Revenue Management: Insurance Claims, Denied Claims and Appeals, and Credit and Collections

claims management

is performed to complete, submit, and follow-up on claims for procedures and services provided; upon completion of the insurance claim, a review is performed to ensure accuracy of completed claims prior to submission

claims submission

is the electronic or manual transmission of claims data to payers, clearinghouses, or third-party administrators (TPAs) for processing

claim scrubber software

is used to review medical claims for coding and billing accuracy and other possible oerrors before submitting them; when errors are identified, corrections are made and the claim is ready for submission

intelligent automation

uses robotic process automation (RPA bots) and AI algorithms to perform repetitive tasks and improve revenue cycle management

RPA bots

complete and submit claims, reducing claims processing time and minimizing claims denials due to fewer human errors

AI algorithms

analyze historical claims data, identifying claims denial and fraud/abuse patterns so procedures can be implemented to prevent future denials

clearinghouse

is an agency or organization that collects, processes, and distributes claims

third-party administrator (TPA)

collects, processes, and distributes claims in addition to providing contractual employee benefits management for medical practices and other companies

explanation of benefits (EOB)

is sent to the patient by the payer and provides details about the results of claims processing, such as provider charge, payer fee shceduled, payment made by the payer, and patient financial responsibility

remit

also known as electronic remittance advice (ERA) or standard paper remit (SPR), is sent to providers by third-party payers and contains details about claims adjudication, including information about payments, deductibles and copayments, adjustments, denials, missing or incorrect data, refunds, and claims withheld due to secondary payer, third-party liability, or penalty situations

value-added network (VAN)

is a clearinghouse that involves value-added vendors, such as banks, in the processing of claims; is more efficient and less expensive for providers than managing their own systems to send and receive transactions directly from numerous entities

electronic flat file format

also called electronic media claim, is a series of fixed-length records submitted to payers as a bill for health care services

electronic data interchange (EDI)

is the computer-to-computer transfer of data between providers and third-party payers in a data format agreed upon by sending and receiving parties

ANSI ASC X12N

is an electronic format standard that uses a variable length file format to process transactions for institutional, professional, dental, and drug claims

covered entities

process electronic claims and include all private-sector health plans, managed care organizations, ERISA-covered health benefit plans, governement health plans, all health care clearinghouses, and all health care providers that choose to submit or receive that transactions electronically

clean claim

contains all required data elements needed to process and pay the claim, including valid diagnosis and procedure service codes, modifiers, and so on; results from audit/edit processing

claims attachment

is a set of supporting documentation or information associated with a health care claim or patient encounter; are used for medical evaluation for payment, past payment audit or review, and quality control to ensure access to care and quality of care

delayed claims

contain incomplete and inaccurate information and require resubmission after correction, which delays payment to the provider

coordination of benefits (COB)

is a provision in group health insurance policies intended to keep multiple insurers from paying benefits covered by other policies; it also specifies that coverage will be provided in a specific sequence when more than one policy covers the claim

claims processing

involves sorting claims upon submission to collect and verify information about the patient and provider

claims adjudication

is the process in which the claims is compared to payer edits and the patient’s health plan benefits to verify that the required information is available to process the claim, the claim is not a duplicate, the payer rules and procedures have been followed, and procedures performed and services provided are covered benefits

noncovered benefit

is any procedure or service reported on the claim that is not included on the master benefit list, and will result in rejection of the claim, and the patient is responsible for payment

unauthorized services

any procedures and services provided to a patient without proper preauthorization from the payer, or that were not covered by a current preauthorization, and the patient is not responsible for payment

common data file

is a summary abstract report of all recent claims filed on each patient; determines whether the patient is receiving concurrent care for the same condition by more than one provider, and it identifies services that are related to recent surgeries, hospitalizations, or liability coverage

allowed charges

is the maximum amount the payer will allow for each procedure or service, according to the patient’s policy

beneficiary

is eligible to receive health care benefits and includes the policyholder and eligible dependents

coinsurance

is the percentage the patient pays for covered services after the deductible has been met and the copayment has been paid

downcoding

assigning lower-level codes than documented in the record

unbundling

also called fragmentation, is submitting multiplte CPT codes when one code should be submitted

upcoding

assignment of an ICD-10-CM diagnosis code that does not match patient record documentation for the purpose of illegally increasing reimbursement

delinguent payment

payment is overdue, based on practice policy

electronic remittance advice (ERA)

is a remittance advice submitted by the third-party payer to the provider electronically

electronic funds transfer (EFT)

means that payers electronically deposit funds to the provider’s bank account

source document

the routing slip, charge slip, encounter form, or superbill from which the insurance claim was generated

open claims

are organized by month and insurance company and have been submitted to the payer but are not completely processed; includes those that were rejected due to an error or omission and must be reprocessed

closed claims

are filed according to year and insurance company, and include those for which all processing, including appeals, has been completed

remittance advice documents

are organized according to date of service because payers often report the results of insurance claims processed on different patients for the same date of service and provider

unassigned claims

are organized by year and are generated for providers who do not accept assignment; the file includes all unassigned claims for which the provider is not obligated to perform any follow-up work

denied claims

are rejected by payers due to coding errors, missing information, and patient coverage issues; are unpaid claims that have been returned to the provider by clearinghouses, third-party administrators, or third-party payers

clinical validation denials

occur when patient records are reviewed by third-party payers, such as physician reviewers, and a determination is made that there is no clinical evidence to support documented medical conditions

coding validation denials

occur when patient records are reviewed and the decision is that provider documentation did no support reported codes or their sequencing

effective claims denial management includes:

identification, management, monitoring, and prevention

identification- for effective claims denial management

identify the reason for claims denials and rejections; correct the issues that resulted in dneied or rejected claims

management- for effective claims denial managment

design a work process that resolves denied or rejected claims; forward denied claims to the appropriate staff person; implement a standard work process for processing denied or rejected claims

monitoring- for effective claims denial management

maintain a log of denied and rejected claims and the response to each, routinely review the log to follow-up on the status of corrected claims that were resubmitted and appeals of denied claims, review samples of submitted appeals to identify work processes that need revision, and proactively review claims prior to submission to ensure accuracy and to reduce claims denials and rejections by clearinghouses and third-party payers

prevention- for effective claims denial management

involve provider staff, providers, and patients at the appropriate level of the claims process to ensure submission of accurate claims and successful appeals of denied claims

appeal

is a documented letter that is signed by the provider to explain why a claim should be redetermined

peer review

is an evaluation process performed to determine whether to reverse or uphold a claims denial; is performed by a medical reviewer or a medical director

Truth in Lending Act regulations, Title I of the Consumer Credit Protection Act

are implemented by the Consumer Financial Protection Bureau (CFPB) and protect consumers from inaccurate and unfair credit billing and credit card practices by requiring lenders to disclose accurate and complete terms in finance contracts, such as credit card rates and other loan cost information

Electronic Funds Transfer Act (EFTA)

establishes liability limits for losses caused by unauthorized transfers to protect consumers from erroneous electronic fund transfers (EFTs) and remittance transfers. Financial institutions are required to adopt practices for transaction accounting, preauthorized transfers, and error resolution

Equal Credit Opportunity Act (ECOA)

was implemented as part of the Consumer Credit Protection Act of 1968, and prohibits creditors from discrimination against applicants on the basis of race, religion, national origin, six, marital status, or age

Fair Credit and Charge Disclosure Act (FCCDA)

amended the Truth in Lending Act, and requires credit and charge card issuers to provide financial disclosures to creditors in direct mail, telephone, and other applications and solicitations. Financial disclosures include fees, finance charge conditions, variable interest rates, and other related charges and fees

Fair Credit Billing Act (FCBA)

amended the Truth in Lending Act, and requires creditors to investigate and resolve consumer billing complaints; protects consumers from unfair billing practices and allows them to dispute billing errors and unauthorized charges

Fair Credit Reporting Act (FCRA)

ensures the accuracy, fairness, and privacy of consumer information in credit reports. Information collected by consumer reporting agencies is protected, and consumer report information is prohibited from being provided to anyone who doesn’t have a specific purpose as described

Fair Debt Collection Practices Act (FDCPA)

was passed in 1977 to prohibit third-party debt collectors from employing deceptive and abusive conduct when collecting consumer debts

Financial Servies Modernization Act (FSMA)

also known as Gramm-Leach-Bliley Act, was passed in 1999 to partially deregulate the financial services industry by allowing insurance firms to merge with banks and cross-sell nontraditional insurance products; prohibits the sharing of medical information among health insurers and other financial institiutions for use in making credit decisions

past-due account

also called a delinquent account, is one that has not been paid by the patient or the payer within a certain time frame (120 days)

skip tracing/tracking

is the practice of locating patients to obtain payment of a bad debt; can involve using credit reports, databases, criminal background checks, and more

bad debt

is an account receivable that cannot be collected by the provider or a collection agency

litigation

is a last resort to recover dept for a medical practice; usually occurs in small claims court where individuals can sue for money only without a lawyer

accounts receivable aging report

shows the status (by date) of outstanding claims from each payer, as well as payments due from patients