Chapter 15

Medical Billing and Reimbursement Essentials

adjudicate

to settle or determine judicially.

Advance Beneficiary Notice (ABN)

a document signed by the patient that authorizes a provider to bill the patient for services that medicare may consider not medically necessary and may decline to cover.

allowed amount

the maximum amount that an insurance company will pay for covered health services.

audit

a process completed before claims submission in which claims are examined for accuracy and completeness.

capitation

a payment arrangement for healthcare providers. the provider is paid a set amount for each enrolled person assigned to him or her, per period of time, whether or not that person has receive services.

claims clearinghouse

an organization that accepts the claim data from the provider, reformats the data to meet the specifications outlined by the insurance plan, and submits the claim.

claim scrubbers

software that finds common billing errors before the claim is sent to the insurance company.

CMS-1500 Health Insurance Claim Form (CMS-1500)

the standard insurance claim form used for all government and most commercial insurance companies.

copayment (copay)

a set dollar amount the patient must pay for each office visit. there can be one copayment amount for a primary care provider and different copayment amount (usually higher) to see a specialist or be seen in the emergency department.

eligibility

meeting the stipulated requirements to participate in the healthcare plan.

endoscopy

a nonsurgical procedure that uses an endoscope to view inside the body.

explanation of benefits (EOB)

a document sent by he insurance company to the patient explaining the allowed charge amount, the amount reimbursed for services, and the patient’s financial responsibilities.

medical necessity

services or supplies (current procedural terminology (CPT) and healthcare common procedure coding system (HCPCS) codes) used to treat the patient’s diagnosis (International Classification of Diseases (ICD) codes) that meet the accepted standard of medical practice.

precertification

the process of determining if a procedure or service is covered by the insurance plan and what the reimbursement is for that procedure or service.

provider web portal

a secure online website that gives contracted providers a single point of access to insurance companies. This allows the provider to determine patient eligibility and deductible status, submit preauthorizations/precertifications, and check the status of claims.

release of information

a form completed by the patient that authorizes the medical office to release medical records to the insurance company for health insurance reimbursement.

remittance advice (RA)

a document sent by the insurance company to the provider explaining the allowed charge amount, the amount reimbursed for services, and the patient’s financial responsibilities.

EOB

explanation of benefits

RA

remittance advice

H&P

history and physical

CMS-1500

CMS-1500 Health Insurance Claim Form

HIPAA

Health Insurance Portability and Accountability Act

MCOs

managed care organizations

PCP

primary care provider

GI

gastrointestinal

NUCC

National Uniform Claim Committee

AMA

American Medical Association

CMS

Centers for Medicare and Medicaid Services

LMP

last menstrual period

NPI

National Provider Identifier

CPT

current procedural terminology

HCPCS

healthcare common procedure coding system

POS

place of service

EMG

electromyography or emergency

EPSDT

early and periodic screening, diagnosis and treatment

CHAMPVA

Civilian Health and Medical Program of the Department of Veteran Affairs

FECA

Federal Employees Compensation Act

SSN

Social Security Number

EIN

employer identification number

PAR

participating provider

CMPs

civil monetary penalties

PPO

Preferred Provider Organization

ABN

Advance Beneficiary Notice

H&P

history and physical

medical billing process

starts when a patient makes an appointment and is complete when payment for services has been received.

regular referral

used when the provider believes that the patient must see a specialist to continue treatment. Usually takes 3 to 10 working days for review and approval.

preauthorization

gives the provider approval to render the medical service.

STAT referral

used in an emergency situation and can be approved online

insured

the individual who is directly contracted with the insurance company

urgent referral

used when an urgent but not life-threatening situation occurs

birthday rule

used to determine primary and secondary insurance status.

intentional

done on purpose

participating provider

agrees to accept the terms of the agreement with the insurance company, as well as accept what the plan states as an allowed amount from the services provided.

clean claim

claims without errors

fraud

knowingly and willfully attempting to execute a scheme to take from any healthcare benefit program.

assignment of benefits

transfers the patient’s legal right to collect benefits for medical expenses to the provider of those services, authorizing payment to be sent directly to the provider.

abuse

unintended action that directly or indirectly results in an overpayment to the healthcare provider.

National Provider Identifier

a number assigned by the Centers for Medicare and Medicaid Services (CMS) that classifies the healthcare provider by license and medical specialities.