PowerPoint® to accompany
Medical Assisting
Chapter 15
Second Edition
Ramutkowski • Booth • Pugh • Thompson • Whicker
Copyright © The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
1
Processing Health Care Claims
Objectives
151 List the basic steps of the health insurance claim
process.
152 Describe your role in insurance claims processing.
153 Explain how payers set fees.
154 Define Medicare and Medicaid.
155 Discuss TRICARE and CHAMPVA healthcare
benefits programs.
156 Distinguish between HMOs and PPOs.
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Processing Healthcare Claims
Objectives (cont.)
157 Explain how to manage a workers’
compensation case.
158 Apply rules related to coordination of benefits.
159 Describe the healthcare claim preparation
process.
1510 Complete a Centers for Medicare and
Medicaid service (CMS1500) claim form.
1511 Identify three ways to transmit electronic
claims.
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Basic Insurance Terminology
Medical insurance (health insurance) is a written
contract policy between a policy holder and a health
plan.
Terms To Know
First Party The patient policy holder.
premium Amount of money paid by the policy holder to the
insurance carrier.
Second Party The physician who provides medical services.
benefits
Medical services provided.
Third Party The health plan.
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Basic Insurance Terminology (cont.)
Deductible a fixed dollar amount that must be
paid or met once a year before thirdparty payers
begin to cover expenses.
Coinsurance a fixed percentage of coverage
charges after the deductible is met.
Copayment a small fee that is collected at the
time of the visit.
Exclusions uncovered expenses.
Formulary an approved list of drugs.
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Basic Insurance Terminology (cont.)
Liability Insurance
Covers injuries caused by the insured or on their
property.
Disability Insurance
Insurance that is activated when the insured is
injured or disabled.
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Types of Health Plans
Managed Care
Plans
• Controls both the financing and delivery of healthcare
to policy holders.
• Both policy holders and physicians (participating
physicians) are enrolled by the Managed Care
Organizations (MCOs).
• In a capitated managed care plan, providers are paid
a fixed amount regardless of the number of times the
patient is seen by the physician.
• Oldest and most expensive type of plan
• Covers costs of select medical services
• Amount services determined by the physician
Fee For Service
Plans
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Types of Health Plans (cont.)
Preferred Provider Organization (PPO)
A network of providers to perform services to
plan members.
Physicians in the plan agree to charge discounted
fees.
Health Maintenance Organization (HMO)
Physicians who contract with HMOs are often
paid a capitated rate.
Patients pay premiums and a small copayment,
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often $10.
Types of Health Plans (cont.)
Medicare is the largest federal program that provides
healthcare to citizens aged 65 and older.
Managed by the Centers for Medicare and Medicaid
Services (CMS)
Part A
Hospital insurance available to anyone receiving social security
benefits.
Part B
Covers physician services, outpatient services, and many other
services.
Available to persons 65 and older that are US citizens
A premium must be paid by all unlike Part A.
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Types of Health Plans (cont.)
Types of Medicare Plans
FeeforService: The Original Medicare Plan
Allows the beneficiary to choose any licensed physician
certified by Medicare.
A deductible was charged then Medicare paid 80 percent
and the patient paid 20 percent.
Medicare + Choice Plans
Allows patients to sign up for one of three plans:
Medicare Managed Care Plans
Medicare Preferred Provider Organization Plans (PPOs)
Medicare Private FeeforService Plans
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Types of Health Plans (cont.)
Medicare Managed Care Plans
• Medical care is managed by a primary care physician (PCP)
• A small copayment for each visit is required but no deductibles
• Some plans allow services from providers outside the network
Medicare Preferred Provider
Organization Plan
• Patients do not need a PCP
• No referrals are required
• Costs less to use referrals
within the network
Medicare Private FeeFor
Service Plan
• Operated by a private insurance
company
• Copayment may be required
• Physicians can bill patients for
amount not covered by the plan
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Types of Health Plans (cont.)
Medicaid
A healthbenefit program designed for:
Lowincome Blind Disabled patients
Temporary assistance to needy families
Foster children Children born with disabilities
Not an insurance program
Funded by the federal and state government
Provides assistance such as:
Physician services Emergency services
Laboratory and xrays SNF care Vaccines
Early diagnostic screening and treatment for minors
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Types of Health Plans (cont.)
Medicaid
Accepting
Assignment
Physicians
agreeing to treat
Medicaid
patients also
agree to the set
reimbursements.
Medi/Medi
Medicaid
Older or disabled
patients unable to
pay the difference
between the bill
and the Medicaid
payment may
qualify for both
Medicaid and
Medicare.
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Types of Health Plans (cont.)
Medicaid
State Guidelines
• Medicaid cards are issued monthly, so always ask the
patient for a current card.
• Ensure that the physician signs all claims.
• Authorization must be received in advance for
medical services.
• Verify deadlines for claim submissions.
• Treat Medicaid patients with the same
professionalism and courtesy that you extend to other
patients.
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Types of Health Plans (cont.)
Tricare and Champva
Run by the Defense
Department
Healthcare benefit for
families of uniformed
personnel and retirees
TRICARE for Life is
offered to persons 65 and
older that are eligible for
both TRICARE and
Medicare.
Covers the expenses of
dependent spouses and
children of veterans with
disabilities
Also covers surviving
spouses and dependent
children of veterans who
died in the line of duty or
from serviceconnected
disabilities
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Types of Health Plans (cont.)
Blue Cross and Blue Shield
A nationwide federation of nonprofit and for
profit service organizations that provide
prepaid healthcare services to subscribers.
Specific plans for BCBS can vary greatly
because each local organization operates
under its own state laws.
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Apply Your Knowledge Answer
A 72year old disabled patient is being treated at an
office that accepts Medicaid. The total office visit is
$165, but Medicaid will only reimburse a set fee of
$125. In this situation, what is the most likely
solution?
a. Bill the patient for the balance due.
b. Expect the balance to be paid at the time of service
c. This patient more than likely has a secondary employer
health insurance plan.
d. This patient may qualify for the Medi/Medi coverage.
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Workers’ Compensation
Insurance covering accidents or diseases
incurred in the workplace.
Federal law requires that employers purchase
a minimum amount of workers’
compensation insurance.
Coverage Includes
Basic medical treatment
Rehabilitation costs
Weekly or monthly amount paid
to patient while not employed
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The Claims Process: An Overview
Services Provided by
the Physician’s Office
• Obtain patient information
• Determine diagnosis and fees
based on services provided
• Records patient payments
• Prepares healthcare claims
• Reviews the insurer’s
processing of the claim
Tasks Supported by using
a Billing Program
• Gathering and reporting patient
information
• Verifying patient’s insurance
coverage
• Recording procedures and
services performed
• Filing insurance claims and
billing patients
• Reviewing and recording
payments
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Obtaining Patient Information
Personal Information
• Name
• Home address
• Telephone number
• Date of birth
• Social security number
• Emergency contact person
• Current employer
• Employer address and telephone number
• Insurance carrier and date of coverage
• Insurance group plan
• Insurance identification number
• Name of subscriber or insured
Release Signatures
• Form to release insurance
information to insurance
carrier
• Form for assignment of
benefits
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Coordination of Benefits
Legal clauses that
prevent duplication
of payment.
Primary or main
insurance plan pays
first, and then the
secondary or
supplemental plan
pays the deductible
and copayment.
The Birthday Rule
If a husband and wife both
have a family insurance plan,
the insurance plan of the
person born first will become
the primary payer.
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Coordination of Benefits (cont.)
Physician’s Services
The physician writes the diagnosis and treatment
The medical assistant translates the medical
terminology into codes for reimbursement
Referrals to Other Services
The medical assistant may also be requested to
secure authorization from the insurance company
for additional services.
22
Insurer’s Processing and Payment
Insurance claims are reviewed for:
Medical Necessity
Allowable Benefits
Payment and
Explanation of Benefits
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Payment and Remittance Advice
Information found on the Remittance
Advice (RA) Form:
Insured name and identification number
Name of beneficiary
Claim number
Date, place, and type of service
Amount billed and amount allowed
Amount of copayment and payments made
Notation of any services not covered
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Reviewing the Insurer’s Remittance
Advice and Payment
Verify all information on the remittance
advice (RA) line by line.
If a claim is rejected check the diagnosis
codes for accuracy.
Track all unpaid claims using either a
followup log or computer automation.
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