Insurance BillIng guIdelines General billing guidelines common to most payers include: 1. Provider services for inpatient care are billed on a fee-for-service basis. Each physician service results in a unique and separate charge des- ignated by a CPT/HCPCS service/procedure code. (Hospital inpatient charges are reported on the UB-04, discussed in Chapter 9.) ExAMPlE: The patient was admitted on June 1 with a diagnosis of bronchopneu- monia. The doctor sees the patient each morning until the patient is discharged on June 5. Billing for this inpatient includes: The development of an insurance claim begins when the patient contacts a health care provider’s office and schedules an appointment. At this time, it is important to determine whether the patient is requesting an initial appointment or is returning to the practice for additional services. (The preclinical interview and check-in of a new patient are more extensive than that of an established patient.) ExAMPlE: Section 1862 of Title XVIII—Health Insurance for the Aged and Dis- abled of the Social Security Act specifies that for an individual covered by both workers’ compensation (WC) and Medicare, WC is primary. For an individual covered by both Medicare and Medicaid, Medicare is primary. 6/1 6/2–6/4 6/5 Initial hospital visit (99xxx) Three subsequent hospital visits (99xxx × 3) Discharge visit (99xxx) ExAMPlE: Dr. Adams and Dr. Lowry are partners in an internal medicine group practice. Dr. Adams’ patient, Irene Ahearn, was admitted on May 1 with a chief complaint of severe chest pain, and Dr. Adams provided E/M services at 11:00 a.m. at which time the patient was stable. (Dr. Lowry is on call as of 5:00 p.m. on May 1.) At 7:00 p.m., Dr. Lowry was summoned to provide critical care because the patient’s condition became unstable. Dr. Adams reports an initial hospital care CPT code, and Dr. Lowry reports appropriate E/M critical care code(s) with modifier -25 attached. 2. Appropriately report observation services. The Medicare Benefit Policy manual (PUB 100-02), Section 20.5—Outpatient Observation Services, defines observation care as “a well-defined set of specific, clinically appropriate services, which include ongoing short-term treatment, assess- ment, and reassessment before a decision can be made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital. Observation status is commonly assigned to patients who present to the emergency department and who then require a significant period of treatment or monitoring before a decision is made concerning their admission or discharge. Observation services are covered only when provided by the order of a physician or another individual authorized by state licensure law and hospital staff bylaws (policies) to admit patients to the hospital or to order outpatient tests. In the majority of cases, the decision whether to discharge a patient from the hospital following resolution of the reason for the observation care or to admit the patient as an inpatient can be made in less than 48 hours, usually in less than 24 hours. In only rare and exceptional cases do reasonable and necessary outpatient observation services span No subsequent hospital visits or discharge day codes are reported because the global surgery package concept applies. more than 48 hours. Hospitals may bill for patients who are direct admis- sions to observation. A direct admission occurs when a physician in the community refers a patient to the hospital for observation, bypassing the clinic or emergency department (ED).” ExAMPlE: A 66-year-old male experiences three or four annual episodes of mild lower substernal chest pressure after meals. The condition is unresponsive to nitroglycerin and usually subsides after 15 to 30 minutes. The patient’s physician has diagnosed stable angina versus gastrointestinal pain. On one occasion, while in recovery following outpatient bunion repair, the patient experiences an episode of lower substernal chest pressure. The patient’s physician is contacted and seven hours of observation services are provided, after which the patient is released. 3. The surgeon’s charges for inpatient and outpatient surgery are billed according to a global fee (or global surgery package), which means that one charge covers presurgical evaluation and management, initial and subsequent hospital visits, surgical procedure, the discharge visit, and uncomplicated postoperative follow-up care in the surgeon’s office. 4. Postoperative complications requiring a return to the operating room for surgery related to the original procedure are billed as an additional pro- cedure. (Be sure to use the correct modifier, and link the additional pro- cedure to a new diagnosis that describes the complication.) 5. Combined medical/surgical cases in which the patient is admitted to the hospital as a medical case but, after testing, requires surgery are billed according to the instructions in items 3–4. ExAMPlE: Patient is admitted on June 1 for suspected pancreatic cancer. Tests are performed on June 2 and 3. On June 4 the decision is made to perform surgery. Surgery is performed on June 5. The patient is discharged on June 10. This case begins as a medical admission. decision is made concerning their admission or discharge. Observation services are covered only when provided by the order of a physician or another individual authorized by state licensure law and hospital staff tests. In the majority of cases, the decision whether to discharge a patient from the hospital following resolution of the reason for the observation care or to admit the patient as an inpatient can be made in less than 48 hours, usually in less than 24 hours. In only rare and exceptional The billing will show: 6/1 6/2 and 6/3 6/4 Initial hospital visit (99xxx) Two subsequent hospital visits (99xxx × 2) One subsequent hospital visit with modifier -57 (99xxx-57) (indicating the decision for surgery was made on this day) At this point this becomes a surgery case. The billing continues with: 6/5 Some claims require attachments, such as operative reports, discharge summaries, clinic notes, or letters, to aid in determination of the fee to be paid by the third-party payer. Attachments are also required when CPT unlisted codes are reported. Each claims attachment (medical report substantiating the medical condition) should include patient and policy identification information. Instructions for submitting elec- tronic media claims (EMC) and paper-generated claims are discussed in Chapter 4. Any letter written by the provider should contain clear and simple English rather than “medicalese.” The letter can describe an unusual procedure, special operation, or a patient’s medical condition that war- ranted performing surgery in a setting different from the CMS-stipulated site for that surgery. A letter should be used in any of the following circumstances: ● Surgery defined as an inpatient procedure that is performed at an ambulatory surgical center (ASC) or physician’s office. ● Surgery typically categorized as an office or outpatient procedure that is performed in an ASC or on a hospital inpatient. ● A patient’s stay in the hospital is prolonged because of medical or psycho- logical complications. ● An outpatient or office procedure is performed as an inpatient procedure because the patient is a high-risk case. ● Explanation of why a fee submitted to an insurance company is higher than the health care provider’s normal fee for the coded procedure. (Modifier -22 should be added to the procedure code number.) ● A procedure is submitted with an “unlisted procedure” CPT code number, or an explanation or report of a procedure is required before reimbursement can be determined. 7. For paper-generated claims, great care must be taken to ensure that the data prints well within the boundaries of the properly designated blocks on the form. Data that run over into the adjacent blocks or appear in the wrong block will cause rejection of claims. 8. Policies located on the back of the CMS-1500 claim provide additional guidance to providers (Figure 11-1). (Electronic versions of the CMS-1500 embed the policies in block instructions.) 9. The provider’s return address can be entered in the upper right-hand cor- ner of the CMS-1500 claims, as permitted by third-party payers. OptIcal scannIng guIdelInes The CMS-1500 paper claim was designed to accommodate optical scanning of paper claims (Figure 11-2). This process uses a device (e.g., scanner) to convert printed or handwritten characters into text that can be viewed by an optical character reader (OCR) (a device used for optical character recognition). Entering data into the computer using this technology greatly increases productivity asso- ciated with claims processing because the need to manually enter data from the claim into a computer is eliminated. OCR guidelines were established when the HCFA-1500 (now called CMS-1500) claim was developed and are now used by all payers that process claims using the official CMS-1500 claim.
FIGURE 11-3 Example of correct placement of the x within a box on the CMS-1500 claim. All claims for case studies in this text are prepared according to OCR standards. ● All data must be entered on the claim within the borders of the data field. “X”s must be contained completely within the boxes, and no letters or numbers should be printed on vertical solid or dotted lines (Figure 11-3). Computer-generated paper claims: Software programs should have a test pattern program that fills the claim with “X”s so that you can test the alignment of forms. This is a critical operation with a pin-fed printer. Check the alignment and make any necessary adjustments each time a new batch of claims is inserted into the printer. ● Enter all alpha characters in uppercase (capital letters). ● Do not enter the alpha character “O” for a zero (0). ● Enter a space for the following, which are preprinted on the claim: ° Dollar sign or decimal in all charges or totals ° Parentheses surrounding the area code in a telephone number ● Do not enter a hyphen between the CPT or HCPCS code and modifier. Enter a space between the code and modifier. If multiple modifiers are reported for one CPT or HCPCS level II code, enter one space between each modifier. ● Do not enter hyphens or spaces in the social security number, in the employer identification number (EIN), or in the Health Plan Identifier (HPID) number. ● Enter commas between the patient or policyholder’s last name, first name, and middle initial. ● Do not use any other punctuation in a patient’s or policyholder’s name, except for a hyphen in a compound name. ExAMPlE: GARDNER-BEY ● Do not enter a person’s title or other designations, such as Sr., Jr., II, or III, unless printed on the patient’s insurance ID card. ExAMPlE: The name on the ID card states: Wm F. Goodpatient, IV Name on claim is entered as: GOODPATIENT IV, WILLIAM, F ● Enter two zeroes in the cents column when a fee or a monetary total is expressed in whole dollars. Do not enter any leading zeroes in front of the dollar amount.
ExamplEs: Six dollars is entered as 6 00 Six thousand dollars is entered as 6000 00 Courtesy of the Centers for Medicare & Medicaid Services, 6 00 www.cms.gov; Copyright © 2015 Cengage Learning®. Courtesy of the Centers for Medicare & Medicaid Services, www.cms.gov; Copyright © 2015 Cengage Learning®. FIGURE 11-4 proper entry for birth date. 03 08 YYYY X ● ● ● ● ● Birth dates are entered as eight digits with spaces between the digits represent- ing the month, day, and the four-digit year (MM DD YYYY). Blocks 24A (MM DD YY) and 31 (MMDDYYYY) require entry of dates in a different format. Care should be taken to ensure that none of the digits fall on the vertical separations within the block (Figure 11-4). Two-digit code numbers for the months are: Jan—01 Feb—02 Mar—03 Apr—04 May—05 June—06 July—07 Aug—08 Sept—09 Oct—10 Nov—11 Dec—12 Note: Typewritten and handwrit- ten claims have higher error rates, resulting in payment delays. For an electronic media claim, all corrections must be made within the computer data set. On a computer-generated paper claim, for errors caught before mailing, correct the data in the computer and reprint the claim. Errors should then be cor- rected in the computer database. Handwritten claims: Claims that contain handwritten data, with the exception of the blocks that require signatures, must be manually processed because they cannot be processed by scanners. This will cause a delay in payment of the claim. Extraneous data, such as handwritten notes, printed material, or special stamps, should be placed on an attachment to the claim. The third-party payer (carrier) block is located from the upper center to the right margin of the CMS-1500 claim form. Enter the name and address of the payer to which the claim is being sent, in the following format. Do not use punctuation (e.g., commas, periods) or other symbols in the address (e.g., enter 123 N Main Street 101, not 123 N. Main Street, #101). When entering a nine-digit zip code, include the hyphen (e.g., 12345-6789). Line 1 – Name of third-party payer Line 2 – First line of address Line 3 – Second line of address, if necessary; otherwise, leave blank Line 4 – City, state (2 characters), and zip code List only one procedure per line, starting with line one of Block 24. (To report more than six procedures or services for the same date of service, generate a new claim.) ● Photocopies of claims are not allowed because they cannot be optically scanned. All resubmissions must also be prepared on an original (red-print) CMS-1500 claim. (In addition, information located on the reverse of the claim must be present.) exercise 11-1 Applying Optical Scanning Guidelines On a blank sheet of paper, enter the following items according to optical scanning guidelines. 1. Patient name: Jeffrey L. Green, D.D.S. 2. Total charge of three hundred dollars. 3. Procedure code 12345 with modifiers -22 and -51. 4. ID number 123-45-6789. 5. Illustrate improper marking of boxes. 6. Enter the birth date for a person who was born on March 8, 2000. Answer the following questions. 7. Your medical office management software automatically enters the name of the payer and its mailing address on the claim. Where should this be placed? 8. Your computer uses pin-fed paper. You just ran a batch of 50 claims that will be mailed to one insurance company. All claims are properly processed. What must be done to the claims before they are placed in the envelope for mailing? 9. What is the rule for placing handwritten material on the claim? 10. Starting with line one of Block 24 on the CMS-1500 claim, list one procedure per line. When more than six procedures or ser- vices for the same date of service, __________. enterIng patIent and pOlIcyhOlder names When entering the patient’s name in Block 2, separate the last name, first name, and middle initial with commas (e.g., DOE, JOHN, S). When entering the policy- holder’s name in Block 4, separate the last name, first name, and middle initial with commas (e.g., DOE, JOHN, S). If the patient is the policyholder, enter the patient’s name as last name, first name, and middle initial (separated by commas). When entering the name of the patient and/or policyholder on the CMS-1500 claim, it is: ● Acceptable to enter a last name suffix (e.g., JR, SR) after the last name (e.g., DOE JR, JOHN, S) and/or a hyphen for hyphenated names (e.g., BLUM-CONDON, MARY, T) ● Unacceptable to enter periods, titles (e.g., Sister, Capt, Dr), or professional suf- fixes (e.g., PhD, MD, Esq.) within a name enterIng prOvIder names When entering the name of a provider on the CMS-1500 claim, enter the first name, middle initial (if known), last name, and credentials (e.g., MARY SMITH MD). Do not enter any punctuation. In Block 31, some third-party payers allow providers to: ● Use a signature stamp and handwrite the date. ● Sign and date a printed CMS-1500 claim. ● Enter SIGNATURE ON FILE or SOF for electronic claims transmissions if a certifi- cation letter is filed with the payer; the date is entered as MMDDYYYY (without spaces). enterIng maIlIng addresses and telephOne numBers When entering a patient’s and/or policyholder’s (Blocks 5 and 7) mailing address and telephone number, enter the street address on line 1. Enter the city and state on line 2. Enter the five- or nine-digit zip code and telephone number on line 3. The patient’s address refers to the patient’s permanent residence. Do not enter a temporary address or a school address. When entering a provider’s name, mailing address, and telephone number (Block 33), enter the provider’s name on line 1, enter the provider’s billing address on line 2, and enter the provider’s city, state, and five- or nine-digit zip code on line 3. Enter the telephone number in the area next to the Block title. recOvery Of funds frOm respOnsIBle payers Payers flag claims for investigation when an X is entered in one or more of the YES boxes in Block 10 of the CMS-1500 claim, or an ICD-10-CM code that begins with the letter V, W, X, or Y is reported in Block 21. Such an entry indicates that payment might be the responsibility of a workers’ compensation payer (Block 10a); automobile insurance company (Block 10b); or homeowners, business, or other liability policy insurance company (Block 10c). Some payers reimburse the claim and outsource (to a vendor that specializes in “backend recovery”) the pursuit of funds from the appropriate payer. Other payers deny payment until the provider submits documentation to support reimbursement processing by the payer (e.g., remittance advice from workers’ compensation or other liability payer denying the claim). Entering an X in any of the YES boxes in Block 10 of the CMS-1500 alerts the commercial payer that another insurance company might be liable for payment. The commercial payer will not consider the claim unless the provider submits a remittance advice from the liable party (e.g., automobile policy) indicating that the claim was denied. For employment-related conditions, another option is to attach a letter from the workers’ compensation payer that documents rejection of payment for an on-the-job injury. Third-party payers also screen submitted claims when codes for accidents and injuries are reported. When an external cause of injury code is reported on Block 21, the claims examiner “pends” the claim and submits a letter to the insured to request details about a possible accident or injury. Depending on the insured’s responses, the payer might deny the claim and instruct the insured to resubmit the claim to another payer (e.g., automobile insurance company, liabil- ity insurance company) for processing. natIOnal prOvIder IdentIfIer (npI) The national provider identifier (NPI) is a unique 10-digit number issued to individual providers (e.g., physicians, dentists, pharmacists) and health care organizations (e.g., group physician practices, hospitals, nursing facilities). The NPI replaced health care provider identifiers (e.g., PIN, UPIN) previously gener- ated by health plans and government programs. Submission of the NPI has been required on the CMS-1500 claim for: ● Large health plans (e.g., private payers, Medicare, Medicaid) and all health care clearinghouses, effective May 23, 2007 ● Small health plans, effective May 23, 2008 Even if an individual provider moves, changes specialty, or changes practices, the provider will keep the same NPI (but must notify CMS to supply the new information). The NPI will identify the provider throughout his or her career.
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The NPI issued to a health care organization is also permanent except in rare situations when a health care provider does not wish to continue an association with a previously used NPI
HIPAA mandated the adoption of standard unique identifiers to improve the efficiency and effectiveness of the electronic transmission of health information for: Note: If an NPI is used fraudu- lently by another, a new NPI will be issued to the individual provider or health care organiza- tion affected. The NPI issued to a health care organization is also permanent except in rare Even if an individual provider moves, changes specialty, or changes practices, the provider will keep the same NPI (but must notify CMS to supply the new information). The NPI will identify the provider throughout his or her career. ● ● ● ● Employers—national standard employer identifier number (EIN) Health care providers—national provider identifier (NPI) Health plans—health plan identifier (HPID) Individuals—national individual identifier (has been placed on hold) HIPAA covered entities include health plans, health care clearinghouses, and health care providers that conduct electronic transactions. HIPAA mandated use of the NPI to identify health care providers in standard transactions, which include claims processing, patient eligibility inquiries and responses, claims status inquiries and responses, patient referrals, and generation of remittance advices. Health care providers (and organizations) that transmit health information electronically to submit claims data are required by HIPAA to obtain an NPI even if the provider (or organization) uses business associates (e.g., billing agencies) to prepare the transactions. NPI Application Process The National Plan and Provider Enumeration System (NPPES) was developed by CMS to assign the unique health care provider and health plan identifiers and to serve as a database from which to extract data (e.g., health plan verification of provider NPI). Each health plan will develop a process by which NPI data will be accessed to verify the identity of providers who submit HIPAA transactions. Providers apply for an NPI by submitting the following: ● Web-based application ● Paper-based application ● Electronic file (e.g., hospital submits an electronic file that contains informa- tion about all physician employees, such as emergency department physicians, pathologists, and radiologists) Practices That Bill “Incident To” When a nonphysician practitioner (NPP) (e.g., nurse practitioner, physician assistant) in a group practice bills incident-to a physician, but that physi- cian is out of the office on the day the NPP provides services to the patient, another physician in the same group can provide direct supervision to meet the incident-to requirements. A supervising physician is a licensed physician in good standing who, according to state regulations, engages in the direct supervision of nurse practitioners and/or physician assistants whose duties are encompassed by the supervising physician’s scope of practice. A super- vising physician is not required to be physically present in the patient’s treatment room when services are provided; however, the supervising phy- sician must be present in the office suite or facility to render assistance, if necessary. When incident-to services are billed, the following entries are made on the CMS-1500: ● Enter the ordering physician’s name in Block 17 (not the supervising physician’s name). ● Enter the applicable qualifier (in the space preceding the name) to identify which provider is being reported. ° DN (referring provider) ° DK (ordering provider) ° DQ (supervising provider) ● Enter the ordering physician’s NPI in Block 17b. Enter the supervising physician’s NPI in Block 24I. ● Enter the supervising physician’s name (or signature) in Block 31. Courtesy of the Centers for Medicare & Medicaid Services, www.cms.gov assIgnment Of BenefIts versus accept assIgnment An area of confusion for health insurance specialists is differentiating between assignment of benefits and accept assignment. Patients sign Block 13 of the CMS-1500 claim to instruct the payer to directly reimburse the provider. This is called assignment of benefits. If the patient does not sign Block 13, the payer sends reimbursement to the patient. The patient is then responsible for reim- bursing the provider. When the YES box in Block 27 contains an X, the provider agrees to accept as payment in full whatever the payer reimburses. This is called accept assign- ment. The provider can still collect deductible, copayment, and coinsurance amounts from the patient. If the NO box in Block 27 contains an X, the provider does not accept assignment. The provider can bill the patient for the amount not paid by the payer. Courtesy of the Centers for Medicare & Medicaid Services, www.cms.gov repOrtIng dIagnOses: Icd-10-cm cOdes Block 21 Diagnosis codes (with decimal points) are entered in Block 21 of the claim. A maximum of 12 ICD-10-CM codes may be entered on a single claim. In the ICD Note: Ind (ICD indicator) box, enter 0 for ICD-10-CM (or 9 for ICD-9-CM). 17. NAME OF REFERRING PHYSICIAN OR OTHER SOURCE 17a. 17b. NPI 13. INSURED’S OR AUTHORIZED PERSON’S SIGNATURE I authorize payment of medical benefits to the undersigned physician or supplier for services described below. SIGNED 27. ACCEPT ASSIGNMENT? (for govt. claims, see back) YES NO ● When entering codes in Block 21, enter the decimal. If more than 12 diagnoses are required to justify the procedures and/or services on a claim, generate additional claims. In such cases, be sure that the diagnoses justify the medical necessity for performing the procedures/services ● When a payer allows more than one diagnosis pointer reported on each claim. Diagnoses must be documented in the patient’s record letter to be entered in Block 24E of the CMS-1500 claim, enter a space between each letter (e.g., A B C D). Do not enter commas between pointer letters. to validate medical necessity of procedures or services billed.
Sequencing Multiple Diagnoses The first-listed code reported is the major reason the patient was treated by the health care provider. Secondary diagnoses codes are entered in letters B through L of Block 21 and should be included on the claim only if they are necessary to justify procedures/services reported in Block 24D. Do not enter any diag- noses stated in the patient record that were not treated or medically managed (e.g., existing diagnosis that impacts treatment of a new diagnosis) during the encounter. Be sure code numbers are placed within the designated field on the claim. Enter the decimal point, if appropriate for the reported code. Accurate Coding For physician office and outpatient claims processing, never report a code for diagnoses that includes such terms as “rule out,” “suspicious for,” “probable,” “ruled out,” “possible,” or “questionable.” Code either the patient’s symptoms or complaints, or do not complete this block until a definitive diagnosis is determined. Be sure all diagnosis codes are reported to the highest degree of specificity known at the time of the treatment. If the computerized billing system displays a default diagnosis code (e.g., condition last treated) when entering a patient’s claim information, determine if the code validates the current procedure/service reported. It may frequently be necessary to edit this code because, although the diagnosis may still be present, it may not have been treated or medically managed during the cur- rent encounter. repOrtIng prOcedures and servIces: hcpcs level II and cpt cOdes Instructions in this section are for those blocks that are universally required. All other blocks are discussed individually in Chapters 12 through 17. Block 24A—Dates of Service When the claim form was designed, space was allotted for a six-digit date pattern with spaces between the month, day, and two-digit year (MM DD YY). No allowance was made for the year 2000 or beyond and the need for a four-digit year. Therefore, a six-digit date is entered with spaces (e.g., MM DD YY). Courtesy of the Centers for Medicare & Medicaid Services, www.cms.gov; Copyright © 2015 Cengage Learning®. Block 24B—Place of Service All payers require entry of a place of service (POS) code on the claim. The POS code reported must be consistent with the CPT procedure/service code description, and it will be one or two digits, depending on the payer. (Refer to Appendix II for POS codes.) When third-party payers and government programs (e.g., Medicaid) audit submitted claims, they require evidence of documentation in the patient’s record about encounters and inpatient hospital visits. It is recommended that when a provider submits a claim for inpatient visits, a copy of hospital docu- mentation (e.g., progress notes) supporting the visits be filed in the office patient record. Without such documentation, payers and government programs deny reimbursement for the visits. Block 24C—EMG Check with the payer for their definition of emergency (EMG) treatment. If the payer requires completion of Block 24C, and EMG treatment was provided, enter a Y (for YES). Otherwise, leave blank. Block 24D—Procedures and Services Procedure codes and modifiers are reported in Block 24D. A maximum of six procedures and/or services may be reported on one claim. If the reporting of additional procedure and/or service codes is necessary, generate additional CMS-1500 claim(s). Below the heading in Block 24D is a parenthetical instruction that says (Explain Unusual Circumstances), which means to enter official CPT or HCPCS level II modifiers, attach documentation from the patient’s record, or include a letter written by the provider. When reporting more than one CPT Surgery code on a CMS-1500 claim, enter the code with the highest fee in line 1 of Block 24, and then enter additional codes (and modifiers) in descending order of charges. Be sure to completely enter data on each horizontal line before beginning to enter data on another line. ● Blocks 24I and 24J were split to accommodate reporting of the NPI (effective May 2007) and other identification num- Identical procedures or services can be reported on the same line if the fol- bers (prior to May 2007). lowing circumstances apply: ● Input from the health insur- ance industry indicated a need to report supplemental ● information about services ● reported. Procedures were performed on consecutive days in the same month. The same code is assigned to the procedures/services reported. Identical charges apply to the assigned code. Block 24G (Days or Units) is completed. ● ● The completely shaded area across rows 1–6 in Block 24 will be used to report supplemental information for each reported Modifiers service (e.g., anesthesia, National Drug Codes, product numbers). To accurately report a procedure or service, up to four CPT/HCPCS modifiers can be entered to the right of the solid vertical line in Block 24D on the claim. The first modifier is entered between the solid vertical line and the dotted line. If additional modifier(s) are added, enter one blank space between modifiers. Do not enter a hyphen in front of the modifier. Courtesy of the Centers for Medicare & Medicaid Services, www.cms.gov; Copyright © 2015 Cengage Learning®. Block 24E—Diagnosis Pointer Diagnosis pointer letters A through L are preprinted in Block 21 of the CMS-1500 claim, and they are reported in Block 24E. Although reporting of diagnosis pointer letters rather than ICD-10-CM code numbers is required, some payers require just one pointer letter to be entered in Block 24E; others allow multiple pointer letters (separated by one blank space) to be entered in Block 24E. Be sure to consult individual payers for specific instructions on how many pointer letters can be reported in Block 24E.
Block 24F—Charges Careful alignment of the charges in Block 24F, as well as the totals in Blocks 28 and 29, is critical. Precise entry of dollars and cents is also critical. The block has room for five characters in the dollar column and three in the cents column. Dollar amounts and cents must be entered in their own blocks with only one blank space between them (Figure 11-5).
Block 24G—Days or Units Block 24G requires reporting of the number of encounters, units of service or supplies, amount of drug injected, and so on, for the procedure reported on the same line in Block 24D. This block has room for only three digits. The most common number entered in Block 24G is “1” to represent the delivery of a single procedure/service. The entry of a number greater than “1” is required if identical procedures are reported on the same line. Do not confuse the number of units assigned on one line with the number of days the patient is in the hospital. ExAMPlE: The patient is in the hospital for three days following an open cholecys- tectomy. The number of units assigned to the line reporting the surgery is “1” (only one cholecystectomy was performed).
sIgnature Of physIcIan Or supplIer The provider signature in Block 31 of the CMS-1500 provides attestation (confir- mation) that the procedures and services were billed properly. This means that the provider is responsible for claims submitted in their name, even if they did not have actual knowledge of a billing impropriety. Courtesy of the Centers for Medicare & Medicaid Services, www.cms.gov repOrtIng the BIllIng entIty Block 33 requires entry of the name, address, and telephone number of the billing entity. The billing entity is the legal business name of the practice (e.g., Goodmedicine Clinic). In the case of a solo practitioner, the name of the practice may be entered as the name of the physician followed by initials that designate how the practice is incorporated (e.g., Irvin M. Gooddoc, M.D., PA). The phone number, including area code, should be entered on the same line as the printed words “& PH #.” Below this line is a blank space for a three-line billing entity mailing address. The last line of Block 33 is for entering the provider and/or group practice national provider number (NPI). Courtesy of the Centers for Medicare & Medicaid Services, www.cms.gov exercise 11-3 Completing Block 33 What is the name of the billing entity in these cases? 1. 2. 3. Dr. Cardiac is employed by Goodmedicine Clinic. Dr. Blank is a solo practitioner. The official name of his practice is Timbuktu Orthopedics. Dr. Jones shares office space with Dr. Blank at Timbuktu Orthopedics; Dr. Jones, PA, and Timbuktu Orthopedics have separate EIN numbers. prOcessIng secOndary claIms The secondary insurance claim is filed only after the remittance advice gener- ated as a result of processing the primary claim has been received by the medical practice. When submitting the secondary claim, attach the remittance advice to the claim sent to the secondary payer.
When primary and secondary information is entered on the same CMS- 1500 claim, primary insurance policy information is entered in Block 11 through 11c, and an X is entered in the YES box in Block 11d. The second- ary insurance policy information is entered in Blocks 9–9d of the same claim (Figure 11-6). When generating claims from this text and the Workbook, a single CMS-1500 claim is generated when the patient’s primary and secondary insurance policies are with the same payer (e.g., BlueCross BlueShield). Multiple claims are gener- ated when the patient is covered by multiple insurance policies with different companies (e.g., Aetna and United Healthcare). For example, if the patient has both primary and secondary insurance with different payers, two claims are generated. The primary claim is completed according to step-by-step instruc- tions, and the secondary claim is completed by following special instructions included in each chapter. Supplemental Plans Supplemental plans usually cover the deductible and copay or coinsurance of a primary health insurance policy. Some plans may also cover additional benefits not included in the primary policy. The best known supplemental plans are the Medigap plans, which are supplemental plans designed by the federal govern- ment but sold by private commercial insurance companies to “cover the gaps in Medicare.” Supplemental plan information is entered in Blocks 9–9d on the primary insurance claim (Figure 11-7).
cOmmOn errOrs that delay prOcessIng Procedure code number ● Diagnosis code number Policy identification numbers ● Dates of service ● Federal employer tax ID number (EIN) ● Total amount due on a claim ● Incomplete or incorrect name of the patient or policyholder (name must match the name on the policy; no nicknames) 2. Omission of the following: ● Current diagnosis (because of failure to change the patient’s default diagnosis in the computer program) ● Required fourth-, fifth-, sixth-, and/or seventh-characters for ICD-10-CM ● Procedure service dates ● Hospital admission and/or discharge dates ● Name and NPI of the referring provider ● Required prior treatment authorization numbers ● Units of service 3. Attachments without patient and policy identification information on each page. 4. Failure to properly align the claim form in the printer to ensure that each item fits within the proper field on the claim. 5. Handwritten items or messages on the claim other than required signatures. 6. Failure to properly link each procedure with the correct diagnosis (Block 24E). fInal steps In prOcessIng claIms STEP 1 Double-check each claim for errors and omissions. STEP 2 Add any necessary attachments
STEP 3 If required by the payer, obtain the provider’s signature on claims. STEP 4 Post submission of the claim on the patient’s account/ledger. STEP 5 Place a copy of the claim in the practice’s claims files. STEP 6 Submit the claim to the payer. maIntaInIng Insurance claIm fIles fOr the practIce Medicare Conditions of Participation (CoP) require providers to keep copies of any government insurance claims and copies of all attachments filed by the provider for a period of five years, unless state law specifies a longer period. “Providers and billing services filing claims electronically can comply with the federal regulation by retaining the source documents (routing slip, charge slip, encounter form, superbill) from which they generated the claim and the daily summary of claims transmitted and received for” these years. Although there are no specific laws covering retention of commercial or BlueCross BlueShield claims, health care provider contracts with specific insur- ance carriers may stipulate a specific time frame for all participating providers. It is good business practice to keep these claims until you are sure all transac- tions have been completed. Insurance File Set-Up Files should be organized in the following manner: 1. File open assigned cases by month and payer. (These claims have been sent to the payer, but processing is not complete.) 2. File closed assigned cases by year and payer. 3. File batched remittance advice notices. 4. File unassigned or nonparticipating claims by year and payer. Processing Assigned Paid Claims When the remittance advice arrives from the payer, pull the claim(s) and review the payment(s). Make a notation of the amount of payment, remittance advice notice processing date, and applicable batch number on the claim. Claims with no processing errors and payment in full are marked “closed.” They are moved to the closed assigned claims file. Single-payment remittance advice notices may be sta- pled to the claim before filing in the closed assigned claims file. Batched remittance advice notices are refiled and if, after comparing the remittance advice notices and the claim, an error in processing is found, the following steps should be taken: STEP 1 Write an immediate appeal for reconsideration of the payment. STEP 2 Make a copy of the original claim, the remittance advice notices, and the written appeal. STEP 3 STEP 4 STEP 5 STEP 6 Generate a new CMS-1500 claim, and attach it to the remittance advice notices and the appeal. (Black-and-white copies cannot be read by the payer’s optical scanner.) Make sure the date in Block 31 matches the date on the original claim. Mail the appeal and claim to the payer. Make a notation of the payment (including the check number) on the office copy of the claim. Refile the claim and attachments in the assigned open claims file. Federal Privacy Act The Federal Privacy Act of 1974 prohibits a payer from notifying the provider about payment or rejection of unassigned claims or payments sent directly to the patient/policyholder. If the provider is to assist the patient with the appeal of a claim, the patient must provide a copy of the explanation of benefits (EOB) received from the payer and a letter that explains the error. The letter is to be signed by the patient and policyholder, to give the payer permission to allow the provider to appeal the unassigned claim. The EOB and letter must accompany the provider’s request for reconsideration of the claim. If the policyholder writes the appeal, the provider must supply the policyholder with the supporting documentation required to have the claim reconsidered.