Module 1

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Bossier Parish Community College *

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Information Systems

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Oct 30, 2023

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1 Module 1: The Revenue Cycle and Regulatory Compliance >>LEARNING OBJECTIVES  Integrate revenue cycle concepts with knowledge of business and payer requirements to support accurate coding and billing.  Clearly and accurately communicate with stakeholders (providers, patients, payers) throughout all phases of the revenue cycle.  Maintain confidentiality and security of PHI.  Release PHI when required in accordance with HIPAA and facility policy.  Ensure compliance with federal laws, regulations and guidelines and help prevent fraud and abuse by adhering to billing policies, coding rules, and conventions to submit clean and accurate claims. >>REVENUE CYCLE  The revenue cycle involves both administrative and clinical oversight of day-to-day operations to capture and collect payment for services rendered.  Accounts receivable: the amount owed to a provider for health care services rendered.  The revenue cycle components typically include the following:  Appointment and scheduling  Patient registration  Charge capture  Diagnosis/service/procedure and supply code assignment  Collecting patient financial portion (copay)  Posting charges and patient payments  Claims creation and submission.  Insurance payment posting  Initiating appeals  Patient billing  Collections  Posting collection payments

2  The tasks associated with the revenue cycle can be complex and demands are placed on organizations by payers to provide more data or follow payer-specific rules.  When claims are denied, the best practice is to perform an analysis to determine where the errors are occurring.  The following are examples of possible errors and where they can occur:  Front-office errors o Eligibility error o Data error  Billing/Coding Error o Code linkage error o Preauthorization not obtained  Back-office errors o Documentation error o Missing/incomplete encounter form documentation  Once the organization determines where the errors are occurring, additional training or workflow corrections should be implemented for the appropriate departments.  All employees who have tasks associated with reimbursement should understand the revenue cycle concepts associated with their department.  Billing and coding errors not only cause delays in reimbursement but also incur additional time and resources for claim correction, resubmission, and resolution.  Revenue Cycle Management: process that health care providers use to manage financial viability by increasing revenue, improving cash flow from registration to final payment.  The revenue cycle order and steps can vary by organization, based on size and/or provider type.  When patient data is entered incorrectly, there will be a delay at the point of claim processing.  Delayed claims prevent payment to the provider, which can then affect accounts payable.  The primary stakeholders in health care are providers, patients, and payers. >>BASIC STEPS OF THE REVENUE CYCLE

3 I. Registration and Scheduling a. Begins with communication between the staff and patient to begin the process b. Communication include phone, email, the organization or patient portal, and health care app II. Patient Check-in a. This process informs the organizations and the patient of pertinent coverage details  Copayment: flat, fixed amount that a patient pays for specific services (office, or ER encounters) b. Compliance and billing regulations are addressed, and copayments are collected c. Assignment of benefits, medical record release forms, financial policy, and HIPAA privacy notifications are signed  Assignment of benefits: method of a patient requesting their claim benefits be paid to the health care organization that provided the service  HIPAA: federal act that governs and mandates regulations that include privacy, confidentiality, and security for health care data and information d. Patient identification and insurance verification are performed to ensure coverage is valid for the date of service and to provide that plan covered e. Details about beneficiary and policyholder are required to verify eligibility.  Beneficiary: person eligible to receive benefits for covered health care services rendered  Eligibility: process of verifying the patient has insurance coverage and has benefits for the services to be provided f. Verification of benefits includes determining OOP payments, such as, coinsurance, copayment, and deductibles  OOP: patient responsibility portion of a health insurance plan defined by the payer (includes annual deductible, copay, and coinsurance amounts)  Coinsurance: predetermined percentage the patient is responsible to pay for covered services once the annual deductible has been met  Deductible: annual amount the patient must pay before the insurance will begin to pay for covered benefits III. Utilization Management Review

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4 a. The utilization management review process determines when referrals or preauthorization’s are required for services/ procedures  Utilization management: method used to control health care costs, by reviewing the appropriateness and medical necessity of services rendered to the patients prior to the treatment being performed  Preauthorization: process of requesting approval for a service or procedure by providing medical history to the insurance to support the medical need for the service/procedure b. Precertification and screening for medical necessities are part of this process.  Precertification: process of determining a patients coverage detail for health care services (laboratory, imaging services, hospitalization, surgical procedures)  Medical Necessity: process of providing diagnosis codes that support the services rendered to the patient; coding for medical necessity involves associating applicable diagnosis codes to service/procedure within the billing software which is referred to as linkage/linking c. This step can occur at different times within an organization’s revenue cycle and can occur more than once if needed. d. Special organizations will typically perform utilization review during check-in. IV. Health Care Encounter and Documentation a. The patient encounter is performed and supporting documentation is entered into the medical record. V. Charge Capture and Coding  Charge capture: the process of selecting and entering codes (CPT, HCPCS, ICD-10-CM) based on the documentation in the patient’s record and entered the financial portion or practice management system of the HER.  Encounter form: document that captures diagnosis or procedure codes for the services provided during the patient’s encounter (electronic or paper form). VI. Patient Check-Out a. This step includes determining additional OOP expenses (noncovered services) VII. Billing

5 a. Charges are validated and transmitted b. The EHR generates, processes, and submits the claim electronically to the payers in the 837P format. c. A claim is generated and printed on CMS-1500 form which is then sent to the payer. VIII. Payer Adjudication a. The payer will review the claim and reimburse services at the allowed (or contracted) amount or apply the charges to the deductible or copay/coinsurance amounts. b. The reimbursement time frame is quicker with electronic claim submission, thus improving the revenue cycle for the organization. IX. Receiving and Posting Reimbursement a. Payers electronically transmit payment and an electronic RA , or EOB, which details how the claim was processed and paid. X. Appeals and Claims Corrections a. Claims that are denied can be corrected or appealed b. There are several levels to the appeals process  Appeals process: a process used the request review of a claim that was denied—to determine if the denial was due to a billing error; if so, correct it; file an appeal at the lowest level; and then move up to higher levels if needed. XI. Patient Responsibility, Collection, Payments, and Posting a. Any patient responsibility amounts that were specified on the RA/EOB must be collected. b. While copay and noncovered amounts are collected at the time of the service, remaining amounts such as deductible or coinsurances need to be collected at this point. c. Aging reports assist in patient collections. **Fair Debt Collection Practice Act** Associated with the patient’s portion of the claim reimbursement. It regulates third-party debt collectors’ actions and practices. >>it is important to consider coding concepts at all phases of the revenue cycle.

6 **Question** An insurance plan is used to which of the following entities? A: Spouse B: Policyholder C: Employer D: Dependent **Question** MATCH THE REVENUE CYCLE FUNCTION WITH DEFINITION Premium Person included on the policy Dependent Amount paid by insurance company Claim Request for payment Insured Policyholder Benefit Fee paid to an insurance company >>Importance of Communication  Successful intrapersonal communication can include self-expression and active listening to develop an understanding of what people are saying.  The dynamics of communication add to or take away from any other factors that are involved.  When negative aspects of life affect attitudes, it decreases the potential to deliver quality health care and communication effectively.  Verbal (including written) and nonverbal forms of communication are critically important in health care.  These details are important for the treatment plan and future use such as referrals and preauthorization requests for additional treatment or therapies.  Communication starts at the point of service, during registration and scheduling, where the information is gathered from the patient to create an account.

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7  Effective communication is an important factor in collecting this portion of care that was provided.  There must also be good communication between the provider and staff to ensure that medical record documentation meets the assigned code requirements for reporting purposes.  Communication barriers in health care occur frequently, and BCS should avoid slang terminology.  BCS must understand the importance of effective communication.  All forms of communication can affect the delivery of health care service, collections, patient adherence, and even patient outcomes. **QUESTION** When does communication with the patient begin? A: Patient check-in B: Registration and Scheduling C: Health care encounter D: Patient Check-out >>Stakeholders  A health care organization can only succeed if it provides health care services to patients.  Part of that success is based on being paid for services provided, and communication with stakeholders is a critical component of revenue- generating activities.  The primary stakeholders in health care organizations are patients, providers, third-party payers, and policymakers.  Providers administer the delivery of care within the policy framework.  Third-party payers: health care insurance company that reimburses services provided by providers and/or health care organizations .  Third-party organizations include employers, commercial or private organizations, government programs, workers’ comp, and homeowner and auto insurance.

8  The administrative process analyzes premium rates, covered benefits, and reimbursement for services rendered, then determine if changes need to be made to coverage plans for the following year.  Regulatory agencies are composed of policymakers that develop the rules and guidelines.  The policymakers establish the framework that determines who is eligible to receive care and what services are provided, how, where, and by whom. **QUESTION** What is a third-party payer? -- SEE DEFINITION ABOVE -- >>Terminology  As health care changes, so do the terms we use. It is important to know and use current health care terminology. **QUESTION** What is a provider? o A licensed professional who can submit claims for services rendered for reimbursement. >>Data Uses  Data retention, maintenance, transmission, and usage are closely regulated.  Medical record retention rules vary by state law and are influenced by federal regulations.  The HIPAA administrative simplification rules also require covered entities such as providers to retain HIPAA-related documents for 6 years, and for at least 2 years after a patient’s death.

9  Federal regulations also stipulate that state laws may require a longer retention period.  Backup and recovery are critical components of maintaining data.  EHR vendors offer HIPAA-compliant solutions such as automated backups and cloud-based storage.  Maintaining patient medical records is important to the organization because a well-documented chart supports the care, and the medical decision-making of the provider.  HIPAA rules for patient transactions also regulate how health care organizations use data for administrative and clinical purposes, how this data is transmitted, and how data is reported for research or quality incentive programs. >> Administrative Uses of Data  The administrative uses of data in a health care organization include important operational tasks such as analyzing the number of patients for census purposes to determine how many patients are being seen in certain health care settings.  Practice management is a collective source of administrative data within an organization.  It includes health care technological tools used to perform operational tasks and the EHR components such as data from patient encounters.  The data can be used in determining reimbursement decisions and strategies for health care organizations. >>Data Storage  data storage refers to the records, files, and documents that are physically or digitally stored for future use.  Data storage is often stored off-site. >>Data Transmission

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10  Data transmission refers to sending digital information over individual or multiple secure communication channels.  This process allows for devices and tools to communicate.  Electronic Data Interchange (EDI): computer technology that involves the exchange of data between the health care provider and payer.  EDI is also used for third-party payers to provide patient information like eligibility and patient responsibility amounts. >>Reporting Data  Data reporting refers to a process of collecting pertinent facts about patient care and outcomes to perform security or other analysis, as well as reporting performance measures for incentive programs.  The collection of key performance indicates that measure the performance and the statistic related to business achievements is an example od how reporting data is important within health care organizations, ***HIPAA*** --HIPAA not only protects PHI in electronic or paper records, but PHI is also protected in verbal form. A conversion with another staff member can violate PHI depending on where and how the conversation takes place. **QUESTION** Match activity with correct data correction Clinical Use Back up Storage Patient Eligibility Transmission Quality improvement Administrative Use Info about type and quality of care

11 >>Compliance  State and federal regulations, such as HIPAA, and organizations such as the OIG are responsible for ensuring health care organizations comply with regulations that safeguard patient information, billing, and health records.  The OIG is a division of the Department of Health and Human Services (HHS) and is responsible for investigating insurance fraud and abuse related to Medicare, Medicaid, and other federally funded programs.  This office creates and manages many programs that guide and support the OIG’s goals of promoting efficient and effective health care for the populations and programs that it serves.  HIPAA is a federal regulation that was designed to provide protection of confidentiality and security for patients.  HIPAA was the first rule that standardized how a patient’s information must remain confidential.  Complying with rules and regulations should be the priority of the entire organization.  Reporting breaches is also an important factor because providers are responsible for safeguarding patient and other stakeholder information.  The HIPAA Breach Notification Rule regulates reporting of impermissible use of disclosure of PHI.  If there is a breach and patient information is accidentally released, the organization is responsible for taking appropriate steps to disclose or report the breach. >>Compliance Plans  Every health care organization has policies and procedural manuals.  The plan addresses compliance rules and regulations of government and private payers.  Having a formal process in place indicates that the practice is making a good-faith effort to achieve a state of compliance for safe, effective, and efficient care of patients.  When developing a compliance plan, the organization should reference the OIG Federal Registration to identify potential areas of risk and develop standard practices around the guidelines.  The OIG offers the following components as the foundation of a compliance plan for individual and small group physician practices:

12 1. Conducting internal monitoring and auditing through the performance of periodic audits. 2. Implementing compliance and practice standards through the development of written standards and proce4dures. 3. Designating a compliance officer or contacts to monitor compliance efforts and enforce practice standards. 4. Conducting appropriate training and education on practice standards and procedures. 5. Responding appropriately to detected violations through the investigations of allegations and the disclosure of incidents to appropriate government entities. 6. Developing open lines of communication such as: a. Discussions at staff meetings regarding how to avoid erroneous or fraudulent conduct. b. Community bulletin boards to keep practice employees updated regarding compliance activities. 7. Enforcing discipling standards through well-publicized guidelines.  These components are intended to offer health coverage organizations a clear plan to develop and implement a compliant culture.  They are not required, and all seven components may not be possible for some individual practices. >>Self Disclosure  Provider self-disclosure protocol is a program developed by the OIG for health care providers to self-disclose instances of potential fraud.  Protocol is done voluntarily and actively implements the compliance plan to support the organization culture of safe and effective health care.  Self-disclosure also lowers the costs and disruption of an OIG-initiated investigation audit. **QUESTION** 1. What is the intent of the OIG? 2. How can a compliance program help an organization?

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13 3. What is the purpose of Self-Disclosure Protocol? >>Confidentiality and Security  Confidentiality: refers to the protection of patient information from any unauthorized person.  Security: refers to the protection of patient information.  Other practices for confidentiality and security include: 1. Conducting periodic training on confidentiality protocols 2. Activity monitoring of EHR use by staff and contractors. >>Privacy Regulations  A key protection for the HIPAA Privacy Rule is the minimum necessary standard.  PHI: individually identifiable patient information.  The minimum necessary standard requires that employees be limited to protected information, accessing only the area of the medical record required to complete the task. >>Breaches of Confidentiality  A breach of confidentiality is normally unintentional and involves the release and disclosure of patient information to a third party.  The following examples apply: 1. Communicating patient information in public places (lobby, elevator, cafeteria) 2. Disclosing patient information in unattended areas (patient results or reports, computer screen) 3. Discussing patient information without patient consent to family members/friends 4. Announcing patient information in the waiting room or registration areas 5. Retrieving patient information not related to job function  The consent related to PHI is individually identifiable health information transmitted or maintained by electronic media, including date such as; patient name, SSN, address, email and phone number. **QUESTION**

14 The assignment of passwords to authorize users to allow access to medical records is a form of which of the following? A: Authorization B: Security C: Privacy D: Confidentiality ***Operator Audit Log*** >>Operator Audit Log >>101692 >>December 1, 20xx >>ALL PATIENTS >>Run Report >>Save (after running report) >>Privacy Rule  Regulations like confidentiality and security ensure that patients have control of their health information, how it is used, and who it can be shared with >>Release of Information  Release of Information: a feature of the HIPAA Privacy Rule , as well as a method of controlling and tracking access to PHI about a patient.  ROI is related to the concept that advises patients of their rights to control their medical records.  The elements of a medical record release form include the following: 1. Identification of the organization and patient 2. Timeframe that will identify the service date and admission/discharge date 3. Information requested to be released

15 4. Purpose for the request 5. Date of the request 6. Original signature from the patient or legal guardian >>Consent  An organization should have clear policies and procedures to protect the unauthorized disclosure or access to PHI  Types of consent are: 1. Implied Consent: this is the act of agreement by a patient, such as when a patient agrees to lab work by following the nurse to the lab to have blood drawn. This type of consent does not require a signature or any specific documentation in the medical record. 2. Informed Consent: consent is an important communication that occurs when a provider explains the risk and benefits of a specific procedure to a patient so they can make an informed decision. Essential elements of consent include communicating the nature of the proposed treatment or service, associated risks, and alternatives, and answering all patient questions. The patient then signs or declines the consent to have the treatment to be done. 3. Written Consent: when a procedure has a significant risk of completion, a written consent form is signed. Once it is signed, the person gives permission for the service or procedure to be done.  Medical records requests must be processed within 30 calendar days of the date of the request.  Extensions are permitted when the records have been archived or are stored off-site.  Organizations must maintain a log to document where patient information was released and who the authorized requestors in the event of a breach.  The only time a provider can send records without patient permission is for the use of treatment, payment, or operations (TPO).  The Privacy Rule permission works in the following manner regarding the disclosure of information among covered entities.  Treatment: the coordination and management of one’s health care  Payment: the activities related to the providers billing and reimbursement.  Operations: are administrative processes that are typical for health care organizations.

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16 **QUESTION** HIPAA guidelines include that PHI cannot be used or disclosed without patient permission. What are 3 instances when patient information can be disclosed? 1. Treatment 2. Payment 3. Operations **QUESTION** Match type of consent with example IMPLIED A patient agrees to have lesion removed at the time of office e visit WRITTEN A patient is placed under anesthesia for hip replacement surgery INFORMED A patient voluntarily undergoes an x-ray for a sprained ankle >>Privacy Exceptions  There are times when there is a reasonable need to release medical records for legal proceedings, such as a civil or criminal court case.  Exceptions to consent also include emergency situations that are defined by most states as life-threatening.  Psychotherapy notes fall under the Privacy Rule.  Discussions between a mental health provider and the patient are to remain confidential.  Mental health records should be kept separate from other medical records to avoid an accidental breach of information.  Mental health records can only be released when there is a signed authorization for the mental health records by the patient. >> Release of PHI for Patients Who have AIDS/HIV

17  The privacy of the diagnosis and treatment for HIV/AIDS is critical to prevent stigmatization or discrimination against the patient.  This occurs when medical information needs to be stored with the patient’s other medical providers to coordinate care and manage the condition.  This is an allowed exception to the Privacy Rule. >>Release of PHI for Substance Abuse  The confidentiality of records for patients who have substance abuse disorder is regulated by CFR Title 42: Part 2.  These regulations require patient records related to drug and alcohol use to be kept confidential and not be subject to disclosure of information, with exception provided by the law. >>Security Rule  The HIPAA Security Rule has standards to protect clinical health information as they are used in various applications, such as computerized physician order entry (CPOE) and EHR or prac tice management systems.  The security rule accommodates these features od health care and allows for the diversity of health care organizational needs. >> HITECH Act  The Health Information Technology for Economic and Clinical Health (HITECH) Act includes 2 important features: 1. Promote use of EHRs by health care services 2. Strengthen HIPAA Privacy and Security Rules

18 **QUESTION** Which of the following types of medical records has exception status under HIPAA? A: Hospital Note B: Psychotherapy Note C: Physical Therapy Note D: Cardiology Note **QUESTION** Which of the following is the mechanism used for securing documentation that involves record retention mandated by federal and/or state law? A: Release B: Storage C: Access D: Security >>Regulations that Support Clean Claims and Accurate Billing  A clean claim is one that is submitted without any errors or implications on the claim; errors can include incomplete supporting documentation that can delay payment.  The accuracy of billing is vital for ensuring a clean claim.  The major implications involve fraud and abuse. >>Fraud  The OIG considers medical billing and coding one of the main areas for fraud investigation.  Fraudulent billing includes intentionally reporting a higher level of service when the presenting problem does not warrant that level of service.

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19  Fraud is considered an intentional act.  The violation of HIPAA can make this federal offense.  There are 3 main categories of fraud: 1. Billing for services that have not been performed. 2. Reporting of fraudulent diagnosis for the patient’s care 3. Purposeful medical coding errors (upcoding) >>Examples of Fraud  An office bills an insurance company for a patient visit on January 15 th , but in the chart, there is no documentation for the date to indicate the visit took place. Understanding that documentation substantiates that the service was performed, the lack of documentation can be considered fraud.  A Medicare patient has a coinsurance or deductible amount due and their physician offers a professional courtesy for the patient (waived the patient portion). According to the Medicare contractual agreement, the physician must ensure that the patient pays OOP insurance at a reasonable and customary rate. >>Abuse  Abuse is billing patterns and practices that are not considered fraudulent but rather excessive or unnecessary.  Includes actions that could directly and indirectly provide financial gain for the health care organization.  The penalties for abuse are intended to educate providers instead of punishing them.  The penalties for the health care organization can include: 1. Educational sessions 2. Recovery of the overpayments 3. Withholding of future reimbursement for the services noted for the abuse. >>Example of Abuse

20  An office bills the insurance for a minor cosmetic surgery (Botox), understanding that it is not clinically appropriate or needed for the patient. The office is fully aware this is not covered by the insurance company but still submits a claim for the service. >>Preventing Fraud and Abuse  Organizations must have ongoing training for employees in the billing and coding department.  Billing abuses can occur in organizations unintentionally.  Best practices that can be used to minimize unintentional claim errors include the following: 1. Accurate and timely documentation 2. Appropriate CPT, HCPCS, and ICD-10-CM code assignment 3. Appropriate code linkage for the CPT, HCPCS, and ICD-10-CM codes. 4. Correct provider and referring physician information included in the claim. 5. Correct service dates  Billing and coding staff need to know common billing terminology and third-party payer rules to avoid abuse.  Unbundling: the process of reporting 2 separate procedure codes with the intent of reimbursement on both codes when CPT rules state only one code should be reported.  Billing and coding errors typically fall into 3 categories: 1. Unintentional billing and coding errors 2. Unnecessary charges for health care services, equipment, and/or supplies. 3. Billing for non-medically necessary charges  Several laws govern fraud and abuse, including the False Claims Act (FCA).  Regulates providers’ conduct for claims submitted to federal plans (Medicare, Medicaid, TRICARE).  Penalties for providers that do not follow the guidelines include fines of more the $20,000 per false claim and other monetary penalties.  Other laws related to fraud and abuse include the following: 1. The Physician Self-Referral Law (Stark Law): prevents providers from referring Medicare patients to health service organizations in which the physician or their family member has financial interest.

21 2. The Federal Claims Collection Act (FCCA): allows Medicare administrative contractors to collect claims overpayments from health care providers and beneficiaries. >>Correct Coding  Coding has a large effect on the revenue cycle and fraud and abuse  The National Correct Coding Initiative (NCCI): a program developed to prevent coding errors that could lead to inappropriate reimbursement for Medicare claims.  NCCI is a series of paired codes that represent services rendered on the same day by the same provider.  Payers use this system to adjudicate claims, but organizations can use it to validate the coding of their claims prior to submission.  NCCI edits works in 2 ways: 1. One of the codes is a component of the other code. 2. One of the codes excludes the other by their code description.  The paired codes relationship is defined by modifier column. >>NCCI Column 1/ Column 2 Edits Column 1 Column 2 *=n Effective Date Deletion Date *= No data Modifier 0=not allowed 1=allowed 9=N/A 10021 J2001 200400701 * 0 10021 19303 200400701 * 0 10021 36000 200400701 * 0 10021 36410 200400701 * 0 10021 37202 200400701 * 0 10021 62319 200400701 * 0 10021 62319 200400701 * 1 10021 64415 200400701 * 1 10021 64416 200400701 * 1 >>CPT Code Descriptions

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22  10021—Fine needle aspiration biopsy, without imaging guidance; first lesion  19303—Mastectomy, simple, complete  If these codes were reported together, it would be rejected as an NCCI edit because it is considered by CPT to be unbundling.  Code 19303 for Mastectomy includes any related biopsy (such as 10021) because CPT considers them integral to surgical codes.  The NCCI table supports this concept by assigning 0 in the modifier column on line 2, demonstrating that those codes are not allowed to be billed together, even with a modifier. **QUESTION** What are the differences between fraud and abuse? 1. Fraud: intentional billing for services not performed, reporting fraudulent diagnosis, or medical coding error. 2. Abuse: billing patterns and practices that are excessive or unnecessary but not fraudulent. >>Claim Data  The development of an insurance claim starts when the patient first presents for health care, but the claim is created after the patient is no longer present.  Encounter forms may be printed or in electronic format of am HER.  Encounter forms contain diagnosis, services, and procedures that are typical to the organization.  The data is critical to a claim, and the accuracy of the codes selected is critical to correct coding and reporting. >>Edit Encounter Form Name: Provider: --- Procedures ---

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23 Category: Established Patient Code:________________________ _ADD_ Code: | Network: <New Patient <Established Patient 99212 Straightforward MDM- 10 to 19 min office visit 99213 Low MDM – 20 to 24 min office visit 99214 Moderate MDM-30 to 39 min office visit 99215 High MDM – 40 to 49 min office visit --- Diagnosis --- Category: Nervous System Code:_____________________ _ADD_ Code: | Name: <(G00-G99) Diseases of the Nervous System <(G00-G09) Inflammatory diseases of the central nervous system G00.0 Hemophilus Meningitis G00.1 Pneumococcal Meningitis G00.2 Streptococcal Meningitis G00.3 Staphylococcal Meningitis >>Types of Claim Formats  Claim forms, whether electronic or paper, are standardized and contain enough fields to meet the requirements for any type of claim or payer requirements and any made of submission.  Outpatient/Professional o 837P: the electronic CMS-1500 claim format used to submit claims for professional services rendered by health care principles. o CMS-1500: the paper form used to submit professional claims for reimbursement with various payer group.

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24  Inpatient/Facility Claims: o 837I: the electronic UB-04 claim format used to submit claims for facility services rendered by inpatient organizations o UB-04: a paper form used to submit hospital and facility claims for reimbursement with various payer groups. >>Creating Claims Revenue Cycle of Insurance Claim  Patient data, insurance information, and codes based on clinical documentation are used to create claims.  The claims are then generated and may be sent through a clearinghouse for further edit checks or submitted to payers.  Clearinghouses can also forward clean claims to the payers while returning claims that are incomplete or have errors. >>Clean Claims  Clean claims submitted to payers are processed and paid according to the individual plan.  This process is referred to as adjudication, determining financial responsibility among the stakeholders.

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25 **QUESTION** BCS completes 837P claims BCS completes CMS-1500 claims BCS batches claims and submits to clearinghouse Clearinghouse converts 837P claims into electronic flat file form Clearinghouse scans and converts them to electronic flat file form Clearinghouse verifies claims data and transmits to payer

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26 What is an efficient mechanism for proofreading claims? --Claims scrubbing or edit checks **QUESTION** The False Claims Act addresses which of the following types of activities? A: Fraudulent B: Criminal C: Abusive D: Civil **QUESTION** Match compliance & legal aspect with definition Upcoding Transmits health info in electronic form Covered entities Purposeful medical coding error PHI Program developed to prevent coding errors HIPAA Governs & mandates regulations that include privacy NCCI Individually identifiable patient information >>Denied Claims  If a claim is denied the insurance payment is withheld and the payer includes the reason for the claim denial in an explanation of benefits or remittance advice form.  Denied claims can come in two categories: 1. Technical errors 2. Patient coverage errors  Common technical errors include missing or incorrect information or transposed or mistranslated numbers: 1. Incorrect diagnostic or procedural code 2. Incorrect service date 3. Incorrect service year reported on a claim.

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27 4. Lack of place of service codes, pay-to-provider address, or identification. 5. Calculation errors (charge amount or balance)  The denials are relatively easy to correct, and the claim can be resubmitted to prompt timely reimbursement.  Coverage errors include: 1. Service not covered by health insurance. 2. Patient not covered by the policy at time of service. 3. Preauthorization so precertification not secured before the service date.  The denials based on coverage issues are more complex to correct.  The BCS might need to contact the patient or insurance company to resolve the claims issues. Clearinghouse transmits claims data to payers. Payer performs claims validation Payer rejects claim Payer denies claim (information requested) Payer approves claim for payment BCS can resubmit claim after correcting error and omissions (or appeal if claim was denied). Payer generates RA and sends to provider (no payment is made); info request is also sent to provider. Payer generates RA and sends to provider with payment.

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28 **QUESTION** What does the term adjudication mean in health care? --the act of determining financial responsibility of claim charges; among the stakeholders. **QUESTION** What is an electronic claim submission? --a process by which insurance claims are transmitted electronically directly from the provider to the insurance company, sometimes through a clearinghouse prior to reaching the insurance company. >>Medical Record Audit  A medical record audit is described as a practice to specifically target and evaluate clinical coding methodology (procedural & diagnosis code) noted in the organization’s documentation.  Audits can be performed by comparing the encounter and all related documentation to the codes that were billed on the claim.  The internal medical record audit is a chart review used to determine if the documentation correctly supports the codes reported for the service, determine where documentation improvement is needed, and identify all coding errors.  This process focuses on erroneous claim submission that can lead to an external audit.  This process also provides valuable feedback about the revenue cycle of an organization by identifying gaps in workflows or learning opportunities for clinicians, billers, and coders.  External audits are performed outside the organization.  They are sometimes referred to as post payment audits.  These audits perform reviews to protect the payer and government programs from fraud and abuse.

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29  Quality care standards can also be reviewed during an external audit process.  These programs include Recovery Audit Contractor (RAC), Zone Program Integrity Contractor (ZPIC), Medicaid Integrity Contractor (MIC), Medicaid Fraud Control Unit (MFCU).  The RAC and ZPIC programs were created by the Medicare Modernization Act of 2003.  The RAC program’s goals are to review fee-for-service claims and medical records on a post payment basis.  The ZPIC audits programs were created to combat fraud, waste, and abuse.  ZPIC audits are not random—they are targeted audits used in cases of suspected Medicare and Medicaid fraud, waste, and abuse at a health care facility.  The goal of the RAC program goal is to identify and recover improper payments made to health care facilities.  The MIC audit program was mandated by the Deficit Reduction Act of 2005.  The programs scope as to review the Medicaid claims, perform audits, identify.  overpayments, and educate providers of care for their patients. **QUESTION** Match the audit type with the audit description: ____MIC ____ZPIC ____RAC ____MFCU A. Investigates & provides Medicaid provider fraud B. Targeted audits used in cases of suspected Medicare & Medicaid fraud, waste and abuse C. Review the Medicaid claims, performs audits, identifies overpayments, educates providers about the program’s integrity, and quality of care for their patients. D. Assist the provider with training programs to ensure they are meeting the documentation requirements. **QUESTION**

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