Chapter 9: Medical Insurance & Coding

policy

a course of action that should be taken every time a certain situation occurs

benefit

in the insurance industry, the services or items covered in an insurance policy

claim

in the insurance industry, a request for payment of covered benefits

dependent

in health insurance, an individual who receives insurance benefits due to a relationship to the subscriber

example of dependents

child or spouse

guarantor

in healthcare, the person who is financially responsible to pay a medical bill

premium

in the insurance industry, a monthly payment made to purchase insurance coverage

deductible

in the insurance industry, an amount that must be paid for covered services by the subscriber before insurance benefits are paid

copayment

in healthcare insurance, a set amount that must be paid by the subscriber for a covered service

coinsurance

in healthcare insurance, a percentage of charges that must be paid by the subscriber for a covered service

Patient Protection and Affordable Care Act (ACA)

federal law enacted in 2010 with the goals of making insurance affordable to more people, expanding Medicaid coverage, and supporting care practices that improve patient health and lower costs

out-of-pocket mximum

in healthcare insurance, a limit on the total amount a subscriber must pay each year for covered services; after the subscriber meets the out-of-pocket maximum, the insurer must pay 100% of covered costs

explanation of benefits (EOB)

a summary of coverage provided by an insurer to the subscriber and the healthcare provider after an insurance claim is made, including what portion of the charges are covered by insurance and waht portion must be paid by the patient

remittance advice (RA) statement

a document provided by an insurer to a healthcare provider summarizing a health insurance claim, including charges that have been billed, what portion are covered by insurance, and what portion must be paid by the patient

allowable amount

a standard fee for a treatment, service, or supply set by an insurer; providers contracted with an insurer are obligated to accept this amount as payment

points about health insurance

insurance helps provide security against financial loss; policies have different benefits, features, and services; patients may have private insurance or be insured through an employer; an insurance policy may cover an individual or the individual and their family members; current insurance information should be presented by the patient each time he visits the provider; insurance coverage is maintained by monthly payment of premiums; insurance plans have different deductibles, copayments, and coinsurance amounts; insurance plans cover different services and can decide which services are considered medically necessary covered services

ACA mandates

1. certain services insurers must provide with no copayment/coinsurance (ex. preventative services)

2. there must be an out of pocket maximum per policy per year

information on EOB and RA statements

dates of service; charges that have been billed; how much is covered by insurance and how much the patient must pay

medically necessary services

preventative care and routine vaccinations; ambulatory care; emergency care; inpatient care; diagnostic services

rider

something added to an insurance policy that changes the terms of the policy; for example to add specific additional coverage

indemnity plan

a type of health insurance in which the subscriber can choose any provider or facility for health care and recieve reimbursement based on billed costs as long as the charges are considered usual, customary, and reasonable; sometimes called a fee-for-service plan

managed care

a system of strategy of managing health care in a way that controls costs

gatekeeper

term sometimes used to describe a primary care provider; refers to the provider’s role in managing a patient’s access to healthcare services

health maintenance organization

a form of health insurance in which the cost of care is covered only when a person uses a particular doctor or group of doctors except in case of emergency; seeing specialists generally requires referrals from a primary care provider

capitation fee

form of health insurance in which the cost of care is covered only when a person uses a particular doctor or group of doctors except in case of emergency; seeing specialists generally requires referrals from a primary care provider

preferred provider organization

a managed care plan in which patients are encouraged, but not required, to see providers in a provider network established by the insurance carrier

exlcusive provider organization

a type of managed care plan that requires the patient to see network providers for all healthcare service

point-of-service plan

a type of managed care plan that requires the patient to choose a primary care provider and see specialists in the provider network with a referral; patients may see providers outside the network but will pay more to do so

points about the ACA and insurance

insurance companies cannot charge higher premiums or deny coverage based on a patient’s health status

common types of managed care plans

health maintenance organizations; preferred provider organizations; exclusive provider organizations; point of service plans

health maintenance organizations

members are required to use the providers in the HMO for services; providers may be employees of the HMO; providers may be paid by patient instead of by service; caption must have a PCP; referrals must be made to other providers; plans are the most affordable; copayments required for most services; nonemergency care by provider outside the network not covered

preferred provider organizations

patient can see any provider in the network; patient may see providers outside the network for a higher fee; patient not required to have PCP; some services require preauthorization; premiums are higher than HMOs; patients have more flexibility; may have separate deductibles for out-of-network care and/or fees for out-of-network providers; out-of-pocket maximums may be higher or may not exist for out-of-network care

exclusive provider organizations

patient is required to see in-network providers for all services; patient not required to have PCP; referrals are not usually required; members may see out-of-network providers only for emergency care

point-of-service plans

least common type of managed care plan; patient must have PCP; referrals required to see in-network specialists; patient may see out-of-network providers for higher fee; premiums and copayments usually lower but deductibles are usually higher

other types of private insurance MAs work with

COBRA allows workers who lose group health insurance to purchase the same coverage privately for a certain amount of time; automobile or homeowner’s insurance may cover medical treatment for injuries; policies may cover specific conditions or situations; disability insurance does not provide healthcare coverage, but providers may need to certify that a person is unable to work

Medicare

a federal health insurance program for people who are 65 or older, have certain disabilities or permanent kidney failure, or are ill and cannot work

Medicare Administrative Contractors (MACs)

private insurers contracted to manage Medicare claims in a specific geographical region

Medicaid

a medical assistance program for people who have low income, as well as for people with disabilities

Children’s Health Insurance Program (CHIP)

a government program providing low-cost health insurance to families and pregnant women with low income

TRICARE

the health insurance program of the US military

factis about Medicare

federal insurance program for those 65 and older; covers people with end-stage kidney disease; persons with permanent disabilities who cannot work and receive SSDI benefits

Medicare part A

covers inpatient care in hospital or skilled nursing facility; no premiums for people who have paid Medicare taxes over time; there is a deductible for each stay; coinsurance payments apply to longer stays

Medicare part B

covers outpatient visits; premiums vary by income; typically covers 80% of costs; patient is responsible for remainder of costs

Medicare part C

part C is optional; offers comprehensive replacements for A and B; administered by CMS-approved private isurers; may offer additional benefits such as vision and dental; most all-in-one plans (Medicare Advantage) also replacepart D and use PPOs; usually have low premiums with some out-of-pocket expenses

Medicare part D

covers prescription drugs; individuals can choose from different plans with different copayments/coinsurance and deductibles; premiums are for people with higher income

provider participation in Medicare

most providers accept Medicare; some providers participate in Medicare’s Accountable Care Organization (ACO) model, working to coordinate care and provider high-quality care at a lower cost; providers can opt out (Medicare will not pay for any services given by providers who opt out

points about Medicare

covers adults, children, elderly adults, and pregnant women with a low income; covers people with disabilities; managed by CMS but administered/operated at state level; funded by federal and state governments; differs by state; eligibility based on income; not all providers accept Medicaid patients; considered the last payer when patients have covered by multiple plans

points about CHIP plans

cover care for lower-income children and sometimes pregnant women for healthcare, dental, and vision services; provide assistance for families whose income is too high to receive Medicaid benefits; vary by state and the MA should understand their state’s CHIP requirements

points about military coverage

TRICARE plans can be used in all military and many civilian facilities; TRICARE Prime is an HMO; TRICARE Select is a PPO: TRICARE Reserve select covers National Guard Reservists; TRICARE for Life is supplemental coverage for retirees and spouses 65 and older; TRICARE Young Adult covers unmarried adult dependents 21-26 or in school; CHAMPVA provides coverage for families of veterans killed or injured in the line of duty

points about CHAMPVA

managed by the US Department of Veterans Affairs; patients can see any provider who accepts CHAMPVA

primary insurance

the first insurer to pay benefits when a patient is covered by more than one policy

secondary insurance

in cases in which a patient is covered by more than one insurance policy, the insurer that pays on the remaining balance after the primary insurance benefits have been paid

coordination of benefits (COB)

determination of how a claim should be paid when more than one insurer covers a patient

assignment of benefits

permission granted by a subscripber for insurance benefits to be paid directly to a provider for services provided

National Provider Identifier (NPI)

10-digit number unique to each healthcare provider and used in the filing of insurance claims

direct billing

in healthcare, an arrangement in which a provider or facility submits claims directly to an insurer on behalf of a patient

clearinghouse

a company that specializes in reviewing insurance claims for errors and submitting claims to insurers on behalf of a provider/facility

information on insurance claims

patients name and demographic information; subscriber’s full name, DOB, and employer on claims for spouse/dependents; provider’s specialty and NPI number; claim details

claim details

patient’s diagnosis; date of service; treatment provided; procedures performed; location of service; provider’s charges

points about electronic and paper insurance claim filing

most insurance claims are filed electronically; clearinghouses may manage claims for some practices; paper filing takes longer to reimburse; CMS-1500 is the standard form used for paper filing; HIPAA guidelines apply to all insurance claim filing, electronic and paper

Advance Beneficiary Notice (ABN)

a Medicare form used to inform a patient that a procedure or service will not be covered by Medicare benefits and that the patient is financially responsible if the service is provided

points about precertification/preauthorization

the MA can check the patient’s insurance card or the insurance company’s website for information about which services require preauthorization; insurance companies may require authorization within a certain time frame in case of emergency treatment; precertification is the process of checking that an insurance company covers a procedure; preauthorization is the approval of a procedure as medically necessary; when an insurance company preauthorizes a procedure, they will provide a preauthorization number which must be on the claim form; the MA should ask the insurer the expected cost to the patient when she obtains preauthorization; the MA should follow each insurer’s procedures carefully when filing an appeal; the MA must include documentation of unsuccessful appeals in the patient’s health record

International Classification of Diseases (ICD)

a coding system used to track morbidity and mortality; the basis of coding systems used to identify diagnoses and inpatient procedures for insurance purposes

uses for ICD codes

established to track morbidity and mortality; used so that disease trends can be tracked around the world; provides information to guide healthcare decisions on a global scale; currently in its 11th revision (ICD-11)

ICD coding uses in the US

provides a uniform way to communicate information about a patient’s diagnosis; makes communication clear and exact; provides a uniform basis for medical billing

ICD code used in the US

ICD-10

billable

in healthcare, a code with adequate detail to present to an insurer as part of a claim

encounter

in health care, an interaction between a patient and a provider that may be billed/ generate an insurance claim

points about ICD-10-CM

used to communicate information about diagnoses; maintained by the CDC’s National Center for Health Statistics; use of IDC-10-CM made mandatory by CDC in 2015; used to communication information about diagnoses; updated annually; developed by CMS; used for coding most inpatient procedures; updated annually

ICD-10-CM codes

1. the first character in a diagnostic category code is alphabetic and the second two are numeric

2. the three-character category code may be followed by a decimal and up to four more characters, which provide more information

3. the final character is a letter usually describing the stage of treatment

4. sometimes the letter X is used as a placeholder to get to a sixth (final) character

5. diagnoses must be coded to the highest level of specificity possible for medical billing

rules and characters in the ICD-10-PCS codes

PCS codes contain seven characters; codes are organized by typ eof procedure and body system; codes are used to bill for each encounter; each character provides information about the procedure or service provided including the hospital department, body system, procedure type, location on the body, the approach, the device, and the qualifier; the letter Z is used as a placeholder when a device or qualifier is not used

guidelines for locating ICD-10-CM/PCS codes

review the provider’s diagnosis; locate the diagnosis in the Alphabetic index; check the Tabular List to locate the diagnosis code; compare the code to the provider’s diagnosis and treatment; choose the most specific code possible to describe the patient’s diagnosis; more than one diagnosis code may be necessary for an encounter; confirm that at elast one ICD-10-CM code is used for each encounter; confirm that at least one ICD-10-PCS code is used for every inpatient procedure performed

CPT code

a code established in the American Medical Association’s Current Procedural Terminology manual, which is the standard coding set used to bill insurers for most outpatient care

bundled code

a code used to submit an insurance claim for two or more procedures that frequently occur together

points about CPT codes

Tabular List includes codes in six categories; categories are devided into subcategories for different procedures; codes are specific regarding types and level of service provided; place-of-service (POS) codes are 2-digit codes added to a CPT code depending on where a service was provided; anesthesiology, surgery, and medicine codes are organized by body system

Tabular List categories

1. Evaluation and Management (E/M)

2. Anesthesiology

3. Surgery

4. Radiology

5. Pathology/laboratory

6. Medicine

guidelines for locating a CPT code

review the procedures performed during the patient encounter; locate a procedure in the Alphabetic Index; locate the procedure code in the Tabular List; compare the code description to the procedure that was performed; use the tables provided to confirm that the most accurate and specific code was chosen to describe the procedure performed

Healthcare Common Procedure Coding System (HCPCS)

an additional coding system for procedures, services, equipment, and supplies not including in the CPT manual

points about the HCPCS coding system

HCPCS is divided into two levels; level 1 HCPCS codes contain the CPT codes; level 2 contains codes for services not included in the CPT; codes are updated annually by CMS; HCPCS codes are alphanumeric; level 2 codes have five characters (1 letter followed by numbers); modifiers may be added to the end of the code; some of the most commonly used HCPCS codes are for ambulance services, durable medical equipment, and medical/surgical supplies, including supplies used in outpatient procedures; some procedures will use an ICD-10 code, a CPT code, and an HCPCS code

A codes

used for ambulance and transportation services; covers some medical and surgical supplies

E codes

used for durable medical equipment

J codes

used for drugs that are administered by a route other than oral

L codes

used for orthotic and prosthetic devices

downcode

in healthcare coding, may refer to either a provider submitting a claim using a code for a lower level of service than what was actually provided or to an insurer paying a claim at a lower rate than the submitted code would require

upcode

in healthcare coding, inappropriately billing for a procedure or service that is more complex than what was performed or provided

audit

in healthcare billing, a review of diagnosis and procedure codes to ensure that they follow the correct guidelines; may be performed internally for quality assurance, or externally as a form of inspection

points about coding

correct billing relies on the facility choosing codes that describe the diagnosis and services in as much detail as possible; insurance companies must see “clear code linkage” between the diagnosis and the services/treatments/procedures performed; not using the correct diagnosis and procedure codes can cause an insurer to deny payment of the claim; MAs should always check with the provider if they are unsure about codes used

billing errors

mistakes in coding such as billing for bundled service separately due to not knowing a bundled code exists and billing for the wrong level of service accidentally/out of ignorance

billing abuse

intentionally misusing codes, such as intentionally unbundling or upcoding

fraud

billing for care that is not provided or equipment that was not used/necessary

internal audit

audits started by the facility for quality assurance/improvement purposes

external audits

started by an outside group such as a government agency or an insurer