MEDICAL BILLING
“Medical billing & Coding is the process of submitting and following up on claims to insurance companies in order to receive payment for services rendered by a healthcare provider. The same process is used for most insurance companies, whether they are private companies or government-owned.
Or In short
Medical billing is the process of providing services to the doctor/provider for our commission.
Medical Billing involves the five basic entities. Following diagram elaborates the whole billing cycle.
Biller Provider Patient Insurance
Clearing House
First of all we discuss patient entity.
1- PATIENT
A patient is any recipient of health care services. The patient is most often ill or injured and in need of treatment by a physician.
In SequelMed applications following mandatory fields are there to fill out when a new patient is enrolled.
Name (First Name, Last Name)
DOB (mm/DD/yyyy)
SSN (9-digit unique code assigned to every person)
Address (Street address, city, state, zip code) ZIP stands for “Zonal Improvement Plan”.
Patient insurance Info
Other than these fields patient demographics window also contains an email address field, Phone# field and Responsible party information etc.
The patient can be of two Types:
New Patient
Established Patient
A patient who has no visited the doctor/group of doctors for the last three years is New Patient for that practice.
A patient who often visits a provider/practice is Established Patient.
We have two other terminologies:
In-patient
Out-patient
A patient who has a stay in hospital for 24 or more than 24 hours is In-Patient.
A patient who visits the provider/doctor receives services and get back is Out-Patient.
Retired/Young Patients:
US government provides MEDICARE health plan to the people who are:
65 years older/ Retirees
Have some Disabilities
Suffer from ESRD (End stage Renal Disease), AIDS and Cancer like diseases.
Other people mostly have commercial health insurance plans.
Low-Income persons have MEDICAID health insurance mostly.
2- INSURANCE
A policy that will pay specified sums for medical expenses or treatments.
In SequelMed applications following mandatory fields for Insurance section are there to fill out when a new patient is enrolled.
Insurance Name
Insurance ID
Termination & Effective Date
Plan Address( Physical/Electronically)
Insured Party Information
When claims are submitted electronically they use an Electronic Payer ID for a particular insurance.
Paper submission requires Physical Address.
Worker Compensation Plans:
Workers' compensation is insurance paid by companies to provide benefits to employees who become ill or injured on the job.
Responsible Party and Employer information is required for WC insurances.
In case of injury Date of Accident (DOA)/ Date of Injury (DOI) is also required.
Dx and DOI must match the Dx and DOI mentioned in patient case.
Health Insurance:
Health insurances provide us health benefits, we purchase different health policies/Insurances and these policies/Insurances pay against our health claims.
Health insurance has Four types:
• Governmental Health Insurances (Medicare, Medicaid)
• Commercial Health Insurances (BCBS, Tricare, VIVA etc.)
• Worker Compensation
• No Fault
CMS (Center for Medicare & Medicaid Services)
The Centers for Medicare & Medicaid Services (CMS), previously known as the Health Care Financing Administration (HCFA), is a federal agency within the United States Department of Health and Human Services (DHHS) that administers the Medicare program and works in partnership with state governments to administer Medicaid.
You must visit www.cms.gov , where very useful information is available for billing.
Parts of Medicare Health Insurance:
• Hospital insurance (Part A) helps pay for inpatient care in a hospital or skilled nursing facility (following a hospital stay), some home health care and hospice care. We use an UB-92 form to submit all Hospital claims.
• Medical insurance (Part B) helps pay for doctors’ services and many other medical services and supplies that are not covered by hospital insurance. HCFA-1500 is used to submit medical claims. HCFA is the abbreviation of HealthCare Financing Administration.
• Medicare Advantage (Part C) plans are available in many areas also known as HMO/Advantage plans. People with Medicare Parts A and B can choose to receive all of their health care services through one of these provider organizations under Part C.
• Prescription drug coverage (Part D) helps pay for medications doctors prescribe for treatment.
Health Insurances fall under different Tariffs/categories. These are:
• HMO ( Health Maintenance Organization)
• PPO (Preferred Provider Organization)
• PFFS (Private Fee For Services)
• SNPO (Private Special Need Plan)
HMO (Health Maintenance Organization)
• HMO insurances provide short area coverage.
• We always have to select a PCP (Primary Care Physician) of the HMO network. Who is responsible for managing and coordinating all of patient’s health care.
• PCP then refers patients to some other provider, if required. If the patient does not have a referral or choose to go to a doctor outside of the HMO's network, He will most likely have to pay all or most of the cost for that care.
PPO (Preferred Provider Organization)
• PPO insurance provides large area coverage.
• If you do not have a referral or you choose to go to a doctor outside of your HMO's network, you will most likely have to pay all or most of the cost for that care.
• You do not need to select a PCP and you do not need referrals to see other providers in the network.
• If you receive your care from a doctor in the preferred network you will only be responsible for your annual deductible (a feature of some PPOs) and a copayment for your visit.
PFFS (Private Fee For Services) Plan
• A Private Fee-For-Service (PFFS) plan is a Medicare Advantage (MA) health plan, which has a yearly contract with the Centers for Medicare & Medicaid Services (CMS) to provide beneficiaries with all their Medicare benefits, plus any additional benefits the company decides to provide.
• A person who purchases a PFFS plan pay premium for the services he decided to receive at the time of purchasing policy.
SNP (Special Need Plan)
A Special Needs Plan (or SNP, often pronounced “snip”) is a category of Medicare Advantage plan designed to attract and enroll Medicare beneficiaries who fall into a certain special needs demographic.
To enroll in Special Needs plan you must meet the plan's specific eligibility requirements such as one or more of these requirements:
• Qualify for both Medicare and Medicaid (also referred to as “dual eligible”)
• Live in a contracted nursing home or skilled nursing facility
• Have certain chronic or disabling conditions
Timely Filing
The final date from DOS on which claims must be received to be considered for payment by Insurance. The filing periods vary depending on the program billed e.g.,
• Medicare/Medicaid and all Medicare Advantage plans, claims could be submitted within 1 year.
• BCBS claims need to be submitted within 6 months.
• AETNA claims must be submitted within 4 months.
Fee Scheduling
A listing of accepted fees or established allowances for specified medical procedures is called Fee Scheduling. The fee schedule is always determined by the Insurer for every procedure.
OR
A list of CPT codes and dollar amounts an insurance company will pay for a particular medical service.
Fee Schedule for Participating Providers:
A physician or other medical provider has agreed to accept a set fee for services provided to members of a specific health plan. They are deemed to be "in-network". They receive more benefits than Non-Participating providers.
Fee Schedule for Non-Participating Providers:
Non-participating providers have chosen not to participate with the Insurance, usually for business or economic reasons. Sometimes a provider does not want to wait for payment from the Insurance. In many cases, non-participating providers charge more for a service than the Insurances’ approved amount.
Policy/Insurance:
A policy or insurance normally requires an address where the claim will be submitted, payer ID, and many other requirements. Even if we purchase a policy, we’ll still have to pay Premiums/Deductibles, Coinsurance and Co-Pay.
Deductible:
The premium which we have to pay annually/ bi-annually to continue our policy.
Coinsurance:
Percentage amount charge to a patient on each claim.
Co-Pay:
Fix dollar amount which a patient has to pay for every visit. It can be $5 to $60 or more. No Co-Pay required in the case of Medicare Insurance.
3- PROVIDER
We called the physicians/doctors as providers because they offer services to the healthcare industry. On the basis of their role we classify the providers in three types;
Rendering Provider:
The provider who performs the services, he/she can be primary care physician/family practitioner/specialist.
Referring Provider:
The doctor who refers a patient to some specialist is known as referring provider. Mostly they are PCP (primary care physicians), family practitioners, Urgent care providers.
Billing Provider:
The provider to whom the insurance supposes to make the payments/checks/EFT’s. Mostly they are the owner of the practice/hospital/healthcare group.
Provider Related Terminologies:
National Provider Identification Number (Consists of 10 digits)
Below are some advantages of NPI
• One unique provider identifier for all health plans to utilize
• A permanent provider identifier that will not change in the event of practice relocation or changes in the specialty
• A more efficient coordination of benefits
• An easier process for health plans to track transactions and avoid duplication
TIN ‘Taxpayer Identification Number’
• Issued by Department of the Treasury Internal Revenue Service
• Consists of 9 digits
• Mostly SSN used as TIN but it can be a different number as well
Insurance PIN (Provider ID for each Insurance)
• PTAN: Provider Transaction Access Number is used for Medicare.
• For all other Insurance every provider has a specific ID for electronic data interchange.
Provider Location
• Providers enrolled themselves under specific location/addresses using which they can have the claims paid on the claim form like HCFA 1500.
CLIA ID
• CLIA stands for Clinical Laboratory Improvement & Amendments.
• If a provider owns a lab, then he’ll must have CLIA certification which is issued be a CMS (Center of Medicare & Medicaid services).
• Some tests could be performed without CLIA certification, they are called CLIA Waved tests, QW modifier is used in such lab tests.
Group Providers
• A group of providers has Group NPIs and Group Tax IDs.
• Groups are registered with Medicare, although some other insurances allow grouping of providers.
• Providers' registered individually with all other insurances
• MD/Specialist providers have 100% fee schedule, whereas Nurse Practitioner/ Physician Assistants have 85%.
State License
When a doctor completes his house job then he is assigned State License like in Pakistan Doctors get it from PMDC.
4 -Medical Billing Company/ Biller
A process initiates from generation of medical claims and ended on its reimbursement/settlement/payment.
Types of Billing
There are two types of billing According to Location.
• In-house Billing
Billing services performed within the provider's office.
• Outsource Billing
Out sourced billing is the business practice of sending all clients' billing information to a separate company, who then handles drawing up, sending and receiving the bills
According to Billing Fee/Commission/Costs billing has three types.
• Percentage
Doctor pays for her/his income for some %age to the biller like 03 to 05%.
• Fixed
Doctor pays a fix salary to biller for the services.
• Hourly
Billing services for on hourly wages as we are performing.
Billing Process Cycle