Medical Insurance: Billing Processes and Procedures

Billing Processes and Procedures

Billing processes and procedures require assigning a participatory contract that outlines parties to a contract, type of service, billing, and reimbursement as well as how payments will be collected. According to Valerius, Bayes, Newby, & Seggern (2008), billing processes and procedures involve ten steps. The first step is to pre-register patients which require a patient to be registered and give his or her demographic information such as name, age, sex, contact address, nature of the medical problem, type of insurance, relationship of the insured to the patient and clarification of whether there is need for referrals (Deutscher, 2010).

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This information also helps to determine whether the cause of the medical problem is work-related or an auto accident. The information is also used in determining whether commercial insurance or other insurance is primary. In addition, medical staff are obliged to ensure that the information is correct and complete (Valerius, Bayes, Newby, & Seggern, 2008).

The second step is to establish financial responsibility for the visit. Information captured in this step includes the name of the insurer and insured, contact address and ID number of the insurance company as well as the type of policy. Insurance information should be obtained before the first appointment with the patient to allow verification of benefits and eligibility. However, this information should also be accurate to avoid rejection (Valerius, Bayes, Newby, & Seggern, 2008).

Check in of patients is the third step whereby, the patient fills a sheet that reveals more personal information, medical information, and insurance information. Normally, the patient signs an assignment of benefit that authorizes the practice to treat the insurer, to pay, and the insured to be responsible for payment. The patient is sometimes required to sign an advance beneficiary note (ABN) if a certain procedure or test that is to be performed will not be covered by the insurer (Valerius, Bayes, Newby, & Seggern, 2008). Moreover, the patient is at liberty to forego the procedure or have it under his/her own cost.

The fourth step entails patient checkout, which involves giving the patient the prescription, any other necessary information, and an appointment if necessary. Information on procedure and diagnosis is coded using the current procedural terminology and the ICD-10-CM. In the fifth step, a review of coding compliance is done to ensure that the coding process is in line with the official guidelines required by the insurer. The sixth step involves checking billing compliance, including verification of all information to ascertain its correctness before being transmitted. In the seventh step, claims are transmitted and verified medical claims are transmitted to the insurer electronically.

In the eighth step, the insurance company does adjudication. this involves determining whether the medical claim will be paid fully, partially, or rejected. The adjudication process starts with reviewing and evaluating the medical claim by a medical practitioner from the insurance company. Here, approved claims are paid for, while rejected claims are sent to the provider in form of Explanation of Benefits (EOB) or Remittance advice. EOB is a form that is sent to the insured by the insurer explaining medical charges that the insurer will cover. It gives details of service rendered, the fee charged by the doctor and reductions by the insurer as well as an amount to be paid by the patient.

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The ninth step involves the generation of patient statements, which are sent to the patient showing an account of payment made by the insurer and what the patient has to pay if any. The last step is a follow-up on the patient’s payments and collection. After all, payments have been finalized, medical, financial, and medical reports of the patient are filed and stored (Valerius, Bayes, Newby, & Seggern, 2008).

  1. Differences between facility claims and professional claims
  2. There are various differences between facility claims and professional claims, one of them being that the former has revenue and ICD9 surgical procedure code, unlike the professional claims. In coding facility claims, the principle diagnose of the claim is the only consideration; while in professional coding, information regarding all services rendered after diagnose is coded. Another difference lies in the forms that are used whereby, different terminologies will be applied on the policy statement depending on whether it is intended for facility of physician/professional (Mundt and Roeske, 2005, p. 217).

Comparison of the contents of commercial, managed care and federal insurance plans

Commercial, managed care and federal insurance plans have similarities in that, all the plans are health plans that seek to cover the insured by paying either part or full payment of bills incase of accident or illness. The insured or the guardian incurs costs either in terms of premiums or in terms of minimal lump sum. However, these plans differ in that: managed care plans emphasize that there must be a verified purpose before provision of any health care.

It is preventive in nature thus provides incentives to maintain good health. The plan covers only part of the costs and makes it difficult to access expensive health care. Moreover, it has a limit on the health care providers to be visited or consulted and the treatment to be given (Simmers et al, 2008, p. 34). On the other hand, federal insurance plan is run and owned by the state and comprises two programs – Medicare and Medicaid.

Medicare provides health care to people who are above 65 years old, those with disability and have benefited from social security benefits for at least two years as well as those with terminal renal disease at its critical stage and special category of children (Simmers et al, 2008, p. 33). It covers pharmaceutical, medical, and hospital insurance. Medicaid provides health care to low income earners, children who qualify for public assistance and the disabled. On the contrary, commercial insurance plan is owned and run by private companies. It is open to all individuals provided they can meet the requirements by the company i.e. payment of premiums. It is at the discretion of the individual to decide on the service provider. It includes self-insurance plans, managed care plans, and traditional indemnity benefit plans.

Major Payment and Reimbursement Systems Found In the US and Germany

The Fee-for-Service Reimbursement

In both countries, a fee is charged for each individual service provided by the medical practitioner and billed or sent to the insurance company who then pays. In both countries, the insured is at liberty to choose the health centre to attend for treatment though co payments are high than in any other system of payment (Anon, 2010).

Episode-of-Care Reimbursement

This method requires that a lump sum amount is paid for all the services rendered related to a certain disease. Both countries use episodes the unit of payment rather than individual services. In both countries, an episode of care refers to health services rendered on a particular disease or for a certain period in a relatively continuous manner.

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Inpatient Hospital Services

Diagnosis related group classify patients with similar medical profiles and require similar resources. Each DRG has weight that is used to determine payment, the higher the weight, the higher the payment (Anon, 2010).

Home health prospective payment system

The diagnosis related group known as the home health resource group is based on a 60-day episode. Normally, an episode is of 60 days and the amount to be paid is fixed and predetermined after an adjustment of patient features likely to affect the costs. A reward for agents who are able to keep each episode cost below payment rate is always provided, and if actual costs are less than amount predetermined, the hospital is entitled to the full amount; however, if the actual costs exceed the predetermined amount, the hospital pays for the deficit (Stein et al, 2006, p. 16).

Differences between the two countries

The first difference in health insurance systems between US and Germany is that, while the US health care system is “based on consumer sovereignty or private insurance model”, Germany’s system is “based on social insurance model” (Anon, 2010).

Secondly, in US system, ambulatory care and inpatient care providers are reimbursed based on the service rendered or per capita, with the payment fluctuating depending on the insurer. In Germany, ambulatory and inpatient physicians are normally compensated with a certain amount agreed upon by representatives of both the patients and physicians (Anon, 2010).

Third, in terms of expenditure for health care, US has the highest more so following the health insurance reforms that tend to delimit the extent of cover for the citizens in addition to making health insurance somehow mandatory. Germany on the other hand restricts the spending levels for health care, while insurance covers are voluntary rather than mandatory (Anon, 2010).

HIPAA Privacy Rule and Security Rule

The Health Insurance Portability and Accountability Act (HIPAA) is a federal government health agency mandated to ensure that entities entrusted with personal health information perform their functions with confidentiality, thus giving individuals the rights to ensure their medical information is never divulged to third parties. However, the agency may permit disclosure of such information on specific and special cases especially where the information will be crucial for the care or treatment of the patient (U.S. Department of Health & Human Services, 2010).

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The agency gives patients the liberty to take care of their health information including demanding to know and understand when and where their health information will be used, as well as obtaining all copies of their health records. In addition, the agency has the powers to institute legal proceedings for both civil and criminal offences on any violators of the privacy rights (Kavaler and Spiegel, 2003, p. 413).

In performing their medical functions, medical officials are mandated and required to comply with the established privacy rules, and this is normally done procedurally. First, the medical office must notify and ensure that all patients understand their rights appertaining to health privacy as well as ensuring that the patients are conversant with kind of usage their health information may be required. Second, the office is mandated to adopt and implement privacy procedures in all their roles, as well as ensuring such procedures are followed in health institutions and health plans. Third, medical office must offer employees effective and high quality training to ensure that they clearly understand their roles in health insurance as well as privacy procedure.

Fourth, the office must ensure that there is a designated individual whose role is to enforce the implementation of the privacy procedures and ensuring that such procedures are followed to the latter. Lastly, the medical office must ensure that individual patient records are kept in safe custody where only authorized personnel can access, and even in such cases, accessibility is restricted through proper sanctioning.

HIPAA usually requires that health information of patients is stored confidentially, and be shared only for treatment purposes. The standards enforced by HIPAA are very important during the processing of insurance claims more so given that the agency emphasizes storage of data electronically, and the same submitted in a standardized format with security coding. In addition, since data is stored electronically, there is guaranteed accuracy as well as real-time processing, thus eliminating the delays and unnecessary costs associated with paper claims. Moreover, HIPAA ensures that processing of insurance claims is done correctly the first time while waiting time for payment of claims is significantly reduced.

Classifications, Taxonomies, Nomenclatures and Terminologies in Claims Processing

In processing of insurance claims, there are various classifications, taxonomies, and terminologies used to ensure that the process runs smoothly. In terms of classification, the insurance claims are usually classified into various classes depending on the type of claim required such as inpatient, outpatient, hospice, and laboratory and so on. In addition to these, Green and Rowell (2007, p. 133) indicate that there are other supplemental classifications involved in claim processing which include V-codes and E-codes each of them using different taxonomies. Claim processing also includes various taxonomies, each of which will be uniquely coded based on the classification of the claim.

This is done to ensure that the billing and payment of claim is made accurately, for instance, there is national provider taxonomy and Medicaid taxonomy, both having different coding formats (Department of Health and Social Sciences, 2010). In terms of terminologies, various vocabularies are used in claim processing for instance, Accountable Health Partnership (AHP), Contract Health Service (CHS), and Electronic Claim Submission (ECS) and so on.

The role of the Office of Inspector General (OIG) in coding compliance, auditing and reporting

The office of Inspector General is government office whose mandate under the Public Law is to ensure that the Department of Health and Human Services upholds integrity in its programs and that all the intended beneficiaries derive the best services from the programs so initiated (U.S. Department of Health and Human Services, 2010). The OIG carries the functions of auditing, investigating and inspecting the DHHS to ensure that all coding standards in relation to medical insurance are complied with at all times.

In addition, the office ensures that internal controls in health insurance providers and health institutions are of high quality in order to mitigate risks, and in so doing, the OIG strives to ensure that assignment of codes is appropriate, all rules in medical insurance are followed, medical records are properly documented and preserved, and updating of coding guidelines routinely. In terms of reporting, the OIG ensures proper reporting by all providers, who in turn must ensure correct records are filed always. In this case, OIG has identified a risky area that may invalidate reporting that involves improper reporting on ‘pass-through items’ as well as some invalid payment and claims.

Quality Improvement Organization

This is a program dealing with the improvement of the quality of care given to clients, ensuring the Medicare Trust Fund’s integrity is protected at all times, and mediating for the beneficiaries in cases of complaints. One of the organizations that are involved in QIO programs is Center for Medicare and Medicaid Services (CMS) whose mandate is to ensure patients get the highest quality of care through continuous improvements.

CMS was born in 1965 in Missouri after its programs, Medicare and Medicaid, were legalized. Over the years, the organization has undergone various changes; however, the benefits of its programs are enormously felt to date. As an agency with the responsibility to ensure quality of care, CMS needs to work with integrity and transparency, thus it is for this reason that it has to publish its annual reports and file them with the congress every year.

CMS endeavors its QIO programs by initiating the project of Care Transitions targeting the improvement of care quality “for Medicare beneficiaries who transition among care settings through a comprehensive community effort” (CMS, 2010). This organization makes use of Continuity Assessment Record Evaluation strategy to ensure that beneficiaries get the sustainable care that will keep them away from health care facilities due to specialized treatment they receive from such facilities.

Professionalism in health care

Health care ethics require that all medical personnel to act professionally when conducting their roles. Generally, the medical profession has code of ethics that govern the practice, with the health practitioner required to exercise some fundamental principles when dealing with patients. These principles as highlighted by Brennan, et al (2002, p. 243) include “principle of primacy of patient welfare, principle of patient autonomy and the principle of social justice.” In addition, having the right morals and ethics is crucial in order for the practitioner to exercise effective decision-making as well as to cultivate the most appropriate behavior (Makey, 2005).

Different people have different personal traits, and the way they make use of these traits as well as the characters they demonstrate the level of professionalism they embrace. Being a competent health care provider will not only require having the a good set of character, but also understanding the importance of putting the plight of the patients before other personal matters and ensuring that any actions taken will go a long way in saving a life of someone.

The Role of Federal Registrar in Insurance Claim Processing

The federal registrar plays a crucial part in insurance claim processing. The statute requires that the federal registrar should publish and establish the criteria and standards for FIs and carriers every year to ensure that the evaluation procedure runs smoothly; this is in addition to being custodian of the federal register. This is basically the register that carries the policies, rules and procedures that the medical insurance providers and carriers should comply with when handling or processing claims.

In the recent past, a rule was proposed and passed requiring all the entities to adopt electronic information capturing model with a standardized format. In this case, the entities will have to use Electronic Data Interchange to share patient information with other health care providers, in a bid to ensure confidentiality. This rule was published in the federal register and ensures that improvement of “Medicare and Medicaid programs in particular and the efficiency and effectiveness of the health care system in general, by encouraging the development of standards and requirements to enable the electronic exchange of certain health information” (Thompson, n.d). Indeed, this rule will ensure that beneficiaries are able to access quality health care all times while insurance claims are processed with speed and accuracy.

References

Anon. (2010). International Comparisons of Health Care – Overviews Of Selected Health Care Systems. Web.

Brennan, T., et al. Medical Professionalism in the New Millennium: A Physician Charter. Annals of Internal Medicine, 136.3:243-6.

CMS. (2010). Quality Improvement Organization. Web.

Department of Health and Social Sciences. (2010). Using Taxonomy in ProviderOne. Web.

Deutscher, S. (2008). Pre-registration. Web.

Green, M. A. and Rowell, J. A. (2007). Understanding Health Insurance: A Guide to Billing and Reimbursement. OH, Cengage Learning. Web.

Kavaler, F. and Spiegel, A. P. (2003). Risk management in health care institutions: a strategic approach. Jones & Bartlett Learning.

Makely, S. (2005). Professionalism in health care: a primer for career success. Volume 1. Pearson Prentice Hall.

Mundt, A. J. and Roeske, J. C. (2005). Intensity modulated radiation therapy: a clinical perspective. PMPH-USA. Web.

Simmers, L. et al. (2008). Diversified Health Occupations. OH, Cengage Learning. Web.

Stein, J. A. et al. (2006). Medicare Handbook 2007. NY, Aspen Publishers.

Thompson, T. G. (N.d). Health Insurance Reform: Modifications to Electronic Data Transaction Standards and Code Sets. Department of Health and Social Sciences. Web.

U.S. Department of Health and Human Services. (2010). About the Office of inspector General. Web.

Valerius, J. et al. (2008). Medical Insurance: An Integrated Claims Process Approach. NY, The McGraw-Hill Companies.

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