Christina J. Bradbury, DBA, CMA, CHFP

Webinar 1:

Compliance, Healthcare Reform, Patient Access and Claims Processing

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The Office of Inspector General (OIG) developed the Model Compliance Plan for Clinical Laboratories in 1997

and the Compliance Program Guidance for Hospitals in 1998.

Key risk areas that are perceived to lead to potential fraud and abuse for hospitals and providers include: Upcoding of DRG assignments, Bundling/unbundling of services, Billing for medically unnecessary services and Waiving of deductibles to entice business.

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False Claims Act

Prohibits the

submission of false

or fraudulent claims

to the Government

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• Self-reporting of adverse administrative • A corporate culture that encourages the constructive identification of potential or actual violations • Full support by the entire organization • Oversight of personnel by high-level personnel • Written policies & procedures, including an employee code of

ethics • Regular, comprehensive training • “Hot line” • Mechanisms for monitoring compliance, i.e., an audit process.

Code of Conduct -Should be embodied within the organization’s compliance program

-Focuses on: Human Resources, Privacy/Confidentiality, Quality of Care,

Billing/Coding, Conflicts of Interest, Laws/Regulation 5

The Office of Inspector General annually publishes the work plan of compliance issues for the following year.

The OIG Work Plan outlines current focus areas and states the primary objectives of each project.

http://oig.hhs.gov/reports-and-

publications/archives/workplan/2014/Work-Plan-2014.pdf

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1. Medicare as Secondary Payer (MSP) 2. MS- DRG window 3. Correct Coding Initiative (CCI) and Modifiers

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Working aged GHP coverage is billed as the primary (Medicare is secondary payer) when

the plan is provided by an employer with 20+ employees.

Accident or other liability Automobile accidents are included in this MSP category.

Disability LGHP coverage is billed as the primary (Medicare is secondary payer) when the plan is provided by an employer with 100+ employees.

End-Stage-Renal-Disease (ESRD) Medicare is secondary payer when patient is covered by a GHP, and has

not completed the 30-month coordination period.

Situations where another payer may be completely responsible for payment : work-related accidents, patients enrolled in Medicare Advantage plan, covered under

federal grant programs, black lung and public health service programs or the VA.

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Under Medicare rules, certain outpatient services provided by hospitals must be billed as part of an inpatient stay. These include: Outpatient diagnostic tests provided within three days of the

admission date, regardless of diagnosis. Other non-diagnostic services related to the admission that are

provided within three days of the admission date. (Ambulance,

Maintenance renal dialysis & Part A services provided by a nursing home are not considered related.)

Admission

Within billing window

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Medicare pays only for medically necessary services. Advanced Beneficiary Notice (ABN) The mechanism used by providers to explain to a Medicare beneficiary that the ordered test or services may not be covered. By providing this notification in advance, the Medicare beneficiary is given the cost of the test and the option to refuse or pay for the service. This allows the beneficiary to make an informed decision about whether or not to receive the items or services for which he/she may have to pay out of pocket or through other insurance.

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The purpose of the CCI is to ensure that the most comprehensive groups of codes, rather than the component parts, are billed.

Healthcare Common Procedure Coding System (HCPCS) – 3 levels of coding

Modifiers indicate a specific circumstance that has affected a procedure or service without changing its definition or code.

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Goals: Expand health coverage by improving the

portability and continuity of health insurance coverage in group and individual markets.

Give patients access to their health files and the right to request amendments or make corrections.

Facilitate the electronic exchange of medical information with respect to financial and administrative transactions carried out by health plans, healthcare clearinghouses, and healthcare providers.

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The final rule on transactions standardized the electronic formats so that data, remittance advice, and claims information could be transmitted using one type of electronic format.

Transaction/Code Set Name Identification # Healthcare claim transactions 837

Enrollment and disenrollment in a health plan 834

Healthcare eligibility verification and response 270/271

Healthcare claim payment and remittance advice 835

Health plan premium payments 820 Health claim status request and response 276/277 Referral certification and authorization 277/278 Coordination of benefits 837 13

Standard Unique Employer Identifier The use of a unique employer identifier is required under HIPAA. The

rule adopts the employer identification number assigned by the IRS.

National Provider Identifier A unique identification number for covered healthcare providers

required under HIPAA.

•Provide training to staff on policies & procedures governing HIPAA compliance.

•Define protected health information and access.

•Ensure training is based on the job responsibilities of staff who handle protected health information.

•Ensure that a privacy officer is hired/designated.

•Ensure that a contact person is hired/designated to handle questions/concerns

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Improve the quality of care i.e. reduce hospital readmissions, reduce hospital acquired conditions, improve physician quality reporting.

Reform the healthcare delivery system i.e. Accountable Care Organizations, Center for Medicare and Medicaid Innovation, Independent Payment Advisory Board.

Encourage pricing transparency and modernize financing systems

i.e. competitive bidding for durable medical equipment , Making market basket adjustments to many providers

Address the issues of waste, fraud and abuse i.e. enhancing screening tools, re-screening and re-validation of provider, Use of data analytics to identify targets for investigation

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Already implemented/In Progress:

• Time period for filing Medicare Fee-for-Service claims reduced to one calendar year after the date of service.

• Prohibition on denying coverage to children under the age of 19 due to preexisting conditions.

• Allowing states to cover more people on Medicaid • Online access for consumers to compare health insurance coverage

options. • Elimination on lifetime dollar limits on coverage • Establishment of the Center for Medicare and Medicaid Innovation • Requirement that insurance plans must spend 80%-85% of premium

dollars on healthcare services. • Implementation of the value-based purchasing program linking payments

to quality concerns. • Regulations issued for the creation of Accountable Care Organizations. • Increased Medicaid payments for primary care • Establishment of affordable insurance exchanges to increase availability of

lower cost insurance plans for consumers. • Individual mandate to obtain basic health insurance coverage • Payments to physicians to become quality-based instead of volume-

based.

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2. Unscheduled Patients: Not scheduled ahead of time. Includes emergency and urgent inpatients, routine walk-in outpatients, emergency department outpatients, observation status patients, and newborns.

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Typical demographic information:

Full patient legal name

Patient date of birth

Patient social security number

Patient sex

Patient marital status

Patient complete address

Patient telephone numbers

Patient race

Patient occupation and employer Emergency contact info. 20

Patient’s full legal name

Date order was written

Test or service ordered

Diagnosis, coded or narrative description of the reason for the test or service

Name of ordering physician

Signature of the ordering physician

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Scheduler Instructions Instructions will be generated and sent to the appropriate department/party within the healthcare organization in support of time requirements and coordination of personnel, equipment and room needs for the requested service.

Patient Instructions Patient preparation instructions often are needed to ensure that the patient will be properly prepared for the service, ie. no eating for 8 to 12 hours before procedure.

Patient Reminders and Arrival Instructions The patient reminder is a written list of the patient’s responsibilities.

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Advance Beneficiary Notice (ABN) If a test or service is not deemed medically necessary according to the LCD/NCD, a signed Advance Beneficiary Notice (ABN) must be obtained from the patient.

This allows the patient to make an informed decision about whether to receive the service.

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For Medicare patients, an important component of pre-registration is the Medicare Secondary Payer (MSP) screening process.

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Advance Beneficiary Notice (ABN) If a test or service is not deemed medically necessary according to the LCD/NCD, a signed Advance Beneficiary Notice (ABN) must be obtained from the patient.

This allows the patient to make an informed decision about whether to receive the service.

With Pre-Registration No Pre-Registration

Total Charges $750 Total Charges $750

Contractual Adjustment ($226) Contractual Adjustment ($225)

Denied Charges: No Pre-certification ($150)

Net Payable $525 Net Payable $375

Payment Received $525 Payment Received $375

Balance $0 Balance: Denied Charges $150

Cost to Provide Service ($300) Cost to Provide Service ($300)

Cost to Generate/Send Claim ($38) Cost to Generate/Send Claim ($38)

Initial Total Cost ($338)

Initial Net Income $37

Total Cost ($338)

Cost to Rebill ($76)

Net Income $187 Additional Collection After Rebilling $150

Net Income After Rebilling $74

Net Income $111 25

Insurance verification is conducted to ensure the

accuracy of the insurance information. Coverage issues

are identified and communicated to the patient.

The birthday rule for dependent coverage

Insurance verification can be completed through

electronic inquiry or telephone contact.

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Important Terminology- Match the terms with the definition

1 Coordination of Benefits (COB):

2 Discounted Fee-for-Service

3 Gatekeeping:

4 Subrogation:

5 Usual, Customary, and Reasonable

6 Utilization Review

Health insurance plan reimbursement methodology that limits payment to the lower billed charges, the provider’s customary charge, or the prevailing charge for the service in the community.

Seeking, by legal or administrative means, reimbursement from another party that is primarily responsible for a patient’s medical expenses.

Review conducted by professional healthcare personnel of the appropriateness of, quality of, and need for healthcare services provided to patients.

Reimbursement methodology whereby a provider agrees to provide service on a fee-for-service basis, but the fees are discounted by a certain percentage.

A typical insurance provision that determines the responsibility for primary payment when the patient is covered by more than one employer-sponsored health benefit program. The coordination avoids duplicate reimbursement for the same medical services. The primary payer is billed first.

Concept wherein the primary care physician provides all primary patient care & coordinates all diagnostic testing and specialty referrals required for a patient’s medical care.

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Part “B”: Outpatient & professional service coverage. Part “C”: Medicare Advantage; a managed care plan Part “D”: Prescription drug coverage program

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Health Maintenance Organization (HMO)

Preferred Provider Organization (PPO)

Point of Service (POS) plans

Consumer-Directed Health Plans (CDHP)

Medicare Advantage plans

Medicaid HMO

Capitation

POS plans combine elements of an HMO and a PPO

“high deductible health plans”

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“Discounted” Payment Models

Percentage Discount Diagnosis-Related Group

(DRG)

Ambulatory Payment

Classification (APC)

Case Rates Per Diem Capitation

Package Pricing

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Stop-Loss Provision– Provides protection for medical expenses that

exceed certain levels.

An example: Assume that the insurance policy provides for 80/20 coverage. Policy covers charges up to $100,000, then stop-loss payment to the provider at 50% of charges over $150,000. Catastrophic event results in total patient charges of $200,000. $100,000 x 80% $80,000 $100,000 x 80% $80,000

($200,000 - $150,000) x 50% $25,000 $0

With stop-loss provision, provider receives: $105,000 Without stop-loss provision, provider receives: $80,00031

Verifying the Patient’s Identification: Scheduled vs. Unscheduled Emergency Medical Treatment and Labor Act (EMTALA) – requires hospitals to provide a medical screening examination and any needed stabilizing treatment to every person at the emergency room requesting medical treatment. EMTALA prohibits inquires about insurance information if the inquiry will delay examination/treatment.

Physician Identification and Orders: Referring physician, Attending physician, Consulting physician, Primary Care physician Registration forms: Consent to Treat, Conditions of Admission, Privacy Notice, Patient Bill of Rights, Advance Directives and Medical Power of Attorney and Important Message from Medicare 32

Patient’s Financial Responsibility

An example: Assume patient’s insurance benefits provide for a $200 deductible and 20% coinsurance to out-of-pocket maximum of $1,000 (incl. deductible). Total anticipated charges = $5,000 Contracted MCO at a 25% Discount

What is the patient’s self pay balance? What is the insurance payment?

Total Anticipated Charge $ 5,000

Contractual Adjustment @ 25% $ (1,250)

Estimated Approved Charge $ 3,750

Patient's Self Pay Balance

Deductible $ 200

Coinsurance at 20% of Est. Approved Charge $ 750

Total Patient Balance $ 950

Insurance Payment

Estimated Approved Charge less Patient Balance $ 2,800 33

Negotiating Account Resolution A typical financial counseling session should be sequenced as follows:

1. Greet the patient and give your name. 2. Review the organization’s financial policies. 3. If the patient has insurance, review his/her insurance benefits and

insurance status. 4. Review anticipated charges and the patient’s anticipated liability

including how the liability was calculated. 5. Ask the patient to resolve the liability – Review payment options

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Full payment

Short-term payment plan

Bank loan program

Medicaid qualification

Possible charity

Billing Impacts—Although the billing office is responsible for submitting claims, over 40% of the information on the claim is gathered by access services!

Physician impacts

Case review & Legal impacts

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ICD-10-CM (clinical modification) codes are used by healthcare providers in all settings except inpatient. ICD-10-PCS (procedural coding system) is used to assign medical diagnoses in the inpatient setting only. These code sets are modifications of the international ICD-10 as developed by the World Health Organization.

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Two Basic Claim Forms: Standard hospital claim form is a UB-04 (837I) Used by Institutional providers. Standard professional service claim form is the CMS 1500

(837-p) Used by Non-Institutional providers.

Benefits of Electronic Claim Submission: The submission, receipt & processing of the claim is automated, which

eliminates mail time and reduces data entry time on the payer’s end.

Providers can eliminating delays caused by file transmission failures with payers.

Online claim adjudication can be performed with the provider receiving the adjudication result in real time.

Payment turnaround is minimized for clean claims.

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The goal is a clean claim! No defect, impropriety, or particular circumstance

requiring special treatment that prevents prompt payment.

UB-04 source data summary 40% Patient Access

responsibility 20% Health Information

Management (HIM) 20% Billing office or system

generated 11% Service or Ancillary

Department responsibility 9% Reserved or Not used

CMS 1500 s0urce data summary 53% Patient Access

responsibility 7% Health Information

Management (HIM) 26% Billing office or system

generated 14% Service Dept. or Provider

responsibility

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Keeping the charge master updated is critical! o Charges remain one of the few consistent indicators

available for providers and healthcare users to monitor resource use.

o Even in the managed care setting, reimbursement in many plans is based on a percentage of charges and/or stop-loss provisions are based on total charges. Therefore, charge master issues can result in inappropriate reimbursement.

o Charges are the basis for third-party and regulatory reviews of resource consumption.

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Rules developed to verify the accuracy and completeness of claims based on each payer’s policies. Some examples: Incomplete demographic information or incomplete / invalid insurance information. Follow up with patient or insurance as necessary. Missing physician NPI number Contact physician for NPI numbers. Invalid revenue code or HCPCS code Review manuals for updated codes; follow up with Health Info. Management area for correct coding.

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Medicare Medicaid Tricare Indian Health Service Managed Care Organizations Blue Cross/Blue Shield Self Insured Plans Community Indemnity Plans Liability Claims

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Medicare

Part A Provides coverage for inpatient hospital services, skilled nursing care, and home healthcare. Payment based on Inpatient Prospective Payment System “Benefit period” Claims submitted using the UB-04

Part B Provides coverage for physician and outpatient services. Payment based on Fee Schedule (APCs) Beneficiary premiums and co-insurance Claims submitted using the CMS 1500

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Medicaid

Provides health and long-term care coverage for low-income individuals or families.

Billing: UB-04 & CMS 1500 Any specific state requirements

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TRICARE (formerly CHAMPUS)

The uniformed services’ healthcare program for active duty service members and their families, retired service members and their families, members of the National Guard and Reserve and their families, survivors, and others who are eligible. Billing: UB-04 & CMS 1500

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Others

Managed Care Organizations

Indian Health Service

Blue Cross/Blue Shield

Self Insured Plans

Commercial Indemnity Plans

Liability Claims 46

Hospital Rural Health Clinic Hospice Clinics Skilled Nursing Facilities Hospital-Based Physicians Ambulance

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Hospital billing refers to the activity of sending a summary bill to the patient and/or a standard claim form (UB-04) to the third-party payer.

The UB-04 claim form contains: • Provider information • Demographic information • Clinical information • Financial information

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Rural Health Clinic (RHC)

Hospice

Skilled Nursing Facilities (SNF)

Ambulance

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A claim is considered rejected when the payer cannot process the claim for payment for any number of reasons.

A claim is denied if it passes the rejection criteria but does not meet all the payer’s rules and results in a partial payment, delayed payment, underpayment, or no payment.

There are 3 types of denials: Technical, Clinical & Underpayment

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Duplicate bills Missing authorizations Wrong insurance plan code Admission notifications not completed within

payer timelines Prior approval not obtained Care provided in non-covered setting Medicare Secondary Payer issues

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Lost reimbursement and additional cost to collect

Productivity decline when staff must research reason & correct issue.

Patients lose confidence when they cannot depend on the provider to handle their case properly .

Employee frustration levels increase

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-Understand payer requirements. -Complete medical necessity screening. -Complete insurance verification for all insurances listed on account -Gather complete and accurate demographic and insurance data. -Obtain all required authorizations. -Provide only ordered services. -Closely monitor patient services and verify that all services.

ordered and provided are clearly documented. -Code accurately based on documentation. -Complete pre-bill edit processing. -Categorize & analyze denied payments to prevent future denials. -Monitor denial activity and final appeal outcomes. -Communicate to the involved staff.

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Dr. Christina Bradbury, DBA, CMA, CHFP Plymouth State University cjbradbury@plymouth.edu Put in “CRCR webinar 1 ” in the Subject Line Please do not duplicate any slides without expressed permission of the author

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