitter is valid Claim is not a duplicate Consolidated A/B MAC Jurisdictions Clearing House

Step 3—VDC and Shared Systems
MACs CMS Enterprise Data Centers (VDCs) house Shared Systems that process claims Shared Systems Check whether the services are covered by Medicare Determine price that should be paid to the provider for the service FISS MCS VMS CWF

Step 4—Common Working File
The VDCs also house the Common Working File (CWF) which checks: Beneficiary eligibility Deductible calculation If beneficiary has other insurance Allowed frequency of service (e.g. for preventive services) FISS MCS VMS CWF Fun Fact: CWF feeds downstream data warehouses (IDR, CCW)

Step 5—Financial System
VDCs Health Care Integrated General Ledger Accounting System (HIGLAS)/VMS Financial System CMS’ general ledger accounting system at the HIGLAS data center Accounts payable and receivable for provider Determines if provider owes money

HIGLAS/VMS Financial System
Step 6—Payment HIGLAS/VMS Financial System VDCs/Shared Systems Prepare claim payment Prepare information for Provider/Suppliers Remittance Advice Prepare information for Medicare Summary Notice for beneficiaries

Step 7—Remittance VDCs/Shared Systems MACs Send MSNs to beneficiaries
Send remittance and payment to providers

Providers/Suppliers & Beneficiaries
Step 8—Receipt MACs Providers/Suppliers & Beneficiaries Providers/Suppliers receive payment and remittance Beneficiaries receive MSN

Resources Claim Processing Manual, Pub , Chapter 20: cms.gov/Regulations-and-Guidance/Guidance/Manuals/Internet-Only-Manuals- IOMs-Items/CMS html?DLPage=1&DLSort=0&DLSortDir=ascending DMEPOS Competitive Bidding link on the cms.gov website: cms.gov/Medicare/Medicare-Fee-for-Service- Payment/DMEPOSCompetitiveBid/index.html CBIC Website : dmecompetitivebid.com Electronic Billing & EDI Transactions link on the cms.gov website: cms.gov/Medicare/Billing/ElectronicBillingEDITrans/index.html Medicare Provider-Supplier Enrollment : cms.gov/Medicare/Provider-Enrollment-and- Certification/MedicareProviderSupEnroll/index.html

Acronyms CEDI – Common Electronic Data Interchange
IOM – CMS Internet-Only Manual System CCW – Chronic Conditions Data Warehouse MCS – Multi Carrier System Comprehensive Error Rate Testing MSN – Medicare Summary Notice CWF – Common Working File MSP – Medicare Secondary Payer DME MAC – Durable medical equipment Medicare administrative contractor NCH – National Claims History NSC – National Supplier Clearinghouse DMEPOS – durable medical equipment, prosthetics, orthotics, and supplies PECOS – Provider Enrollment, Chain and Ownership System FISS – Fiscal Intermediary Standard System PDAC – Pricing, Data Analysis, and Coding Contractor HIGLAS – Healthcare Interactive General Ledger Accounting System PPS – Prospective Payment System IDTF – Independent Diagnostic Testing Facility RAC – Recovery Audit VMS – VIPS Medicare System IDR – Integrated Data Repository ZPIC – Zone program integrity contractor

Life of a Claim Life of a Claim provides an overview of the Medicare claims processing. This training module was developed and approved by the Centers.

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Life of a Claim Life of a Claim provides an overview of the Medicare claims processing. This training module was developed and approved by the Centers.

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Presentation on theme: "Life of a Claim Life of a Claim provides an overview of the Medicare claims processing. This training module was developed and approved by the Centers."— Presentation transcript:

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