VIII HTH

HTH 2305, Health Information Documentation Management 1

Course Learning Outcomes for Unit VIII At the end of this unit, you should be able to:

2. Discuss how medical coding impacts the health care revenue cycle. 2.4 Examine medical claim rejections caused by coding errors.

3. Analyze medical records for accuracy and completeness.

3.4 Perform claim submission activities using patient medical records.

4. Apply compliance standards that govern how patient information is collected, stored, and transmitted. 4.5 Explain HIPAA’s transaction and code set rule.

5. Describe how accurate documentation improves health care delivery and patient outcomes.

5.3 Discuss mechanisms that maintain the integrity of the Medicare program.

Required Unit Resources Chapter 17: Insurance Claims Processing (ULOs 2.4, 3.4, 4.5, and 5.3) Chapter 18: The Revenue Cycle: Fees, Credit, and Collection (ULOs 2.4, 3.4, 4.5, and 5.3)

Unit Lesson Lesson: Claims Submission Practices (ULOs 2.4, 3.4, 4.5, and 5.3)

Introduction Throughout this course we have aimed to better understand the key components of revenue cycle management and regulatory compliance as they are essential for professionals working in administrative and billing roles. From the initial patient encounter to the claim submission process, each aspect of the healthcare revenue cycle ensures the sustainability of healthcare providers. This section will focus on six important claim submission topics: claim submission guidelines, physician fee schedules to include participating vs. non-participating providers, Recovery Audit Contractors (RACs), Medicare Administrative Contractors (MACs), the False Claims Act, and collection laws. Claim Submission Guidelines Claims must adhere to specific guidelines to ensure timely payment and compliance with insurance policies. As outlined in the last unit, insurance coverage verification is an important first step before submitting a claim. The claim verifies patient eligibility, benefits, and coverage limitations, minimizing the risk of claim denial due to lack of coverage or expired policies. Effective use of standardized coding, including ICD-10-CM, CPT, and HCPCS codes, is necessary to describe diagnoses and procedures accurately. Incorrect coding can lead to denied or rejected claims. Each payer has specific deadlines, often referred to as the "timely filing limit." Missing these deadlines can also result in claim denial. Submitting clean claims, free of errors and omissions, results in faster processing and reduces the likelihood of rejections. Claims must also be supported by medical records, such as chart notes and test results, to justify the services billed. Many providers use clearinghouses to review and submit

UNIT VIII STUDY GUIDE

Claims Submission Practices

HTH 2305, Health Information Documentation Management 2

UNIT x STUDY GUIDE

Title

claims electronically. Failure to follow these guidelines can lead to claim rejections, delays in payment, or even penalties for noncompliance. When all the data has been collected, the insurance claim will go through four major stages, which include:

Four Stages of Insurance Claim

The CMS-1500 claim form is accepted by most insurance carriers for outpatient services. The preferred method for submission is electronic; however, there may be some qualifying circumstances where a paper claim may be filed to an insurance carrier. All sections of the CMS-1500 claim form need to be completed according to HIPAA transaction and code set standards. This transaction and code set rule makes sure that a patient’s electronic protected health information remains secure during the transmission process. All covered entities such as providers, clearinghouses, vendors, and health insurance carriers are required to adhere to HIPAA standards in this area. Claim status can be described in several ways. The table below lists several insurance claim statuses:

Insurance Claim Statuses

Clean Claim

Dirty Claim

Incomplete Claim

Denied Claim

Pending Claim

Rejected Claim

Suspended Claim

• A clean claim means that the claim submitted contains all necessary elements to be processed and paid correctly.

• A dirty claim means that the claim was submitted with errors.

• An incomplete claim is missing required information and needs to be resubmitted to the insurance carrier.

• A denied claim has been rejected due to a technical error or a payment policy such as a non-covered benefit.

HTH 2305, Health Information Documentation Management 3

UNIT x STUDY GUIDE

Title

• Pending claims are held in suspense and need to be reviewed further, resulting in either a payment or denial.

• Rejected claims have been submitted to the insurance payer but have technical errors, require correction, or require reprocessing.

• Suspended claims are held by the insurance company and are considered pending due to an error or a request for additional information.

Claim adjudication is the decision-making process the insurance company follows that will ultimately result in payment or denial of the claim. If the claim meets all requirement parameters, it will be approved for payment by the insurance carrier and sent to the physician or healthcare facility. Medicare Administrative Contractors (MACs) and Recovery Audit Contractors (RACs) Medicare Administrative Contractors (MACs) are private organizations that process Medicare claims and serve as intermediaries between healthcare providers and the Centers for Medicare and Medicaid services (CMS). Each MAC is responsible for a specific geographic jurisdiction. They manage claims processing, enroll providers, and conduct audits to ensure compliance with Medicare regulations. MACs also provide information on Medicare updates and serve as a resource for providers seeking clarification on billing practices. Recovery Audit Contractors (RACs) are organizations contracted by the Centers for Medicare and Medicaid Services (CMS) to identify improper Medicare payments. RACs aim to ensure the accuracy of Medicare claims and protect taxpayer funds by using automated and manual reviews to identify discrepancies in claims. Examples include claims with incorrect coding or instances where medical necessity was not adequately documented. Providers can appeal RACs determinations through a five-level appeal process, but it is key to avoid errors upfront to minimize audit risks. Together, RACs and MACs work to maintain the integrity of the Medicare program by reducing fraud, waste, and abuse. False Claims Act The False Claims Act (FCA) is a federal law designed to combat fraud in government programs, including Medicare and Medicaid. Under the FCA, it is illegal to knowingly submit false claims for payment or approval. This includes billing for services not rendered, using improper coding, or providing medically unnecessary services. False claims are submitted with the intent to defraud Medicare and Medicaid. Key provisions of the FCA include qui tam lawsuits, which allow individuals (known as whistleblowers) to file lawsuits on behalf of the government if they have evidence of fraudulent activities. Whistleblowers may receive a portion of any recovered funds. Violators of the FCA may face fines ranging from $12,000 to $25,000 per false claim, in addition to treble damages (three times the government's losses). To avoid violations, providers must implement compliance programs, conduct internal audits, and provide staff training on ethical billing practices. Transparency and accountability are essential to prevent fraudulent claims. Physician Fee Schedules Physician fee schedules are essential tools that determine how healthcare providers are reimbursed for services. They list procedures and their corresponding reimbursement rates, ensuring consistency and fairness in payments. Both private and public insurers use fee schedules to standardize billing and simplify claims. These schedules consider factors including service complexity, resource use, and geographic location, helping streamline the revenue cycle for providers and insurers. The Medicare Physician Fee Schedule (MPFS) specifically governs reimbursement for Medicare Part B services, which are related to outpatient care. Administered by the Centers for Medicare & Medicaid Services (CMS), it uses the Resource-Based Relative Value Scale (RBRVS) to assign relative value units (RVUs) based on physician work, practice expenses, and malpractice costs. Geographic adjustments (GPCI) and an annually updated conversion factor are applied to determine final reimbursement rates. The MPFS affects providers differently depending on their participation status. Participating (PAR) providers agree to accept the payer's allowed amount as full payment for services. In Medicare, PAR providers receive

HTH 2305, Health Information Documentation Management 4

UNIT x STUDY GUIDE

Title

100% of the allowed amount directly from Medicare and may only bill patients for coinsurance, copayments, and deductibles. Being a PAR provider often leads to higher patient volumes due to lower out-of-pocket costs. Non-participating (NonPAR) providers, on the other hand, can choose whether to accept on a claim-by-claim basis. If they do not accept assignment, they can charge up to 115% of the Medicare limiting charge. Patients may pay more upfront and are reimbursed by Medicare. For example, Dr. Smith is a PAR provider, while Dr. Jones is not. Both treat Medicare patients. Dr. Smith bills Medicare directly and receives full payment minus the patient’s coinsurance. Dr. Jones bills the patient, who is responsible for submitting the claim to Medicare for partial reimbursement. Patients often prefer PAR providers due to the simplified billing process and lower costs. Understanding fee schedules and participation status is necessary for effective revenue cycle management and compliance. Collection Laws There are times patients can default on their financial responsibility. If regular statements have been sent, two or three months have elapsed since the service, and the patient cannot be reached by telephone or email or a promised payment has not been received, then it is time to send a collection letter (French, 2024). Debt collection in healthcare must comply with federal and state laws to protect patients from abusive practices. The Fair Debt Collection Practices Act (FDCPA) regulates third-party debt collectors, prohibiting harassment, misrepresentation, and unfair fees. Collectors must identify themselves and the purpose of the call, provide written validation of the debt upon request, and refrain from contacting patients at inconvenient times or locations. The Health Insurance Portability and Accountability Act (HIPAA), while primarily focused on patient privacy, also affects collections by restricting how patient information is shared. State collection laws often provide additional protections, such as caps on interest rates for medical debt or extended grace periods for payment. Offering flexible payment plans, communicating clearly with patients about financial responsibilities, and training staff on compliant collection practices can minimize delinquent accounts. Providers who violate collection laws risk legal penalties and damage to their reputation, while ethical and transparent billing practices build trust and improve patient satisfaction.

Conclusion The healthcare revenue cycle involves several processes, from accurate claim submission to compliance with audits and collection laws. Understanding the roles of RACs and MACs, adhering to claim submission guidelines, and maintaining compliance with the False Claims Act are necessary to reduce errors and prevent fraud. A provider’s decision to participate in insurance networks affects billing and reimbursement, and adherence to collection laws affects ethical financial practices. By mastering these practices, healthcare professionals can effectively navigate billing and reimbursement while upholding the integrity of their organizations.

Reference French, L. L., & Turner, L. H. (2024). Administrative medical assisting (9th ed.). Cengage.

HTH 2305, Health Information Documentation Management 5

UNIT x STUDY GUIDE

Title

Learning Activities (Nongraded) Nongraded learning activities are provided to aid you in your course of study. You do not have to submit them. If you have questions, contact your instructor for further guidance and information. These four MindTap assignments will introduce you to hands-on claim form processing measuring your mastery of ULOs 3.4 and 5.3.

• Chapter 17 MOSS 4.0 Assessment 17.2A Batching and Billing Electronic Claims (Signal HMO)

• Chapter 17 MOSS 4.0 Assessment 17.3A Generating Paper (CMS-1500) Claims (FlexiHealth PPO)

• Chapter 17 MOSS 4.0 Assessment 17.4A Billing a Secondary Insurance

• Chapter 17 MOSS 4.0 Assessment 17.5A Billing Medicare as a Secondary Payer (MSP)

HTH 2305, Health Information Documentation Management 1

Course Learning Outcomes for Unit VIII At the end of this unit, you should be able to:

2. Discuss how medical coding impacts the health care revenue cycle. 2.4 Examine medical claim rejections caused by coding errors.

3. Analyze medical records for accuracy and completeness.

3.4 Perform claim submission activities using patient medical records.

4. Apply compliance standards that govern how patient information is collected, stored, and transmitted. 4.5 Explain HIPAA’s transaction and code set rule.

5. Describe how accurate documentation improves health care delivery and patient outcomes.

5.3 Discuss mechanisms that maintain the integrity of the Medicare program.

Required Unit Resources Chapter 17: Insurance Claims Processing (ULOs 2.4, 3.4, 4.5, and 5.3) Chapter 18: The Revenue Cycle: Fees, Credit, and Collection (ULOs 2.4, 3.4, 4.5, and 5.3)

Unit Lesson Lesson: Claims Submission Practices (ULOs 2.4, 3.4, 4.5, and 5.3)

Introduction Throughout this course we have aimed to better understand the key components of revenue cycle management and regulatory compliance as they are essential for professionals working in administrative and billing roles. From the initial patient encounter to the claim submission process, each aspect of the healthcare revenue cycle ensures the sustainability of healthcare providers. This section will focus on six important claim submission topics: claim submission guidelines, physician fee schedules to include participating vs. non-participating providers, Recovery Audit Contractors (RACs), Medicare Administrative Contractors (MACs), the False Claims Act, and collection laws. Claim Submission Guidelines Claims must adhere to specific guidelines to ensure timely payment and compliance with insurance policies. As outlined in the last unit, insurance coverage verification is an important first step before submitting a claim. The claim verifies patient eligibility, benefits, and coverage limitations, minimizing the risk of claim denial due to lack of coverage or expired policies. Effective use of standardized coding, including ICD-10-CM, CPT, and HCPCS codes, is necessary to describe diagnoses and procedures accurately. Incorrect coding can lead to denied or rejected claims. Each payer has specific deadlines, often referred to as the "timely filing limit." Missing these deadlines can also result in claim denial. Submitting clean claims, free of errors and omissions, results in faster processing and reduces the likelihood of rejections. Claims must also be supported by medical records, such as chart notes and test results, to justify the services billed. Many providers use clearinghouses to review and submit

UNIT VIII STUDY GUIDE

Claims Submission Practices

HTH 2305, Health Information Documentation Management 2

UNIT x STUDY GUIDE

Title

claims electronically. Failure to follow these guidelines can lead to claim rejections, delays in payment, or even penalties for noncompliance. When all the data has been collected, the insurance claim will go through four major stages, which include:

Four Stages of Insurance Claim

The CMS-1500 claim form is accepted by most insurance carriers for outpatient services. The preferred method for submission is electronic; however, there may be some qualifying circumstances where a paper claim may be filed to an insurance carrier. All sections of the CMS-1500 claim form need to be completed according to HIPAA transaction and code set standards. This transaction and code set rule makes sure that a patient’s electronic protected health information remains secure during the transmission process. All covered entities such as providers, clearinghouses, vendors, and health insurance carriers are required to adhere to HIPAA standards in this area. Claim status can be described in several ways. The table below lists several insurance claim statuses:

Insurance Claim Statuses

Clean Claim

Dirty Claim

Incomplete Claim

Denied Claim

Pending Claim

Rejected Claim

Suspended Claim

• A clean claim means that the claim submitted contains all necessary elements to be processed and paid correctly.

• A dirty claim means that the claim was submitted with errors.

• An incomplete claim is missing required information and needs to be resubmitted to the insurance carrier.

• A denied claim has been rejected due to a technical error or a payment policy such as a non-covered benefit.

HTH 2305, Health Information Documentation Management 3

UNIT x STUDY GUIDE

Title

• Pending claims are held in suspense and need to be reviewed further, resulting in either a payment or denial.

• Rejected claims have been submitted to the insurance payer but have technical errors, require correction, or require reprocessing.

• Suspended claims are held by the insurance company and are considered pending due to an error or a request for additional information.

Claim adjudication is the decision-making process the insurance company follows that will ultimately result in payment or denial of the claim. If the claim meets all requirement parameters, it will be approved for payment by the insurance carrier and sent to the physician or healthcare facility. Medicare Administrative Contractors (MACs) and Recovery Audit Contractors (RACs) Medicare Administrative Contractors (MACs) are private organizations that process Medicare claims and serve as intermediaries between healthcare providers and the Centers for Medicare and Medicaid services (CMS). Each MAC is responsible for a specific geographic jurisdiction. They manage claims processing, enroll providers, and conduct audits to ensure compliance with Medicare regulations. MACs also provide information on Medicare updates and serve as a resource for providers seeking clarification on billing practices. Recovery Audit Contractors (RACs) are organizations contracted by the Centers for Medicare and Medicaid Services (CMS) to identify improper Medicare payments. RACs aim to ensure the accuracy of Medicare claims and protect taxpayer funds by using automated and manual reviews to identify discrepancies in claims. Examples include claims with incorrect coding or instances where medical necessity was not adequately documented. Providers can appeal RACs determinations through a five-level appeal process, but it is key to avoid errors upfront to minimize audit risks. Together, RACs and MACs work to maintain the integrity of the Medicare program by reducing fraud, waste, and abuse. False Claims Act The False Claims Act (FCA) is a federal law designed to combat fraud in government programs, including Medicare and Medicaid. Under the FCA, it is illegal to knowingly submit false claims for payment or approval. This includes billing for services not rendered, using improper coding, or providing medically unnecessary services. False claims are submitted with the intent to defraud Medicare and Medicaid. Key provisions of the FCA include qui tam lawsuits, which allow individuals (known as whistleblowers) to file lawsuits on behalf of the government if they have evidence of fraudulent activities. Whistleblowers may receive a portion of any recovered funds. Violators of the FCA may face fines ranging from $12,000 to $25,000 per false claim, in addition to treble damages (three times the government's losses). To avoid violations, providers must implement compliance programs, conduct internal audits, and provide staff training on ethical billing practices. Transparency and accountability are essential to prevent fraudulent claims. Physician Fee Schedules Physician fee schedules are essential tools that determine how healthcare providers are reimbursed for services. They list procedures and their corresponding reimbursement rates, ensuring consistency and fairness in payments. Both private and public insurers use fee schedules to standardize billing and simplify claims. These schedules consider factors including service complexity, resource use, and geographic location, helping streamline the revenue cycle for providers and insurers. The Medicare Physician Fee Schedule (MPFS) specifically governs reimbursement for Medicare Part B services, which are related to outpatient care. Administered by the Centers for Medicare & Medicaid Services (CMS), it uses the Resource-Based Relative Value Scale (RBRVS) to assign relative value units (RVUs) based on physician work, practice expenses, and malpractice costs. Geographic adjustments (GPCI) and an annually updated conversion factor are applied to determine final reimbursement rates. The MPFS affects providers differently depending on their participation status. Participating (PAR) providers agree to accept the payer's allowed amount as full payment for services. In Medicare, PAR providers receive

HTH 2305, Health Information Documentation Management 4

UNIT x STUDY GUIDE

Title

100% of the allowed amount directly from Medicare and may only bill patients for coinsurance, copayments, and deductibles. Being a PAR provider often leads to higher patient volumes due to lower out-of-pocket costs. Non-participating (NonPAR) providers, on the other hand, can choose whether to accept on a claim-by-claim basis. If they do not accept assignment, they can charge up to 115% of the Medicare limiting charge. Patients may pay more upfront and are reimbursed by Medicare. For example, Dr. Smith is a PAR provider, while Dr. Jones is not. Both treat Medicare patients. Dr. Smith bills Medicare directly and receives full payment minus the patient’s coinsurance. Dr. Jones bills the patient, who is responsible for submitting the claim to Medicare for partial reimbursement. Patients often prefer PAR providers due to the simplified billing process and lower costs. Understanding fee schedules and participation status is necessary for effective revenue cycle management and compliance. Collection Laws There are times patients can default on their financial responsibility. If regular statements have been sent, two or three months have elapsed since the service, and the patient cannot be reached by telephone or email or a promised payment has not been received, then it is time to send a collection letter (French, 2024). Debt collection in healthcare must comply with federal and state laws to protect patients from abusive practices. The Fair Debt Collection Practices Act (FDCPA) regulates third-party debt collectors, prohibiting harassment, misrepresentation, and unfair fees. Collectors must identify themselves and the purpose of the call, provide written validation of the debt upon request, and refrain from contacting patients at inconvenient times or locations. The Health Insurance Portability and Accountability Act (HIPAA), while primarily focused on patient privacy, also affects collections by restricting how patient information is shared. State collection laws often provide additional protections, such as caps on interest rates for medical debt or extended grace periods for payment. Offering flexible payment plans, communicating clearly with patients about financial responsibilities, and training staff on compliant collection practices can minimize delinquent accounts. Providers who violate collection laws risk legal penalties and damage to their reputation, while ethical and transparent billing practices build trust and improve patient satisfaction.

Conclusion The healthcare revenue cycle involves several processes, from accurate claim submission to compliance with audits and collection laws. Understanding the roles of RACs and MACs, adhering to claim submission guidelines, and maintaining compliance with the False Claims Act are necessary to reduce errors and prevent fraud. A provider’s decision to participate in insurance networks affects billing and reimbursement, and adherence to collection laws affects ethical financial practices. By mastering these practices, healthcare professionals can effectively navigate billing and reimbursement while upholding the integrity of their organizations.

Reference French, L. L., & Turner, L. H. (2024). Administrative medical assisting (9th ed.). Cengage.

HTH 2305, Health Information Documentation Management 5

UNIT x STUDY GUIDE

Title

Learning Activities (Nongraded) Nongraded learning activities are provided to aid you in your course of study. You do not have to submit them. If you have questions, contact your instructor for further guidance and information. These four MindTap assignments will introduce you to hands-on claim form processing measuring your mastery of ULOs 3.4 and 5.3.

• Chapter 17 MOSS 4.0 Assessment 17.2A Batching and Billing Electronic Claims (Signal HMO)

• Chapter 17 MOSS 4.0 Assessment 17.3A Generating Paper (CMS-1500) Claims (FlexiHealth PPO)

• Chapter 17 MOSS 4.0 Assessment 17.4A Billing a Secondary Insurance

• Chapter 17 MOSS 4.0 Assessment 17.5A Billing Medicare as a Secondary Payer (MSP)