chapter 11 workbook
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Principles of Healthcare Reimbursement and Revenue Cycle Management
Student Workbook
Chapter 11
Beginner Exercises
1.
Key Term Word Search (Level 1—Remembering)
Use the clues to determine the key term, then find the key term in the grid.
Copyright ©2021 by the American Health Information Management Association. All rights reserved.
Principles of Healthcare Reimbursement and Revenue Cycle Management
Student Workbook
Chapter 11
2.
Understanding the Back-end Revenue Cycle Processes (Level 2—Understanding)
Complete the following table using information from the text. Develop your own description in everyday
language.
Back-end RC
Process
Description
Responsible Party
(Facility/Provider
or Payer)
Claims Production
Happens after the charge capture is
complete. The Claim is checked to make sure
it is correct and has no errors before it is sent
to the third-party payer. An internal system
called a Scrubber may assist in the checking
of a claim before it is submitted.
Facility or
provider
Claims Submission
After being reviewed and corrected in the
claims production the claim is submitted to
the third-party payer for payment.
Submission is done through a set of codes set
by Medicare requirements. Claims are sent
through an electronic process through most
facilities, although there are a select few
claims, such as workers compensation, that
may use paper form.
Payer
Determining
Expected
Reimbursement
Process to determine the payment amount
for accounts receivable. This happens after a
claim has been submitted and verified
correctly. This process is completed to ensure
that the payer and beneficiary pay the
correct amount for the services provided.
Facility/Provider
Adjudication
This process if used to determine the correct
amount for reimbursement to the
facility/provider. The payer compares the
services provided to the beneficiary’s health
plan benefits. There are four possible
outcomes from adjudication.
Payment: which means the claim is paid
without any more issues or processing.
Suspend: which means payment has been
suspend until it has been reviewed by analyst
again due to an added document.
Reject: which means the claim was reject
either in total or in just a line rejection due to
missing information or error.
Denial: like rejection but instead of an error
or missing code it means an appeal may be
needed to move forward with the claim.
Payer
Benefits Statement
Third-party payers prepare an explanation
of benefits statement for the patient to break
Payer
Copyright ©2021 by the American Health Information Management Association. All rights reserved.
Principles of Healthcare Reimbursement and Revenue Cycle Management
Student Workbook
Chapter 11
down coverage, charges, services, and
anything that was denied.
Claims
Reconciliation
After the claim has been through the
adjudication process by the insurance
company a remittance advice statement is
sent to the provider.
The RA covers why
claims may have been rejected or denied as
well as reporting the payments to facilities.
Once the RA is received the provider
compares it with what they expected to
receive for the claim. If the claim is denied it
is sent off to another team to be processed
and gone over to fix errors or issued. If the
claim is approved but the amount of
reimbursement is not correct a claim
reconciliation specialist goes over the claim
to ensure the provider can be reimbursed for
all the services provided.
Facility or
provider
Collections
Health care facilities and providers use
remittance advice to resolve accounts.
Providers may use an internal collection
service of have a contract with an outside
collection agency where a specialist reaches
out to the patient for payment. RA’s also
verify that third-party payers have
compensated their part of the charges as
well.
Facility or
provider
Intermediate Exercise
1.
Explanation of Benefits Analysis (Level 4—Analyzing)
Review figure 11.5, Explanation of benefits, in the textbook. Answer the following three
questions.
a. Why are the charge and allowable charge different amounts? Explain your answer in technical
terms and then explain your answer in layman’s terms.
The charge is coming from the hospital in exchange for service and supply. Allowing the
provider to submit a charge to the insurance company to gain reimbursement for the service and
supply given. While the hospital wants more for a service, there is also an agreement from the
insurance companies at a set rate for each service to be reimbursed, and the reason for the
allowable charge. The allowable charge is the amount in which the payer agrees to reimburse for
the services and supply. So, while the payer is responsible for some, so is the beneficiary since
they are using contracted amounts.
b. Differentiate between the contractual adjustment and the charge. Explain your answer in
technical terms and then again in layman’s terms.
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Principles of Healthcare Reimbursement and Revenue Cycle Management
Student Workbook
Chapter 11
Third-party insurers and government programs like Medicare have contracts that say what each
party will pay for different medical services. The contractual allowance is the portion of the bill
that a doctor or hospital must cancel. The do not charge for this part of the bill because of their
agreements with health insurance companies and would be considered a write-off.
The charge of
the statement is what they would like to receive for their services but due to their contracts with
insurance companies and government programs they are only allowed to charge the conrtactal
amount.
c. If the procedure on line 4 was denied by the payer for incorrect coding, how would the benefit
payment change? What are the revised benefit payment and coinsurance amounts?
If the coding was incorrect, the claim would be denied. The claim then goes to the denials
management team to be looked over to see exactly why the code was incorrect. This allows the
claim to be evaluated once again and to see where the corrections can be made. Once the code is
corrected, the benefit payment will be paid. If not, the patient will be responsible for the amount
the payer does cover. Collections may ask for the payment, giving them payment options, if
needed.
Total benefit payment is $1,349.33 and the coinsurance is $337.32
Copyright ©2021 by the American Health Information Management Association. All rights reserved.