Health Care Entity :

* Patient * Provider * Payer

Patient - Who goes for treatment or general checkup.
Provider - Any one who gives health care facilities. E.g. Doctors, Physicians et
c.
Skilled Nursing Facility : The Nurses, who is present in the place of Doctor, Fo
r E.g. Coma Patients, sitting the next to the patient all the time in the place
of doctors.
Hospice : Terminally ill patient, the patient who is going to die within a short
span of time, will be brought to the hospice place & treatment.
Home Health Agency - Home Health Agencies will help those people who done have a
nyone at home for taking care.
Payers - Any persons who pays on behalf of the patients in general, but most of
the people in US is insured.
Billing Office - The office which maintains the financial transactions of the pr
ovider.
Patient - Front Office Executive - Registration form - Encounter - Transcription
- Transcribed sheet - Coding.
Registration Form:
Patient Details or Personal Details
* Name * Gender M/F
The Name written as Last name, First name and Middle Initial
* Date of Birth (MM/DD/YY) * Age * Marital status (Married/ Unmarried/Other)
* Address
ZIP - Always five digits + add on codes (XXXXX-XXXX) (Zonal Improvement Plan)
* Telephone - (XXX-XXX-XXXX) 1st three is Area code.
* SSN (Social Security No) - Which is given by SSA -Social Security Administrati
on. It's nine digits no. (XXX-XX-XXX)
2. Employer's Details
3. Guarantor's Details - Its must in case of Minors, and Optional for Adults (Pr
omissory notes).
4. Insurance Details ( Name, Policy Id, Plan, Effective & Termination Date, Insu
rance Company Address, Telephone no, Claims Mailing Address)
Card Copy is must.
5. Co- Ordination of Benefits (COB) (Primary, Secondary and priority wise)
6. Assignment of Benefits (AOB) - By signing AOB, the patient states that the se
rvice is received from particular provider, so asking the insurance company to p
ay the money to the provider on behalf of the him, that is subscriber.
7. Release of Information(ROI) - The Personnel and all other information regardi
ng the patient can be released only after signing ROI.
8. Medical Recording Index no (MRI)- It's maintained for 3 years in the sense af
ter 3 years from the last visit to the doctor, then he is considered as New Pati
ent. The others are called Established Patient. After this, A account no. is giv
en each visit is given a New A/C no.
Inpatient - Who stays for more than 24 hrs.
Outpatient - Who stays for less than 24 hrs.
Coding- A predefined set of codes which contain Alpha Numeric values organized f
or diagnosis & procedures done by the provider.
The Sheet where the coding is written, is called Charge Sheet.
E-Claims are go to clearing house and Paper claims are go to insurance.
Functions of Clearing House:
Preliminary Screening - The checking will send the error claims to the billing o
ffice, and those claims are called dropped claims.
Conversion to Insurance Specific Format - (NSF - National Standard Format & ANSI
- American National Standard Institute)
Despatch
Scrubber Report - The Scrubber Report contains, No. of claims received from bill
ing office, No. of claims dropped to billing office. No. of claims which one dis
patched. This report is sent to the billing office periodically.
HCFA (CMS1500) - It's a professional bills form. It contains 33 fields. Physicia
ns fees, bills are sent through CMS1500.
(HCFA - Health Care Financial Administration, CMS - Center for Medicare & Medica
id Services)
CMS1450 (UB - Universal Billing) - It's used for hospital billing - technical co
mponents like wheelchairs, x-rays, oxygen. It has 81 fields.
Functions of Insurance Company for E- Claims:
Pre Edit / Audit: The Error claims are sent to billing office which are called u
nprocessed claims.
Claim Adjudication: Take a decision whether to pay or not. Denied claim- not to
pay
Communication of Decision : Sent to the provider by EOB or Remittance Advice or
Payment Voucher. If Payable, then EOB is attached with a payment details & Chequ
e. If denied, then EOB is attached with denying codes & denying reasons, then th
e EOB denying statement is sent back to the billing offices by scanning.
In Billing office, people called as Payment Posters / Cash Posters.
Payment Detail from Insurance Company
Any payment from the patients.
Any Denying, then enter it
Functions of ARE ( Accounting Receivable Executives) :
Pre Call Analysis
Make the Call
Documentation
Post Call Analysis
Functions of Billing Office :
Demo Entry
Charge Entry
Cash Posters
ARE.
CODING
The assigning of predefined numeric and alphanumeric to procedure and diagnosis
called coding.
Classification of Coding:
* Diagnosis * Procedure Code * Modifier
DIAGNOSIS
Diagnosis codes are codes which are attached a particular diagnosis or an ailmen
t. These codes are formulated by WHO. They are called as ICD ( International Cla
ssification Diseases) codes. We are ICD9-CM (clinical modification).
Format for Diagnosis : XXX.X or XXX.XX
ICD-9CM classifieds into three categories they are follows:
* Volume one contains numeric format * Volume two contains alpha numeric format
* Volume three is used for Hospital Billing.
Volume two are classified into two categories they are follows :
* E-Codes * V-Codes
E-Codes
* E-codes is used to both the even during which the injury took place and the in
dividuals who were injured.
* E-Codes are mandatory on the death records for all persons whose deaths are in
jured related.
Format for E-Codes : EXXX.X
* Diagnosis is used for all sickness and E-Codes used for injury.
some major category of E-codes:
* Poisoning * Transport Accidents * Accidents falls * Accidents caused by fire *
Accidents by natural calamities like earthquake.
V-Codes
V-Codes is used for without any Diseases and Injury. V-Codes are found in Volume
Two
V-Codes are fall into three categories they are follows:.
* Problem ( Disease affected from surroundings )* Services ( Like Kidney & Blood
Donations) * Factual ( Checkup for gene disease)
Format for V-Codes : VXX.X or VXX.XX
PROCEDURE CODES
Procedure codes are used for technical components like products, equipments, sup
plies and services provide to the patient.
Procedure codes are classifieds into three categories:
* Level 1 HCPCS codes ( CPT - Current Procedure Terminology) * Level 2 HCPCS(Fed
eral and National HCPCS) * Level 3 HCPCS ( Medical Billing)
HCPCS - Healthcare Common Procedural Coding System
* CPT Developed by American Medical Association (AMA)
Format for Procedure : XXXXX.
CPT4 Manuals is revised annually.
Six Sections of CPT4 ( Level 1)
Nature of Treatment Code
Nature of Treatment
Code Category
Evaluation & Management
99201 to 99499
Surgery
10040 to 69990
Anesthesiology
00100 to 01999 & 99100 to 99140
Radiology
70010 to 79999
Pathology & Lab
80049 to 89399
Medicine
90281 to 99199

Level 2 HCPCS:
National / Federal codes are developed by CMS. Alpha character followed with 5 d
igit with A through V. E.g. AXXXXX.
Some of the HCPCS level 2
* Transportation * Dental * Injection * DME ( Durable Medical Equipment)
HCPCS Level 3 Codes
* It''''''''''''''''''''''''''''''''s five digits alphanumeric beginning with W
through Z. Its used only for Insurance Company.
MODIFIERS
Modifiers are set of codes. Modifiers are codes that are adopted by the physicia
ns to reaffirm to the carriers that the procedures performed was altered or modi
fied due to certain unavailable circumstances.
Modifiers are classified into two types:
* CPT Modifiers : Format 2 Digits
* HCPCS Modifiers : 2 numeric or alpha followed by a numer or 2 alpha.ex - 80, Q
6 or AS
Classification are Modifiers:
Modifiers are classified into two categories they are follows
* Informational - It contains only information like left side or right side (LT&
RT) it''''''''''''''''''''''''''''''''s not affect the price.
* Pricing - If the surgery done by the Main surgeon and Assistant. It'''''''''''
'''''''''''''''''''''s affected the price.
Coding for Modifiers:
21 - Prolonged Evaluation and Management Service.
22 - Unusual Procedural Service.
23 - Unusual Anesthesia.
26 - Professional Component ( TC - Technical Component ).
50 - Bilateral Procedure ( Both side surgery).
62 - Two Surgeons.
66 - Above two surgeons.
99 - More than 4 Modifiers.
Terminology
Participating Provider : Contract between the Provider & Payers. He is a provide
r who signs a contract with the payers.
Non - Participating Provider : Who don't accept the contract with the insurance
company or payer
.
Network of Provider : Under a same plan, a group of participating providers are
there, they are called as Network of Providers.
Billed Amount (or) Total charges (or) Submitted charges (or) : Service Charge fo
r Provider. It's fixed by the Provider. It doesn't change from patient to patien
t, unless the cost of living differs.
Allowed Amount : The Maximum payable amount is called as Allowed Amount. Each in
surance will prepare fee schedule.
Contractual Adjustment (or) Negotiated Amount (or) Discount : The difference bet
ween he billed amount and the allowed amount, is called as contractual adjustmen
t. If the provider is a Par Provider, then the difference is taken as a discount
& not collected from the patient. In case for Non - Par Provider, the differenc
e amount is collected from the patient. Discount which is accepted by the Partic
ipating Provider.
Paid Amount: The Amount paid by the insurance company as per, the policy of pati
ent. Paid amount will never be equal to the billed amount.
Out-of Pocket Expenses : Any thing which is paid from the pocket of the patient.
Stop-loss clause (or) Catastrophic Limit: The insurance company fix the slab amo
unt if the payee reach the amount and the patient need not to pay.
Patient Responsibilities:
Copay : Amount fixed by the insurance company, which varies according to the pla
ce of service. This amount can be paid by the patient to the provider at the tim
e of service. So it is also known as ' Time of Service Payment' or 'Upfront Paym
ent'.
Co- Insurance: It is a Percentage or a ratio which is shared between the insuran
ce company and the patient.
Deductible: It is a fixed amount determined by the insurance company which is th
e patient has to pay towards initial medical expenditure.
COB(Co-ordination of Benefits): It is to avoid the exploitation of the policy th
ere are two rules. ( Birthday Rule & MSP Rule).
Provider Reimbursement Methods:
Capitation: This is only for participating providers a Buck or Lump sum amount g
iven by the insurance company to provider in advance.
Fee for Service: Claim to claim basis
Pay Back / Refund: The provider should refund the excess amount through demand d
raft or cheque for claim to claim basis or it can be adjusted in the next transa
ction is called as Offset. The adjustment is communicated through EOB, to the pr
oviders. T his facility is available only for participating providers.
Prior Authorization (or) Pre certification (or) Pre admission (PAN): Before prov
iding Service , asking Permission and getting authorized or approval from the pa
nel of doctors, UMR (Utilization Management Review) who are present the insuranc
e company, and while billing or claiming, the provider has to write the PAN in t
he claim. It is certain service only.
Retro Authorization: Only in emergency or certain contains the provider can get
the retro authorization. Getting authorization after rendering the services with
in a prescribed of time or day, then it is called as retro- authorization no.
Referral Authorization No(RAN): Patient - PCP - Specialist ( PCP referring the s
pecialist. In HMO plan, PCP is called as Gate Keeper. (PCP - Primary Care Physic
ian)
Pre-Determination: Provider calling up to the insurance company to find out the
benefits of the patients.
Pre-Existing Condition: Any coverage provided by the Insurance Company for the d
isease which is existing before taking up the policy. Such condition is called a
s pre-existing condition.
Waiting Period: It is a length of the time given by the insurance company to the
patient for pre- existing condition.
Waiver of Liability: It is a document, signed by the patient, stating that, in c
ase of insurance is not going to pay, or not covering the payment, the patient h
imself is liable for the payment.
Advanced Beneficiary Notice(ABN): In case of Medicare Beneficiaries, the patient
s will sign ABN instead of Weaver of liability. ABN is a Legal document.
Provider ID Numbers
UPIN(Unique Physician Identification No): 6 digit alpha numeric. It's issued by
CMS to Medicare insurance company for participating providers.
PTAN(Physician Transaction Number): It is given by Medicare to their par provide
rs.
TIN(Tax Identification No): 9 digit number. It's issued by federal government to
all the business persons.
NPI(National Provider Identifier): 10 digits no issued by CMS under HIPAA Act to
all the U.S. Providers.
Difference between Par Provider & Non Par Provider:
Par Provider
Nan Par Provider
Accept the allowed amount
Accept the Billed Amount
More patients
Less patients
Capitation
No Capitation
Process Done Quickly
Slower Process
Higher Provider Reimbursement
Lower Reimbursement
Contractual adjustment is not billed to the patients
Contractual adjustment is billed to the patients.

Traditional Plan
First plan of Insurance company in U.S is Traditional Plan or Indemnity Plan.
They can visit any providers, no specific providers.
No 3P network or no payer, provider etc
The Cost insurance is very high.
Under, this traditional plan we have three different plans:
Basic Coverage - Inpatients only
Major Medical Coverage - Supplementary
Comprehensive Coverage - Both Major & Basic
Managed Care
It found the concepts of 3P network
The liability of the insured is always a fixed amount (copay)
Participating provider most often render the service
The Insured must go the network of providers
Referred Authorization numbers play an important role
Focus on preventive medicine is high
They are classified into four categories they follow:
HMO(Health Maintenance Organization) :
HMO plan, there is a PCP process. Referral authorization no is important before
going to specialist.
Out of Network benefits are not covered.
It is cheaper than any other plan
Out of Pocket expense will be less.
It is a individual plan
POS(point of service) : 1.can choose the PCP, 2.out of network benefits are cove
red with lesser than HMO , 3.costlierthan HMO, 4.out of pocket expensive is more
PPO(preferred provider organsation) : 1.NO PCP paln we can go seee specialist 2.
We can goto network proveders woth lesser reimbersement rate,3.out of pocket exp
ensive is high 4.group health plan.
EPO(Exclusive Provider organisation) ; 1. No PCP concept , 2. out of pocket bene
fists are not covered, 3.group health paln, 4.out of pocket expensive is less.
GOVT(FEDERAL PLAN)
MEDICARE: (self policy , 1965, only person can enjoy) eligiable : at the age of
above the age of 65 , 2.the permantly disabled patient, 3. ESRD(End Stage Renal
Disease) patient suffering from froom the kidney failure.divided into 4 parts 1.
Part A ,2.Part B , 3.Part C, 4.Part D. 1 & 2 (traditional care) 3 & 4(managed ca
re )
PART A (HI) : Premiun free policy 99% free policy, 1% of premiun based upon the
salary. COVERS : only for impatient stay professional feee is not covered 2.it i
s also cover hospice 3.skilled nursing facility 4.home health agency ...FINANCE
: taxes paid by the employers and emplotee through FICA(federal insurance contri
bution), Self employment contribution Act , rail road retriment act..... TERMINA
TE : dealth , Voluuntary request(they dont want medicare) , premium is not paid
PART B : (supplemental mediacal insurance) : without part A cant join in part B
- premium depends upon the salary... COVERS 1. Physician services , 2. Lab test
,3.Therapy , 4.Ambulance , 5.Mammograms for 2 yrs, 6. Pap smears for 3 yrs. FINA
NCE premiun paid... TERMINATE : 1. Premium is not paid , 2.Dealth , 3.volentary
, 4.part A is terminate automatically part b terminate....... as soon as the mem
bers become 65 yrs if old He/She must registor in CMS, between jan to march. if
they are not registrating means they must to pay penalty while going.
PART C : Private insurance company - (Medicare HMO , Medicare Advanced plus Medi
care Choice plus) : If have part A & part B is main eligiable for part C, it cov
ers part A , Part B & extra benefits. If anyone take part C we can terminate Par
t A, Part B..(premiun is high).
PART D: only for drugs
Two more concepts in medicare: 1.MEDICARE CROSS OVER auto cross over or automati
c cross over (PAR providers) : when the medicare which is the primary insurance
will send the EOB directly to the secondary insurance EOB with two codes MA07(an
y other govt plan) MA18(medicare plan) 2. LIMITING CHARGE : if the patients goes
for non par provider their responsibilities has reduced or limits by the insura
nce company by using limiting charge concept..
MEDICAID ; (govt plan state govt) : 1.Assistance program, 2.FPL(federal poverty
line) medicaid given the paln to below proverty lines peoples, in few states the
y have their own poverty line.3. 6000 - family income per ann , 4000-individual
per ann. 4. if they have any other policy medicaid only consider as last payer,
monthly policy every month renewed.
MEDICAID SPEND DOWN: the patient has not come under FRL but due to medical expen
diture his monthly income come down to FPL. to compensate the out the pocket exp
enses and he is eligiable for get medicaid policy for that he has to pay small a
mount of copay for his medical expenses.
CHAMPUS (Civilian Health Medical Program for Uniform Service,1962) : only for de
fence people, Army , Navy , Airforce. Service benefit program : 1. It covers the
ir depemdence also, 2.inservice,3.must goes to defence hospital, 4.covers the pe
ople die in the service time, 5. day to day activites given to the services by F
ISCAL intermidiaries (PVT insurances) done by TRICARE & PALMATTE.... people whoe
ver in defence they must enroll in DEERS(Defence Enrollement ELigibility Reporti
ng System)
CHAMPVA (Civilian Health Medical Program for department of Veteran Affairs, Aug
1st 1973) : any person who working during the wat.those people have champva. the
patient will cover under champvethe disabled person have some income from champ
va after the age of 65 its automatically get into medicare ..
MEDIGAP(Medicare supplement insurance) : 1. secondary policy , 2. private insura
nce policy, 3. some medigap plan taken to cover con insurance , deductiable, 4.i
t takes services for uncoverdd in medicare policy, 5.Commericl insurance (eg, AA
RP , Bankers).
PRIVATE PLAN:
INDIVIDUAL : 1.gets plan from agent to get policy, 2.Premium is high, 3.waiting
period, pre-exiting condition, 4.network providers, 5.Physical examination done
before taking up the policy
GROUP - EGHP(Employer Group Health Plan)- two types are LGHP and SGHP
LGHP(Large Group Health Plan) : it covers more than 100 employees
SGHP(Small Group Health Plan) : it cover less than 20 employee. it falls 20-100
depends upon the employees.
WORKERCOMPENSATION : 1.Any work related injury but also occupational hazards, 2.
Employer pay the premium employee enjoy, 3. issued by govt or privae of self po
licy..... CWCP(Office of Worker Compensation Program).. once a patient injured d
uring the work place the employer immediately report to the OWCP. OCWP give the
case no or claim no provides bill the amount to the work compension insurance.wo
rk compension send through papaer claim with physician note, employer report, OC
WP report, Lawyer Report. In work compension we cany say claim we use the word B
ILL. Neutral doctor will decide to need further treatment or not.
MVA(Motor Vehicle Accidents) : 1.only for 4 wheeler, 2.we should have enough cov
erage to our properties, 3.send through paper claim, 4.does not hace secondary 5
.contract maximun is reached the patient will pay. 6 types of coverage.....
1.PIP(personal injury protetion) , 2.bodily injury liability , .3.property Damag
e 4.Collision Coverage,5.comprehensive converage 6.nofault coverage