Chapter 27: Preparing Insurance Claims and Posting Insurance Payments

What is the purpose of completing a claim form?

To request payment from the patient’s insurer for services rendered

What is the standard paper claim form used to bill Medicare fee-for-service contractors?

CMS-1500

What must a medical assistant obtain before filing a claim on a patient’s behalf?

Assignment of benefits and release of information signature

What does the assignment of benefits clause authorize?

Benefits to be paid directly to the provider

When should patient demographic and insurance information be updated?

At each visit and annually for signatures

Which section of the CMS-1500 form is used to list CPT or HCPCS codes?

Box 24

What is the main advantage of submitting claims electronically?

It improves cash flow and reduces denials

What is a “claim scrubber”?

A program that checks claims for missing or incorrect data

What organization must approve a provider’s waiver to submit paper claims to Medicare?

The Medicare Administrative Contractor (MAC)

What system is required to submit electronic data transactions between providers and payers?

EDI (Electronic Data Interchange)

Which of the following is an example of real-time adjudication (RTA)?

The payer instantly calculating what the patient owes during the visit

What is the role of a clearinghouse?

To translate, check, and forward clean electronic claims to payers

Which of the following may cause a paper claim submission to be allowed by Medicare?

Staff disability preventing electronic submission

Which box on the CMS-1500 form requires the provider’s signature and date?

Box 31

What happens if a claim contains missing or invalid data when sent through a clearinghouse?

It is returned in a status report for correction and resubmission

What law sets forth the limited conditions under which paper claim forms are permitted?

Administrative Simplification Compliance Act (ASCA)

What paper claim form is used by hospitals and inpatient facilities?

UB-04 (CMS-1450)

What paper claim form is used by individual physicians and outpatient clinics?

CMS-1500

What is the most common result of a claim form error?

The claim is rejected or denied

Why is timely follow-up important after a claim rejection?

It helps meet timely filing deadlines

What is the purpose of a retroactive authorization?

To gain approval for a service already provided

Which of the following is a common claim error?

Using outdated CPT codes

Which error could cause a claim to be rejected for “lack of membership in the insurance plan”?

Use of patient’s Social Security number instead of policyholder’s ID

What section must be completed when a patient has more than one insurance policy?

Coordination of Benefits

Which of the following errors could result in mispayment or misdirected funds?

Incorrect national provider identifier (NPI)

What is the main difference between fraud and abuse in medical insurance?

The intent behind the action

How does TRICARE define fraud?

Intentional deception or misrepresentation of fact for unauthorized payment

How does TRICARE define abuse?

Any action outside acceptable professional standards or medically unnecessary

Which of the following is an example of Medicare fraud?

Billing for services not provided

Which of the following is an example of abuse, not fraud?

Accidentally billing Medicare for non-covered services

What are potential consequences of Medicare fraud and abuse?

Criminal and civil liability

What is the NPI (National Provider Identifier)?

A 10-digit unique identifier for health care providers

If a provider doesn’t have an NPI, where should their identifying number be reported on the CMS-1500 form?

Shaded area of Box 24J

Which of the following errors can occur due to incorrect patient identification?

Claim rejection for non-member ID

Who may conduct an external appeal review of a denied insurance claim?

An independent third party

What does IPA stand for in healthcare insurance?

Individual Practice Association

Which statement best describes an IPA?

It’s a type of HMO where providers maintain their own offices

What type of insurance entitles members to services provided by participating hospitals, clinics, and providers?

HMO

In an HMO, who files the claim for payment?

The provider

In an HMO, can the provider bill the patient directly?

No, providers cannot bill the patient directly

A PPO is best described as:

A network of providers and hospitals contracting with insurers for discounted fees

When a PPO patient receives care from an out-of-network provider, what is the patient usually required to do?

File a claim for reimbursement

Under a PPO, who is responsible for the balance not paid by the insurance company?

The patient

What does “accepting assignment” mean for Medicare providers?

Agreeing to accept Medicare’s approved amount as full payment

What is a provider called if they do not accept assignment for all Medicare-covered services?

Nonparticipating provider

What is the maximum amount a nonparticipating Medicare provider can charge above the Medicare-approved amount?

15%

How much of the fee schedule amount are nonparticipating Medicare providers paid?

95%

What form can patients use to submit their own Medicare claim if needed?

CMS-1490S

What does APC stand for in Medicare reimbursement?

Ambulatory Payment Classification

APCs are used to reimburse which type of services?

Hospital outpatient services

Under the Outpatient Prospective Payment System (OPPS), the main unit of payment is the:

APC

What does ECT stand for in medical billing?

Electronic Claims Tracking

What is the main purpose of an Electronic Claims Tracking (ECT) system?

To monitor the status of claims electronically

What standard ensures providers are informed when electronic claims are received by the payer?

Functional Acknowledgment

Which of the following is an advantage of using an ECT system?

Real-time claim tracking and quicker payments

How quickly are claims typically received by a payer when submitted electronically?

Within 24 hours

Which feature is not a benefit of ECT systems?

Higher postage and paper costs

In an EHR system, how often is claim status automatically checked?

Every evening

What is typically not necessary when using an EHR for claims tracking?

Manual status checks for each claim

What is one disadvantage of manual claims tracking?

It is time-consuming and causes payment delays

What information should be recorded when manually tracking claims?

Claim filing date, insurance name, and amount billed

What is used in some practices to keep a list of insurance claims manually?

Insurance log book

What typically causes delays in payment when using manual claims tracking?

Payers do not inform providers of claim status

When a claim has not been paid within the appropriate time and no denial is received, what should be done?

Follow up with the insurance company

Before calling a carrier to check on a delinquent claim, which information should you have?

Provider’s NPI and patient’s group number

If the carrier has no record of receiving a claim, what should you do?

Resubmit a copy and verify the mailing address

What should you ask for when a claim is still “in process”?

An anticipated payment date

If a claim payment was sent to the patient instead of the provider, what should you do?

Send the patient a statement requesting payment

According to best practice, when should follow-up occur on open claims in an EHR?

After 7 days, then 3 days later if still in process

What does EOB stand for?

Explanation of Benefits

Who receives the Explanation of Benefits (EOB)?

The patient

Who receives the Remittance Advice (RA)?

The provider or medical practice

What is the main purpose of an EOB?

To inform the patient of the payment details of a claim

What does ERA stand for in medical billing?

Electronic Remittance Advice

What is the difference between an EOB and an RA?

The EOB is sent to the patient, and the RA is sent to the provider

Which of the following components would you find on an EOB?

Patient name, claim number, date of service, and charges

What does the “Amount Allowed” on an EOB represent?

The contracted rate agreed upon between the payer and provider

What does the “Not Allowed Amount” on an EOB mean?

The amount of a noncovered service or deductible

What does “Coinsurance” refer to on an EOB?

The percentage of costs the patient pays after deductible

What should a patient understand about an EOB?

It is not a bill, but an explanation of how the claim was processed

What is the “Claim Number” used for on an EOB?

To track the claim for questions or appeals

What does “Patient Responsibility” mean on the EOB?

The portion of the bill the patient owes

What document is similar in content to the EOB but sent to the provider?

Remittance Advice (RA)

What does EFT stand for in medical billing?

Electronic Funds Transfer

What does an ERA typically contain?

Claim details for multiple patients and payments

What happens if a transaction in an ERA does not match a patient’s record in the EHR?

The payment must be manually matched or entered

What is the purpose of a remark code on an EOB?

To provide explanations for payment adjustments or nonpayment

What should a medical assistant do after explaining the EOB to a patient?

Ask if the patient has questions and offer payment options

What information is needed to post insurance payments accurately?

Payer details, patient ID, CPT code, and charge amount

What information is required to manually post an insurance payment?

Date of payment or adjustment, payment amount, check/reference number, and insurance company name

What document contains the information needed to process and post an insurance payment?

Remittance Advice (RA) or Explanation of Benefits (EOB)

What does an “insurance adjustment” represent?

The difference between the amount billed and the contracted rate

What is another term that can be used for “insurance adjustment”?

Amount allowed or contracted rate

Why is accurate data entry important when posting insurance payments?

It maintains accurate financial records and business viability

When does billing a secondary insurance company occur?

After payment is received from the primary insurance

What is a crossover claim?

A claim sent from Medicare to a secondary insurer automatically

In secondary billing, where is the primary insurance information entered on the CMS-1500 form?

Block 9

What should be attached when submitting a secondary claim by paper?

A copy of the RA from the primary carrier

What is the main purpose of billing secondary insurance?

To have the secondary insurer pay remaining balances after the primary insurance