Medical billing and reimbursement essentials introduction
The Medical billing process
Medical billing and reimbursement represent the financial lifeline of the healthcare facility. Collecting accurate patient health insurance information is essential to submitting accurate health insurance claims. Each health insurance company has its own claims submission policies and procedures for timely reimbursement. A successful medical assistant in insurance billing learns the insurance company requirements and submits accurate claims. Many health insurance companies have online provider web portals. This has made the process of checking the status of a claim quick and easy. The medical assistant also needs to be able to look at a patient’s insurance card and interpret the information found there, including copayment (copay) amounts. An explanation of benefits (EOB)/remittance advice (RA) from the insurance carrier will indicate the patient’s deductible and/or co-insurance. Clear communication with the patient about his or her financial responsibilities takes patience and sensitivity.
The medical billing process, also known as the revenue cycle, starts when a patient makes an appointment and is complete when payment for services has been received. The following steps are typically taken for medical billing:
- Collect patient information when the patient calls to schedule an appointment. This includes information about the insured, his or her employer, demographic information, and health insurance data.
- Verify the patient’s eligibility, confirming that the patient’s contract with the insurance company is valid for the date of service. Patient eligibility can be confirmed by doing the following:
- Calling the provider services phone number on the back of the health insurance ID card
- Using the provider web portal sponsored by the patient’s health insurance company
- When the patient arrives for the appointment, you should do the following:
- Make a copy or scan both sides of the patient’s insurance card (FIGURE 18.1) and government-issued ID card.
- If the patient has a copayment (copay) responsibility, collect it before services are provided
- Review patient benefits and exclusions for certain medical procedures and services.
- If precertification is needed, contact the health insurance company to request it.
- After services have been provided to the patient, code the diagnosis and procedures and review the encounter form/superbill for completeness. The charges for the procedure or procedures should be provided automatically by the medical billing software.
- Complete the CMS-1500 Health Insurance Claim Form (CMS-1500), or an electronic claim form. Submit the form to the insurance company. Electronic claim information may be submitted to a claims clearinghouse.
- Review the electronic claims submission report to ensure that the claim was submitted accurately. Correct any discrepancies through the claims clearinghouse and resubmit claims that have not been paid (denied claims).
- Meet the timely filing requirements that are outlined in the contract of each of the different health insurance carriers. These requirements can vary from carrier to carrier. Health insurance companies do not pay claims submitted after the established filing period, and this balance cannot be billed to the patient.
- Post payments in the patient’s account using the EOB/RA to identify the line items that were paid, reduced, or denied. Patient account statements for the person’s financial responsibility should be mailed out. Health insurance claims for patient accounts with secondary insurance should be submitted to the secondary carrier.
Types of information found in the patient’s billing record
The claim submission process begins after the patient receives services from the provider. When a patient makes their first appointment, it is routine to ask the patient for insurance billing information. Much of this information is collected on the patient information form. This form can be sent to the patient ahead of time or completed when the patient comes to the medical office for the first visit. This form should always be completed for every new patient. For established patients, demographic and insurance information should be verified at every visit.
Accurate patient information for submitting a health insurance claim is important, but a medical release of information form, signed by the patient, should also be kept in the person’s health record. The release form allows the release of medical information to the insurance company. The Health Insurance Portability and Accountability Act (HIPAA) does not require this, but some state laws do. Many healthcare facilities will have patients complete the form and keep it in their health records.
Managed care policies and procedures
Medical billers should be familiar with procedures commonly used by managed care organizations (MCOs), such as precertification. If the procedures are not followed, the MCO might not pay for the services. For example, pain management services typically require a preauthorization. If a pain management facility were to provide these services to the patient without preauthorization, the MCO could deny all insurance claims. To submit accurate health insurance claims, medical assistants should follow office procedures for applying MCO policies and procedures.
Precertification/preauthorization
In an effort to control costs, many MCOs require pre-certification for certain procedures and services. The insurance company, in turn, will determine if it is a covered service and what the reimbursement will be. Precertification must be done before the procedure or service is performed.
The medical assistant will take the following steps to obtain precertification:
- Call the provider services phone number on the back of the patient’s health insurance ID card or complete this process through the insurance company’s web portal.
- Provide the insurance company with procedures or services requested and the diagnoses.
- Document the outcome of the call in the patient’s health record, including the precertification number.
Precertification does not guarantee payment of services. The process ensures that both the healthcare provider and the patient are informed of the amount that the insurance company will pay and also the amount that the patient will have to pay.
Each insurance company has its own pre-certification requirements. Almost every MCO requires precertification, but medical assistants must confirm this by contacting the insurance company. Successful medical billers are diligent in obtaining pre-certification.
The precertification and preauthorization processes are very similar. The insurance company is contacted after the primary care provider (PCP) recommends the procedure or service. In fact, many health insurance companies use the terms precertification and preauthorization interchangeably. However, precertification specifically determines whether the procedure is medically necessary, and preauthorization gives the provider approval to render the medical service. Precertification and preauthorization can be requested through an insurance company’s online web portal.
Referrals
Patients seeking specialized care must first visit their assigned PCP to obtain a referral to a specialist or for more specialized therapy or care. Patients with HMO plans can only obtain a referral to the specialist by visiting their assigned PCP. HMOs will track how many patients are referred to specialists by individual PCPs. Approval or denial of a referral can take anywhere from a few minutes to a few days. The three types of referrals are as follows:
- A regular referral usually takes 3 to 10 working days for review and approval. This type of referral is used when the provider believes the patient must see a specialist to continue treatment.
- An urgent referral usually takes about 24 hours for approval. This type of referral is used when an urgent but not life-threatening situation occurs.
- A STAT referral can be approved online when it is submitted to the utilization review department through the provider’s web portal. A STAT referral is used in an emergency situation as indicated by the provider.
A regular referral is the most common type and can be inconvenient for the patient. With most managed care plans, preauthorization needs to be obtained for a referral. Remember this cardinal rule: never tell the patient the referral has been approved unless you have a hard copy of the authorization. A referral is authorized after the approval has been received. When a referral is approved, the PCP’s office and the patient should receive a copy of the authorization. Always review the authorization thoroughly and confirm details, such as approved diagnosis and procedure codes and the exact period of time the authorization lasts. The patient will receive a letter with an authorization number and details regarding the approved services. The patient must bring the authorization to the specialist’s office on the date of the appointment.