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Medical Insurance Billing Ch. 7

Visit Charges and Compliant Billing
STUDY
PLAY
Consequences for incorrect billing compliance
1. Denied claims
2. Delays in processing claims & receiving payments
3. Reduced payments
4. Fines & other sanctions
5. Loss of hospital privileges
6. Exclusion from payers' programs
7. prison sentence
8. Loss of physician's license
Code Linkage
connection between a billed service and a diagnosis or patient's condition or illness
Billing Rules
stated in patients' medical insurance policies and in participation contracts.
Centers for Medicare and Medicad Services (CMS)
make the rules about billing
Federal Register and Medicare Carriers Manual and Coverage Issues Manual
publications that contain rules about Medicare and Medicaid Billing
Correct Coding Inniative (CCI)
computerized medicare system that prevents overpayment; controls improper coding that would lead to inappropriate payment for Medicare claims
CCI is based on
- Coding conventions in CPT
- Medicare's national and local coverage & payment policies
- National medical societies' coding guidelines
- Medicare's analysis of standard medical & surgical practice
CCI is upated when
every quarter
CCI contains
many thousands of CPT code combinations
CCI edits
computerized system that identifies improper or incorrect CPT code combinations; available on a CMS website.
CCI edits
apply to MEDICARE claims that bill for more than one procedure performed on the same patient; on the same date of service; by the same performing provider.
CCI edits (correct coding innitiative edits)
- test for unbundling
- prevents billing 2 procedures that could not have been performed together
- requires physicians to report only the more extensive of the procedure performed & disallows reporting of both extensive & limited procedures.
Types of CCI Edits (checks)
- Column 1 / Column 2 code pair edits
- Mutually exclusive code edits
- Modifier indicators
CCI Column 1 / column 2 code pair edit
Medicare code edit where CPT codes in column 2 will not be paid if reported in the same way as the column 1 code
CCI mutually exclusive code (MEC) edit
both services represented by MEC codes that could not have been done during one encounter; Medicare only pays lower-paid code.
CCI Modifier Indicators
Number showing if the use of a modifier can bypass a CCI edit
CCI Modifier indicators
control modifier use to "brea" or avoid CCI edits
- appear next to 1/column 2 code pair list and mutually exclusive code list
CCI Modifier Indicator of 1
means that a CPT modifier MAY be used to bypass an edit
CCI Modifier Indicator of 0
means that use of a CPT modifier will not change the edit.
Medically Unlikely Edits (MUE's)
units of service edits used to lower the Medicare fee-for-service paid claims error rate; They also correct coding mistakes.....
UOS
Unit of Service edits CMS uses; also called MUE's Medically Unlikely Edits
MUE
related to a specific CPT or HCPCS code and applies to the services that a single provider provides for a single patient on the same date of service.
MUE's correct coding mistakes based on
anatomic consideration
CPT/HCPCS code descriptors
CPT coding instructions
Medicare policies, or unlikely services
OIG Work Plan
OIG's annual list of planned projects
Advisory Opinion
Opinion issued by CMS or OIG that becomes legal advice
(issued when regulations seem contradictory or unclear)
Excluded Parties
Individuals or companies not permitted to participate in federal health care programs
OIG
Office of Inspector General... issues other government billing regulations... publishes annually
OIG Website has
Legal advice regarding regulations
Audit reports
List of Excluded Individuals/Entities (lists providers found guilty of fraud or abuse)
Claims are rejected or downcoded because of:
- Medical Necessity errors
- Coding error
- Errors related to billing
Truncated Coding
diagnoses not coded at the highest level of specificity
Assumption Coding
Reporting undocumented services the coder assumes have been provided due to the nature of the case or condition
Upcoding
use of a procedure code that provides a higher payment
Downcoding
payer's review and reduction of a procedure code
Major strategies to ensure compliant billing:
* Carefully define bundled codes & know global periods
* Benchmark the practice's E/M codes with national avg's
*Keep up to date thru ongoing coding/billing education
* Be clear on professional courtesy & discounts to uninsured/ low-income patients
* Maintain compliant job reference aids and documentation templates
* Audit the billing process
Professional Courtesy
providing free services to other physicians
Job reference aid
list of a practice's frequently reported procedures and diagnoses
Computer-assisted coding (CAC)
allows a software program to assist in assigning codes
Documentation template
form used to prompt a physician to document a complete review of systems (ROS) and a treatment's medical necessity
Monitoring the coding and billing process is done to:
ensure adherence to established policies and procedures
An important compliance activity involves audits
- An audit is a formal examination or review
- REcovery Audit Contractor (RAC) - program designed to audit Medicare claims
Audit -External Audit
audit conducted by an outside organization
Audit -Internal Audit
self-audit conducted by a staff member or consultant
Audit -Prospective audit
internal audit of claims conducted before transmission
Audit - Retrospective audit
internal audit conducted after claims are processed and RA's have been received
Physician Fees
Physicians set their fee schedules in relation to the fees that other providers charge for similar services
Charge / Fee -Usual Fee
normal fee charged by a provider
Charge / Fee - Payers Fee Schedules
methods used to establish the rates paid to providers (two main methods)
Charge / Fee - Charge based fee structure
fees based on typically charged amounts
Charge / Fee -Resource based fee structure
fee structures built by comparing three factors:
1. how difficult it is for the provider to do the procedure
2. How much office overhead is involved in procedure
3. The relative risk that the procedure presents to the patient and to the doctor
Charge CBFSDB
Payers using charge-based fee structure analyze charges using one of 2 national databases:
(USR) or (RVS)
Charges CBFSDB
USR = Usual, Customary, Reasonable database.
Nat'l database used to set fees by comparing usual, customary & reasonable fees
Charges CBFSDB
RVS = Relative Value Scale database
Nat'l database used to determine fees by assigning unit values to medical services based on their required skill and time
Charges CBFSD
Releative Vaue Unit (RVU)
a factor assigned to a medical service based on the relative skill and required time for a service or procedure
Charges CBFSD
Conversion Factor
Amount used to multiply a relative value unit to arrive at a charge
Charges -Resource-based relative value scale (RBRVS)
relative value scale for establishing Medicare charges
Charges -Geographic practice cost index (GPCI)
Medicare factor used to adjust providers' fees in a particular geographic area
Charges -Parts of the RBRVS
1. RVU's - based on physician's work, overhead cost & cost of malpractice insurance
2. GPCI - raises or lowers cost based on city's cost of living
3. Uniform Conversion Factor
RBRVS
All Parts of RBRVS are updated
annually by CMS
RVRVS
Steps used to calculate the RBRVS payments under the MPFS:
1. Determine procedure code for service
2. Use MPFS to find three RVU's- work, practice expense, and malpractice - for the procedure
3. Use the Medicare GPCI list to find the 3 geographic practice cost indices
4. Multiply each RVU by its GPCI to calculate the adjusted value
5. Add the 3 adjusted totals, and multiply the sum by the annual conversion factor to determine the payment
CBFSDB
Fee Based payment Methods by Payers
1. Allowed Charges
2. Contracted Fee schedule
3. Capitation
Charge
Allowed Charge
maximum charge a plan pays for a service or procedure
Charge
Capitation Rate (or cap Rate)
the periodic prepayment to a provider for specified services to each plan member
- Health plan sets a capitation rate that pays for all contracted services to enrolled members for a given period
Provider Withhold
Amount withheld from a provider's payment by an MCO
Balance Billing
Collecting the difference between a provider's usual fee and a payer's lower allowed charge
Write off
to deduct an amount from a patient's account