Insurance determination and CMS-1500 blocks 1–23

Primary and secondary insurance determination

When a patient is covered by more than one insurance policy, it is important to determine which policy is considered primary. The primary insurance pays the claim first, and if there is anything left over, it is submitted to the secondary insurance company. One of the most common situations is a patient with coverage under two policies, such as a dependent whose parents each have family coverage through employer group insurance.

In the case of a child whose mother and father both carry the child as a dependent on their employer’s health insurance plan, primary and secondary insurance status is determined by the birthday rule. Whichever parent’s birth date falls first in a calendar year is considered to have the primary insurance. The year of the parent’s birth is not used. If the mother’s birth date is February 20 and the father’s birth date is May 1, the mother’s insurance is the primary insurance, and the father’s insurance is the secondary. This means the claim will be submitted to the mother’s insurance first, and if there is any balance left, it will be submitted to the father’s insurance.

Medicare is usually the primary insurance, and there is a secondary policy to cover the patient’s responsibility. In some cases, however, Medicare can be the patient’s secondary insurance. This typically happens when a Medicare patient is still covered under an employer-sponsored group policy because the patient works full time.

Medicaid is always the payer of last resort. That means if there is any other type of insurance coverage for the patient, that insurance is responsible for the claim. If there is any balance left over, it will be submitted to Medicaid.

Section 2: Patient and insured information - Blocks 1 through 11

The top third of the CMS-1500 form establishes who was treated, who holds the policy, and whether anyone other than the health plan might be responsible for the bill. Every one of these blocks is filled in from the patient registration form and the insurance card, which is why accuracy at check-in is what makes this part of a claim clean. A transposed digit here is returned by the payer weeks later as an unpaid claim.

Block 1: Type of health plan

Place an X in the box for the type of insurance being billed: Medicare, Medicaid, TRICARE, CHAMPVA, Group Health Plan, FECA Black Lung, or Other. Only one box is marked.

Block 1a: Insured’s ID number

Enter the identification number exactly as it appears on the card of the person who holds the policy, including any letter prefix or suffix. This is the number the payer uses to find the policy.

Block 2: Patient’s name

Enter the patient’s last name, first name, and middle initial, spelled as the name appears on the insurance card rather than as the patient writes it.

Block 3: Patient’s birth date and sex

Enter the date of birth in MM/DD/YYYY format and mark M or F.

Block 4: Insured’s name

Enter the last name, first name, and middle initial of the person who holds the policy. When the patient is the policyholder, this block is completed with the patient’s own name or marked SAME, depending on the payer’s instructions.

Block 5: Patient’s address

Enter the patient’s street address, city, state, ZIP code, and telephone number.

Block 6: Patient relationship to insured

Mark Self, Spouse, Child, or Other. This is what tells the payer whether the patient is the policyholder or a dependent on someone else’s policy.

Block 7: Insured’s address

Enter the address and telephone number of the person named in Block 4. If it is the same as the patient’s address, enter SAME.

Block 8: Reserved for NUCC use

Leave blank. On the earlier version of the form this block held the patient’s marital and employment status; on the current 02/12 version it is reserved, and older study materials still show the retired labels.

Block 9: Other insured’s name

Complete this block and Blocks 9a and 9d only when the patient has secondary coverage - that is, when Block 11d is marked YES. Enter the last name, first name, and middle initial of the person who holds the other policy.

Block 9a: Other insured’s policy or group number

Enter the policy or group number of the secondary plan.

Blocks 9b and 9c: Reserved for NUCC use

Leave both blank on the 02/12 form.

Block 9d: Insurance plan name or program name

Enter the name of the secondary insurance plan or program.

Block 10: Is the patient’s condition related to employment, an auto accident, or another accident?

Mark YES or NO in each of Blocks 10a, 10b, and 10c. If the condition is related to an auto accident, enter the two-letter abbreviation of the state where the accident happened. A YES in any of these boxes tells the payer that another carrier - workers’ compensation, or auto liability - may be responsible for the claim ahead of the health plan.

Block 10d: Claim codes

Completed only when a payer requires a condition code designated by the NUCC. Most claims leave it blank.

Block 11: Insured’s policy group or FECA number

Enter the group number of the primary policy. Medicare will not process a claim until this block is completed; entering the word NONE here is what tells Medicare that no other coverage is primary to it.

Block 11a: Insured’s date of birth and sex

Enter the date of birth of the person named in Block 4 and mark M or F.

Block 11b: Other claim ID

Used when a payer requires an additional claim identifier, such as a claim number assigned by a property and casualty carrier.

Block 11c: Insurance plan name or program name

Enter the name of the primary insurance plan or program.

Block 11d: Is there another health benefit plan?

Mark YES or NO. A YES means Blocks 9 through 9d must be completed with the secondary plan’s information - this block and those blocks are always answered together.

Assignment of benefits

In the health insurance contract between the third-party payer and the patient, the patient receives the payment when a claim is submitted. For the healthcare facility to receive the reimbursement directly from the insurance company, the patient must sign an assignment of benefits. The assignment of benefits transfers the patient’s legal right to collect benefits for medical expenses to the provider of those services, authorizing the payment to be sent directly to the provider. In other words, the assignment of benefits authorizes the provider to not only submit the insurance claim on behalf of the patient but also to be reimbursed directly by the third-party payer. There is usually a statement about the assignment of benefits on the patient information form. When the patient has signed the assignment of benefits, the medical assistant completes Blocks 12 and 13 on the CMS-1500 form with the statement “Signature on File” or “SOF” and the claim filing date.

Blocks 12 and 13

Block 12 requires the signature of the patient or an authorized person, and Block 13 requires the signature of the insured or an authorized person. In Block 12, the signature authorizes the release of any medical or other information necessary to process or adjudicate the claim. In Block 13, the signature affirms that the healthcare organization has a signature on file authorizing payment of medical benefits directly to the provider (whose name appears in Block 31). The phrase “Signature on File” or “SOF” may be entered in these fields. The healthcare organization must actually have a signed authorization in the patient’s health record.

Section 3a: Physician or supplier information - Blocks 14 through 23

Block 14: Date of current illness, injury, or pregnancy (LMP)

Block 14 requires the date of the current illness, injury, or pregnancy (LMP). The date should be the date on which the current illness or condition began; the date an injury occurred; or, in the case of pregnancy, the date of the last menstrual period (LMP), all in MM/DD/YYYY format.

Block 15: Other date

This block is used for another date related to the patient’s condition or treatment. Enter the applicable qualifier to identify which date is being reported.

Block 16: Dates patient unable to work in current occupation

These dates help determine an employee’s long- or short-term disability payments.

Blocks 17 and 17b: Name of referring provider or other source

Block 17 is for the name of the provider who referred or ordered the services or supplies. The following qualifier can be added:

• DN Referring Provider
• DK Ordering Provider
• DQ Supervising Provider

The provider’s National provider identifier (NPI) is entered in Block 17b.

National provider identifier (NPI)

Government insurance claims require that national provider identifiers (NPIs) be used for the referring providers (Block 17b) and rendering providers (Block 24J). Every healthcare entity is required to have an NPI. The NPI is an identifier assigned by the CMS that classifies the healthcare provider by license and medical specialty. The Administrative Simplification provisions of the Health Insurance Portability and Accountability Act (HIPAA) required the adoption of standard unique identifiers for healthcare providers and health plans. The purpose is to improve the efficiency of electronic transmission of health information.

Some private insurance companies may require claims to be submitted with the NPI. However, each privately sponsored insurance plan in each state has its own policies and procedures. Medical assistants will find that some third-party payers require NPIs and others do not.

Block 18: Hospitalization dates related to current services

If inpatient services are provided, the admission and discharge dates are entered here.

Block 19: Additional claim information (designated by the National Uniform Claim Committee [NUCC])

Some insurance plans ask for specific identifiers in Block 19. The medical assistant should check the instructions from the applicable third-party payer.

Block 20: Outside lab charges

This block is used for diagnostic laboratory services purchased from an independent or a separate provider (listed in Block 32). Put an X in the YES box to indicate that the diagnostic test was performed by an entity other than the provider billing for the service (i.e., the provider listed in Block 33) and that the provider in Block 33 paid the laboratory directly. Include the amount the provider was charged by the diagnostic laboratory.

Block 21: Diagnosis or nature of illness or injury

The ICD-10-CM diagnosis code or codes are entered. Up to 12 diagnostic codes can be entered here. The primary diagnosis should be recorded in the first field. Do not include the decimal point in the diagnosis code. Relate lines A to L to lines of service in Block 24E by the letter of the line. This will link the diagnosis to the service provided.

Block 22: Resubmission code and/or original reference number

Both the resubmission code and the original reference number assigned by the insurance payer must be entered in this block. Here are the resubmission codes:

• 7 Replacement of prior claim
• 8 Void/cancel of prior claim

Block 23: Prior authorization number

The preauthorization/precertification number obtained from the insurance company is entered.