BILLING, REIMBURSEMENT, AND

COLLECTIONS

Chapter 7

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LEARNING OUTCOMES: WHEN YOU FINISH THIS CHAPTER YOU WILL BE ABLE TO

7.1 Recognize and calculate charges for medical services and process patient statements based on the patient encounter form and the physician’s fee schedule.

7.2 Compare and contrast the process of completing and transmitting insurance claims using both hardcopy and electronic methods.

7.3 Describe the different types of billing options used by medical practices for billing patients.

7.4 Paraphrase the procedures and options available for collecting delinquent accounts.

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clearinghouse cycle billingclean claim dependent

CMS-1500 electronic claims

claim form EOB

collection agency

ERA

collection at the time of service

fee adjustment

collection ratio fee schedule

guarantormonthly billingpatient information formpatient statementscrubber programterminated accountthird-party liabilitywrite-off

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KEY TERMS

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KEY TERMS (CONTINUED)clearinghouse –a service bureau that collects electronic

claims from many different medical practices and forwards the claims to the appropriate insurance carriers

clean claim -- a claim that is accepted by the insurance payer for adjudication

CMS-1500 -- which is filled out or updated by the patient, and the patient encounter form

claim form -- is one of the most important steps in successful claim reimbursement

collection agency -- for collecting unpaid bills, as most agencies work on a contingency basis

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KEY TERMS (CONTINUED)collection at the time of service -- Patients pay at

the time of the visit by cash, check, debit card, or credit card

collection ratio -- (total collections divided by net charges of the practice

cycle billing -- is designed to avoid once-a-month peak workloads and to stabilize the cash flow

dependent -- children usually children under the age of 18 (or children under 21 who are full-time students)

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KEY TERMS (CONTINUED)electronic claims -- are prepared on a computer and

transmitted electronically (from one computer to another) to an insurance carrier for processing

EOB -- explanation of benefits

ERA -- electronic remittance advice

fee adjustment -- Should the need arise, the physician can adjust the cost of any procedure

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KEY TERMS (CONTINUED)

fee schedule -- which lists the usual procedures the office performs and the corresponding charges

guarantor -- guarantees payment of the account charges

monthly billing -- bills are sent out once a month and are timed to reach the patient no later than the last day of the month

patient information form -- which is filled out or updated by the patient

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KEY TERMS (CONTINUED)

patient statement -- is sent to the patient for billing purposes on the next billing date

scrubber program – used to check for errors on insurance claim forms before they are submitted

terminated account -- A physician who finds it impossible to extract payment from a patient may decide to terminate the physician-patient relationship

third-party liability -- Sometimes a person other than the patient assumes liability, or responsibility, for the charges

write-off -- One type of fee adjustment a medical office makes regularly with certain health plans

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Administrative medical assistants keep track of the services rendered and any payments made during a visit to the physician. After the patient completes the office visit, the administrative medical assistant updates the patient ledger to show the financial information for the encounter.

Patient Encounter Form

Fee Schedule

Patient Statements

Computerized Billing

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7-97.1 RECOGNIZE AND CALCULATE CHARGES FOR MEDICAL SERVICES AND PROCESS PATIENT STATEMENTS BASED ON THE PATIENT ENCOUNTER FORMS AND THE PHYSICIAN’S FEE SCHEDULE.

7.2 COMPARE AND CONTRAST THE PROCESS OF COMPLETING ANDTRANSMITTING INSURANCE CLAIMS USING BOTH HARDCOPY AND ELECTRONIC METHODS. Complete the insurance claim form, either electronic

or on paper, Verify patient demographic, encounter, and insurance

information. Transmit, electronically or by postal mail, the claim

form to the insurance company, which decides to pay the fee, deny the claim, or pay a certain portion of the claim.

Verify the accuracy.

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7.3 DESCRIBE THE DIFFERENT TYPES OF BILLING OPTIONS USED BY MEDICAL PRACTICES FOR BILLING PATIENTS.

Methods of Payments Sending Statements Payment Plans Fee Adjustment Health Insurance Third-Party Liability

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7.4 PARAPHRASE THE PROCEDURES AND OPTIONS AVAILABLE FOR COLLECTING DELINQUENT ACCOUNTS

Communicating with Patients Guidelines for Payment The Office Collection Policy Laws Governing Collections Course of Action Statute of Limitations Credit Arrangements and the Truth in Lending Act Writing Off Uncollectible Accounts

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