Submitting and completing health insurance claims

After the registration information has been collected and coverage verified, the patient is then provided services. An encounter form is used to document the services and the diagnoses for those services, and then the encounter form is used to complete a claim to be submitted to the insurance company (third-party payers).

All health insurance companies accept the following:

• CMS-1500 as the standard claim form or the HIPAA 5010 electronic claim
• International Classification of Diseases (ICD)-10-CM for diagnostic codes
• Current Procedural Terminology (CPT) and Healthcare Common Procedure Coding System (HCPCS) procedural/supply codes

However, each health insurance company has its own policies and procedures for the submission of claims.

Guidelines for Medicare and Medicaid claims can be found on the administrator websites for each state. MCO plans associated with capitation agreements have specific guidelines on the types of medical services that are billable. Private health insurance plans have their own policies and procedures for submitting claims. The medical assistant should research the health plans commonly seen in the healthcare facility.

The medical assistant can successfully manage the requirements of the different insurance plans by keeping a medical billing manual. The manual should contain the billing policies and procedures for the most common third-party payers. The person in charge of the manual should make sure that every medical biller has a copy and that the policies and procedures are up to date. Whenever an update is released, the medical billing manual also should be updated.

Most providers are required to submit claims electronically for Medicare patients and are doing so for most other health insurance plans. If the majority of claims are submitted electronically, why is it important to learn the different fields of the CMS-1500 paper form? The data used to submit electronic claims is the same data used on the CMS-1500. A medical assistant who is familiar with a paper CMS-1500 will have no problem collecting the proper data for an electronic claim. Both methods are discussed in the following sections.

Generating electronic claims

Electronic claims are insurance claims that are transmitted over the internet from the provider to the health insurance company through electronic data interchange. Electronic data interchange is the electronic transfer of data between two or more entities. When submitting electronic claims, a healthcare facility transmits the data for the claim, and the health insurance company accepts it. Most medical billing software is designed to generate electronic claims.

As with paper claims, when electronic claims are submitted, accurate data is essential. When the medical assistant reviews the claim for accuracy, the claim is prepared for submission.

Electronic claims are submitted in the 5010 format established by HIPAA and can be directly transmitted to the insurance carrier or a claims clearinghouse.

Direct billing

Direct billing is the process by which an insurance company allows a provider to electronically submit claims directly to the company. Most major insurance companies, including Medicare and Medicaid, provide software packages that are used to enter the following:

• Patient’s information
• Insured’s information
• Charges
• Provider details

Many carrier-direct systems are supplied free of charge to the provider, but the direct system can transmit only to specific carriers. If a majority of claims for the healthcare facility are submitted to just one insurance company, direct billing would be a good way to submit claims.

Clearinghouse submissions

A claims clearinghouse is an organization that acts as a go-between for the healthcare facility and the insurance company. The clearinghouse takes the following actions:

• Accepts electronically submitted claims information from healthcare agencies
• Audits the claims for completeness
• Reformats claims to meet insurance company specifications

The claims are sorted by insurance plans and sent in batches electronically to the appropriate insurers. The insurance companies then send a report through the data clearinghouse to do the following:

• Confirm the receipt of claims
• Report the status of previously submitted claims
• Serve as a claim payment notification

A clearinghouse charges the healthcare facility a small fee to cover the following services:

• Sending and receiving claims transmissions
• Checking and preparing the claims for processing
• Consolidating claims so that one transmission can be sent to each carrier
• Submitting claims in correct data format to the appropriate insurance payer

Clearinghouses typically provide other services as well:

• Reporting the number of claims submitted, and the number of errors and their specifics
• Forwarding claims to insurance carriers that accept electronic claims (e.g., Medicare, Medicaid, Blue Cross/Blue Shield, and others) or to another clearinghouse that may hold the contracts with specific payers
• Keeping provider offices updated as new carriers are added to the database
• Generating informative statistical reports

Completing the CMS-1500 health insurance claim form

The National Uniform Claim Committee (NUCC) is a voluntary organization that is chaired by the American Medical Association (AMA) and works closely with the Centers for Medicare and Medicaid Services (CMS). The organization is tasked with maintaining national standard content related to claims submission as well as standardizing national instructions for claim form completion. NUCC is the best resource for the most up-to-date information and instructions for the completion of the CMS-1500 claim form. The CMS-1500 Health Insurance Claim Form is required by HIPAA for paper claim submission. The form has 33 blocks. These blocks are divided into three sections:

• Section 1: Carrier. The first section indicates the type of insurance plan to which the claim is being submitted; this section includes only Block 1.
• Section 2: Patient and Insured Information. The second section contains information about the patient and the insured; it includes Blocks 1a through 13.
• Section 3: Physician or Supplier Information. The third section contains information about the provider or supplier; it includes Blocks 14 through 33.

Section 1: Carrier—Block 1

Block 1 shows the type of insurance the patient has. The type of health insurance coverage for this claim is indicated by putting an X in the appropriate box, marking only one box. This information directs the claim to the correct payer.

Section 2: Patient and insured information — Blocks 1a through 13

The CMS-1500 distinguishes between the patient and the insured. The insured is the individual who is directly contracted with the insurance company. For example, if an insurance claim for Lisa Parker is submitted and Blue Cross covers her through her employer, she is both the patient and the insured. However, if the insurance claim is for Johnny Parker, her son, Lisa Parker is the insured, and Johnny Parker, her dependent, is the patient. Every CMS-1500 requires the name, gender, and birth date of both the insured and the patient, even if they are different individuals. The blocks highlighted in yellow are for the patient’s information, and the blocks highlighted in blue are for the insured’s information.

Blocks 1a, 4, 7, and 11 a–d

Information required for the insured includes the following:

• Block 1a—person’s health plan ID number
• Block 4—name
• Block 7—address
• Block 11—policy and group numbers
• Block 11a—birth date (MM/DD/YYYY) and gender
• Block 11b—other claim ID designated by NUCC
• Block 11c—name of the insurance plan
• Block 11d—whether the insured has another health benefit plan

Blocks 2, 3, 5, 6, and 10 a–c

Required information for the patient includes the following:

• Block 2—person’s name
• Block 3—birth date (MM/DD/YYYY) and gender
• Block 5—address and telephone number
• Block 6—relationship to the insured
• Block 10 a–c—patient’s status, whether the patient’s condition is related to the person’s job, an automobile accident, or some other accident

Block 9

Block 9 is for recording information about any secondary insurance plan that may be applicable. The data required includes the following:

• The other insured person’s name
• Policy or group number
• Name of the other insurance plan