Understanding Medical Billing 2

Overview of Electronic Billing Process

• The session focuses on the electronic billing process within medical offices, covering the batch and submission of claims, review of claim reports, preparation of CMS-1500 forms, submission of secondary claims, payment posting, and patient ledger review.

Remittance Advice (RA)

• Definition: Notice of payment sent to providers, containing information about payments, adjustments, denials, and uncovered charges for medical claims.

• Importance of reviewing all segments of RA, not just denials:

  • Denials indicate no revenue; could be due to missing modifiers or coding errors.

  • Adjustments may arise from changes in contractual rates between providers and insurance companies.

Reconciliation Process

• Purpose: Verify that all submitted claims reflect in reimbursements received.

• Involves checking the remittance advice against submitted claims to ensure accurate recordkeeping.

• A failure to reconcile could lead to loss of funds.

Electronic Remittance Advice (ERA)

• Definition: Electronic version of the remittance advice that enables automatic posting of payment details in practice management systems.

• Manual adjustments are still needed in the system to ensure accurate financial records.

Posting Insurance Payments

• Batch Payment Entry: Claims should be batched to simplify posting payments received based on ERAs, RAs, or EOBs.

• Adjustments must be made when insurance payment amounts differ from provider charges.

• Ensure that all payments are allocated correctly to the corresponding patient accounts.

Handling Denials

• Common Causes for Denials:

  • Missing modifiers or incorrect diagnosis codes.

  • Lack of pre-authorization.

  • Procedure codes not aligning with diagnosis.

• Importance of documenting reasons for denial for future follow-ups and to support revenue recovery efforts.

Posting Payments for Noncovered Services

• Evaluate denied claims due to medical necessity.

• Action: May require updating CPT codes or resubmitting claims for payment.

• Noncovered services may necessitate patients to pay out of pocket.

Understanding Financial Terms

• Familiarity with terms such as deductibles, co-payments, allowed amounts, and adjustments is crucial for effective patient communication and billing.

  • Deductibles: Patient may need to pay a certain amount before coverage begins.

  • Co-Payments: Fixed amounts patients pay for particular services or medications.

Aging Reports

• Used to track pending insurance claims based on time intervals:

  • Current to 30 days.

  • 31 to 60 days.

  • 61 to 90 days.

  • 91 to 120 days.

  • Greater than 120 days.

• Essential for following up on delayed payments and ensuring timely revenue collection.

Patient Statements

• Statements must communicate total charges clearly, outlining what has been submitted to the insurance and remaining balances.

• Monthly statements to patients are crucial for maintaining open lines of communication about their accounts.

• Incorporates electronic methods such as patient portals for convenience.

Journal or Day Sheet

• Provides a summary of daily financial transactions prior to posting batches.

• Allows identification of errors before locking transactions in the system.

Conclusion

• Engaging with all aspects of the revenue cycle, from claims submission and payment posting to denial management, is vital for operational efficiency in medical billing.

• Continuous learning and attention to detail ensure smooth communications with patients and insurance companies, enhancing the overall revenue cycle.

• Thank you for participating in this educational session.