Module 2

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Bossier Parish Community College *

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200

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Health Science

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Oct 30, 2023

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1 Module 2: Insurance Eligibility & Other Payer Requirements  Acute data entry is required for claim insurance.  Other important considerations are the ability to identify primary vs secondary insurance; understanding coordination of benefits (COB); and how to calculate copays, coinsurance, and deductibles.  Most patients have some sort of insurance from an employer, private payer, or government plan.  Other types of insurance plans include Workers’ Compensation, auto insurance, and homeowners’ insurance. >> Third-Party Payer Requirements  The foundation of a claim begins by creating the patient account with preregistration. Patient Consent Information O Medical Date of Consent:___________________ O Office Use of Limitations:___________________ O Internet  Typical patient information includes: o First and last name o Sex and gender o DOB o Mailing Address o Contact information (phone number and/or email) o Emergency contact information o Reason for visit  New patient registration includes: o Gathering demographic information and insurance information o Scheduling the appointment o Generating the patient account

2 Health Care Demographic Form 1234 Main St Providers Chaz, MO 1230 Name :________________________________ Date :__________________________________ Address :_________________________________________________ SSN ________________ Email : ________________________________________________________________________ Phone Number : _______________________________________________________________ Reason for Visit: _____________________________________________________________________________ _____________________________________________________________________________ _____________________________________________________________________________ _____________________________________________________________________________ ______________________________________________________________________  Third-party payers provide coverage for medical expenses and other losses to policyholders.  Policyholder: the individual who signs a contract with a health insurance company.  Guarantor: the individual who is responsible for paying any patient responsibility after the insurance has processed a claim.  Other types of third-party payers include the following: o Workers’ Compensation o Automobile Insurance o Homeowners’ Insurance >>EMR vs EHR  Electronic Medical Record (EMR): a patient’s medical record in digital format that resides within a health care organization.

3  Electronic Health Record (EHR): a collection of medical records that is used and shared by more than one organization or provider. >>Workers’ Compensation  Workers’ Compensation: provides benefits and wage replacements to employees who need medical care due to a work-related injury.  The employee is responsible for notifying the employer of any injury that is sustained while on the job.  CONFIRM: call the employer for information of the WC injury if the employer has not already contacted the office.  OBTAIN: o Case number o Date of injury o Case worker contact information o Claim mailing address  CREATE: new or separate account number o Create a new electronic medical record (EMR) if the patient is already established with the organization. o Identify the account type as WC and add the appropriate WC carrier to the insurance screen.  These types of claims should not be submitted to the health insurance plan but rather directly to the employer’s WC plan.  If the required claims data id missing, the claims can be denied. >>Auto Claims  Auto Insurance: a contractual agreement between the policyholder and insurance company that protects the driver and passengers and pays for medical expenses and other expenses related to an accident.  The National Association of Insurance Commissioners (NAIC) identifies coverage requirements for auto insurance.  Each state develops their own laws as long as the minimum standards are met.  Premium: the amount a patient pays each month to receive benefits.  Deductibles: annual amount the patient must pay before the insurance will begin to pay for covered benefits.

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4  Some auto policies have medical expense policies (med pay), which offer assistance with medical expenses to the policyholder or passengers no matter who caused the accident.  Med-Pay policies reimburse outpatient and other expenses including hospital. Surgery, testing, ambulance, and other emergency services. >>Homeowner Insurance  Homeowners’ insurance covers the policyholder for events that occur to the home or personal property structure, such as fire, water damage, theft, or other disasters.  When a patient presents with an injury related to homeowners’ insurance, the following steps should be taken: o CONTACT; Homeowners’ insurance o PROVIDE: Details of the incident  Date of injury  How the injury occurred  OBTAIN: Claim number, contact person, mailing address  CREATE: New or separate account number  CREATE: New medical record if the patient is already established with the organization.  Identify the account type as homeowners’ insurance and add the appropriate homeowners’ carrier to insurance screen.  In most cases, the WC, auto insurance, and homeowners’ policy is the primary policy and is the only insurance company billed for related services until the policy limit has been reached. **QUESTION** OOP expenses must be paid by which of the following? A. Provider B. Patient C. Health Plan

5 D. Guarantor **QUESTION** Match the insurance type with the corresponding scenario. _____Medical Health Plan _____Auto Insurance Plan _____Homeowners’ Plan _____Workers’ Compensation A. Patient involved in multi-vehicle accident. B. Patient falls off ladder on the job. C. Patient falls off roof putting up holiday lights. D. Patient presents to the PCP office for a cough. **QUESTION** Which of the following types of insurance plan can offer Med Pay? A. Homeowners’ Insurance B. Auto Insurance C. Employer Insurance D. Workers' Compensation >>Verifying Insurance Eligibility and Benefits  The first step to insurance verification is to collect the patient insurance information and verify with a photo ID.  Next, determine what coverage the patient responsibility is for the services to be rendered.  Coinsurance: predetermined percentage the patient is responsible to pay for covered services once the annual deductible has been met.  The process of verifying patient eligibility is critically important to billing and the revenue cycle because it identifies the primary payer for services and offers specific details about the patient’s coverage limit.

6  Insurance eligibility verification can be performed through an online portal, electronic data interchange (EDI), or directly within the EHR via an eligibility application.  The EDI system does not eliminate the need to contact the health care plan to determine remaining deductible amounts, coinsurance, or if prior authorizations are needed for certain procedures.  For organizations that have access to a clearinghouse, the BCS can use this resource for verification.  In-Network (INN): a provider who has signed an agreement with the insurance plan.  Out-of-Network (OON): a provider who does not have a signed agreement with an insurance plan.  Confirms if the provider is INN or OON with the plan and verifying any patient responsibility such as the remaining annual deductible amount, copays, coinsurance, OOP limitations, or OOP benefits. >>Typical Information from Insurance Cards 1. Insurance company name 2. Plan type and name 3. Policyholder identification number 4. Policyholder name and any dependents 5. Group number 6. Copay requirements 7. Members/provider contact phone number and claims mailing address 8. utilization review contact information  insurance cards are then scanned into the patient’s account. Sample Insurance Group Logo State/Region Member Name Dependents Jane Smith Dependent 1 Member ID Dependent 2

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7 XYZ98765432 Dependent 3 Group No. 034567 Plan PPO BIN 987654 Office Visit $15 Benefit Plan HIOPT Specialist Copay $50 Effective Date xx/xx/xxxx Emergency $75 Deductible $1500 **QUESTION** Using the insurance card above, what is the copay for an emergency visit? A. $15 B. $50 C. $75 D. $250 **QUESTION** Which of the following is not found on a patient insurance card? A. Policyholder name B. Group number C. Claim mailing address D. DOB >>Network Providers  An INN provider signed a contract with the payer to accept assignment for services rendered.  When the claim is processed, any remaining balance above the allowed amount is adjusted off the patient account balance; this amount cannot be billed to the patient.

8  An OON provider has not accepted assignment with an insurance company and the patient will typically pay higher OOP expenses when using an OON provider.  Many organizations charge more than the contracted allowed amount for their services, so they need to adjust the difference between the billed and allowed amounts. **QUESTION** Which of the following providers must accept assignment for services or procedures rendered to a patient? A. OOP B. Nonparticipating C. INN D. Noncontracted  Prior to the scheduled encounter, the specialist should review patient benefits and verify that any utilization management requirements have been met, such as precertification or preauthorization. >>Coordination of Benefits  Determine COB, including which third-party payer is responsible for claim processing on behalf of the patient.  Insurance verification helps to minimize delayed reimbursement or denied claims.  Documentation of the adjustor’s name, authorization number, date of injury or loss, and any other claim-related, or a patient might not follow the appropriate protocol to report the injury. >>Understanding Insurance Plan Coverage  The cost of an insurance policy varies based on details such of coverage, cost sharing, and plan type.  Each plan will have different premium rates, deductibles, copayments, and coinsurance agreements.

9  The insurance premium is the monthly amount the policyholder pays each month to receive plan benefits.  The deductible is the annual amount that the policyholder must meet before the insurance plan will begin to pay for benefits the deductible applies to; it restarts each calendar year.  Covered benefits: services outlined in the policy that are payable by the health plan.  Plan details are discovered during the eligibility and benefits verification.  Covered benefits typically include visits to the primary care provider or specialists, diagnostic and laboratory testing, and preventive services.  Copayments are a set amount that is paid for office visits, specialists, and ED visits.  The insurance plan will state the coinsurance terms.  OOP maximum is the dollar amount required before full coverage begins. **QUESTION** Match term with definition. _____Premium _____Deductible _____Coinsurance _____Copayment A. Set amount the individual pays for primary care, specialty, or ED visits. B. Set amount defined by the insurance plan that must be met before the insurance will pay their portion of the services. C. Monthly amount paid by the individual to receive coverage for medical expenses. D. Percentage the insurance/individual will pay for services rendered after the deductible has been met. **QUESTION** A patient receives gastric bypass surgery in March and the yearly deductible has been met by this claim. After the procedure, the maximum OOP amount has also been met for the year. The patient presents the office in June for

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10 joint injection that costs $2000. If the coinsurance amount is 20%, which of the following amounts is the patient’s responsibility? A. $0 B. $400 C. $1500 D. $2400 >>Other considerations  Understanding the terms and conditions of the insurance policy is important to the health care organization and patient.  The process of obtaining preauthorization and precertification are used interchangeably depending on the insurance plan or organization.  Managed care programs are organized to contain and reduce medical costs and monitor the higher-cost services (diagnostic, laboratory, and surgical).  Health Maintenance Organization (HMO): a group of contracted providers that agrees to the payment contract for its members.  An HMO policy requires the patient to be assigned to a designated PCP.  Some plans require preauthorization for certain services.  Precertification might be required for: o Diagnostic tests o Emergency admissions o Outpatient services that need to be performed in the inpatient setting o Extension for hospital stay.  Each insurance plan will have a list of services that need preauthorization and the medical treatment that must be performed before a preauthorization will be approved.  If preauthorization is not approved, the specialist can file an appeal and provide additional patient history to support medical necessity. **QUESTION** Which of the following is a way third-party insurance keep medical costs down? A. Pay at 50%

11 B. Pay at 80% C. Preauthorization D. Claim denial >>Financial Considerations  Once the insurance has been verified, the plan benefits determined, and any necessary preauthorization obtained, the financial responsibilities of the patient should be discussed.  OOP expenses (copays, coinsurances, deductibles, noncovered services) should be collected at the time of service to increase cash collections for the practice, which supports the revenue cycle.  Communicating the financial responsibility to the patient is especially important to ensure the patient is aware of the financial obligations.  Some organizations require the patient to be paid in full by the service date, while others will allow various types of payment plans.  Example: o A knee replacement will cost $5000. The patient’s plan has a deductible of $1500 and only $1000 has been met this year. Once the deductible is met, the insurance has an 80/20 policy for the coinsurance amount. How much will the patient owe for the procedure. >>Knee replacement example Description Amount Cost of replacement $5000 Portion of deductible not yet met -$500 Amount after deductible $4500 Coinsurance Amount Insurance pays 80% $3600 Insurance pays 20% $900 Patient Responsibility Amount Deductible $500 Coinsurance +$900 Total Responsibility $1400 5000-500=4500 This leaves 4500 that the insurance will process at the coinsurance agreement of 80/20.

12 Multiply: 4500x80%=3600 4500x20%=900 Now add the patient’s remaining deductible amount ($500) and the 20% coinsurance amount ($900) to determine the patient’s entire financial responsibility. >>Self-Pay Patients  Patients who do not have insurance are referred to as self-pay or private pay.  These patients are financially responsible for the cost of services rendered.  Typically, an insurance specialist will attempt to determine if the patient is eligible for any state or federal benefit programs, or a hardship waiver.  The patient must prove their financial burden by providing proof of qualification based on the federal poverty level.  The OIG allows for a good-faith determination of financial need depending on factors the patient id currently experiencing with regards to being able to pay bills.  These factors can include: o Cost of local living o Patient’s income, assets, and expenses o Scope and extent of patient’s medical bills >>Types of payments  Payments can be paid via cash, check, or credit card.  Many credit agencies offer medical credit cards.  Health Savings Accounts (HSA) are another payment option.  An advantage to an HSA is that the funds are tax-exempt.  The employer deducts a set amount from each paycheck and places those funds on the medical card at the beginning of the year.  The organization has policies to determine acceptable payment plans.  Example:

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13  A patient with a balance of $300 might be able to make a monthly payment of $50 a month. However, the minimum payment for a balance of $3000 might be $100 a month.  Medicare fee-for-service claims rely on medical necessity rather than requiring preauthorization’s that managed care plans use.  When a claim is denied due to lack of medical necessity Medicare will pay the claim and will not make the allowed amount the patient’s responsibility—which means the provider is not reimbursed for services rendered.  The mechanism that Medicare uses to mitigate this situation is the Advance Beneficiary Notice of Noncoverage (ABN).  The ABN documents the beneficiary’s decision about a service or procedure that Medicare may not cover.  Signing the ABN does not mean that Medicare will not pay for a service but just reassigns liability for it.  Some services have frequency limitations, which means that there is a predetermined number of times a service can be reported during a specific time.  When there is a medically necessary reason to perform the service frequently, the specialist should obtain a signed ABN in case Medicare determines the service to be outside the frequency parameters and not medically necessary.  There are also associated billing requirements for the use of the ABN on the claim form. >>ABN Claim Reporting Modifiers 1. -GA A. Description: Waiver of Liability Statement Issued as Required by Payer Policy, Individual Case. B. When to Use: Report when you issue a mandatory ABN for a service as required and it is on file. You do not need to submit a copy of the ABN; but you must have it available on request, The -GA modifier is used when both covered and noncovered services appear on an ABN-related claim. 2. -GX A. Description: Notice of Liability issued, Voluntary Under Payer Policy

14 B. When to Use: Report when you issue a voluntary ABN for a service Medicare never covers because it is statutorily excluded or is not a Medicare benefit. You may use this modifier combined with Modifier -GY. 3. -GY A. Description: Notice of Liability Issued. Not Required Under Payer Policy. B. When to Use: Report that Medicare statutorily excludes the item or service, or the item or service does not meet the definition of any Medicare benefit. You may use this Modifier combined with -GX. 4. -GZ A. Description: Expect item or service denied as not reasonable and necessary. B. When to Use: Report when you expect Medicare to deny payment of the item or service because it is medically unnecessary, and you issued no ABN. **QUESTION** According to Medicare, a patient who has diabetes mellitus should receive a hemoglobin A1c blood test once every 3 months. More testing should only be performed when medically necessary. What modifier would be reported if the specialist does not obtain an ABN prior to performing the service? A. GA B. GZ C. GY D. GX >>Types of Insurance  Commercial health plans can be either private or group.  Government plans are also available.  Insurance policies cover the cost od health care services for the individual and/or family after the deductible and copays have been met.  Health insurance plans can be structured as preferred provider organization (PPO), or indemnity plans, and Point-of-Service plans (POS).

15  Preferred Provider Organization (PPO): a type of managed care organization where providers join the network and are considered preferred when a patient seeks treatment.  Consumers can also choose coverage through an HMO.  Premium costs, benefits and patient responsibility amounts are based on the type and details of the plan.  A rule of thumb is that the more freedom a plan offers, the higher the patient responsibility amounts will likely be.  Providers that have signed a contract with the insurance company plan or considered to be INN.  INN provides have agreed by contractual obligation to receive a set payment for services rendered at a discount to the patient.  Providers who do not sign a contract are OON, which the insurance plan pays at a lower rate than those who are INN.  The patient has higher OOP expenses for seeing an OON provider.  PPO plans allow the patient to see providers (PCP, specialist, hospital) within the network without need for a referral.  POS plans also have a contracted group of providers, but the patient must choose a PCP.  The PCP will manage the patient’s health care needs and refer the patient to a specialist when necessary.  PPO plans are also called fee-for-service because the provider is paid for each billable service during an encounter based on medical necessity.  A monthly premium id required, and services are paid at a percentage after the deductible has been met.  Employer-sponsored plans are offered to employees.  HMO plans also contract with a network of provider for patient care.  HMO plans reimburse providers using a capitation method.  Capitation: an agreement with a provider to receive pre-established payment for health care services to enrollees over a period.  There is no limit to the number of times a patient may be seen—some patients visit the provider rarely, and others are seen multiple times a month.  The capitation period is typically per month. **QUESTION** What is the difference between INN and OON provider?

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16 A. INN: have signed a contract with an insurance company. B. OON: have not signed a contract with the insurance company. >>Federal Payer: Medicare, Medicaid, and TRICARE  Medicare: is a government plan that was established in 1965, the largest health insurance program in the US.  There may be premiums for both Parts A and B, Medicare Part C is composed of Medicare Advantage (MA) programs that allow for all the same benefits as traditional Medicare and additional vision and dental services.  Part A: reimburses organizations for inpatient hospital, skilled nursing facility, hospice, and some home health services.  Part B: is a fee-for-service plans that reimburses for provider and professional services, outpatient hospital care, and durable medical equipment (DME).  Part C: is the option to choose a managed care plan, which reimburses providers for all the same benefits as traditional Medicare and additional services such as vision and dental.  Part D: is the prescription medication benefit that was established in 2003. This program offers plans that cover prescription medications at discounted rates to Medicare-eligible beneficiaries.  Dual eligibility is a program to assist qualified individuals who have low income with premiums, copays, coinsurance, and deductibles.  The Qualified Medicare Beneficiary Program (QMBP) assists with Part A and B premiums, copays, deductible, and coinsurance amounts.  Specified low-income Medicare beneficiary (SLMB) requires the state to pay for Medicare Part B premiums. Medicare Premiums Based on Income If your yearly income was: Projected Premium: Individual Tax Return Joint Tax Return Married & Separate Return

17 $88,000 or less $176,000 or less $88,000 or less $148.50 $88,000 to $111,000 $176,000 to $222,000 n/a $207.90 $111,000 to $138,000 $222,000 to $276,000 n/a $297.00 $138,000 to $165,000 $276,000 to $330,000 n/a $386.10 $165,000 to $500,000 $330,000 to $750,000 $88,000 to $412,000 $475.20 $500,000 or greater $750,000 or greater $412,000 to greater $504.90 **QUESTION** According to the Example Medicare Premiums Chart, what is the monthly premium for an individual who has an income of $25,000 on the tax return? A. $148.50 B. $297.00 C. $386.10 D. $475.20 **QUESTION** Which of the following Medicare plans is responsible for paying for prescription medications? A. Part A B. Part B C. Part C D. Part D  Medicaid: is a government program that assists qualified individuals with health care needs.  States determine eligibility requirement benefits, and how long an individual can remain in Medicaid.  They can make decisions about covered benefits if they meet the minimum requirements established federally.

18  Enrollment status is typically checked annually to ensure that the recipient still qualifies for Medicaid.  Medigap: is a supplemental policy to Medicare and offered by private insurance companies.  Medigap would be filled as a secondary policy to Medicaid.  TRICARE: is a government program for active military and their families.  Retirees and surviving spouses also qualify.  The plan is more comprehensive than some other plans, and it covers medical expenses, special programs, prescriptions, and dental services,  All TRICARE members must be enrolled in the Defense Enrollment Eligibility Reporting System (DEERS), which is used by claims processing to ensure eligibility. **QUESTION** Patient A sees the physician three times this month. Patient B has been healthy and has not seen the physician is paid a capitation rate of $35 per month. What is the reimbursement for Patient A & B for the month? A. Patient A $105, Patient B $0 B. Patient A $35, Patient B $0 C. Patient A $35, Patient $35 D. Patient A $105, Patient B $105 >>Coordination of Benefits and Timely Filling  Coordination of Benefits (COB): is a provision of health care plans to define the order of responsibility for claims when there is more than one payer.  This feature prevents duplicate payments, underpayments, and/or overpayments.  The payer who is primarily responsible for the claim’s payment will reimburse the claim based on the limits of the plan coverage and the contracted amounts for the services rendered.  A secondary payer will pay if there are any remaining amounts.  Tertiary coverage is rare but can occur.  Tertiary care: highly specialized medical care usually over an extended period of time that involves advanced and complex procedures and

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19 treatments performed by medical specialists in the state-of-the-art facilities compare secondary care.  Claims can be delayed if there are questions related to which carrier is primary.  It is important to determine the primary and secondary insurance verification process to avoid potential delays,  Medicare uses a crossover claims feature to expediate processing of claims that have more than one payer.  This crossover transaction is on RA. **QUESTION** Which of the following is the provision to prevent multiple insurance plans from overpaying on services and procedures? A. Accept assignment B. Preauthorization C. Timely filing D. COB >>Birthday Rule  Confusion sometimes occurs when a family has more than one health insurance policy.  The rule states the following: o For a child or dependent whose parents or guardians are married or living together, the caretaker who has their birthday earliest in the calendar year (month/day) will be primary. If both caretakers have the same birthdate the caretaker who had the plan the longest is primary.  A court order has the authority to specify the primary plan of a child or dependent when both caretakers have health insurance.  The birthday rule applies if the court order specifies both caretakers are responsible for health insurance or there is joint custody and both caretakers have insurance plans that cover the dependent child. **QUESTION** A child’s mother and father have health coverage on the child, and there is a court order stating the father is a court order stating the father is

20 responsible for the child’s health care. According to the birthday rule, whose insurance would be primary? A. Father B. Mother >>Timely Filing  When a facility or provider enters into a contract with an insurance plan, the contract has timely filing rules and limitations.  Timely filing is when the organization is required to submit a claim to the insurance plan for services.  Each plan has its own definitions and criteria, typically ranging from 30 days to 12 months.  Medicare and TRICARE have filing limits of 1 year from the DOS were rendered.  Commercial plans typically offer less than 1 year for timely filing.  Insurance plans also have time limitations for resubmitting denied claims. **QUESTION** Which of the following is the timely filing limit for a BCBS Tennessee claim from the DOS? A. 30 days B. 60 days C. 120 days D. 365 days >>Resources the Support the Revenue Cycle  When there are questions about billing and coding guidance, it is important to refer to reliable resources.

21  Reliable resources include professional organizations specific to the area of expertise, such as the American Academy of Pediatrics, the American Academy of Orthopedic Surgeons, or payer websites.  Medicare Learning Network (MLN) Matters articles and booklets by CMS help explain Medicare policies in an easy-to-understand format.  Medicare Administrative Contractors (MACs) have resources available for coding and billing guidance on their individual web site.  Professional conferences, symposiums, and webinars can be valuable resources to gain knowledge about current and upcoming coding and documentation changes. **QUESTION** Which of the following is an example of reliable resource that could be used to help a provider understand the guidelines and completion of ABN form? A. Blog B. Centers for Medicare and Medicaid Services C. American Academy of Pediatrics D. Vlog >>Correct Coding: CPT vs HCPCS  CPT: a uniform language for coding medical services and procedures to streamline reporting, increase accuracy and efficiency.  HCPCS: a collection of standardized codes that represent medical procedures, supplies, products, and services.

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