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M e d i c a l B i l l i n g a n dC o d i n g : B a s i c

Instructors Edition

NOT FOR PRINTING OR INSTRUCTIONAL USE

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Medical Billing and Coding: Basic

Series Product Managers: Charles G. Blum and Adam A. WilcoxDevelopmental Editor: Don Tremblay

Copyeditor: Robb Tillett

Series Designer: Adam A. Wilcox

COPYRIGHT 200 9 Axzo Press

ALL RIGHTS RESERVED. No part of this work may be reproduced, transcribed, or used in any form or by anymeans graphic, electronic, or mechanical, including photocopying, recording, taping, Web distribution, orinformation storage and retrieval systems without the prior written permission of the publisher.

For more information , go to www.axzopress.com.

TrademarksILT Series is a trademark of Axzo Press.

Some of the product names and company names used in this book have been used for identification purposes only andmay be trademarks or registered trademarks of their respective manufacturers and sellers.

DisclaimerWe reserve the right to revise this publication and make changes from time to time in its contentwithout notice.

ISBN 10: 1-4188-1488-1

ISBN 13: 978-1-4188-1488-5

Printed in the United States of America

1 2 3 4 5 GL 06 05 04 03


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C o n t e n t s

Introduction iii

Topic A: About the manual.................. ................. .................. ................. ......... iv Topic B: Setting student expectations ................. .................. .................. ......... ix Topic C: Classroom setup.......... .................. ................. .................. ................. xiii Topic D: Support....................... ................. .................. .................. ................. . xiv

Introduction to medical billing and coding 1-1 Topic A: Roles and responsibilities .................. .................. .................. ........... 1-2 Topic B: Applying for a position........ .................. .................. .................. ...... 1-22 Topic C: Self-employment in the field .................. .................. .................. ..... 1-44 Topic D: The basics of health insurance.................. ................... .................. .. 1-57 Topic E: Medical billing today and tomorrow .................. ................. ............ 1-66 Unit summary: Introduction to medical billing and coding ................. ........... 1-73

Federal and state insurance plans 2-1 Topic A: Medicare ........................................................................................... 2-2 Topic B: Medicaid ..........................................................................................2-16 Topic C: Workers Compensation ................................................................... 2-19 Topic D: TRICARE and CHAMPVA ............................................................2-23 Topic E: Managed Care Organizations .......................................................... 2-27 Topic F: Other Insurance plans .................. .................. ................... ............... 2-31 Unit summary: Federal and state insurance plans ................ ................... ........ 2-34

Health insurance claims 3-1 Topic A: Types of forms................... .................. .................. .................. ......... 3-2

Topic B: Electronic data interchange..................... .................. ................... .... 3-14 Topic C: More on the claims process ................. ................. .................. ......... 3-21 Topic D: Reports....... ................. .................. ................. .................. ................ 3-26 Unit summary: Health insurance claims ......................................................... 3-34

Payments and collections 4-1 Topic A: The Medicare payment process ................. ................... ................... . 4-2 Topic B: Managed Care Organizations .......................................................... 4-20 Topic C: Other carriers ................ .................. .................. .................. ............. 4-29 Topic D: The collection process ................. .................. ................... ............... 4-33 Unit summary: Payments and collections ................. .................. .................. .. 4-46

Applications and audit trails 5-1 Topic A: The billing cycle ................. ................... .................. ................... ...... 5-2 Topic B: Completing the process....................................................................5-15 Topic C: Audit trails .................. ................. .................. ................. ................. 5-24 Topic D: Practice makes perfect ................. .................. .................. ................ 5-29 Unit summary: Applications and audit trails.......... .................. .................. ..... 5-32

Course summary S-1 Topic A: Course summary ................ ................. .................. ................. ........... S-2 Topic B: Continued learning after class ................. .................. ................... .... S-4


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ii Medical Billing and Coding: Basic

Index I-1


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iii

M e d i c a l B i l l i n g a n dC o d i n g : B a s i c

Introduction

After reading this introduction, you will knowhow to:

A Use ILT Series training manuals ingeneral.

B Use prerequisites, a target studentdescription, course objectives, and a skillsinventory to properly set studentsexpectations for the course.

C Set up a classroom to teach this course.

D Get support for setting up and teaching thiscourse.


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iv Medical Billing and Coding: Basic

Topic A: About the manual

ILT Series philosophy

Our goal is to make you, the instructor, as successful as possible. To that end, our

training manuals facilitate students learning by providing structured interactionwith the subject itself. While we provide text to help you explain difficult concepts, theactivities are the focus of our courses. Leading the students through these activities willteach the concepts effectively.

We believe strongly in the instructor-led classroom. For many students, having athinking, feeling instructor in front of them will always be the most comfortable way tolearn. Because the students focus should be on you, our manuals are designed andwritten to facilitate your interaction with the students, and not to call attention tomanuals themselves.

We believe in the basic approach of setting expectations, then teaching, and providingsummary and review afterwards. For this reason, lessons begin with objectives and end

with summaries. We also provide overall course objectives and a course summary to provide both an introduction to and closure on the entire course.

Our goal is your success. We encourage your feedback in helping us to continuallyimprove our manuals to meet your needs.

Manual components

The manuals contain these major components: Table of contents Introduction Units Course summary Index

Each element is described below.

Table of contents

The table of contents acts as a learning roadmap for you and the students.

Introduction

The introduction contains information about our training philosophy and our manualcomponents, features, and conventions. It contains target student, prerequisite,

objective, and setup information for the specific course. Finally, the introductioncontains support information.


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vi Medical Billing and Coding: Basic

Manual conventions

Weve tried to keep the number of elements and the types of formatting to a minimumin the manuals. We think this aids in clarity and makes the manuals more elegant. Butthere are some conventions and icons you should know about.

Instructor note/icon Convention Description

Italic text In conceptual text, indicates a new term or feature.

Bold text In unit summaries, indicates a key term or concept. In anindependent practice activity, indicates an explicit itemthat you select, choose, or type.

Code font Indicates code or syntax.

Instructor notes. In the left margin, provide tips, hints, and warnings forthe instructor. Instructor notes are not visible in student

books.

Select bold item In the left column of hands-on activities, bold sans-seriftext indicates an explicit item that you select, choose, ortype.

Warning icon.Warnings prepare instructors for potential classroommanagement problems.

Tip icon.Tips give extra information the instructor can share withstudents.

Setup icon.Setup notes provide a realistic business context forinstructors to share with students, or indicate additionalsetup steps required for the current activity.

Projector icon.Projector notes indicate that there is a PowerPoint slidefor the adjacent content.


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Introduction vii

Activities

The activities are the most important parts of our manuals. Many activities in this bookallow for as much discussion as the instructor allows, so you have a lot of control overhow long each units takes. Activities are usually divided into two columns, withquestions or concepts on the left and answers and explanations on the right. To the left,instructor notes provide tips, warnings, setups, and other information for the instructor

only. Heres a sample:

Do it! A-1: Steps for brainstorming

Exercises

1 Sequence the steps for brainstorming.

Begin generating ideas

Select the purpose

Organize for the session

Ask questions and clarify ideas

Review the rules

Select the purpose

Organize for the session

Review the rules

Begin generating ideas

Ask questions and clarify ideas

PowerPoint presentations

Each unit in this course has an accompanying PowerPoint presentation. These slideshows are designed to support your classroom instruction while providing students witha visual focus. Each one begins with a list of unit objectives and ends with a unit

summary slide. We strongly recommend that you run these presentations from theinstructors station as you teach this course. A copy of PowerPoint Viewer is included,so it is not necessary to have PowerPoint installed on your computer.

The ILT Series PowerPoint add-in

The CD also contains a PowerPoint add-in that enables you to do two things: Create slide notes for the class Display a control panel for the Flash movies embedded in the presentations

To load the PowerPoint add-in:1 Copy the Course_ILT.ppa file to a convenient location on your hard drive.2 Start PowerPoint.3 Choose Tools, Macro, Security to open the Security dialog box. On the Security

Level tab, select Medium (if necessary), and then click OK.4 Choose Tools, Add-Ins to open the Add-Ins dialog box. Then, click Add New.5 Browse to and select the Course_ILT.ppa file, and then click OK. A message

box will appear, warning you that macros can contain viruses.6 Click Enable Macros. The Course_ILT add-in should now appear in the

Available Add-Ins list (in the Add-Ins dialog box). The x in front ofCourse_ILT indicates that the add-in is loaded.

7 Click Close to close the Add-Ins dialog box.


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Introduction ix

Topic B: Setting student expectations

Properly setting students expectations is essential to your success. This topic will helpyou do that by providing:

Prerequisites for this course A description of the target student at whom the course is aimed A list of the objectives for the course A skills assessment for the course

Course prerequisites

Students taking this course should be familiar with personal computers and the use of akeyboard and a mouse. Specifically, students should be comfortable using MicrosoftWindows and Internet Explorer (or some other browser). Furthermore, this courseassumes that students have completed the following courses or have equivalentexperience:

Medical Terminology

Target student

The typical students of this course will be interested in a career in medical billing andcoding, and may be interested in certification in the field.

Course objectives

You should share these overall course objectives with your students at the beginning ofthe day. This will give the students an idea about what to expect, and will also help youidentify students who might be misplaced. Students are considered misplaced when they

lack the prerequisite knowledge or when they already know most of the subject matterto be covered.

After completing this course, students will know how to: Understand the roles, responsibilities and options of those in the medical billing

field; identify different rsum types, keywords, and application avenues;describe the pros and cons of self-employment in the field; gain a baseknowledge of US health insurance history and terminology; understand currentevents in the field and expected growth and change to come.

Know the basics and history of Medicare as a driving force for the industry;understand the Medicaid and the Medicare-Medicaid relationship; knowapplications of Workers Compensation for medical billers; identify the general

concepts of Tricare and ChampVa; know the specific types and applications of amanaged care organization; know what additional health insurance options andresources are available.

Complete basic claim forms and understand the differences in claim types;understand the connection of the Health Insurance Portability andAccountability Act to electronic claims; apply unique requirements to otherinsurance carriers such as Medicaid and Workers Compensation; combinenecessary reporting mechanisms to the overall claim process.


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x Medical Billing and Coding: Basic

Calculate the Medicare and Medicare-related fee-schedules to a payment,adjustment, and collection process for PAR and Non-PAR providers; combineyour knowledge of managed care to the complete payment and collections

process; use and understand the different payment methods and calculations;apply collection methods and types to complete the claims process, along withlearning about different options for collections.

Follow the medical claims steps from predetermination to the end of a claimslife; understand and apply different types of patient statements and follow thesteps in the management of the billing process; know the administrative tasks forthe medical billing cycle, such as audit trails, practice analysis, and problemidentification; apply the whole billing process by completing claims, followingup, and using patient ledgers in sample cases.


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Introduction xi

Skills inventory

Use the following form to gauge students skill level entering the class (students havecopies in the introductions of their student manuals). For each skill listed, have studentsrate their familiarity from 1 to 5, with five being the most familiar. Emphasize that thisis not a test. Rather, it is intended to provide students with an idea of where theyrestarting from at the beginning of class. If a student is wholly unfamiliar with all the

skills, he or she might not be ready for the class. A student who seems to understand allof the skills, on the other hand, might need to move on to the next course in the series.

Skill 1 2 3 4 5

Listing job titles and describing different positions in themedical billing and coding field

Listing skills and proficiencies needed for success in themedical billing and coding field

Describing the standards of ethical coding

Describing medical etiquette and HIPAA

Listing and describing certifications in the field

Creating a rsum that matches your goals and experience

Describing the pros and cons of self-employment

Relating the history and future of health insurance in theUnited States

Describing the basics of Medicaid, PAR, and non-PAR providers, and fraud awareness

Describing different types of Medicare and eligibility

Describing the history and coverage of WorkersCompensation.

Describing TRICARE and CHAMPVA

Comparing managed care organizations and other healthinsurance plans

Completing basic health insurance claim forms

Understanding the overall claims and billing process

Using various billing reports

Calculating the Medicare and Medicare-related fee-schedules to a payment


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xii Medical Billing and Coding: Basic

Skill 1 2 3 4 5

Completing patient ledgers

Using different payment methods and calculations

Tracking, managing, and improving collections

Following up on pending claims

Completing the claims process

Documenting and managing accounts

Maintaining an audit trail

Finding and identifying problems in the billing process


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Introduction xiii

Topic C: Classroom setup

This course assumes that each student has a personal computer with Internet access touse during the class. In addition to a manual, each student should also be provided witha pad and pens or pencils for filling out forms jotting down notes questions. Studentsshould have a comfortable place to sit and ample table space to spread out theirmaterials.

First-time setup instructions

The first time you teach this course, you will need to perform the following steps:1 Ensure each student should have a computer with Internet access and a Web

browser. Newer versions of Windows and Mac OS come with a browserinstalled.

2 Some documents that students open during Web activities are in PDF format (asare the student data files), so youll need to install the free Adobe reader: Open aWeb browser and go to www.adobe.com. Click the link for Get Adobe Reader

and follow the instructions for installation.3 If you dont already have the student handout files on CD, download the

Student Data files for the course. a Connect to www.axzopress.com.

b Under Downloads, click Instructor-Led Training. c Browse the subject categories to locate your course.

4 Print out a copy of each data/case document for each student. These include filesin the unit folders and in the case subfolders. Print two copies of each form(these are found in the Forms subfolder in the unit folders, where applicable).Some forms appear in more than one unit, so students will have four or sixcopies of some blank forms.

Setup instructions for every class

Before the start of every class, print out fresh data sheets, case studies, and forms foreach student.


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xi v Medical Billing and Coding: Basic

Topic D: SupportYour success is our primary concern. If you need help setting up this class or teaching a

particular unit, topic, or activity, please dont hesitate to get in touch with us.

Contacting us

Please contact us through our Web site, www.axzopress.com. You will need to providethe name of the course, and be as specific as possible about the kind of help you need.

Instructors tools

Our Web site provides several instructors tools for each course, including courseoutlines and answers to frequently asked questions. To download these files, go towww.axzopress.com. Then, under Downloads, click Instructor-Led Training and

browse our subject categories.


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11

U n i t 1Introduction to medical billing and coding

Unit time: 360 minutes

Complete this unit, and youll be able to:

A Discuss the roles, responsibilities, andoptions of those in the medical billing field.

B Identify different rsum types, keywords,and application avenues.

C Describe the pros and cons of selfemployment in the field.

D Discuss U.S. health insurance history andterminology.

E Understand current events in the field andexpected growth and change to come.


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1 2 Medical Billing and Coding: Basic

Topic A: Roles and responsibilities

Explanation The healthcare industry today provides many job opportunities. According to the U.S.Department of Labor, Bureau of Labor and Statistics, About 16 percent of all newwage and salary jobs created between 2002 and 2012 will be in health services3.5million jobs, which is more than in any other industry. 1 The workforce in healthcare islargely divided into two main categories: clinical and non-clinical. The clinical sideincludes those medical careers that are highly visible such as doctors, nurses, medicalassistants, and other direct patient contact careers. While these are all considered greatcareer options, a demand for staff that support such positions in healthcare are becomingeven more recognized and valued such as medical billing insurance specialists and otheradministrative-related positions.

Positions, titles, and places of employment in the field

Health insurance policies and contracts barrage our healthcare industry and can be quitecomplicated in nature. Reimbursement for services rendered in the field has become amuch more difficult task than in the past as a result of changing policies and guidelinesand therefore requires additional knowledge to ensure proper handling of claims,

payments, and reviews. Due to this need, achievable avenues have developed to aid professionals who are forced to keep up with the constant changes in guidelines andconventions.

Managers and administrators are no longer able to spend the enormous amount of timerequired to efficiently complete the insurance billing cycle. An array of positions suchas health insurance specialists, medical documentation coders, and health informationtechnicians has arisen due to the ever-changing complexity of the required billingguidelines and coding conventions. Although the rising need for such specialization hasserved to raise the recognition of professionals in the field, unfortunately there are stillsome employers out there who have not yet realized the true value of having such

specialists as professionals among their staff. With continued focus on this need,however, and the assistance of national organizations that are willing to continue thefight, it is expected that this trend for more educated professionals in medical healthinsurance billing and coding will continue to grow. Therefore, the timing for thosegoing into medical billing and coding is perfect.

Note: It is important to understand that the positions listed below under specific facilityoptions are in general terms and that some positions may cross the location/facility

barrier, depending on the specific needs and responsibilities of that employer. Forexample, a billing company may need to hire all types of certain facility-based billerssuch as those companies who bill for hospitals, medical offices, and a combination offacilities. It is also worth noting that some employers require different skills andresponsibilities. For example, employers who might want to include codingresponsibilities along with required billing responsibilities. Note that this list is non-inclusive of positions in the field as new ones are created and specified constantly asnew responsibilities and specializations come about.


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Introduction to medical billing and coding 1 3

Hospital and inpatient facilities Medical Records Specialist Hospital Patient Accounts Representative Health Information Technicians and Managers (HITs and HIMs)

Responsibilities: Working with medical records in an inpatient facility such as a skilled

nursing facility, medically-based nursing home, or hospital. Data entry is usuallyconsidered to be a big part of this list of positions with the exception of the HealthInformation Managers whose duties are more administrative in nature. The HealthInformation Technician differs from the Medical Records Specialist in that theseinformation technicians are usually involved in the coordination of information (e.g.,computer information with electronic and paper documentation) and usually alsoinvolve a level of medical coding as well.

Clinical facilities

Generally, the clinical facilities category includes medical offices, healthcare clinics,and outpatient services facilities.

Medical Office Billing Specialist Electronic Claims Professional (ECP or CECP for Certified) Medical Billing Specialist (MBS)

Responsibilities: Completion of CMS/HCFA 1500; customer service related tocompletion of claims and insurance assistance; working closely with back-office

personnel to ensure proper coding, documentation, and billing; determining propercoding and billing conventions; possessing a basic knowledge of insurance types andfamiliarity with general policies and procedures for each.

Patient Billing Advocate Claims Assistance Professional (CAP) Patient Claims Specialist (PCS) Medical Savings Plan Representative

Responsibilities: These individuals may or may not work for a medical facility or billingcompany. They represent and are considered advocates for patients in their quest for

proper payment of services or procedures rendered to them or a family member. Manymedical facilities are recognizing the need for such positions in the ever-complicatedworld of claims and are contracting with companies that provide these types of services.They assist patients with such issues as their patient rights, including financial matterswhen claims are not getting properly paid or a patient is financially unable to payrequired bills. CAPs may also be self-employed and are considered to be a great up-and-coming profession. There is a word of caution in this position: the insurance industrydoes not allow CAPs or patient advocates to recommend or suggest certain insurances

or types as it is considered selling and will fall under their insurance salesrepresentative state laws per the national insurance commissioner. 2


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Non-clinical facilities

These employers generally include such entities as insurance companies, healthmaintenance organizations, or other third party administrators (TPAs).

Health Insurance Specialist (HIS) Health Insurance Claims Reviewer Electronic Insurance Specialist (EIS)

Responsibilities: Receiving and reviewing insurance claims submitted in a timelymanner; understanding codes and conventions; determining errors, omissions orinconsistencies with claims under review according to standards and policy.

Positions that can be filled at more than any one location

These positions are based on duties and specialties and are therefore able to be filled atany or all facility types such as hospitals, clinics, medical offices, laboratories, billingcompanies, and other medically-related businesses.

Collection Specialist Reimbursement Specialist A/R Collections Representative (Accounts Receivable) Patient Account Specialist

Responsibilities: Reviewing outstanding claims to determine payment requirements orreimbursement necessities; following up with insurance carriers, network plan

providers, or Third Party Administrators to determine reason(s) for any unpaid claims;following up with patients for payment of claims unrecoverable from insurance carriers;referring those with financial hardships to the proper channels (Medicaid, payment planoptions, State, County or Federal Health Assistance programs).

Coding positions

Certified Professional or Procedural Coder (CPC) Certified Hospital Coder (CHC or CCS-H) Certified Coding Specialist (CCS) Certified Coding Associate (CCA)

Responsibilities: Translating medical documentation services and procedures into validCPT (Current Procedural Terminology), ICD9CM (International Classification ofDiseases, 9th Revision, Clinical Modification), or HCPCS/CPT, level 2 (Health CareProcedural Coding System). Many coders specialize in specific types of coding suchas, but not limited to: hospital coding, outpatient coding, procedural coding, diagnosticcoding, physician coding, DME (Durable medical equipment) coding, and specialtycoding. Each type of position focuses on transcribing the medical documentation or

services or procedures codes rendered along with conditions, symptoms or diagnosesinto these nationally (above) and internationally (ICD10) recognized codes.

Other positions Medical Secretary Medical Facility Unit Clerks Administrative Assistants


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Responsibilities: Generally responsible for a variety of administrative and clerical dutiesnecessary to run an organization efficiently. They need skills for a variety of tasks andmachines such as computers, facsimile machines, photocopiers, complex telephonesystems, and other office equipment. In addition, these individuals increasingly use

personal computers to create spreadsheets, compose correspondence, manage databases,and create reports and documents via desktop publishing and digital graphicsall tasks

previously handled by managers and other professionals.

Chiropractic, acupuncture, and alternative medicine facilities

Modern healers are continuing to embrace ancient medicine. Many health insurancecompanies are also beginning to recognize that these methods might have a hand in

preventative and overall good health, and a few have even begun including them in patients benefits and on a case-by-case basis. It is expected that this trend in medicinewill continue to grow, thus increasing the need for medical billers and coders.

Medical software applications specialists

Computers, Internet access, electronic billing, and HIPAA have all sparked the need forcomputer software companies to offer solutions to the healthcare community. Even

President George W. Bush in his 2004 presidential debate with Senator John Kerryrecognized the need for the medical community to become better equipped and moreup-to-date with the twenty-first century in assisting patients, doctors, and insurancecompanies. 3 This makes it essential for software development companies to work hand-in-hand with the medical professionals, which has already begun creating the need for

professionals who understand and are educated in regulations, billing guidelines, andconventions. Software and programs that are able to complete these tasks often requirethe assistance of full-time medical billers and coders.

These other possible careers for professionals can sometimes be a part of, derived from,or even grow out of a medical billing and coding position.


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Do it! A-1: Reviewing positions and titles

Exercises

1 Match each title or title acronym on the left with its corresponding description onthe right.

a. CPC

b. CBCS

c. ReimbursementSpecialist

d. CAP

e. CCA

f. ECP

g. HIT

h. A/R Representative

1. Claims Professional that often works for individualsrather than companies.

2. Concerned with collections.

3. Certified Procedural or Professional Coder.

4. Claims Specialist that uses electronic means for claimssubmissions.

5. Considered and recommended by most as the first stepon the National Certification ladder.

6. Considered by AHIMA to be the first step in NationalCoding for those who do not yet qualify as a full-fledged coder.

7. Generally works with medical documentation at aninpatient facility.

8. Reviews outstanding claims and accounts to track the percentages of monies still due to the facility.

Answers: a=3; b=5 (certified billing and coding specialist); c=2; d=1 (claims assistance professional); e=6 (certified coding assistant); f=4 (electronic claims professional); g=7(health information technician); h=8 (accounts receivable representative)

2 After you have completed the matching above, list general responsibilities foreach.

3 Discuss possible places of employment for each.


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Skills and proficiencies

Explanation There are many characteristics that an individual should possess in order to functionwell in the medical billing and coding profession. It is also important to realize thatalthough the skills and proficiencies listed are considered for most positions mentioned,additional skills and proficiencies may be required by an employer.

Generally, a minimum of a high school diploma or equivalent is considered a must asreading, logic, and critical problem solving are required skills to begin with. Goodorganizational skills are also invaluable in this field. Moreover, proactive tactics areoften necessary to complete accurate claims and reviews since many times in the fieldreimbursement hinges on the careful approach of someone who has an eye for detailsthat can be easily overlooked.

Minimal skills Critical thinking skills It is important to possess the ability to think logically

and solve problems. Comprehensive and precise reading skills Applicants must not only be able to

read carefully but also be able to understand that detailed issues in

documentation can be extremely crucial. For example, noticing the difference insimply a few letters of a medical procedure can prevent a huge clerical mistake,such as the difference between words like colotomy , which is a surgical incisionin the colon, versus colectomy , the surgical removal of all or part of the colon.

Basic mathematics Calculating fees, percentages, and reimbursements are anecessary part of any billing position. Verification of an understanding of basicmultiplication, division, addition, and subtraction by testing is considered to be

part of the application process for some billing positions. Computer skills An overall comprehension of inputting, typing, and general

computer knowledge is required for almost all positions in the field. The abilityto use programs such as MS Word, Word Perfect, and Excel are minimalrequirements in most facilities.

Additional skills Medical Terminology A basic understanding of general medical terms,

including the ability to break down words and comprehend which bodysystem(s) is being referred to is considered a must in this field.

Anatomy & Physiology A working knowledge of gross anatomy and physiology (e.g., knowledge of disease processes) is also required by mostemployers.

Proficiencies Typing Skills A minimum of 35 WPM is usually required. Some employers

require more, depending on what the job entails. Mathematical Problem Solving Not only are basic mathematical skills

important, but also the ability to understand math solutions and theirimplications.

10-Key and Calculator Usage A general understanding of how to use a 10-key calculator is assumed by most employers. Some companies even testapplicants in this skill.

Data Entry Data entry goes hand-in-hand with computer skills and isconsidered an important responsibility of most positions.


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Ethics, etiquette, and HIPAA

Explanation As in any business arena, it is important for those entering the medical billing andcoding field to project a professional image. This not only includes presenting a

business appearance via ones attire, but also exhibiting professionalism through such behavioral manifestations as effective communication, displaying a team playerattitude, and speaking intelligently. An understanding of the essentials of common

medical etiquette and ethics should include having at least a basic knowledge of themost current issue affecting the field. The Health Insurance Portability andAccountability Act (HIPAA) has affected everyone in the medical field recently, andthose entering the medical billing and coding world should be aware of the name, atminimum. HIPAA will be discussed in more detail later.

Medical ethics

Medical ethics are the standards of conduct that are generally accepted within themedical community as guidelines for behavior from a moral perspective.

Acting ethically means behaving in a way toward others that includes such conduct ashonesty, integrity, decency, consideration, mutual respect, fairness, and self control.

Hippocrates, along with the medical community of the time, established the mostfamous written ethical principles in about the fifth-century BCE, known as the Oath ofHippocrates. An updated version of these ethical boundaries were issued in 2002 by theAmerican Medical Association called the Charter on Medical Professionalism 4 and are

based also in part on the Principles of Medical Ethics that were developed by the AMAin 1980.

Some educational facilities are even including Medical Ethics in their courses asrequired material for students entering this field. The American Health InformationManagement Association has devised the Standards of Ethical Coding for coding

professionals. 5


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Other national associations that have gained authority in the field of medical billing andcoding are the National Healthcareer Association (NHA), and the Healthcare Billingand Management Association (HBMA). They continue to require members to maintainsuch ethical standards as professionalism, competency, integrity, objectivity,confidentiality, honesty, diligence, and complying with all relevant local, state, andfederal laws as applicable. 6

Professional etiquette

In any business setting, interactions between professionals should include suchstandards as courtesy, manners, and consideration for others. Some detailed examples ofrecommended practices in professional etiquette are:

Always rise when introducing or being introduced to others. Maintain a firm handshake and eye contact with others during introductions. Always use proper titles, names, and company information. Unless requested or given permission to do otherwise, always use title and last

name for introductions. Always arrive on time for appointments: It is recommended to arrive ten minutes

early to be considered on time in most corporate situations.Specifically, medical etiquette is an essential part of the medical billing and coding fieldand should include the etiquette practices above as well as these suggested by mostmedical professionals:

With respect to physicians and providers, never keep them on hold for more thana few seconds on the telephone and keep other waiting times to a minimum.

Offer to assist providers in any way necessary, such as by pulling a patientschart or medical records.

Regarding all medical professionals and clients, treat them with a respect andcourtesy that demonstrates an awareness of health concerns and stress factors.

Always maintain patient confidentiality. Respect patients privacy. Be aware of the federal mandate HIPAA, or Health

Insurance Portability and Accountability Act, discussed later.

Netiquette

With todays convenience of the Internet at our disposal, it is important to discuss thisrecent addition to the professional community at large. For the medical community in

particular, the Internet can be a great delivery system for expeditious exchanges ofinformation and data. Although still in its beginning stages in the medical realm, theWeb can provide consumer access to health records and medicines for emergencysituations, offer quicker approval of health benefits or specific services needed, andassist in research efforts for better patient care. In response to this new instant access formedical professionals, there derives the need to communicate and correspond in the vastInternet world.

Netiquette (from Inter net etiquette ) guidelines that are widely accepted align with the professional etiquette that is recommended for any communication or correspondencewith another professional in any setting.

Here are some of the applicable netiquette guidelines for consideration.


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Do not type in all caps in communications, as this is considered a form of yellingor screaming online.

Whether e-mailing, chatting, or submitting information online, always give asubject or heading to your correspondence.

Keep formatting simple: do not add color, graphics, or fancy font/characters.Although it might look great from your end, it is always questionable forviewing at the receiving end.

Do not send anything to a blind receiver (one who is not authorized to receiveyour correspondence or information).

Always use proper language and professional tones in writing because the onlytone an Internet receiver will perceive is the one contained within your writtenwords.

Never give out phone numbers or personal information online. Patientinformation and data exchanged over the Internet is considered subject toHIPAA 7, and any correspondence sent in unsolicited bulk can be consideredspam. 8

Due to the need for more Internet e-Health ethical guidelines, the Journal of MedicalInternet Research (JMIR) is one international entity that has taken on the enormous task.They began their goal with the e-Health Ethics Summit, which convened inWashington, DC, on January 31, 2000 along with and hosted by the World HealthOrganization (WHO) and the Pan-American Health Organization (PAHO). They begantheir questalong with many other international guests from all over the worldtodiscuss this vital issue. The e-Health Code of Ethics guidelines and information is still

being discussed 9 and can be viewed at: http://www.jmir.org/2000/2/e9 .

HIPAA awareness and compliance

Not only is it imperative from an ethical and etiquette standpoint, but now also from alegal standpoint that medical professionals maintain confidentiality for patients.

The Health Insurance Portability and Accountability Act of 1996 was implemented bythe Centers for Medicare and Medicaid (CMS) and incorporates two main parts thathave digressed into more detailed portions of the law. Title I of HIPAA is intended to

protect health insurance coverage for workers when they change or lose their jobs. This part is known as HIPAA Insurance Reform.

Title II of HIPAA requires the Department of Health and Human Services to establishnational standards for electronic healthcare transactions along with providing nationalidentifiers for providers, health plans, and employers. It incorporates the privacy andsecurity of confidential medical data and information and is commonly referred to as

PHI (Protected Health Information). It also contains standardized code sets for claimsand unique NPIs (National Provider Identifier numbers) that providers will need to

request beginning May, 2005.The main point of discussion with respect to those just beginning to learn HIPAA is tounderstand the responsibilities of those in the medical field that may be privy to detailedmedical and financial issues that pertain to individuals. There has been a need for manyyears to standardize our industry, and HIPAA allows for and assists with this. Withrespect to privacy specifically, Privileged information is basically everything you see,hear, or read about a particular patient that needs to remain confidential and should not

be discussed without the patients permission. Some employers now even require somesort of confidentiality agreement signed by new employees and business associates,such as contracted billing companies.


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2 Read the netiquette scenario.

You receive an e-mail back regarding some medical billing concerns you had sentto an insurance companys contractor representative. In the response you received,you noticed several acronyms that were unfamiliar to you, as well as a cc(carbon copy) to the patient account representative supervisor. Here is the sample

e-mail you received:

To: Responder Date:8-22-2004From: ABC Insurance CompanyRe:cc: Suzy SupervisorHi Betty Biller,In response to your question about a contract with your provider, Dr. XXXXXX andsubscriber Penny Patient; I would like you to know that because we have no specificinformation about this patient on file from you, and apparently she is NDA, IMHO ICANNOT ASSIST YOU AT THIS TIME. BTW, you might want to review yourcontract for the doctor and contact us for further answers as per the contract. Dont

contact us this way again.Thank you,Miserable Marcia Company Representative

After researching further, you define the acronyms:

NDA = Not Diagnosed with AnythingIMHO = In My Humble/Honest OpinionBTW = By The Way

What are the ethical issues (if any) and the proper medical netiquette techniquesthat Miserable Marcia (Company Representative) did not follow?

There is no Subject/Reference in the Heading.

The phrase I CANNOT ASSIST YOU AT THIS TIME is all in caps. This is consideredinappropriate.

The use of abbreviations and Internet acronyms might be cute; however, they are not tobe used in business netiquette.

The letter contains a patients name and the heading has a cc (carbon copy) to SuzySupervisor, which is unauthorized.

The entire tone of the letter is unprofessional.


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Title Organization Description

Certified ProfessionalCoder (CPC)

Certified ProfessionalCoder Hospital

(CPC-H)

Certified ProfessionalCoder Apprentice

(CPC-A)

American Academy ofProfessional Coders (AAPC)

309 West 700 SouthSalt Lake City, Utah 84101

Phone: 800-626-CODE (2633)Fax: 801-236-2258

Web address: www.aapc.com

Coding Professionals focus on codingand coding compliance, standards andconventions. They also includemedical terminology, anatomy and

physiology. They offer training inProfessional Medical CodingCurriculum (PMCC).

Certified RNCoder/Clinical Coder

Certified RNAuditor/Clinical Auditor

Certified Medical Coder(CMC) Technical Coder(Non-clinical)

Certified Outpatient Coder(COC) Technical Coders(Non-clinical)

American Association ofCertified Coders and Auditors(AACCA)

3233 Grand Avenue #N291Chino Hills, CA 91709

Phone: 909 590-5307Fax: 909-752-5315

Website: www.aacca.net

Predominantly a certificationspecifically designed for Registered

Nurses (RNs) and also includes physical therapists, physicians,speech language pathologists;however, now open to non-clinical

professionals beginning 2005.

Certified Medical Biller(CMB) and CertifiedMedical Billing Specialist(CMBS)

American Association of MedicalBillers (AAMB)

1840 E. 17th St., Suite 140Santa Ana, Ca. 92701

Phone: 1-888-BILLERS

Website: www.billers.com

This organization is becoming morerecognized for medical billers.

Certified Claims AssistanceProfessional (CCAP) orCertified Electronic ClaimsProfessional (CECP)

National Association of ClaimsAssistance Professionals, Inc.(NACAP)

5329 S. Main St., Suite 102Downers Grove, IL 60515

Phone: 708-963-3500

A great organization for thoseconsidering becoming CAPs.


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Do it! A-4: Certifications and education game

Heres how Heres why

You will need Internetaccess for this activity.

1 Choose Start , All Programs ,Internet Explorer

To start the Web browser. You will play anonline activity game.

2 Go to http://www.quia.com/cm/66259.html

Follow the instructions on the site This will bring you to the Quia Medical Billingand Coding Certification game.

3 You may play more than once You will become familiar with the acronymsand titles in the field.

4 You will also need to view eachassociations website for currentinformation:

Changes in the field make it necessary to changerequirements and qualifications; therefore it isimportant to make sure you review the most up-to-date information available.

http://www.aapc.com

http://www.ahima.org

http://www.nha2000.com

http://www.aacca.net

Look up certifications for each organizationswebsite.

5 Write down any sites orcertifications that you areinterested in pursuing


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4 Review the above to see if the amount of information you gathered matches yourarea(s) of strength determined in Step 2. Do you need to adjust your targeted areasof strength on your rsum to draw more attention to these areas?

If you have more than one area that you would like to focus on then you will wantto reflect any and all applicable strengths in the beginning or top portion of your

rsum.I have strengths in the following areas(list):

Some examples are employment: previous management, previous medicalexperience, accounting background, customer service; and education:completion of a medical billing and coding program/seminar/course, collegedegree, continued education.

5 Based on your answers to the above questions, you can then decide which type ofrsum would suit your needs.

Reverse Chronological format

Functional Rsum format

Combination Rsum format

Note: Most professionals in medical billing and coding will want to use theCombination Rsum format due to the nature of the information included.

6 What type of position are you looking for and where are you going to marketyourself?

I am specifically looking for a position in or at: (fill in the blank).

Notes: Medical billing and coding positions are considered to be technically-skilled positions that can be marketed in many ways, such as in direct or localemployment guides, via medical organizations, newsletters, or electronic media.

Rsums are generally preferred in this field over Curriculum Vitaes unless amedical background exists in an administrative or clinical capacity.

E-rsums are widely accepted in the industry and will become a more requiredform for employers seeking qualified applicants in the future.


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7 What if I dont have much to puton my rsum or it lackssomething like length of time at a

job?

You want to include all your relevant skills andqualifications and present them in the most

positive light. But that doesnt mean lying orstretching the truth. You also dont want toinclude irrelevant information just to make yourrsum longer.

Remember that employers check employmenthistory, references, and dates so it is never wiseto provide anything but the absolute truth. Youcan, however, stress your willingness to complyor stay with a company long-term.


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Rsum Packages

Explanation After you have completed your rsum, you will be ready to submit it to a prospectiveemployer or department. Remember, a rsum is a concise outline of what you have tooffer. Because the space and content can be limited, you will want to also create anentire rsum package. A rsum package consists of your cover letter, the rsum, aseparate list of references, and a thank you note.

Cover letters

The cover letter should be a sales letter that will encourage and lead the reader toreview your rsum. Its design should entice the reader to learn more about youtoshow a personal aspect of the accomplishments that are reflected in the rsum.

Cover letters should also be unique and company-specific. It is a great place to alsoshow your knowledge about the company (make sure you do your research and includeonly factual information). You can use a general format to start with; however, it isrecommended that you change parts of it to include unique details.

Get the readers attention by including something that will convince him or her that youare the perfect match for their needs and yours. Use a simple business letter format andthe same font style and size as in your rsum. You can be more creative in the coverletter because of its nature, but again, do not be too fancy or you risk losing theirinterest.

References

A reference is someone who can provide a prospective employer with informationregarding your professional strengths and weaknesses. Obviously, you want to givethem names of people who will concentrate more on your strengths and less on yourweaknesses. The most difficult part of a reference is deciding just who to use and forwhich positions it will be necessary to use them.

There are generally three main types of references: Professional reference This is generally considered to be someone who was a

supervisor or a higher-level co-worker who has some sort of authority andmanagerial responsibility. The more recent and the more time known are twofactors that can help, depending on your relationship with that person.

Academic or educational reference This reference source can be used bythose who are possibly new to the field but have completed a program, course,or seminar related to the field in which you are applying. Do not use someonewith whom youve only taken one class or day seminar. However, you cancertainly obtain a reference from him or her if there were extraordinarycircumstances (i.e., you made an abnormally high grade on a project or test forthat day or seminar or your Instructor mentioned that you stand out for some

reason in a positive way). Personal reference This should be considered a character reference

someone who can vouch for your desirable personal traits, ones that will reflecthow much of an asset you would be to the prospective company or department.

Regardless of the type of reference, be sure to ask their permission prior to adding themon your list. This is not only courteous, but it might just help you filter out those whocould end up hurting your chances for an interview if they found out you wrote theirname and phone number down without discussing it with them.


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Do it! B-4: Reviewing rsum packages

Questions and answers

1 Write down some ideas with respect to what you might want to include in yourcover letter that cannot be reflected on your rsum.

The cover letter should contain positive information only. You would not wantto include any negatives not reflected on your rsum, such as personalityconflicts with past employers, pending litigation, unacceptable pay, oranything that emphasizes the bad points in your reasons to seek employmentor advancement.

In one example, if you had no previous experience in a profession, but hadrecently completed a program focusing on that field, a cover letter mightinclude a statement such as Recently successfully completed a medical

billing program with exceptional grades and equivalent knowledge to fulfillthe duties of this position.

2 Organize your cover letter ideas in a rough-draft.A basic cover letter is usually composed of three paragraphs: an opening, themiddle or meat, and then a closing paragraph.

The opening paragraph should spark the interest of the reader and include suchimportant facts such as Successfully completed a medical billing and codingtraining program. It should also contain the reason for sending your rsum,like I am sending this in reference to fulfilling your need for a full-timeMedical Billing Specialist.

The second paragraph should demonstrate and highlight how yourqualifications match those needed for the job. You can use this portion toreally sell your strengths in a more personal and specific way than yourrsum.

The final paragraph should contain your call to action. You will include yourreference to the enclosed rsum and express thanks to the reader for his or hertime and consideration. Also be specific on your availability and just how andwhen the reader can contact you to set up an interview.

3 After reviewing the possible reference questions listed in the References sectionabove, begin writing a list of possible references and include why you chose them.

Remember to categorize them according to the type of reference, being sureto consider the questions that might be asked of a reference.


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The Interview

Explanation Nothing is as important as the ever-so-dreaded interview; however, there are some tipsthat can help ease your tension about this critical step in the hiring process. Per theConnecticut Department of Labor, there are only a few crucial issues that can make or

break an interview.

Key issues at the interviewAlong with your knowledge, skill level, and ability to perform a particular job, there aresome key issues or concerns that most employers share that can actually help or hinderyour chances of being hired.

Have a good attitude and be positive in your comments. Nothing pleases anemployer more than knowing she will be hiring someone who will contribute ina positive way to the staff and general atmosphere in the office. An employerwill find great comfort in knowing that you are able to comply and can do sowith respect and a team-player attitude.

Maintain your professionalism at all times. Keeping your cool during difficultinterviews, treating others with courtesy and respect, and always addressing

others by their last names and titles will get you far on the career ladder in life.Even if you decide, due to the circumstances surrounding the interview that youare not interested in taking the position, you never know just who networks withwhom and that regardless of how they act or treat you that you maintain your

professionalism. Express your ability to learn anything new quickly and to work efficiently;

discuss your positive qualities and desire to be flexible. Employers want to knowthat the company will benefit by hiring you and that you will make things easierin the workplace.

Present yourself as a true professional. Appearance matters greatly. First-timeimpressions only come around once; therefore, it is critical to dress the partand be appropriate in fashion, hair-style, and consideration of time.

Review the Interview Cheat Sheet to help you prepare for your interview.


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2 With respect to the company and the position you are interviewing for, youshould:

A Do your homework about the company and the position.

B Ask the interviewer about the company and the position.

C Dont mention anything about this because it would be considered rude.

3 Other employees or staff members that you meet while waiting for your interview:

A Are insignificant and therefore not a consideration.

B Are significant and therefore you need to be extra courteous.

C Are certainly worth consideration: treat them professionally and courteously;however, address this in your interview.

4 Asking questions of the interviewer:

A Is inappropriate because they are interviewing you.

B Is perfectly appropriate because you are both interviewing each other.

C Is acceptable but only to clarify items that you do not understand.

5 If you have had a bad experience with a previous employer, it is important todiscuss this with your interviewer when?

A Never, because you do not want to leave an impression with the interviewerthat you are difficult to work with and not a team-player.

B You discover that this interviewer is possibly another problem for you.

C You are asked about any negatives that you need to mention.

6 With respect to the subject of salary, you should:

A Be the first to bring it up because it is critical.

B Not discuss it at all in the first interview.

C Allow the interviewer to bring it up and then discuss it because it isimportant.

7 When finishing an interview, it is appropriate to:

A Ask the interviewer if you have the job.

B Ask the interviewer if you can contact her in a week to follow up on this position because you realize you are interested.

C Let the interviewer know that the salary you expect is $XXXXX.


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Topic C: Self-employment in the field

Explanation Running your own medical billing company can be a great goal to work toward, but it ishighly recommended that you take time to work in the field first as an employee orsubcontractor in order to gain hands-on experience and confidence in the necessaryskills before venturing out on your own.

Advantages

Many professionals consider at some point the possibility of having a small business. Itcan be a great goal to attain; however, it can be a difficult venture and therefore it ishighly recommended that you spend time in research and planning to gather as muchinformation as possible to aid in making your business successful.

Flexibility

The satisfaction of being your own boss and being in control of your own financial and personal goals can be extremely self-motivating. Because of this, more and more

professionals want the flexibility and freedom associated with owning a small business.Even if they must put in more hours than their corporate counterparts, home-based business owners gain the flexibility to structure their own time and control their ownlives.

A home-based business allows you to eliminate the cost of an officea major expensefor most small businesses. Also, most home-based business owners are eligible for a

partial write-off of their house payment, utilities, and maintenance costs. (The laws are,however, becoming stricter in this area. Be sure to check the current tax laws in yourstate.)

Commuting

For many Americans, the trip to work is the dominant focus of travel each day.According to the U.S. Census Bureaus American Community Survey, approximately123 million people in the United States commuted to work outside the home in 2000.The average American spends 1 hour and 13 minutes behind the wheel each day. Andaccording to the Nationwide Personal Transportation Survey using the 2001 AAAstatistics; the average household spends about $6,400 per year just to keep a newvehicle operable. It is also amazing to consider that the Westchesters Smart CommutePrograms from New York stated in its report that A typical household spends nearly 20

percent of its income in driving costsmore than it spends on food. 9

All of this adds up to another great advantage to owning and running your own business.

Other AdvantagesSome professionals experience less stress and better health than those working outsideof the home. Although it is not true for all, most do agree; however, not having a boss toanswer to is definitely a plus for overall stress level.

Disadvantages

While there are apparent pros to working for oneself, there are also some cons that needto be addressed and considered if you are going to work for yourself.


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Lack of personal interaction

The need for networking and communication with others is even more essential andnoteworthy when you are working in an isolated situation that running your own

business can cause. Making an effort to include yourself in networking opportunitiessuch as belonging to a local medical billing and coding association, taking seminars inthe field, and setting up appointments with those in the community that can provide a

mutually beneficial relationship is suggested to help with this.Lack of boundaries and limitations

For many home-based business owners, one of the biggest challenges is the lack of boundaries, such as knowing when to set hours of working versus down or off time.By following a carefully considered schedule, setting up special boundaries and treatingyour time at work the same as you would by wearing appropriate business attire,resisting the urge to do personal chores during work hours, and just using overallcommon sense will help you in setting up and complying with your necessarylimitations.

Scams

According to the Federal Trade Commission, medical billing scammers generallycharge a fee of $300 to $500. In exchange, they claim to provide everything yousupposedly need to launch your medical billing business: the software program to

process the claims and a list of potential clients. But in reality, few consumers who payfor medical billing opportunities find clients or make any money, let alone earn the

promised substantial income. Competition in the medical billing market is quite fierce,especially for those who are new in the field. Many doctors offices process their ownmedical claims. Doctors who contract out their medical billing often use establishedfirms, not individuals working from home. In short, if it sounds too good to be true, it

probably is.

For further information or reporting contact the Federal Trade Commission. Call 1-877-

FTC-HELP (1-877-382-4357) or log on to http://www.ftc.gov


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Do it! C-1: Discussing self-employment in medical billing

Exercises

1 List your reasons for considering a medical billing business of your own. Consideryour own goals such as home circumstances, financial reasons, or health issues.

2 Review your reasons for considering a medical billing business of your own fromStep 1. Based on your reasons, write down some advantages to having your own

business. When you are done writing individually, share some of your advantageswith the group.

No commuting to work.

The satisfaction of being your own boss.Lower overhead and expenses because you are working from your home. (This also can provide some tax breaks; check with your tax advisor or accountant.)

Flexible hours in your work schedule. You can determine your own hours.

3 List some disadvantages of having your own home-based billing company.

There are no guarantees: unlike the benefit of knowing you will be getting a paycheckevery week or so, working for yourself provides no guarantees of being able to provide aspecific amount of income until you reach a stable level, which on average takes aminimum of 5 years.

Requires self-discipline and setting boundaries: you will need to treat this just like you

are going to work. Setting times for work by not answering the personal telephone callsand requiring family to respect your work time versus taking time off (clocking out) andnot working too late.

Projecting professionalism at all times and in a home office can be difficult.

It can be difficult to accept the challenge of accomplishing all tasks and goals yourself.

Requires a high level of knowledge and skills in medical billing and coding as well asoverall good business sense.

It can be costly if you do not do your research and continue to manage and adjust whennecessary.


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4 Discuss the reality of scams and what you can do to protect yourself.

Per the Federal Trade Commission, here are some tips:

Ask and check references from companies.

Consult with organizations and medical facilities in your area.

Check with the State Attorney Generals office, consumer protection agency, and theBetter Business Bureau in the area where the company is located.

If the company sells specific software, check with the software company to see if therehave been any negative reports.

You also might want to consult an attorney or accountant in certain circumstances.

It is also highly recommended that you not only do the research on possible avenuesthat you are considering, but also to actually spend time out in the field first as anemployee or subcontractor to get hands-on experience and to make a good name foryourself out in the medical community.


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Strategies and beginning your business

Explanation As a potential medical billing business in your area, it is wise to research thosecompanies locally who will be your competition. As you check out the competition, youwill want to ask what type of services they offer to see where the needs might be.

Starting off

Your own state might want you to purchase or qualify for a license or state permit to do business in your home.

You might also want to discuss with an attorney or accountant what type of businessyou want, such as a corporation or a limited liability company. Obtaining yourEmployer Identification Number will also be a necessity.

Managing

According to the Womens Business Center of the Small Business Administration, ifyou are diligent about monitoring and researching your bottom line, initialexpenditures, and business ratios, you will be able to develop your own insight intowhat is working versus what is not working.


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Personal and professional assessment in medical billing and coding

Assessing your own strengths may prove to be extremely valuable. For example, one particular biller had an accounting background and was therefore able to sell heraccounting services as part of the companys services which made a very appealing

package for prospective accounts. Her marketing strategies focused heavily on thisunique additional benefit. Another strength might be medical coding documentation

review, which would encompass a coding background. Finding a niche in the billing business will add to your companys value and overall professional appeal.

As with the last activity, expand on specific medical billing and coding strengths. Beginwith jotting down these items. Writing things down is vital and a great habit to develop.Start with ideas, lists, and areas of expertise; you may be surprised at the avenues youwill develop by performing this simple exercise. It may also clue you in as to neededareas of education. Make a separate list of these weaknesses as well. It is important tomention here that a certain weakness is not indicative of a certain area of failure, this ismerely an assessment tool to assist in obtaining possible training if needed.

Medical software and clearinghouses

What is a clearinghouse for electronic claims? It is just like a bank clearinghouse: ittakes the data from one computer, edits it, and then sends it to the destinationcomputer/data system. It not only offers the convenience of reporting mechanisms butalso assists you by offering edits. Edits are screens that can drop off those claims that donot meet certain standards and correct formats. For example, Medicare might have oneformat required in a particular claim block, and Aetna might have another. It is worththe added cost to make sure your electronic claims are being handled by a large,reputable clearinghouse that can save you thousands in rejected claims.

If a company tells you they are their own clearinghouse, beware! That means you aretied into them, and cant use any other clearinghouse. What happens to you if they goout of business? Youll have to buy new software so you can make your ownconnection with a different clearinghouse.

HIPAA and business associates

Per the Centers for Medicare and Medicaid, a business associate is a person ororganization that performs a function or activity on behalf of a covered entity.Companies such as billing and software vendors are not considered covered entitiesunder HIPAA. However, many of these companies have a business relationship withcovered entities and may be considered their business associates. For example, vendorsmay provide claims processing functions, practice management, or billing softwareservices for a covered entity. Because they also have access to Protected HealthInformation (PHI), business associates must agree to the privacy and securityrequirements of HIPAA. The business associate agreement is used to describe the

business associates responsibilities for protecting the privacy and security of PHI. Eventhough covered entities are already required to comply with all HIPAA privacy andsecurity requirements, if they are business associates they still must have a businessassociate agreement between them.

For billing services that still send paper claims, they are not governed by HIPAA. Thefact that the health plan or Health Care Clearinghouse converts paper claims into data ina standard transaction does not make the health care provider a covered entity andthereby not subject to HIPAA transactions requirements, according to the Centers forMedicare and Medicaid.


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To find out whether you are a covered entity or a business associate as a billingcompany, go to http://www.cms.hhs.gov and search on vendor billing service.The direct link to this document is as follows: http://www.cms.hhs.gov/hipaa/hipaa2/education/infoserie/5-VendorBillingservice.PDF

Obtaining new medical billing accounts

Although there are many advertisements out there claiming to assist you in starting yourown medical billing company and obtaining new accounts, remember that caution isnecessary. Per the Federal Trade Commission, be leery of medical billing scamsoffering unsubstantiated claims for income potential. 10 Be sure to check out ways of

protecting yourself. Go to: http://www.ftc.gov .

Another consideration is the calculation of fees. Depending on the areas you choose tospecialize in and service, fees can vary widely. Many medical billing companies offerfees based on one of three methods:

1 A flat fee usually based on the average number of patients over a given time.2 Per claim/per statement basis.3 A combination method

Additional information

Offering percentage-based billing arrangements is not recommended due to the Officeof Inspector Generals (OIG) concern that it might violate the anti-kickback statute thatassesses risk factors. 11 With some plans, such as with Florida Medicaid, it is consideredunacceptable practice. 12 This might vary from state to state.

It is suggested for any medical billing company to review and comply with the OIGsCompliance Program Guide. The guidelines can be viewed at:http://oig.hhs.gov/fraud/docs/complianceguidance/thirdparty.pdf

View the checklist for items needed from new accounts/facilities to help you.


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Do it! C-3: New business checklist and marketing strategies

Heres how Heres why

1 List your Medical Billing andCoding areas of strength

You can gain a perspective of just what servicesto provide in a billing business. Some examplesof areas that you might possess strengths in andcan include in your services are:

Accounting background Offer accountingservices such as collection services, A/P, andextra reporting mechanisms along with the

billing/submission of claims.

Coding Offer coding convention edits of yourown by verification of submitted codes with theclaims.

Management Offer overall managementservices that include all aspects of follow up,reporting, A/R, collections for all categories, andstatement completion. This added service is agrowing market and therefore contains high

potential.

2 List areas of weakness in medical billing and coding

You might want to enroll in extra learningavenues to offer a higher level of service or youmight just want to negate those areas in yourservices (at least in the beginning).

Determining your areas of weakness is meant tohelp you in your overall assessment and cankeep you from getting into areas that could costyou financial losses.

3 Choose a medical/accountingsoftware

You will want to research different types ofsoftware that can correspond with your strengthsand possibly also assist you in the weak areas bycontaining extras.

Some of the different medical softwarecompanies to consider are:

Medical Manager at:http://www.medicalmanager.com

Medisoft at: http://www.medisoft.com

MedMaster at: http://www.medmaster.com

Lytec Practice Management at:http://www.microwize.com/Lytec/


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4 Consider clearinghouses in yourresearch of medical software

Clearinghouses are a major part of a billingservices ability to conduct business.

What exactly does a clearinghouse do? Well, forone thing, they check claims for accuracy. But,the biggest thing they do is reformat the datayou send to them to a format that a given carriercan read. Most medical software companiesalign themselves with a clearinghouse, so besure to ask about this for Electronic DataInterchange along with applicable HIPAArequirements.

5 Discuss how HIPAA will affect you as a billing company.

For more information and a flow chart to help you with HIPAA go to:www.cms.hhs.gov/hipaa/hipaa2/support/tools/decisionsupport/CoveredEntityFlowcharts.pdf

6 Review the Medical Billing NewBusiness Checklist

You can use this as your template to obtainspecific required information with respect tonew accounts for your medical billing business.You will want to add to this list any extraservices you might want to include.


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Health insurance policy terms

Like other fields, the health insurance industry has its own unique vocabulary.

Considered a legal document, the health insurance policy contract contains terminologythat applies solely to that contract but can be understood in the context of acceptedhealth insurance jargon.

Review the chart below to familiarize yourself with some of the main terms used inhealth insurance contracts.

Term Description

Benefits The money that is paid to the policyholder for medical services thatare specified in a healthcare contract.

Deductible The cumulative amount that you must pay annually before benefitswill be paid by the insurance company.

Coinsurance The amount that a policyholder or a secondary insurance portion pays. One common payment percentage for coinsurance is 80/20,

which indicates that 20% is the coinsurance or secondary portiondue.

Co-payment The set or fixed-dollar amount you are required to pay each time a particular medical service is used.

The three Pres:

Predetermination

Pre-certification

Preauthorization

Predetermination is another term for discovery of a patients benefits and the dollar limits, including their annual deductible.This is often the first step of the insurance verification process andis completed prior to their first visit.

Pre-certification refers to the process of verification of coverage fora specific treatment such as surgery, hospitalization, laboratory

tests, etc.

Preauthorization relates to pre-certification, however, it alsoindicates that a specific procedure or service is deemed medicallynecessary.

Policyholder Also known as the Insured, member , subscriber , or recipient . Thisindicates the person or organization responsible for and the

purchaser of a health insurance policy. This person buys protectionfrom financial loss due to an illness, injury, or medical condition.

Dependents A person for whom the insured has some legal obligation. For most plans, it is the insureds spouse and/or children. Some plans also

allow non-traditional spousal relationships (significant other, life- partner, etc.) to be considered a dependent with some additionalcertifying paperwork.

Third PartyAdministrators(TPAs)

Generally an administrator for an employers self-funded insurance plan, they handle the claims and paperwork for them.


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Group health insurance plans versus individual policy plans

An individual plan or contract contains an individual or family that has contracted withan insurance carrier or MCO. These plans do not fall under the same as groupinsurance state and federal law mandates. They often have a higher premium.

A group plan or contract is any plan in which a group of employees and their eligibledependents are insured under a single policy issued to their employer. They offerindividual certificates of insurance that are given to each contracted member. Group

policies often offer lower premiums and better benefits because they have the advantageof using a larger group to help with contract negotiations.

The main difference between a group and an individual insurance plan has nothing to dowith the number of participants but instead is based on the qualifications of that

participant or group (i.e., whether or not an employer identification number exists and aregular group as defined by that insurance carrier).


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Healthcare insurance timeline

Explanation It is an important step in understanding health insurance to familiarize yourself with thetimeline and pertinent history facts associated with the healthcare programs in ourcountry.


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Topic E: Medical billing today and tomorrow

Explanation Medical billing, as it relates to healthcare insurance, is one of the fastest-changingindustries in the United States. Keeping current with new plans and programs isessential to maintain accuracy and efficiency. Certification, education, networking, and

proactive vigilance in the field will greatly benefit the medical biller today and in thefuture.

Current issues and events

More and more varied types of insurance plans and creative healthcare assistanceoptions for patients and policyholders are being developed. A few more unique types arementioned here.

Medical savings accounts (MSAs)

They combine high-deductible health insurance with a savings plan similar to an IRA.Insurance policies for individuals have generally carried a minimum deductible of

$1,600 to $2,400 ($3,200 to $4,800 for families). When you open an account foryourself, you can contribute to the MSA up to 65% of the deductible, 100% of your netself-employment income, or 100% of your wages, whichever is least. The contributionlimit rises to 75% of the deductible for family policies. You deduct contributions onyour federal income-tax return. Withdrawals you make to

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