Healthcare Billing & Revenue Cycle Management

Revenue Cycle Management (Chapter 26)

• The revenue cycle involves managing the financial side of a medical business.
• It includes the administration of financial transactions resulting from medical encounters between patients and providers/facilities/suppliers.

Components of the Revenue Cycle

• Procedure/service coding and charge capture.
• Claim submission (billing).
• Collecting payments from insurance companies and patients.

Revenue Cycle in Detail

• Insurance Eligibility Verification: Checking if the patient's insurance covers the intended services. This often happens during appointment scheduling. In the example, the instructor had to verify insurance eligibility before even scheduling an appointment for her son.
• Patient Demographics Entry: Entering the patient's information (including insurance details) into the practice management system (PMS). The PMS is the administrative system—a part of the EHR—that handles billing and other administrative tasks.
• Medical Record Retrieval for Coding: Retrieving medical records to determine appropriate codes for billing purposes.
• Coding Documents: Assigning relevant codes to the services and procedures performed.
• Claim Submission: Sending claims to the insurance company electronically or via paper.
• Payment Posting: Recording payments received from insurance companies.
• Follow-Up and Denial Management: Addressing denied claims and following up on outstanding payments.
• Report Generation: Creating reports for the client or practice.

Stages of the Revenue Cycle

• Patient Registration: Entering patient insurance and demographic details into the system.
  • Insurance eligibility is checked when the appointment is scheduled and again right before the patient comes in for their visit.
  • The patient's address and insurance details are verified upon check-in, and any co-pays are collected and entered into the system.
  • A receipt is provided to the patient for every payment made.
• Patient Visit: During the visit, all procedures and services are coded using CPT and HCPCS codes.
  • The practice management system automatically assigns a fee based on these codes; this is similar to how prices pop up when items are scanned at retail stores like Walmart or McDonald's.
  • Fee schedules can be updated as needed but require administrative privileges, similar to how installing programs on computers requires administrator access.
• Charge Entry: Capturing all charges related to the visit.
• Claim Submission: Electronically generating and submitting claims to the insurance company for adjudication.
  • Adjudication: The insurance company reviews the medical claims for medical necessity, ensuring that the codes (CPT and ICD-10) match and are appropriate.
• Electronic Remittance Advice (ERA): The practice receives an ERA, which details each code, the charged amount, and what was paid or denied.
• Payment Posting: The payment information from the ERA is entered into the patient's account. For example, if a 99201 code was billed at 213, and the insurance paid 166.10, this payment is posted, and the system calculates the patient's remaining balance.
• Explanation of Benefits (EOB): The patient receives an EOB, which is similar to the ERA, explaining what the insurance paid and what the patient can expect to be billed.
• Statement Generation: If there's a balance due, the practice management system generates a statement that is sent to the patient.

Bookkeeping Responsibilities

• Collecting co-payments and payments is a key bookkeeping task.
• A bookkeeper records financial transactions, maintaining records of accounts receivable (money owed to the practice) and accounts payable (bills the practice needs to pay).
  • Accounts Receivable: Money the practice will receive from patients and insurance companies.
  • Accounts Payable: Money the practice owes for its expenses.
• Accurately posting payments to patient accounts.
  • Posting involves transferring information from one record to another; for example, entering that a patient had a urinalysis, hemoglobin test, and office visit.
  • Each service and procedure is identified with a CPT or HCPCS code; modifiers may also be needed.

Visit Capture Screen

• Procedure and diagnostic codes are found in the visit capture screen of the EHR. The visit capture screen is like an electronic version of an encounter form, charge slip, or super bill.
• Patient account numbers or medical record numbers (MRNs) are assigned by the EHR and identify the patient; this can be letters or numbers.

Manual Posting

• Day Sheet/Pegboard System: A manual way of recording financial transactions.
• Debit: A charge added to an existing balance. For example, if a patient owes 20 and incurs a 50 charge, the new balance is 70.
  Balance{new} = Balance{old} + Debit
• Credit: A payment subtracted from the existing balance. For example, if a patient has a 50 visit, owes 20, and pays 70, the balance is 0.
  Balance{new} = Balance{old} - Credit
• Balance: The difference between debits and credits.
  • A debit balance means the amount paid is less than the total due.
  • A credit balance means the amount paid is greater than what was due.

Encounter Form

• Includes the patient's name, record number, date of encounter, and other relevant information.
• Lists common procedures done in the office along with their HCPCS or CPT codes; also known as charge slips or super bills.
• In an EHR, the provider typically enters charges in the visit capture screen.
• Electronic encounter form includes CPT codes, descriptions, patient information (name, address, phone number), payer information (insurance company), copay, visit location and type, date of birth, date of service, and diagnostic codes.
• Diagnostic codes must match with CPT codes for medical necessity.

Electronic Fee Schedule

• An electronic fee schedule shows the prices for different procedures and services. Students are working with these in their MOS (Microsoft Office Specialist) training.

Visit Capture Screen

• In the visit capture screen, diagnoses and procedures are selected, and a business summary is generated.
• A receipt must be given to the patient after each payment, regardless of amount or payment method.
• Cash receipts should be balanced at the end of each shift, with a coworker verifying the count.

Claims Processing

• Procedure and diagnostic codes are essential for transmitting a claim.
• The sooner coding and entry are completed, the faster the turnaround for payments.

Patient Ledger

• A ledger tracks all financial activity for a patient, including charges, services rendered, payments made by the patient or insurance carrier, and adjustments.
• Adjustments: Corrections to a patient's balance (e.g., a write-off, such as the instructor's dentist adjusting his balance because the insurance claim was filed incorrectly).
• Example scenarios highlight issues such as providers not being in-network or incorrect information being submitted to insurance companies.

Patient Statement

• A patient statement shows the procedures performed, the amount charged, payments made by insurance, and the remaining balance due.

Day Sheet

• A manual payment receipt journal for the day, listing all patient charges and receipts. Most entries are in the practice management system, but a manual journal is kept as a backup.
• Transactions are recorded chronologically and include payments received by mail or in person.
• The total amount of cash and checks is recorded on a cash control sheet.

Cash Control Sheet

• Daily or monthly record of income, including cash and checks, deposits made, and amounts not deposited.
• The balance is carried forward to the next day's sheet.

Batch Journal

• A computerized version of the day sheet, used in practice management systems.
• It posts charges, adjustments, and credits.

Advantages of Computerized Systems

• Speed: Fast processing due to electronic screens and databases.
• Efficiency: Improved process efficiency.
• Automation: Quick and accurate generation of accounting documents (invoices, statements, etc.).
• Calculations: Automatic calculations of charges and totals.
• Accuracy: Reduced errors compared to manual entry.
• System Integration: Business transactions recorded and linked to accounts.
• Concurrent Information: Real-time updates across systems, integrating the EMR and practice management programs.
• Availability of Information: Instant access to information.
• Management Information: Useful reports for accounting and collections.
• Legibility: Eliminates issues with handwriting.
• Staff Motivation: Opportunity for staff to learn new skills and stay up-to-date.
• Reduction of Frustration: Easier to manage accounts and reduce stress.
• Cost Savings: Reduced staff time and audit expenses.

Disadvantages of Computerized Systems

• Computer System Problems: Power failures, viruses, and hacking.
• Garbage In, Garbage Out: Inaccurate data entry leads to inaccurate results. For example, entering a patient's name incorrectly or failing to use their legal name can cause issues with insurance billing.
• Proper Accounting System: Requires the accounting program to be properly set up.
• Computer Fraud: Risks of HIPAA violations and data breaches.

Communicating Fees to Patients

• Medical assistants may need to discuss fees with patients, including insurance policy information and medical bills.
• They should be prepared to discuss payments prior to patient care, especially with high-deductible insurance plans.
• Informing patients about costs in advance helps them be prepared for payments.

Cost Estimate Sheet

• A cost estimate sheet includes the patient's name, date, scheduled surgery, hospital details, and itemized costs (surgeon, assistant surgeon, anesthesiologist, hospital stay).
• The patient typically signs the cost estimate sheet.

Payment Schedules

• Assisting patients with planning a payment schedule can ease their concerns about finances.
• If a patient is unhappy about medical costs, it is important to explain the charges clearly and professionally.
• The provider should be informed if a patient is unhappy with the cost or treatment.

Discounts

• Discounts are less common and may be illegal in certain circumstances (considered kickbacks).
• Medical assistants should not offer discounts without authorization.
• Professional discounts may be authorized by the provider, such as for other physicians or medical staff.
• Discounts for patients experiencing financial hardship must be based on established policies.
• Routine waivers of Medicare deductibles and co-pays are unlawful and can result in false claims, violation of anti-kickback statutes, and excessive utilization of Medicare services.
• For patients without insurance, alternative funding and payment plans (such as government assistance or Medicaid) should be offered.

Communicating Payment Options

• Clearly communicate payment expectations and options (cash, check, credit card) to patients.
• For example, "Your co-payment for today is 25. Will that be cash, check, or charge?"

History of Bookkeeping

• The lecture references traditional paperwork systems.
• Students will practice pegboarding (manual posting of payments) and electronic data entry in their MOS training.