Chapter 4
Life Cycle
of an Insurance Claim
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Development
of an Insurance Claim
• CMS-1500 claim is used to report
professional and technical services
• Patient encounter form (or Superbill) is
used to generate the provider’s claim for
payment
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Life Cycle
of an Insurance Claim
3
Copyright © 2008 Delmar Learning. All rights reserved.
Information to Claim
• Information from the Superbill, patient
record, or chart is then transferred to
the CMS-1500 claim
4
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Accepting Assignment
• When provider agrees to what the
insurance company allows and or
approves as payment
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Accepting Assignment
• CMS-1500 claim:
– Requires responses pertaining to patient’s
condition and if related to employment,
auto or any other accident, additional
insurance coverage, or use of an outside
laboratory.
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Accepting Assignment
• Patient is responsible for co-payment
and coinsurance amounts
• “Signature on File” can be used as a
substitute for patient’s signature, as
long as real signature is on file.
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Accepting Assignment
• Claim is proofread and double checked
– Any supporting documents are copied from
patient’s chart and attached to claim
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Copyright © 2008 Delmar Learning. All rights reserved.
Managing New Patients
• Office policy and procedures (paying
co-payments)
– Should be explained and posted at
receptionist desk
• Determine whether appropriate office
has been contacted
– Then preregister new patients
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Managing New Patients
• Patient must complete a patient
registration form upon arrival
• Make photocopy (front and back) of
patient’s insurance card
– File in patient’s financial record
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Copyright © 2008 Delmar Learning. All rights reserved.
Managing New Patients
• Contact payer
– Confirm patient’s insurance information
located on back of insurance card
• Verify information with patient and/or
subscriber
– Make changes
– Enter information using computer entry
software
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Managing New Patients
• Create a new medical record for the
patient
• Generate patient’s encounter form
• Encounter form is a financial record that
documents treated diagnoses and
services
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Managing Established Patients
• Schedule a return appointment when
patient is checking out or when patient
calls office
• Verify all registration information
• Encounter form needs to be generated
for patient’s current visit
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Managing Office Finances
• CPT and HCPCS level 2 (national)
codes are assigned to procedures
• Enter charges for services and/or
procedures
• Post charges to patient’s account
• Collect payment from patient
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Managing Office Finances
•
•
•
•
Post payment to patient’s account
Complete insurance claim
Attach documents that support the claim
Obtain provider’s signature on claim if
processed manually
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Managing Office Finances
• File copies of the claim and attachments
in the practice’s insurance files
• Log completed claims in an insurance
registry
• Send claims by mail or electronically
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Appealing Denied Claims
• Remittance advice indicates that the
payment was denied for reasons other
than a processing error
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Steps to Appeal Denial
1. Procedure or services should be
reviewed from original documents for
diagnostic supporting documentation
– Research procedure and patient
documentation when denied for
“medical necessity.”
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Steps to Appeal Denial
2. Determine if condition is pre-existing
– If incorrect diagnosis code was
submitted on original claim
•
Correct claim and resubmit
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Steps to Appeal Denial
3. Noncovered benefit
– Determine if treatment submitted was
excluded
– If incorrect procedure code was
submitted
•
Correct claim, resubmit, and attach copy of
medical record documentation to support
code change
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Steps to Appeal Denial
4. Termination of coverage
– Contact patient
– Determine current coverage
– Authorization should be performed prior
to service
– If this was performed, submit with
authorization number
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Steps to Appeal Denial
5. Failure to obtain preauthorization
requests is a costly error for practice
– Retrospective review of claims are more
difficult or sometimes impossible to
obtain
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Steps to Appeal Denial
6. Out of network providers
– Write letter of appeal explaining why
treatment was sought outside the
provider network
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Steps to Appeal Denial
7. Provide letter of appeal explaining why
higher level of care was required
– Copies of patient’s chart may be needed
for review by insurance adjudicator.
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Credit and Collections
•
•
•
•
Delinquent claims and prevention
Verify health insurance cards
Determine each patient’s coverage
Electronically submit a clean claim
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Copyright © 2008 Delmar Learning. All rights reserved.
Credit and Collections
• Contact payer to verify received claim
• Review records to determine if claim is
paid, denied, or pending
• Submit supporting documents
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Claim Submission Problems,
Descriptions, and Resolutions
•
•
•
•
Coding errors
Delinquent
Denied
Lost
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Claim Submission Problems,
Descriptions, and Resolutions
• Overpayment
• Payment errors
• Pending
– Suspense
• Rejected
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Copyright © 2008 Delmar Learning. All rights reserved.