5-29

31-51
54-60
62-72
74-80
82-104

Medical Billing
 Medical Billing

• Processing of medical claims is called Medical

Billing.

• The parties involved in this process are Providers,

Patients & Insurance Companies.
 Billing Company
• A company that helps provider to get payment for
each claim.

• They submit claims to the insurance company on

behalf of Providers or Facilities.
 Why & how do Americans get medical
insurance ?
• Americans take up medical insurance because the
medical treatments are very expensive.

• They take up a policy & pay the premium. If the

services are within the policy then the insurance
pays for the claim.

• Americans get their insurance directly through their

employer or an agency.
Self pay / Private pay patient /Cash patient

• A patient who pays the doctor himself & does not

have a medical insurance.
 Subscriber/Insured/ Policy Holder

• The person who pays the premium, enjoys the

benefits himself or dependents enjoy the benefits.
 Beneficiary

• One who enjoys the benefits but does not pay the
premium

• Eg. Child or Spouse

 Guarantor

• One who guarantees payment for patient portion.

 Reason for outsourcing

1 2 3 4
Less Time Human Knowledge
labour difference / resources of English &
costs geographical IT
location.
 Our Clients

• Our client is a doctor / provider. (individual doctors

& sometimes group practices).

• Medical billing Company in US.

FEDERAL CARRIERs

• Medicare
• RR Medicare
• Medicaid
• Tricare
• Champus
• Champva
 Medicare
• You are eligible, if you or your spouse worked for at
least 10 years in Medicare-covered employment, ( paid
FECA taxes )you are 65 years old or older , and you
are a citizen or permanent resident of the US.

• If you are a younger person with a disability.

• If you are a younger person with End-Stage Renal

disease (permanent kidney failure requiring dialysis or
transplant).
 Railroad Medicare

• RR Medicare is for retirement-survivor and

unemployment-sickness benefit programs for
railroad workers and their families.
 Medicare options
Medicare Part A

• It is a Hospital Insurance

• It covers inpatient care in hospitals, including

critical access hospitals, and skilled nursing
facilities.
 Medicare Part B

• Medicare Part B (Medical Insurance) covers doctors'

services and outpatient care.
 Medicare Part C

• It is Medicare Advantage (Medicare + Choice) Plan.

• 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.
 Medicare Part D

It is prescription drug coverage.

 Medicare Secondary Payer (MSP)

• Medicare is always a primary payer except the

following cases.
• a. Workman’s Compensation/ No Fault
• b. Working Disabled
• c. Working Aged
• d. ESRD
• e. Black Lung Program
• f. Veterans Administration
 Medigap

• A Medigap policy is a health insurance policy sold

by private insurance companies to fill the “Gaps” in
the original Medicare plan.

• This is secondary to Medicare.

• Usually Medicare does not cover Syringe, supplies

etc. That will be covered by the secondary
insurance.
 Medicaid

• Medicaid is for the poor or low income people.

• The cost of state Medicaid programs is divided

between the state and the federal governments.

• We should not bill Medicaid patients.

 Tricare

• Tricare is for Active Duty, Reserves & Retired

members of the uniformed services, their families.
 CHAMPUS

• Retired military are eligible, as well as dependents of

active-duty, retired and deceased military.
 CHAMPVA

• It is a comprehensive health care program in which

the VA shares the cost of covered health care
services and supplies with eligible beneficiaries.

• If you are a military retiree, or the spouse of a

veteran who was killed in action, you are and will
always be a TRICARE beneficiary.
 Commercial or Non-federal

• Commercial insurance means a private company

which runs for profit. People will get through their
employer or Agency.

• Some of the major commercial insurances are Aetna,

Cigna, UHC & Health Net etc.
 Blue Cross Blue Shield (BCBS )

These plans are a federation of the individuals.

This is a non-profit organization.

Options:
Home Plan: Where we take policy.
Local Plan : Where we take treatment.
 Workers compensation
• This insurance is to provide medical coverage for the
employees who are injured when performing their
duties.

• The employers pay the entire premium for WC

coverage.

• There will be no secondary insurance for WC & we

should not bill patient.

• Type WC after Patient Account # for WC claims

Important details for WC claim

• DOI / onset date

• Medical Record,
• Employee ID
• Provider License #
 Auto Accident (AA) Ins

• This program is designed to provide medical

coverage for the person who met with an accident
through vehicle.

• We should specify DOI (date of injury) & Case

number on the claim.
 No-Fault Insurance

• No-fault liability generally refers to auto insurance

programs that allow insured to recover financial
losses from their own insurance company,
regardless of who was at fault in an accident.
 Personal Injury Protection

• Personal injury protection pays the hospital, medical

and funeral expenses for the member, passengers
and/or any pedestrians that you hit.
 HMO - Health Maintenance Organization
• It is an organization of healthcare providers (e.g. doctors
and hospitals) that have contracted with an insurance
company.

• Members must choose a primary care physician (PCP).

• The PCP must be consulted before you can see a

specialist.

• HMOs typically do not set deductibles that must be met

before insurance benefits begin.

• Less Co-payments for HMO members.

 PPO - Preferred Provider Organization
• A PPO consists of a group of hospitals and
health-care professionals.
• PPO members do not choose a primary care
physician and can refer themselves to specialists.
• They pay more if the member received care from
in network when compared to out of network.
• PPOs sometimes require members to meet a
deductible
• Have larger co-payments than HMOs.
 POS – Point of Service
• A point-of-service plan (POS) is a combination
of HMO and PPO plans.

• Like an HMO, participants designate an in-

network physician to be their primary care
provider.

• Like a PPO, patients may go outside of the

provider network for health care services.
 EPO – Exclusive Provider Organization

• EPO plans are structured much the same as POS

plans; however, out-of-network benefits are
reduced.
 Demo / Charge Sheet

• Patient Demographics / Face Sheet:- covers all

the details about the patient.

• Superbill/Encounter Form/Charge Sheet :-

covers all the details about the patient & all the
procedure codes done in the facility & common
diagnosis codes are listed.
• The diagnosis & treatment undergone by the patient
are circled.
 Formats
• Name : Last name, First name Middle Initial
*The name before the , (comma) is the last name.

• Date format : MMDDCCYY

• SSN:- Unique 9 digit for every American

citizen. (Format : 000-00-0000)

• Telephone # :- 10 digit # (Format: 000-000-0000)

 New patient

• One who meets the doctor for the first time

OR
• One who has not received any treatment from the
physician, for the past three years.
 Established Patient

• One who has already taken the treatment from

the Doctor.
 Billing rule
• Billing Rule:-
No duplication of patient records & charges.
• How:-
Check if the patient has been registered & any charges
entered for the same DOS.
Method to check if patient is registered in
system:-
• a) SSN
• b) Last name of the patient
• c) DOB
 Pre-Existing Condition

• An injury that occurred or a sickness that first

appeared before the policy was taken.

• Most plans will exclude coverage for pre-existing

conditions, or will specify a wait period for coverage
to begin for these conditions.
Medical Billing Process Flow Chart
Patient info Ecare Downloadi
Patient Service info Scanning Coding
Dr office
ng & Dept
&
Payment info Uploading Process Printing

Transmission Clean Claims

PD & Charge Clearing Insurance
Entry House
in US
Error Claims

Rejection Payment Denials

Report

Correction Cash Posting

Dept
AR Analyst

Work order Fast Notes

AR Callers

Calling Feedback

Insurance
REP
 Clearing House

• A third party that will help Billing Company/Providers

to submit claims electronically to the insurance
company.

• They convert the format, which is accepted by the

insurance company & they filter the claims if there is
any error & it is sent back to us.
 Patient’s relationship with Subscriber

Patient Insured Rel

• M Self M Subscriber
• F Self F Subscriber
• M father/mother M child
• F father/mother F child
• M Wife M Spouse
• F Husband F Spouse
• M/F - Others
 Provider Enrollment

• Provider should enroll with every insurance

companies for which we are filing a claim; otherwise
insurance will deny the claims as “unknown
provider”.
 Participating Provider
• If the Doctor has signed contract with insurance
company then that Dr is a Participating provider.

• ie. Provider agrees for whatever the insurance pays.

• For Par-Provider processing period is less.

• Provider should not bill patient for any non-allowed

amount.
 Non-Participating Provider
• Provider who has not signed contract with
insurance company.

• Processing period will be more.

• Provider can bill patient for any non-allowed

amount.
 Primary Care Physician (PCP)

• A PCP is usually a family practitioner . PCP's are

also known as "gatekeepers" because they control a
member's access to medical care within a health
plan.

• A PCP generally does not specialize in any medical

specialty, such as neurology, cardiology, or
pulmonology, nor perform surgery.
 Attending/Rendering Provider

• Provider who renders or gives treatment to the

patient.
 Admitting Provider

• Provider who admits the patient in to the Hospital

or Nursing Home.
 Locum

• Means substitute doctor. This doctor will cover

when the main doctor is absent.
 Referring Provider

• Provider who refers the patient to some other

Provider or Specialists
 Patient Registration

Patient Personal Details

• Patient’s Last Name, First Name Middle Initial
• Address * City, State Zip
• DOB * Social Security #
• Home Phone # * Work Phone #
• Employer Name * Marital Status
• Gender * Guarantor Name
• Guarantor Address * Referring Provider
• PCP
 Insurance Details
• Insurance Name
• Insured/Subscriber/Policy holder
• Insurance ID
• Group Number
• Relationship to the subscriber
• Effective From / To
• Insurance Address ( P O Box #)
• Insurance City, State Zip
• Insurance Phone Number
 Co-ordination Of Benefits (COB)

• Co-ordination Of Benefits is how health care

carriers co-ordinate benefits when the patient is
covered by more than one group health care plan.

• The carriers work together to make sure you receive

the maximum benefits available under your health
care plans.
• Primary Insurance: Primary insurance pays the
maximum amount for the service.

• Secondary & Tertiary pay the amount left over by

the primary insurance.
 HIPAA – Health Insurance Portability
and Accountability Act

• HIPAA is all about standards

• Standards for automating the business process of

claims administration and

• Standards for the security and confidentiality of

health information
 Charge

• It is the amount billed by the provider for the

treatment given.
 Current Procedural Terminology (CPT)

• It is a 5 digits code.

• This was developed by AMA

• It describes the treatment given by the provider.

• It is updated every January

 CPT - Classification
• 0**** - Anesthesia Codes

• 1**** to 6**** - Surgery Codes

• 7**** - Radiology

• 8**** - Laboratory/Pathology

• 99201 to 99499 - E/ M Codes

• J**** - Drug Codes

 International Classification of Diseases
(ICD)
• This was developed by World Health Organization.

• It is used to specify the disease for which patient

comes to the provider for treatment.

• It is updated every October.

 ICD - Classification
• · Infectious and Parasitic Diseases (001-139)
• · Neoplasms (140-239)
• · Endocrine, Nutritional, and Metabolic Diseases and Immunity Disorders (240-279)
• · Diseases of the Blood and Blood-forming Organs (280-289)
• · Mental Disorders (290-319)
• · Diseases of the Nervous System and Sense Organs (320-389)
• · Diseases of the Circulatory System (390-459)
• · Diseases of the Respiratory System (460-519)
• · Diseases of the Digestive System (520-579)
• · Diseases of the Genitourinary System (580-629)
• · Complications of Pregnancy, Child Birth, and the Puerperium (630-676)
• · Diseases of the Skin and Subcutaneous Tissue (680-709)
• · Diseases of the Musculoskeletal System and Connective Tissue (710-739)
• · Congenital Abnormalities (740-759)
• · Certain Conditions Originating in the Perinatal Period (760-779)
• · Symptoms, Signs and Ill-defined Conditions (780-799)
• · Injury and Poisoning (800-999)
• · V Codes - Preventive
• · E Codes – External Cause
 ICD - Format

• ***
• ***.*
• ***.**
• V**.* - It is for Preventive.
• E***.* - External Cause. (Should not be used as
primary diagnosis)
 Modifier
• It is a two digits Alpha/Numeric Code.

• This will give additional information/modification

done in the procedure.

• The meaning of the procedure remains the same.

 Circumstances to use Modifier
• A service or procedure has both a professional and technical
component.
• A service or procedure was performed by more than one
physician and/or in more than one location.
• A service or procedure has been increased or reduced.
• Only part of a service was performed.
• A bilateral procedure was performed.
• A service or procedure was provided more than once.
• Unusual events occurred.
 Technical / Professional Component

• Technical Component : If any equipment is used

to perform the procedure (eg. X-Ray, CT scan) .
Modifier for Tech Comp is “TC”.

• Professional Component : If provider interprets

any report of the patient. Modifier for Prof Comp is
“26”.
 Units

• The number of times the procedure is done.

 Location/Facility/Place of Service

• Where the treatment is rendered.

 Outpatient & Inpatient

• An outpatient is a patient who is not hospitalized

overnight but who visits a hospital, clinic, or
associated facility for diagnosis or treatment.

• An inpatient on the other hand is "admitted" to the

hospital and stays overnight or for an indeterminate
time, usually several days or weeks.
 Place of Service (POS) Codes
POS Code Place of Service Name
• 11 Office
• 12 Home
• 20 Urgent Care Facility
• 21 Hospital In patient
• 22 Hospital out patient
• 23 Hospital Emergency Room
• 24 Ambulatory Surgical Center
• 25 Birthing Center
 Place of Service (POS) Codes

POS Code Place of Service Name

• 26 Military Treatment Facility
• 31 Skilled Nursing Facility
• 32 Nursing Facility
• 33 Custodial Care Facility
• 34 Hospice
• 51 Inpatient Psychiatric Facility
• 65 ESRD Treatment Facility
• 99 Other Place of Service
 Types of Dates
• Date of Service (DOS): Date on which the
service is rendered.
• Julian Date: 365 Days. (eg. Julian Date of
Jan 1st is 1, Feb 1 is 32)
• Admission Date: The date on which the
patient is admitted in the hospital
• Discharge Date: The date on which the
patient is discharged.
• Onset/Injury Date: The date on which the
patient is injured/met an accident.
 Types of Dates
• Accounting Date: Calendar Date
• Open date and close date: Everyday the accounting
date. The calendar date is opened and then after all
transactions for that date are entered & completed the
day is closed. The next day is opened.
• Filing Date: The date on which the claims are filed to
the insurance.
• Check Date: The date on which the check is issued or
written.
• Deposit Date: The date on which the amount/Check is
deposited in the bank.
• Scan Date : Usually it is a day previous to calendar
date
 Batch Number

Batch number is assigned, based on any one of the

following:

• Julian Date + # of files

• Scan Date
• Service Date
• Deposit Date
 Prior Authorization

• Dr has to get approval from the patient’s insurance

company before performing the treatments like
surgeries, Hospitalization or Psychiatric Services.

• The Insurance issues a prior auth# & it should be

printed on the Claim form ie. Block 23 of HCFA.

• Name of the Claim form is CMS 1500 (formerly it is

HCFA 1500)
 Retro Authorization

• Getting approval from the patient’s insurance

company after giving the treatment (mostly
emergency cases).

• Most of the insurance gives short time limit like 3-5

days from the DOS to get retro auth.
 On-bill comment

• This comment get printed in Block 19 of CMS 1500.

• Eg. Corrected Claim, NDC # for Drug codes.
 Off Bill Comments

• This is an alert message. Off-bill comment is used if there is

any information about the patient, that has to be passed to
all, who access the account. (Eg. Give 50% Discount for
DOS)

• It pops up every time the account is accessed.

• It is not printed on the Claim form. It is for our internal

purpose.
 Charges on Hold

• If any information is missing to process the claim,

then we need to put it as “on hold”. Also send
request to the client for the missing information.

• After receiving the information we should release

the claim & file it to the insurance.
 Filing /Re-filing

• When the claims are submitted to insurance for the

first time, it is known as filing.

• When the claims are resubmitted to insurance after

correcting the errors, it is known as Re-filing.
 Rejections / Denials

• When the claims are sent back by the clearinghouse

for the missing/invalid information, it is known as
rejection.

• When the claims are sent back by the insurance for

some reason, it is known as Denials
Steps to be followed if patient changes the
insurance
• 1. Store old insurance (Archive)
• 2. Add the new insurance
• 3. Change Patient’s Type & Coverage Type
• 4. File insurance on the claim for the DOS.
 Flagging/ Flipping
• Flagging: Once the claim is transmitted the
software changes the status from “to be printed” to
“Filed”. If we need to reprocess the claim to the
new insurance, we should FLAG so that the claim
will be transmitted to the new insurance.

• Flipping: When a claim is denied by ins & the

patient has to pay.
• If we transfer the insurance balance to patient
balance, it is called flipping.
 Filing Limit

• Each insurance has a specified number of days to

file a claim from the date of service.

• If the claim reaches the insurance after the filing

limit then that claim will be denied.
 Payment

Two Payers
• Insurance
&
• Patient
 Type of Insurance Payment

• Fee Schedule/Allowed Amount

• Case Rate
• Capitation
 Fee Schedule/Allowed Amount
• Ins pays for each procedure based on their fee
schedule or allowed amount. Fee Schedule means it
is a fixed fee for medical services/procedures.

• Payment is either less than the allowed or equal to

the allowed amount but never more than the
allowed amount.
 Case Rate

• This payment is for each DOS or each case.

Irrespective of number of services done for one
DOS insurance pays per case/DOS.
 Capitation

• Insurance pays to the provider in the concept of Per

Month Per Member irrespective of the number of
visits.

• The patient is responsible only for the Copay.

 Explanation of Benefit (EOB)
or
Remittance Advice
• Document sent by the insurance to the provider
when payment is made, to show allocation of
payment for each procedure.
We need to enter the following from the EOBs
• Billed
• Allowed
• Payment
• Copay
• Coins
• Deductible & Write-Off
 Billed Amount / Payment

• Billed Amount : Amount billed by the provider for

the procedure performed

• Payment: Amount paid by the insurance.

 Allowed Amount
• Allowed Amount: A set amount paid by the insurance
company that is unrelated to the doctor's fee. Which is

• Primary payment + secondary payment + patient

payment
Or
• Primary payment + coins + Deductible + Copay
 Copay

• A copayment is a fixed dollar amount paid

whenever an insured person receives specified
health-care services.

• In other words, a small fixed amount to be paid by

the patient for each date of service irrespective of
charges for that service. Usually it is $5,$10,$20,$25
or $30
 Coins

• This is a varying one.

• It is a fixed percentage of the allowed amount

(fixed by the insurance like 10%,20% or 30%).

• It is paid either by the secondary insurance or by the

patient (if there is no secondary insurance).
 Deductible

• Deductible is the amount that must be paid by the

member before the insurance company starts
paying. This amount would be deducted as and
when the provider sends in a bill to the ins
company.

• In other words, some amount should be paid by the

patient as ‘Out-of-Pocket’ expense before the
insurance start paying. Usually it is $500-$2500.
 Write off / Adjustment

• It is the difference between the billed and the allowed

amount. It has to be adjusted by the PAR-Provider.

• Write off = Billed - Allowed

• Terms used in EOBs: Non-allowed, Ineligible,

Discount, Non-covered, Adjustment, Contractual
adjustments etc.
 ERA / EFT

• ERA – Electronic Remittance Advice. Receiving

EOBs from insurance electronically.

• EFT – Electronic Fund Transfer. Insurance will

transfer the amount/payment to the provider’s
account electronically.
 Fee for Service (FFS)

• Refers to payment of providers for individual

services rendered, as opposed to payment with
salaries or under capitation.
 Refund / Offset

• Refund: If there is any excess payment made by

the insurance or patient. It has to be refunded by
the provider.

• Offset : If there is any overpayment made by the

ins, and it is adjusted in the future payment.
 Interest / Late Filing Penalty

Interest – If there is any delay to pay the provider due

to some problem with insurance part. Insurance will
pay interest for that payment.

Late Filing Penalty – Medicare reduces 10% of the

payment as penalty if we submit claims after the
specified filing limit.
 HPSA Incentive

• Any given area has a shortage of health

professionals, a Health Professional Shortage Area
(HPSA) incentive program is established.

• Medicare pays 10% of the paid amount as incentive

on a quarterly basis.
 Crossover/ Piggyback

• When Medicare automatically forwards the claims to

secondary insurance, those claims are known as
crossover claims or Piggyback.
• We have no need to print and send to secondary
insurance.
• Remark Codes:
• MA07: When Medicare automatically forwards the
claims to Medicaid.
• MA18: When Medicare automatically forwards the
claims to any other supplemental insurance (other
than Medicaid).
 Internal Control Number (ICN)

• When Medicare receives a paper or electronic claim;

it is assigned an Internal Control Number (ICN).

• These numbers identify how and when the claim

was received in the Medicare office
 W9- Form

A tax form which certifies an individual's tax

identification number.

A Form W-9 is a document required by the

IRS(Internal Revenue Service) for certain taxation
purposes.
 Advance Beneficiary Notice (ABN)
• It is a document used by Medicare to inform
patients that a particular service may not be
covered.

• By obtaining the beneficiary’s signature on

the ABN, it allows the patients to participate
in their own healthcare treatment decisions.

• If Medicare denies patient is responsible.

 Patient AR
• Budget : Patient agrees to pay on installment basis.

• Professional Courtesy: If provider gives any discount

to patient for their portion. (eg. Employee, Friends,
Relations etc)

• Collections : It is an External Debt Recovery Agency.

If patient does not respond for our bills, Discount
letter, then we will send the list to the Collection
Agency. They collect the amount and get commission
on their collections.
 VETERAN

A veteran (from Latin vetus, meaning "old") is a person

who is experienced in a particular area, and is particularly
used in Russia and the United States to refer to people with
experience in the armed forces or law enforcement.

The most common usage is for former armed services personnel.

A veteran is one who has served in the armed forces, but usually
not to someone who had a dishonorable discharge. It is especially
applied to those who served for an entire career, usually of 20 years
or more, but may be applied for someone who has only served one
tour of duty.