1. Billing, reimbursement, and collections
Chapter 7
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2. Learning outcomes: When you finish this chapter you will be able to
7.1
Recognize and calculate charges for medical services and process patient statements based on the patient encounter form and the physician’s fee schedule.
7.2
Compare and contrast the process of completing and transmitting insurance claims using both hardcopy and electronic methods.
7.3
Describe the different types of billing options used by medical practices for billing patients.
7.4
Paraphrase the procedures and options available for collecting delinquent accounts.
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3. Key terms clearinghouse cycle billing clean claim dependent CMS-1500
electronic claims
claim form
EOB
collection agency
ERA
collection at the time of service
fee adjustment
collection ratio
fee schedule
guarantor
monthly billing
patient information form
patient statement
scrubber program
terminated account
third-party liability
write-off
Teaching Strategies:
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4. Key terms (continued)
clearinghouse –a service bureau that collects electronic claims from many different medical practices and forwards the claims to the appropriate insurance carriers clean claim -- a claim that is accepted by the insurance payer for adjudication CMS which is filled out or updated by the patient, and the patient encounter form claim form -- is one of the most important steps in successful claim reimbursement collection agency -- for collecting unpaid bills, as most agencies work on a contingency basis
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5. Key terms (continued)
collection at the time of service -- Patients pay at the time of the visit by cash, check, debit card, or credit card collection ratio -- (total collections divided by net charges of the practice cycle billing -- is designed to avoid once-a-month peak workloads and to stabilize the cash flow dependent -- children usually children under the age of 18 (or children under 21 who are full-time students)
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6. Key terms (continued)
electronic claims -- are prepared on a computer and transmitted electronically (from one computer to another) to an insurance carrier for processing EOB -- explanation of benefits ERA -- electronic remittance advice fee adjustment -- Should the need arise, the physician can adjust the cost of any procedure
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7. key terms (continued)
fee schedule -- which lists the usual procedures the office performs and the corresponding charges guarantor -- guarantees payment of the account charges monthly billing -- bills are sent out once a month and are timed to reach the patient no later than the last day of the month patient information form -- which is filled out or updated by the patient
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8. key terms (continued)
patient statement -- is sent to the patient for billing purposes on the next billing date scrubber program – used to check for errors on insurance claim forms before they are submitted terminated account -- A physician who finds it impossible to extract payment from a patient may decide to terminate the physician- patient relationship third-party liability -- Sometimes a person other than the patient assumes liability, or responsibility, for the charges write-off -- One type of fee adjustment a medical office makes regularly with certain health plans
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9. Patient Encounter Form Fee Schedule Patient Statements
7.1 Recognize and calculate charges for medical services and process patient statements based on the patient encounter forms and the physician’s fee schedule.
Administrative medical assistants keep track of the services rendered and any payments made during a visit to the physician. After the patient completes the office visit, the administrative medical assistant updates the patient ledger to show the financial information for the encounter.
Patient Encounter Form
Fee Schedule
Patient Statements
Computerized Billing
7.1
Patient Encounter Form
To facilitate the process of billing patients for physicians’ services, medical offices use a patient encounter form. A blank patient encounter form (also called a charge slip, superbill, routing slip, or patient service form) is attached to the patient’s medical record for completion. It is used to record the details of patients’ encounters for billing and insurance purposes.
Fee Schedule Each physician or medical practice has a fee schedule , which lists the usual procedures the office performs and the corresponding charges. The administrative medical assistant should always refer to the practice’s fee schedule in determining the total cost for each patient’s visit.
Patient Statements The administrative medical assistant records all transactions—that is, charges incurred by the patient for office visits, x-rays, laboratory tests, and so on and all adjustments and payments made by the patient or the patient’s insurance company—in the patient ledger. The patient’s copy of the information stored in the patient ledger (hardcopy or electronic)
Computerized Billing Most medical practices, even though they may not be using a complete EHR system, use a computerized billing program to generate patient statements.
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10. Complete the insurance claim form, either electronic or on paper,
7.2 Compare and contrast the process of completing and transmitting insurance claims using both hardcopy and electronic methods.
Complete the insurance claim form, either electronic or on paper,
Verify patient demographic, encounter, and insurance information.
Transmit, electronically or by postal mail, the claim form to the insurance company, which decides to pay the fee, deny the claim, or pay a certain portion of the claim.
Verify the accuracy.
7.2
Bill patient for coshares.
• Both paper and electronic claims — Use patient information collected during the registration.
— Use diagnostic and procedural information from the patient’s encounter.
— Gather needed information from either electronic or hardcopy records.
• Electronic claims are entered only once, creating fewer opportunities for errors, whereas paper
claims—even if produced electronically—may be scanned by the payer or physically reentered,
creating greater opportunities for errors.
• Payments resulting from electronic claims submission are faster and, most commonly, are electronic funds transfers. Payments from paper
claims may be electronically deposited but may also be sent to the provider via a hardcopy check through the postal service creating a
much slower process.
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11. Third-Party Liability
7.3 Describe the different types of billing options used by medical practices for billing patients.
Methods of Payments
Sending Statements
Payment Plans
Fee Adjustment
Health Insurance
Third-Party Liability
7.3
Methods of Payments -- The assistant must be careful to enter each cash payment in the patient’s ledger and in the daily summary record. The patient’s name, the services rendered, the charges, the payment received on the account, and any balances should be included.
Sending Statements -- Although most bills are sent out once a month, a statement may be sent at the end of a procedure or upon discharge from the hospital. Practices decide to do either monthly billing or cycle billing
Payment Plans – For the patient who is unable to pay a medical bill in one lump sum, a schedule of payments, or contract, can be agreed upon. The agreement should be in writing, and a copy of the plan should be given to the patient as a reminder of the commitment to pay the physician
Fee Adjustment – Should the need arise, the physician can adjust the cost of any procedure; the physician will then inform the administrative medical assistant of the fee adjustment . Fees should not be reduced as a way to receive payment quickly and avoid collection procedures
Health Insurance – Many patients carry health insurance that provides payment for a portion of their medical expenses. Depending on whether or not the physician accepts the health insurance the patient has, the payment arrangement varies. Essentially, there are two options: patients are billed at the time of service or after the insurance claim has been processed.
Third-Party Liability -- Sometimes a person other than the patient assumes liability, or responsibility, for the charges. Such responsibility is called third-party liability . The assistant must contact this third party for verification of financial obligation. Relatives, particularly children of aged parents, may say they will be responsible for payment of the bill, but this promise must be in writing. Oral promises are not legally binding. A third party is not obligated by law unless he or she has signed an agreement to pay the charges. Therefore, a signed promise obtained prior to treatment will greatly reduce the credit risk.
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12. Communicating with Patients Guidelines for Payment
7.4 Paraphrase the procedures and options available for collecting delinquent accounts
Communicating with Patients
Guidelines for Payment
The Office Collection Policy
Laws Governing Collections
Course of Action
Statute of Limitations
Credit Arrangements and the Truth in Lending Act
Writing Off Uncollectible Accounts
7.4
• Guidelines are determined by each office in regard to payment—how much is to be collected daily, how much should be collected on each account, etc.
• Communications with patients from the start about what is expected from them in terms of payment are the beginning of the collection process.
• Patients should be notified in advance of all procedures that are not covered by insurance.
• Policies and procedures for handling overdue accounts are determined by each office in conjunction with state and federal laws.
• Collection processes may be ended and the amount written off as a bad debt when the amount to be collected is less than the cost of
collecting the debt.
• State statutes are used to determine the legal period of time to continue the collection of a debt.
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