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CHAPTER 7 CHAPTER 8
Medicare 199

General Commercial Health Insurance Information

3
179 XX
177

CHAPTER 9
Medicaid XX

CHAPTER 10
Managed Care Plans XX

CHAPTER 11
TRICARE/CHAMPVA XX

CHAPTER 12
Workers Compensation XX

CHAPTER 13
Insurance Payments and Follow-up Procedures

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Chapter Outline I. Introduction II. Insurance Fundamentals A. Types of Commercial Insurance 1. Group Insurance 2. Individual Insurance 3. Fee-for-Service versus Managed Care 4. Health Maintenance Organization 5. Preferred Provider Organization 6. Government Health Plans 7. Prepaid Health Plans 8. Differences in Commercial Plans III. Patient/Policyholders Cost A. Out-of-Pocket Expenses (OOPs) B. Flexible Spending IV. Levels of Coverage V. Coordination of Benets A. The Birthday Rule B. Separated or Divorced Parents C. Parents Remarry D. Stepchild/Foster Child VI. Assignment of Benets VII. The Claim Form A. Electronic Claim Filing B. Completing the Claim Form 1. A and B Boxes 2. Back of CMS-1500 Claim Form VII. Conclusion

179

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OBJECTIVES
G G G G G G G G G G Describe insurance fundamentals Understand the difference between group and individual health insurance Recognize the difference between fee-for-service and managed care plans Gain knowledge of the different health insurance plans available Explain the various costs the patient can be responsible for Complete claim form accurately Be aware of the benefits of electronic claim filing Determine which insurance plan is primary for patients with more than one plan Clarify the order of benefits for stepchildren or children of separated or divorced parents Explain assignment of benefits

MEDICAL ASSISTING COMPETENCIES ABHES

1i. 2d. 2g. 2h. 2j. 3b. 3e. 3v. 3w. 3x. 5b. 5c. 8b. 8c. conduct work within scope of education, training, and ability serve as liaison between Physician and others use appropriate medical terminology receive, organize, prioritize, and transmit information expediently use correct grammar, spelling and formatting techniques in written works prepare and maintain medical records locate resources and information for patients and employers perform diagnostic coding complete insurance claim forms use physician fee schedule document accurately use appropriate guidelines when releasing records or information implement current procedural terminology and ICD-9 coding analyze and use current third-party guidelines for reimbursement

CAAHEP
IV.P.3. Use medical terminology, pronouncing medical terms correctly, to communicate information, patient history, data and observations VII.C.1. Identify types of insurance plans VII.C.7. Describe how guidelines are used in processing an insurance claim VII.P.3. Complete insurance claim forms VIII.C.1. Describe how to use the most current procedural coding system VIII.C.3. Describe how to use the most current diagnostic coding classification system VIII.C.4. Describe how to use the most current HCPCS VIII.P.1. Perform procedural coding VIII.P.2. Perform diagnostic coding VIII.A.1. Work with physician to achieve the maximum reimbursement

KEY TERMS
Benets Birthday Rule CMS-1500 Coordination of Benets Co-Insurance Copayment Deductible Dependent Electronic Data Interchange Fee-for-Service Group Insurance Individual Insurance Lifetime Maximum Major Medical Insurance Out-of-Pocket Expenses Policyholder Premium Prepaid Health Plan Subscriber

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INTRODUCTION
Health insurance has been around since 1860 when a company in Massachusetts offered the first policy. According to the U.S. Census Bureau, the number of Americans currently with health insurance is more than 250 million. Health insurance, simply defined, is a contract between a person (the policyholder) and an insurance company or carrier to provide a monetary coverage for medical services incurred by the policyholder. The policyholder or patient may be covered for his or her medical expenses by a commercial insurance company or by government sponsored programs such as Medicare, Medicaid, TRICARE/ CHAMPUS/CHAMPVA, or Workers Compensation.

! KEY TERM
POLICYHOLDERAn individual enrolled in a health insurance plan; also referred to as a subscriber.

INSURANCE FUNDAMENTALS
Medical insurance is a contract between an insurance company and a policyholder. No matter what they are called, the policyholder, member, recipient, subscriber, or insured is better known in the medical office as the patient. A commercial insurance company is an organization that provides health-care benefits to people through (1) individual or private policies or (2) through group plans such as an employer or professional organization or prepaid health plan. Commercial insurance companies usually operate as for-profit organizations. Several well-known insurance companies are Aetna, Blue Cross Blue Shield, CIGNA, Prudential, Mutual of Omaha, Allied, Principal, or Farm Bureau.

! KEY TERMS
BENEFITSCovered services available to an individual or group by a health insurance plan or government agency. FEE-FOR-SERVICEThe traditional method of paying a health-care provider for services as they provided. PREPAID HEALTH PLANA method of nancing the cost of health care for a dened population in advance of receipt of services.

Types of Commercial Insurance

Insurance companies offer many types of plans or products. Each plan can offer various types of coverage to various groups of individuals or to a single individual. The types of health insurance are group health plans, individual plans, workers compensation, and government health plans such as Medicare and Medicaid.

! KEY TERMS
DEPENDENTThe subscribers spouse or children under a limiting age. SUBSCRIBERAn individual enrolled in a health insurance plan; also referred to as a policyholder. GROUP INSURANCEA health insurance policy to a group of people who are part of the same company or organization (employees, members, etc.) and their dependents who are covered under a single contract.

Group Insurance
Group insurance can be offered to a group of employees or an organizations members and their dependents. Each employee or member would be given his or her own policy number or identification number and be responsible for his or her own premiums. A group policy usually provides better

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benefits and lower premiums than individual plans. The premiums are lower because the premiums are pooled from everyone in the group and the risk is spread among the entire group. If a person leaves the employer or organization the group contract is terminated but the insured can continue the same or lesser coverage through provisions of COBRA and/or HIPAA. COBRA, an acronym for Consolidated Omnibus Budget Reconciliation Act of 1985 is a federal law that provides an employee working within a company of 20 or more employees, extension of their group health insurance for themselves and their dependents for up to 18 months after leaving the company. Many states go beyond this and require smaller groups and other federally exempted employers to also offer it. The employee must be offered the exact benefits they received immediately before they qualified for COBRA. The employee is responsible for the premiums of their policy. Premium amounts will vary depending on the groups coverage and rates. The premiums are, however, less than an individual plan would be. HIPAA, the Health Insurance Portability and Accountability Act ,was created by the federal legislature to, among other things, protect workers and their families maintain health insurance if they change or lose their jobs. For more detailed information on HIPAA, see Chapter 3.

Individual Insurance
An individual policy is issued to an individual and his or her dependents. This type of policy typically has a higher premium and the benefits are less than those in a group plan. Unlike group insurance, an individual plans premiums and coverage is based solely on the health and use of the individual and his or her dependents. The more claims and illness the individual incurs, the higher the premiums will be to cover those medical expenses.

! KEY TERM
INDIVIDUAL INSURANCEAn insurance plan issued directly to an individual and their dependents who are covered under a single contract.

Fee-for-Service versus Managed Care

Health insurance can be further classified into fee-for-service (traditional insurance) and managed care. The following are types of managed care plans: I Health Maintenance Organization (HMO) I Preferred Provider Organization (PPO) Managed care plans are sold to both groups and individuals. A persons health care is managed by the insurance company. Approvals are needed for some services, including visits to specialist doctors, medical tests, or surgical procedures. In order for people to receive the highest level of coverage they must obtain services from the doctors, hospitals, labs, imaging centers, and other providers affiliated with their managed care plan.

Health Maintenance Organization

An HMO is a type of managed care. This type of coverage was designed to help keep people healthy by covering the cost of preventive care, such as medical checkups. The patient selects a primary care doctor, such as a family physician, from an HMO list. This doctor coordinates the patients care and determines if referrals to specialist doctors are needed. Insured members pay a premium and a small fee, or copayment, to receive health-care services. The HMO has arrangements with caregivers and hospitals, and the copayment applies to those caregivers and facilities affiliated with the HMO. Although this type of coverage is more restrictive than fee-for-service coverage, the patients out-of-pocket health-care costs are generally lower and more predictable. A persons out-of-pocket costs will be much higher if he or she receives care outside of the HMO unless prior approval from the HMO is received.

Preferred Provider Organization

A PPO combines the benefits of fee-for-service with the features of an HMO. If patients use healthcare providers (e.g., doctors, hospitals) who are part of the PPO network, they will receive coverage for most of their bills after a deductible and copayment is met. Some PPOs require people to choose a

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primary care physician who will coordinate care and arrange referrals to specialists when needed. Other PPOs allow patients to choose specialists on their own. In addition, a PPO may offer less coverage for care given by doctors and other professionals not affiliated with the PPO. For more detailed information about managed care, see Chapter 10.

Government Health Plans

Medicare and Medicaid are two health plans offered by the U.S. government. They are available to individuals who meet a certain age, income, or disability criteria. TRICARE Standard, formerly called CHAMPUS, is the health plan for U.S. military personnel. These health plans are discussed in Chapters 8, 9, and 11.

Prepaid Health Plans

Better known as managed care organizations, prepaid health plans are contracts with a network of health-care providers. Services are performed for a predetermined fee that is paid on a monthly or yearly basis rather than for a fee-for-service. Details of plan features, coverage, and billing issues are included in Chapter 10.
Differences in Commercial Plans

Many commercial insurance companies offer a number of different plans. The medical coder cannot assume that every patients coverage is the same, even when from the same carrier. For example, Blue Cross Blue Shield offers a number of different plans, Classic Blue, Blue Access, Blue Choice, Blue Advantage, to name a few. Each of these plans offer different benefits, coverage, and restrictions. The coder must know which plans their physician participates with and verify coverage for their patients.

PATIENT/POLICYHOLDERS COSTS
The policy represents the benefits or coverage provided to the policyholder. The benefits or coverage defines the services that the insurance company will pay for when rendered to their policyholder, such as office and hospital services, emergency care or prescription drugs. Whether or not the policyholder/patients plan is an individual plan or a group plan, he or she is responsible for paying a premium to keep the policy enforced and to maintain health coverage. The premium is often part of an employees company benefit and may be paid or subsidized by the patients employer.

! KEY TERM
PREMIUMThe amount paid by an insured regularly (monthly/semi-monthly) to keep any health insurance policy.

In addition to the premium there may be other costs involved: I A yearly deductible before the health insurance begins to contribute I A per-visit copayment I A percentage of health-care expenses, known as co-insurance. In most cases, the insured is responsible for the deductible. A deductible is an amount that must be paid for covered medical services each calendar or fiscal year by the insured before the benefits of the insurance will begin. The deductible amount will vary depending on the policy anywhere from a $100 to $1000 or more dollars. The higher the deductible is, the lower the premium. A deductible will apply to each member of the plan. If the plan covers more than one family member, each family member will be responsible for meeting that annual deductible. Some plans offer a family deductible, which means all covered family members contribute to the deductible until it is satisfied. Once the deductible is met, the insurance company begins to pay benefits toward the rendered medical services for any covered family member. For example, if a plan has a $500.00 family deductible and each member has $100.00 individual deductible and five out of the six family members have met their $100.00

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deductible, the family deductible kicks in and the sixth member does not need to qualify with additional $100.00 of expenses. The insurance company will begin paying for that sixth members services automatically.

! KEY TERM
DEDUCTIBLEAn amount that must be paid for covered medical services each calendar year by the insured before the benets of the insurance plan will begin.

Copayment is an amount that must be paid by the insured for any rendered services. The insured is usually responsible for the copayment at the time the service is rendered. For example, if an office visit copayment is $20.00 under the insurance plan, the patient would be expected to pay that amount at the appointment. Often, the patients insurance identification card has the copayment amount(s) printed right on it. Not all patients will have a copayment in their coverage. Some plans have different copay amounts for different services and some plans may waive a copayment depending on the circumstance or type of service rendered (e.g., an accident or laboratory services). A medical coder may need to verify with the insurance company whether a copayment applies to a particular service rendered. If so, how much it is. The medical coder may need to verify with the person in charge of copayment collections, whether it was collected. When the third-party payer has paid the submitted charges and the patient has paid their copayment, there still may be co-insurance to collect.

! KEY TERM
COPAYMENTThe cost an insured person is expected to pay at the time a service is rendered, such as $20 per ofce visit.

Co-insurance is the amount or the balance that an insured person must pay for health-care services after the insurance companys payment. For example, if the insurance company pays 80% of the patients $200.00 office visit, the patients co-insurance would be the 20%, or $40.00. This co-insurance amount is the balance leftover after the patients initial copayment at the time of service and any other write-offs that have been deducted.

! KEY TERM
CO-INSURANCEA percentage of the cost of the service rendered that the person insured is responsible for.

Out-of-Pocket Expenses (OOPs)

Any medical expenses that are not covered by insurance are considered out-of-pocket expenses because they must be paid by the insured. These expenses include deductibles, co-insurance, and copayments. Medical insurance plans often have out-of-pocket limitations written into the plan that provide up to 100% payment of covered medical expenses after a certain amount of out-of-pocket expenses has been reached. For example, if an insureds policy stipulates a limit of $5000 for out-ofpocket expenses over the calendar year, either for the insured and/or any dependents, the insurance will pay 100% of the covered medical expenses incurred after the $5000 limit is reached. Lifetime Maximum is a dollar amount that an insurance company will pay toward an illness or injury for each covered person while the policy is in effect. After that amount has been reached, there is no other coverage offered by that plan and the patient is responsible for all additional expenses.

! KEY TERMS
OUT-OF-POCKET EXPENSEAny medical-care cost that must be paid by the person insured (coinsurance, co-payments, deductibles). LIFETIME MAXIMUMThe maximum dollar amount that an insurance company will pay toward care in the insured persons lifetime.

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Flexible Spending
Flexible spending accounts are offered to many employees as a way of using non-taxable dollars to pay for medical expenses. The individual takes out a chosen dollar amount from his or her paycheck and deposits that money into a personal flexible spending account. This money has not been taxed yet and is set aside for any medical expenses occurred throughout the year. The account can be set up any way the employee wants, but is to be used only on medical expenses for themselves and/or family members. A patient may have a flexible spending credit card to be used when needed, or, if done manually, a patient may need a receipt or a copy of the superbill showing any expense(s) to be properly reimbursed.

LEVELS OF COVERAGE
There are various levels of coverage available in a group or individual plan: I Basic health insurance I Major Medical insurance I Comprehensive insurance

! KEY TERM
MAJOR MEDICAL INSURANCEInsurance coverage for signicant procedures or situations.

Basic health insurance may include the following: I Hospital room and board and hospital care I Hospital services and supplies such as x-rays and medicine I Surgery, whether performed in or out of the hospital I Doctor visits I Prescription drugs Major Medical insurance may include the following: I Treatment for long-term, high-cost illnesses or injuries I In-patient and outpatient expenses Comprehensive insurance is a combination of basic insurance and major medical insurance. Premiums vary with the level of coverage. Major medical insurance, for example, can be very expensive.

COORDINATION OF BENEFITS
There may be times when patients (usually dependents) are covered under more than one policy. Information must be obtained from the patient to determine which insurance company is the primary one responsible for making the initial payment and which is the secondary to eliminate duplication or an overpayment for the services rendered.

! KEY TERM
COORDINATION OF BENEFITS (COB)The system that ensures insurance payments do not exceed 100% of a given charge when more than one insurance policy is in place.

Coordination of benefits (COB) refers to a method of limiting health insurance payments to no more than 100% of the actual charge. COB is written into the group policies to apply when a policyholder or designated dependents are covered by more than one health insurance policy. This coordination between plans prevents payments from each plan from exceeding the actual amount charged to the patient.

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In the past, there had been long delays in the payment of these claims while the insurance companies involved decided who was the primary payer and who was the secondary payer. The medical coder will need to verify coverage of each patient and determine which plan is primary and which plan is secondary to properly submit the claims.

The Birthday Rule

In 1984, the National Association of Insurance Commissioners (NAIC) adopted the following coordination of benefits rule:

The benets of a plan covering a child as the dependent of a parent whose birthday occurs earlier in a calendar year will determine the primary insurance and pay before the benets of a plan covering a child as the dependent of a parent whose birthday occurs later in the year. If both parents have the same birthday, the benets of the plan that covered the parent longer are primary to those of the plan that covered the other parent for a shorter time.

! KEY TERM
BIRTHDAY RULEA coordination of benets rule that determines the order of benets paid by parents of a dependent child if there is more than one insurance plan to consider.

Birthday means the month and the day, not the year of birth. If one of the plans does not have a birthday rule and the plans do not agree on the order of benefits, the plan without a birthday rule will be primary. Most states have adopted this rule, but the medical coder must inquire with the state insurance commissioner to determine if the birthday rule is applicable.

Separated or Divorced Parents

NAIC guidelines, regarding COB situations involving a child of divorced or separated parents, are as follows: I If a divorce decree exists and the financial responsibility for the childs health care is placed on one of the parents, that parents insurance plan is primary. I If there is no divorce decree and/or financial responsibility has not been established, then the plan of the parent with custody is primary. I If the parents share joint custody, the plan of the parent who claims the dependent for tax purposes is primary. If the parents claim the dependent in alternative years, the order of benefits also would alternate.

Parents Remarr y
If parents remarry: 1. The plan of the parent with custody is primary. 2. The plan of the spouse of the parent with custody is secondary. 3. The plan of the parent without custody is tertiary.

Stepchild/Foster Child
If the child is a stepchild, custody of the child supersedes the birthday rule. For foster children covered under the foster parents plans, the standard order of benefits applies.

ASSIGNMENT OF BENEFITS
An assignment of benefits takes place when the insured/patient has signed an agreement instructing their insurance company to pay the health-care provider directly for services rendered. The patient

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information form will include a statement for the patient to sign, which indicates the patient has given permission (Fig. 71). The information form is kept in the patients medical record to document the authorization. On the claim form the following area can be completed when a claim is submitted for payment (Fig. 72). Typically the words signature on file or the acronym SOF is entered on the signature line to instruct the insurance company to pay the doctor directly. This signature on file refers to the patients signature on the patient information sheet. The patients dont actually sign claim forms, instead they give their authorization when completing their patient information sheet. Patients would not typically ever see their claim forms. The patient receives a statement from his or her insurance company, either hard copy or electronic, indicating how a procedure was covered and paid for. With Medicare, a provider who accepts assignment will receive reimbursement directly from Medicare and agrees to accept Medicares approved reimbursement amount, as payment in full. This will be discussed in detail in Chapter 8.

THE CLAIM FORM

For many years there were several different claim forms and coding systems being used to communicate the diagnoses and procedures performed to third-party payers. There was no standardized form for physicians to report the services provided to their patients. In the 1980s, the AMA, CMS (known at the time as the Healthcare Finance Administration [HCFA]), and other organizations formed the Uniform Claim Form Task Force. They worked together to standardize and promote the use of a universal claim form. The HCFA-1500 claim form, now known as the CMS-1500 claim form (Fig. 73), was soon accepted nationwide by most insurance carriers as the standard claim form for submission of medical claims.

! KEY TERM
CMS-1500The claim form used for submitting medical services for payment to an insurance organization.

Electronic Claim Filing

In the early 1980s, there was a push to move away from paper claims to claims sent via computer or telephone transmission. These claims became known as Electronic Data Interchange (EDI), and that interchange was broadened to include prior authorizations and a variety of medical record information. The third-party carriers have also gone to Electronic Funds Transfers (EFT), which drastically cuts the payment time. Instead of processing and mailing a check to each provider, the payments are deposited into the providers bank account and an online report is sent to the billing office. Based on the report, the medical coder applies insurance payments to the appropriate patient accounts for the paid services. Instead of waiting 2 to 4 weeks to receive payment or rejection of services, the medical coder receives weekly reports showing the total amount of money deposited and to whom it applies, for services processed in that group or batch of claims.

I hereby authorize payment of medical benefits billed to my insurance to John Smith, DO. I hereby accept responsibility for payment for any service(s) provided to me that is not covered by my insurance. I agree to pay all co-payments, coinsurance, and deductibles at the time the service is rendered.

Signature of Patient or Guardian

Date

FIGURE 71: Patient authorization for payment of medical benefits.

13. INSUREDS OR AUTHORIZED PERSONS SIGNATURE I authorize payment of medical benefits to the undersigned physician or supplier for services described below. r

FIGURE 72: Box 13 from CMS-1500 form.

SIGNED

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HEALTH INSURANCE CLAIM FORM

APPROVED BY NATIONAL UNIFORM CLAIM COMMITTEE 08/05 PICA 1. MEDICARE MEDICAID TRICARE CHAMPUS (Sponsors SSN) CHAMPVA GROUP HEALTH PLAN (SSN or ID) FECA BLK LUNG (SSN) SEX M 5. PATIENTS ADDRESS (No., Street) F 7. INSUREDS ADDRESS (No., Street) OTHER 1a. INSUREDS I.D. NUMBER PICA (For Program in Item 1)

(Medicare #)

(Medicaid #)

(Member ID#)

(ID)
4. INSUREDS NAME (Last Name, First Name, Middle I le Initial)

2. PATIENTS NAME (Last Name, First Name, Middle Initial)

3. PATIENTS BIRTH DATE MM DD YY

6. PATIENT RELATIONSHIP TO INSURED Self Spouse Child Other

Single ZIP CODE TELEPHONE (Include Area Code)

Married Full-Time Student

Other ZIP CODE

TELEPHONE (Include Area Code)

Employed

Part-Time Student

(
REDS a. INSUREDS DATE OF BIRTH MM DD YY M b. EMPLOYERS NAME OR SCHOOL NAME

)
SEX F

9. OTHER INSUREDS NAME (Last Name, First Name, Middle Initial)

10. IS PATIENTS CONDITION RELATED TO:

11. INSUREDS POLICY GROUP OR FECA NUMBER

a. OTHER INSUREDS POLICY OR GROUP NUMBER

a. EMPLOYMENT? (Current or Previous) YES NO PLACE (State) NO

b. OTHER INSUREDS DATE OF BIRTH MM DD YY M c. EMPLOYERS NAME OR SCHOOL NAME

SEX F

b. AUTO ACCIDENT? YES c. OTHER ACCIDENT? YES

c. INSURANCE PLAN NAME OR PROGRAM NAME

NO PLAN? d. IS THERE ANOTHER HEALTH BENEFIT P

YES NO

d. INSURANCE PLAN NAME OR PROGRAM NAME

10d. RESERVED FOR LOCAL USE E

If yes, re s return to and complete item 9 a-d.

READ BACK OF FORM BEFORE COMPLETING & SIGNING THIS FORM. 12. PATIENTS OR AUTHORIZED PERSONS SIGNATURE I authorize the release of any medical or other information necessary to process this claim. I also request payment of government benefits either to myself or to the party who accepts assignment y below. SIGNED 14. DATE OF CURRENT: MM DD YY ILLNESS (First symptom) OR INJURY (Accident) OR PREGNANCY(LMP) DATE

PERSONS SIGNATURE I authorize 13. INSUREDS OR AUTHORIZED P payment of medical benefits to the undersigned physician or supplier for services described below.

SIGNED

15. IF PATIENT HAS HAD SAME OR SIMILAR ILLNESS. 16. DATES PATIE NT PATIENT UNABLE TO WORK IN CURRENT OCCUPATION DD YY MM MM DD YY GIVE FIRST DATE MM IRST DD YY TO FROM
17a. 17b. NPI

17. NAME OF REFERRING PROVIDER OR OTHER SOURCE

HOSPITALIZATION DATES RELATED TO CURRENT SERVICES 18. HOSP MM DD YY MM DD YY FROM TO F 20. 2 OUTSIDE LAB? YES NO $ CHARGES

19. RESERVED FOR LOCAL USE

21. DIAGNOSIS OR NATURE OF ILLNESS OR INJURY (Relate Items 1, 2, 3 or 4 to Item 24E by Line) Relate 1.
3.

22. MEDICAID RESUBMISSION CODE ORIGINAL REF. NO. 23. PRIOR AUTHORIZATION NUMBER

MM

DATE(S) OF SERVICE From To DD YY MM DD

YY

B. C. PLACE OF SERVICE EMG

E. DIAGNOSIS POINTER

F. $ CHARGES

DAYS OR UNITS

G.

EPSDT ID. Family Plan QUAL.

H.

I.

J. RENDERING PROVIDER ID. #

1 2 3 4
5

NPI

NPI

NPI

NPI

NPI

6
25. FEDERAL TAX I.D. NUMBER AL SSN EIN S 26. PATIENTS ACCOUNT NO. 27. ACCEPT ASSIGNMENT?
(For

NPI
govt. claims, see back)

28. TOTAL CHARGE $

29. AMOUNT PAID $

30. BALANCE DUE $

YES 31. SIGNATURE OF PHYSICIAN OR SUPPLIER INCLUDING DEGREES OR CREDENTIALS EES (I certify that the statements on the reverse me apply to this bill and are made a part thereof.) 32. SERVICE FACILITY LOCATION INFORMATION

NO

33. BILLING PROVIDER INFO & PH #

SIGNED

DATE

a.

b.

a.

b.

NUCC Instruction Manual available at: www.nucc.org

PLEASE PRINT OR TYPE

APPROVED OMB-0938-0999 FORM CMS-1500 (08-05)

FIGURE 73. CMS-1500 form.

PHYSICIAN OR SUPPLIER INFORMATION

2. 24. A.

4. SUPPLIES D. PROCEDURES, SERVICES, OR SUP (Explain Unusual Circumstances) MODIFIER CPT/HCPCS MODI

PATIENT AND INSURED INFORMATION

CITY

STATE

8. PATIENT STATUS

CITY

STATE

CARRIER

1500

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In the 1990s, the interest turned toward electronic claims submission and HIPAA regulations. The Uniform Claim Form Task Force was replaced by the National Uniform Claim Committee (NUCC). Their goal was to standardize the data used in the electronic claim submissions and remain consistent with the standard paper claim. The NUCC developed the NUCC Data Set (NUCC-DS), which is a set of standardized instructions for electronic claims. These instructions are consistent with the paper claim instructions. The claim completion instructions have been released by the NUCC and do not represent the requirements that every third-party payer demands, but rather a standard set of instructions to complete the CMS-1500 form. The medical coder must have an understanding of the requirements in each field of the claim form to determine if the form has been properly completed and ready to be sent to a third-party carrier. Upcoming chapters will address the data required by other carriers. The NUCC is currently responsible for the maintenance of the claim form. The most recent version of the claim form is the CMS-1500 (08-05). The form was revised in 2007 to accommodate the National Provider Identifier (NPI), and the NUCC continues to study the type of data required by third-party payers. There are fields still labeled as RESERVED FOR LOCAL USE, but the NUCCs ultimate goal is to standardize the claim form completion instructions to meet both public and private payers.

Completing the Claim Form

Completing the claim form properly is the key to expediting accurate payment for the services rendered to patients (Table 71 and Box 71). When a patient is seen for the first time, he or she completes a patient registration form. (See Fig. 11 for a sample patient registration or information form.) The patient demographics include name, address, phone number, place of employment, the responsible party for the bill, and the type of insurance coverage. The medical coder will use this information to complete the first half of the CMS-1500 claim form, items 1 through 13 (Fig. 74).

TABLE 71: Information Needed to Complete the CMS-1500 Form

Information Needed Items 113 Patient and Insured Information Item 1: Type of Health Insurance Check the box of the insurance company where the claim will be sent The ID number of person who holds the policy The name of the patient who received the service The patients date of birth and gender, male or female The name of the person who holds the policy The patients permanent address and phone number Indicate how the patient is related to the insured The insureds permanent mailing address Indicate the patients marital and employment status The name of the person who holds another policy on the patient Patients insurance card and patient information sheet Patients insurance card and patient information sheet Patient information sheet Where the Information Will Be Found

Item 1a: Insureds ID Number

Item 2: Patients name (Last, First, Middle Initial) Item 3: Patients Date of Birth

Patient information sheet

Item 4: Insureds Name (Last, First, Middle Initial) Item 5: Patients Address

Patients Insurance Card & Patient information sheet Patient information sheet

Item 6: Patients Relationship to Insured Item 7: Insureds Address Item 8: Patients Status

Patient information sheet

Patient information sheet Patient information sheet

Item 9: Other Insureds Name

Patient information sheet

Continued

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TABLE 71: Information Needed to Complete the CMS-1500 Formcontd

Information Needed Items 113 Patient and Insured Information Item 9a: Other Insureds Policy or Group Number Item 9b: Other Insureds date of birth Item 9c: Employers name or School Name Item 9d: Insurance Plan Name or Program name Item 10a: Is Patients Condition Related To Employment? The policy number of the insured in Box 9 Patient information sheet and Box 9 of claim Patient information sheet and Box 9 of claim Patient information sheet and Box 9 of claim Patient information sheet and Box 9 of claim Patient information sheet and/or the appointment schedule Where the Information Will Be Found

The birth date and gender of the insured in Box 9 The employer or school name of the insured in Box 9 The name of the plan or program of the insured indicated in Box 9 Indicate yes or no if the condition of the patients is related to an employment incident Indicate yes or no if the condition of the patients is related to an auto accident Indicate yes or no if the condition of the patients is related to another type of accident Any information required by the insurance company in Box 1 The group ID number or the alphanumeric number (FECA) of the health, auto, or other insurance plan of the insured in Box 4 The birth date and gender of the insured in Box 1a The employer or school name of the insured in Box 1a The name of the plan or program of the insured indicated in Box 1a If the patient is covered under another plan other than the one in Box 1

Item 10b: Is Patients Condition Related to Auto Accident? Item 10c: Is Patients Condition Related to Other Accident?

Patient information sheet and/or the appointment schedule Patient information sheet and/or the appointment schedule

Item 10d: Reserved for Local Use

Insurance company information indicated in Box 1s policy manual Patient information sheet and/or the ID card of the person indicated in Box 4

Item 11: Insureds Policy Group or FECA Number

Item 11a: Insureds Date of Birth

Patient information sheet

Item 11b: Employers Name or School Name Item 11c: Insurance Plan Name or Program Name Item 11d: Is There Another Health Plan? If yes, return to and complete 9 ad Item 12: Patients or Authorized Persons Signature

Patient information sheet

Patient information sheet

Patient Information Sheet and Boxes 9 ad

A signature on file authorizing a release of medical records or other information needed to process the claim A signature on file authorizing payment for the services indicated on the claim, to be sent directly to the provider who appears in Boxes 31 and 32 of the claim

Patient information sheet

Item 13: Insureds or Authorized Signature

Patient information sheet

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TABLE 71: Information Needed to Complete the CMS-1500 Formcontd

Information Needed Items 1433 Patient and Insured Information Item 14: Date of Current Illness, Injury, Pregnancy The first date of onset of illness, the actual date of the injury, or the LMP for pregnancy The first date the patient had the same or a similar illness The from and to dates that the patient is/was unable to work Name of the referring, ordering, or supervising provider who referred, ordered, or supervised the service on the claim Was used for the other ID # of the referring, ordering, or supervising provider listed in Box 17, who referred, ordered, or supervised the service on the claim HIPAAs National Provider Identifier (NPI) number of the referring, ordering, or supervising provider listed in Box 17 The admission and discharge dates of the inpatient stay related to the services listed on the claim The appropriate information requested by the payer the claim will be submitted to Yes or no; the service/s on the claim were purchased from an outside laboratory and the charged amount The ICD-9-CM code representing the patients diagnosis or condition. The reason for the services on the claim The original reference number assigned by Medicaid to indicate a previously submitted claim The number assigned by payer when a service has been approved/determined medically necessary The date service(s) where performed (mmddyyyy) (up to 6 services billed per claim) The location the service was rendered (Y) Yes or (N) No the service(s) was an emergency The CPT/HCPCS code and modifier if needed, identifying the service Patients medical record Where the Information Will Be Found

Item 15: If Patient Has Had Same or Similar Illness Item 16: Dates Patient Unable to Work in Current Occupation Item 17: Name of Referring Provider or Other Source

Patients medical record

Patients medical record

Patients medical record

Item 17a: Other ID #

The referring, ordering, or supervising provider or directory containing the ID numbers

Item 17b: NPI #

The referring, ordering, or supervising provider directory containing the ID numbers Patients medical record

Item 18: Hospitalization Dates Related to Current Illness

Item 19: Reserved for Local Use

The policy manual of the thirdparty payer indicated in Box 1 Patients medical record or log kept on file

Item 20: Outside Lab? $ Charges

Item 21: Diagnosis or Nature of Illness or Injury (relate items 1, 2, 3, or 4 to 24E by line) Item 22: Medicaid Resubmission

Patients medical record and current ICD-9-CM manual

The instructions from the local and current Medicaid policy manual

Item 23: Prior Authorization Number

Patients Medical Record or log kept on file

Item 24A: Date(s) of Service

Superbill

Item 24B: Place of Service Item 24C: EMG

Superbill Superbill

Item 24D: Procedures, Services, Supplies

Superbill
Continued

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TABLE 71: Information Needed to Complete the CMS-1500 Formcontd

Information Needed Items 1433 Patient and Insured Information Item 24E: Diagnosis Pointer Indicates the line number from Box 21 that relates to the service(s) rendered Total billed amount for each service line The number of days indicated in the date span of Box 24A or the number of units or minutes the service was performed (1 visit = 1 unit) If applicable, a Yes(Y)/No(N) indicating the service rendered was related to Early Periodic Screening, Diagnosis, and Treatment Was used for the ID# of the provider of service if they do not have an NPI # (1C = Medicare) The ID number assigned to the provider of service indicated in Box 24D The tax ID or social security number of the provider of service The identifying number assigned by the provider of service (if assigned) Yes or No box indicating if the provider of service accepts Medicares payment The sum of all services entered in Box 24J Amount patient or other payer paid toward the services in Box 24J Superbill Where the Information Will Be Found

Item 24F: $ Charges Item 24G: Days or Units

Log kept on file Superbill

Item 24H: EPSDT Family Plan

The instructions from the local and current Medicaid or other thirdparty carriers policy manual

Item 24I: ID Qualifier

The instructions from the local and current Medicaid or other thirdparty carriers policy manual The provider directory containing the ID numbers The provider of services records

Item 24J: Rendering Provider ID #

Item 25: Federal Tax ID #

Item 26: Patients Account No.

Patients medical record or file

Item 27: Accept Assignment

The provider of services records

Item 28: Total Charge

The superbill, a hospital report, or the patients account The superbill, a record of receipts, or statement from a third-party payer, or the patients account The superbill, a record of receipts or statement from a third-party payer, or the patient s account (this field does not exist on paperless claims) The provider or their representatives signature A signature is needed on any paper claim, but may be a stamped signature The signature and date field does not exist when billing paperless claims A provider directory or phone book The coders place of employment The provider directory containing the ID numbers

Item 29: Amount Paid

Item 30: Balance Due

Amount left after payment.

Item 31: Signature of Physician or Supplier including Degrees or Credentials (I certify that the statements on the reverse apply to this bill and are made a part thereof)

The physicians or other health-care providers signature or that of their representative Signature on File or SOF with the date the claim form was completed (6 or 8 digits MMDDYY or MMDDYYYY)

Item 32: Service Facility Location Information Item 32a: NPI #

The name and address of facility where services were rendered The NPI number of the facility where the service took place

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TABLE 71: Information Needed to Complete the CMS-1500 Formcontd

Information Needed Items 1433 Patient and Insured Information Item 32b: Other ID # Was used for the two-digit non-NPI number (see Fig. 76) followed by the NPI identification number of the facility where the service took place The name and address of the provider requesting payment for the service in Box 24 The NPI number of the provider requesting payment for the service(s) in Box 24 Was used for the two-digit non-NPI number followed by the NPI identification number of the provider requesting payment for the service(s) in Box 24 The instructions from the thirdparty carriers policy manual Where the Information Will Be Found

Item 33: Billing Provider Info and Phone #

A provider directory or phone book, or the coders place of employment

Item 33a: NPI #

The provider directory containing the ID numbers The instructions from the thirdparty carriers policy manual

Item 33b: Other ID #

BOX 71: General Claim Completion Tips

I I

Itemize all other services (laboratory and x-ray) from the office visit. Always include the date of birth and name of patient, the appropriate policy number, and name of the insured. I Always complete Box 10 and use accurate diagnoses codes. They identify the accident or illness and can affect the percentage of reimbursement from the insurance company. I Use of accurate CPT and ICD-9-CM codes will expedite the processing of your claims. I Most commercial insurance companies will allow more than four diagnoses on the claim. Use more codes to show the severity or the full description of the patients illness or injury, if needed. I Up to six separate services may be billed on a claim form. The shaded area of each line item in 24 A through 24 J does not indicate space for two separate services/charges. I The physicians Federal Tax ID number or given provider number must be included for processing claims. The physicians signature should be on the claim as well. I Completed claim forms must be submitted to the appropriate third-party carriers/insurance companies address found on the back of most insurance ID cards. Manuals with third-party addresses also are available for purchase. I The medical coder should rely on the information offered by a third-party carrier, either online or from manuals offered. Many carriers provide for either and the medical coder will find information pertinent to that carrier. I The medical coder also may contact the local, state medical society. Each society provides information pertinent to the state in which the services were rendered.

Most offices will have a superbill or route slip (see Fig. 15 for a sample superbill) that will be used to document the following: I Date of service I Service(s) that were provided to the patient I Diagnoses of the patient I Provider of service to the patient I Location the service was rendered This information is used along with the patients medical records to complete items 14 through 33 of the CMS-1500 (Fig. 75).

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DO NOT USE PUNCTUATION

HEALTH INSURANCE CLAIM FORM

APPROVED BY NATIONAL UNIFORM CLAIM COMMITTEE 08/05 PICA 1. MEDICARE MEDICAID TRICARE CHAMPUS (Sponsors SSN) CHAMPVA GROUP HEALTH PLAN (SSN or ID) FECA BLK LUNG (SSN) SEX M F OTHER 1a. INSUREDS I.D. NUMBER

PICA (For Program in Item 1)

(Medicare #)

(Medicaid #)

(Member ID#)

(ID)

XGA00778
4. INSUREDS NAME (Last Name, First Name, Middle I le Initial)

2. PATIENTS NAME (Last Name, First Name, Middle Initial)

3. PATIENTS BIRTH DATE MM DD YY

COHELO CARA M
5. PATIENTS ADDRESS (No., Street)

06 21 1984
Self STATE

COHELO CARA M
7. INSUREDS ADDRESS (No., Street)

6. PATIENT RELATIONSHIP TO INSURED

127 WEST ROAD

CITY

Spouse

Child

Other

127 WEST ROAD PRESLEY

ZIP CODE

PRESLEY
ZIP CODE

CT
TELEPHONE (Include Area Code)

Single

X X

Married Full-Time Student

Other Part-Time Student

CT
TELEPHONE (Include Area Code)

06100

( 555 )

555 1111

Employed

06100 4488

( 555 )

555 1111

9. OTHER INSUREDS NAME (Last Name, First Name, Middle Initial)

10. IS PATIENTS CONDITION RELATED TO:

11. INSUREDS POLICY GROUP OR FECA NUMBER

a. OTHER INSUREDS POLICY OR GROUP NUMBER

a. EMPLOYMENT? (Current or Previous) YES

X X X

REDS a. INSUREDS DATE OF BIRTH MM DD YY

SEX M F

NO PLACE (State) NO

06 21 1984

b. OTHER INSUREDS DATE OF BIRTH MM DD YY M c. EMPLOYERS NAME OR SCHOOL NAME

SEX F

b. AUTO ACCIDENT? YES c. OTHER ACCIDENT? YES

b. EMPLOYERS NAME OR SCHOOL NAME

ALOISO ADVERTISING ASSOCIATES

c. INSURANCE PLAN NAME OR PROGRAM NAME

NO

QUALITY HEALTHCARE
PLAN? d. IS THERE ANOTHER HEALTH BENEFIT P
YES

d. INSURANCE PLAN NAME OR PROGRAM NAME

10d. RESERVED FOR LOCAL USE E

NO

If yes, re s return to and complete item 9 a-d.

READ BACK OF FORM BEFORE COMPLETING & SIGNING THIS FORM. 12. PATIENTS OR AUTHORIZED PERSONS SIGNATURE I authorize the release of any medical or other information necessary to process this claim. I also request payment of government benefits either to myself or to the party who accepts assignment y below. SIGNED

PERSONS SIGNATURE I authorize 13. INSUREDS OR AUTHORIZED P payment of medical benefits to the undersigned physician or supplier for services described below.

SIGNATURE ON FILE OR SOF

DATE

SIGNED

SIGNATURE ON FILE OR SOF

FIGURE 74: Top of completed CMS-1500 form.

A and B Boxes
During the implementation of the new identification numbers mandated by HIPAA, the carriers needed a way to identify or cross-reference each provider accurately. Before the implementation of new provider identification, a Provider Identification Number or PIN was assigned to providers by some carriers, such as Medicare, Medicaid, or Blue Cross Blue Shield. As the carriers were making provider number switches in their own systems, many carriers asked that the providers use their old provider identification numbers and their new NPIs to simplify the process. Boxes 17b, 32b, and 33b were used for this information. Identification number change was a huge transformation. The revised CMS-1500 claim form was designed with areas in which both new and old identification numbers could be included. The B boxes used the old provider number with a non-NPI two-digit number in front of it temporarily. Carriers assigned two-digit alphanumeric codes referred to as non-NPI number qualifiers, to be added to the health-care providers identification number. The two-digit code identified what the old provider identification number had previously been used for. For example, 1B was a Blue Shield identification number, 1D was a Medicaid identification number, and 1C was used by Medicare. Other two-digit numbers were created for the use of tax ID numbers, and commercial and managed care plans. After all providers and carriers were newly identified and systems were updated, the use of the B boxes was eliminated. The NPI numbers are used in boxes 17a, 32a and 33a. Box 24 I was used just like a B box and contained the non-NPI qualifier (Fig. 76).

Back of CMS-1500 Claim Form

On the back of the CMS-1500 claim form (Fig. 77), the medical coder will find certifications, authorizations, and validations for submitting the claim form. When signed, it becomes a legal document requesting money from the federal government or a third-party payer. The signatory on the front certifies that the information on the claim form is legitimate and accurate. If found to be false, the person of the signature may be prosecuted in a court of law. This alone is incentive for the medical coder to be accurate when coding and knowledgeable of current claim form completion rules and regulations.

PATIENT AND INSURED INFORMATION

8. PATIENT STATUS

CITY

STATE

CARRIER

1500

A COMPUTER-GENERATED CLAIM WILL PRINT OUT THE NAME OF THE INSURANCE COMPANY AND ITS ADDRESS

QUALITY HEALTHCARE 444 MAIN STREET DES MOINES, IA 55555

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DECIMAL POINT SHOULD BE USED WHEN APPLICABLE

DECIMAL POINT MAY BE USED HERE

14. DATE OF CURRENT: MM DD YY

03 20 09

ILLNESS (First symptom) OR INJURY (Accident) OR PREGNANCY(LMP)

15. IF PATIENT HAS HAD SAME OR SIMILAR ILLNESS. 16. DATES PATIE NT PATIENT UNABLE TO WORK IN CURRENT OCCUPATION DD YY MM MM DD YY GIVE FIRST DATE MM IRST DD YY TO FROM
17a. 17b. NPI

17. NAME OF REFERRING PROVIDER OR OTHER SOURCE

LOUISE RENSHAW MD
19. RESERVED FOR LOCAL USE

7690859444

HOSPITALIZATION DATES RELATED TO CURRENT SERVICES 18. HOSP MM DD YY MM DD YY FROM TO F 20. 2 OUTSIDE LAB? YES $ CHARGES NO

21. DIAGNOSIS OR NATURE OF ILLNESS OR INJURY (Relate Items 1, 2, 3 or 4 to Item 24E by Line) Relate 1.

22. MEDICAID RESUBMISSION CODE ORIGINAL REF. NO. 23. PRIOR AUTHORIZATION NUMBER

346.01

3.

MM

DATE(S) OF SERVICE From To DD YY MM DD

YY

B. C. PLACE OF SERVICE EMG

E. DIAGNOSIS POINTER

F. $ CHARGES

DAYS OR UNITS

G.

EPSDT ID. Family Plan QUAL.

H.

I.

J. RENDERING PROVIDER ID. #

1 2 3 4
5

03 27 03 29 04 01 04 04 04 06

09 09 09 09 09

03 27 03 29 04 01 04 04 04 06

09 09 09 09 09

11 11 11 11 11

97813 97813 97813 97813 97813

1 1 1 1 1

65.00 65.00 65.00 65.00 65.00

1 1 1 1 1

NPI

NPI

NPI

NPI

NPI

6
25. FEDERAL TAX I.D. NUMBER AL SSN EIN S 26. PATIENTS ACCOUNT NO. 27. ACCEPT ASSIGNMENT?
(For

NPI
govt. claims, see back)

28. TOTAL CHARGE $

29. AMOUNT PAID $

30. BALANCE DUE $

865623498

1296

YES

NO

325 00

325 00

31. SIGNATURE OF PHYSICIAN OR SUPPLIER INCLUDING DEGREES OR CREDENTIALS EES (I certify that the statements on the reverse me apply to this bill and are made a part thereof.)

32. SERVICE FACILITY LOCATION INFORMATION

33. BILLING PROVIDER INFO & PH #

( 555 ) 111-5555

Henry Lee, MD 04/06/2009

SIGNED OR SIGNATURE ON FILE DATE

HENRY LEE MD 15 MAIN STREET BLUEVILLE CT 06100 a. 8700334239 b. NPI

PLEASE PRINT OR TYPE

HENRY LEE MD 15 MAIN STREET BLUEVILLE CT 06100 a. 8700334239 b. NPI

APPROVED OMB-0938-0999 FORM CMS-1500 (08-05)

NUCC Instruction Manual available at: www.nucc.org

THE SIGNATURE OF THE PHYSICIAN OR SUPPLIER AND DATE DOES NOT EXIST ON ELECTRONIC CLAIMS

FIGURE 75: Bottom half of completed CMS-1500 form.

FIGURE 76: Non-NPI qualifier list.

0B 1A 1B 1C 1D 1G 1H G2 LU N5 TJ X4 X5 ZZ

State License Number Blue Cross Provider Number Blue Shield Provider Number Medicare Provider Number Medicaid Provider Number Provider UPIN Number CHAMPUS Identification Number Provider Plan Network Identification Number Location Number Provider Plan Network Identification Number Federal Taxpayers Identification Number Clinical Laboratory Improvement Amendment Number State Industrial Accident Provider Number Provider Taxonomy

PHYSICIAN OR SUPPLIER INFORMATION

2. 24. A.

4. SUPPLIES D. PROCEDURES, SERVICES, OR SUP (Explain Unusual Circumstances) MODIFIER CPT/HCPCS MODI

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S
FIGURE 77: Back of the CMS-1500 form.

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CONCLUSION
Accurate coding, claim form completion, and accounting are essential to the success and job gratification of any medical coder. It is a challenge to keep up with the ever-changing standards and codes. Joining or forming a network of and relationship with other coders and even third-party carrier representatives, provides the coder with a wealth of knowledge and the confidence to do the job right.

RESOURCE LIST National Association of Insurances Commissioners (NAIC)

www.naic.org

National Uniform Claim Committee

www.nucc.org

Centers for Medicare & Medicaid

www.cms.hhs.gov

Austrin, MS. (1999). Managed Care Simplied: A Glossary of Terms. Delmar Cengage Learning. State of New Jersey Medicaid Management Information Systems
www.njmmis.com

State of California Department of Health Care Service

www.dhcs.ca.gov

New York State Department of Health

www.health.state.ny.us

See the DavisPlus website for a full list of State Medical Societies.

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Chapter Review Exercises

General Insurance
Complete the following questions. 1. The CMS-1500 claim form is designed to accommodate up to six different services. True or False (circle one) 2. A person can obtain health insurance in what three types of insurance policies?

3. The Birthday Rule is used to determine the order of benefits. True or False (circle one) 4. Always use the patients social security number for identification when completing the claim form. True or False (circle one) 5. To the medical office, an individual is referred to as the patient. To third party insurance carrier that individual is known as the 6. Yes or No. The state of the birthday rule. (insert your state here) has adopted

Commercial Insurance Claim Completion

For the following exercises, you will fill out claims as if you were part of the insurance personnel for Dr. John Smith. You will find demographics, office fee schedule, and a blank CMS-1500 form in Appendix A. You will use this information along with Claim Completion scenarios to complete the claim form exercises. 7. Terri Jones Terri Jones is seen in Dr. Smiths office on April 3 of this year. She is covered under her husbands insurance that is through Aetna Life and Casualty. Her husbands name is Richard and he works for ABC Electric. His insurance I.D. number is 333-25-8888. Terri came to see Dr. Smith for headaches she has been suffering from. Dr. Smith performed an established patient, problem-focused exam, straightforward decision making office visit. He also took complete sinus x-rays. Terris date of birth is 2-12-55. Her address is 730 West Grand, Anytown, USA 51111. Complete a CMS-1500 form using the information above, the appropriate patient registration information, superbill, and fee schedule in Appendix A. 8. John Doe John Doe is seen in the emergency room at Anytown Hospital on September 12, of this year. John was playing softball with his neighbors. He collided with another player and may have fractured his right arm. Dr. Smith performs an expanded problem-focused, low-complexity, emergency department visit and finds no fracture. The hospital will bill for the x-ray. Complete a CMS-1500 form using the information provided, the appropriate patient registration information, superbill, and fee schedule in Appendix A.

198