HC Ch 9: RCM: billing, coding, and collections

Final

what are the cash management fundamentals?

accounts receivable, accounts payable, collections, and patient billing

what are accounts receivable?

money owed to the organization for services provided

what are collections?

systematic approach to secure payments for services rendered

what are accounts payable?

financial obligations the organization owes to others

what is patient billing?

key process for ensuring timely service reimbursement

what is the billing and coding process?

patient care → documentation → coding → claim submission

what do each of the processes entail?

patient care: initial medical encounter and service delivery

documentation: recording diagnoses and procedures performed

coding: translating services into standardized codes

claim submission: sending billable information to payers

what is the patient care phase?

• patient encounter: the medical office visit is the foundation of the billing process

• information gathering: provider collects vital medical information from the patient

• service delivery: medical care, treatments, and procedures are performed

• care conclusion: medications, prescriptions, and referrals are provided as needed

what is medical records management?

• EMR

• EHR

what is the difference between EMR & EHR?

• EMR: digital version of paper charts in a single practice, contains patients medical history, limited to one practice location, facilitates accurate coding

• EHR: comprehensive patient records across providers, broader than EMR systems, accessible by multiple providers

What is the ICD-10 coding system?

it contains about 70,000 diagnosis codes, significantly more detailed than previous version

• international classification of diseases: standardized coding system for diagnoses and medical conditions

• diagnostic purpose: identifies the patients diagnosis or reason for medical consultation

• evolving system: updates regularly as healthcare industry identifies new conditions

CPT coding system

maintained by the American medical association - CPT codes are essential for proper reimbursement

• current procedural terminology: standard codes for medical services, procedures, and treatments

• treatment identification: specifies procedures performed for diagnosed conditions

• code matching: CPT and ICD codes must align in terms of medical necessity

HCPCS Coding system

Healthcare common procedure coding system: codes for supplies, equipment, and non physician services

• transportation services: includes ambulance and medical transportation coding

• medical supplies: covers durable medical equipment like wheelchairs and crutches

• situational usage: not required for all patient visits or encounters

What are the billing code relationships?

ICD-10 - diagnosis

CPT - procedure

HCPCS - supplies

DRG - inpatient stay

what are DRGs?

diagnosis related groups - used by medicare and others to calculate inpatient reimbursement, patients are categorized into groups with similar resource utilization

• resource calculation: assigns balue to providers inpatient resources

• severity-based: higher acuity requires more resources

• applied post discharge: finalized after hospital stay completion

what is the claims preparation process?

thorough preparation minimizes claim denials and accelerates payment

• charge master reference: consult organizations established service list with prices

• claims scrubbing: internal review to verify claim accuracy

• clean claim creation: error-free claims ready for submission

claims submission process

• capture all charges: record all medical visit activities and associated costs

• final review: verify all medical billing codes for accuracy

• submit to payer: send claim to insurance provider in required format

• await response: monitor for acknowledgment of claim receipt

What is the EOB and Superbill?

• explanation of benefits: insurance company’s response to a claim

  • summarizes diagnosis and treatment

  • lists charges for services

  • shows amounts covered by insurance

  • indicates patient responsibility

• superbill: detailed service record for direct patient billing

  • lists of diagnoses and treatments

  • includes provider charges

  • details supplies and related costs

  • used when patients bill insurers directly

what does the accounts receivable management entail?

1. submit claims: initiate billing process for services rendered

2. monitor payments: track incoming revenues from all payers

3. manage denials: address rejected claims promptly

4. resubmit claims: correct and reprocess denied claims

what is claims adjudication?

the process by which insurers evaluate and make final payment decisions on claims - this process ensures claims meet payer requirements before payment

• submission methods: electronically or manually

• decision outcome: claims may be approved, partially approved, pending additional information, or denied

what is the adjudication process flow?

1. claims submission: provider sends complete claim to insurer

2. claims review: insurer evaluate claim against policy guidelines

3. determination: decision made on payment amount

4. payment processing: approved claims proceed to payment

What are the adjudication review stages? (3)

1. initial review: check for data errors in patient, providers, diagnosis or treatment information

2. automatic review: verify patient policy coverage for claimed medical services

3. clinical review: examine medical necessity and preauthorization requirements

what are the adjudication outcomes?

1. full approval: claim meets all requirements and proceeds to payment

2. partial approval: some services approved while others denied

3. denial: payment refused after documentation review

4. pending: additional information needed before decision

how do you improve claims processing?

• performance analysis: track key metrics for continuous improvement
  denials management: document and streamline appeals process

• patient access: improve registration and eligibility verification

• technology upgrades: implement advanced billing and coding systems

what are the collections processing fundamentals?

• documented collections process: establish clear procedures for payment collection and follow up

• collections aging schedule: track accounts receivable by time intervals since billing

• patient accounts receivable: measure average collection time for outstanding reimbursement

• performance monitoring: regularly assess collection efficiency and identify improvement areas

what are the receivables management impact?

revenue support: patient services revenue directly funds organizational projects and initiatives

payer mix analysis: breakdown of payer types reveal revenue stream diversity

payer performance: historical data shows claim acceptance rates and payment timeliness