A medical billing service serves as the essential link for doctors to receive their payments efficiently. Despite the thriving healthcare industry in America, most healthcare providers struggle to navigate the complexities of receiving timely reimbursements from insurers or patients. The proliferation of various insurance plans has made physician reimbursements elusive, causing doctors to face challenges in the healthcare landscape. However, medical billing services come to the rescue, offering billing expertise that significantly boosts a doctor’s immediate revenue. Using advanced technology, medical billers electronically transmit insurance claims directly to the insurance company ( HIPAA 5010), expediting the process and increasing the likelihood of prompt payment. Medical billing and coding present an exhilarating career path, particularly suitable for those interested in the healthcare field but seeking roles without direct patient interactions. This profession offers both challenges and fulfillment. Nevertheless, specific personal qualities are crucial for achieving success as a medical biller or coder. Medical billing plays a pivotal role in the healthcare revenue cycle, making it vital for the survival of any medical facility or practice. While most healthcare establishments recognize the importance of effective billing and payment collection from patients, numerous challenges exist in the medical billing process.

“Becoming a Certified Professional Medical Biller (CPMB) opens the door to a rewarding career where your dedication and skills can make a difference in patients’ lives and healthcare organizations.”

In the realm of medical billing, professionals oversee the payment process, obtaining insurance details from patients, and ensuring follow-up on medical claims. Their primary responsibility is to collect payments from health insurance companies or other responsible entities. On the other hand, medical coding involves the translation of medical reports into codes, which subsequently facilitate reimbursement within medical practices.Sarah is a skilled Medical Biller working for a busy healthcare facility. She possesses several essential qualities that make her an exceptional professional in her field.

FACT's - Insufficient awareness of your potential earnings creates challenges in the planning phase when contemplating the establishment of a new business.

The U.S. Census Bureau today released estimates showing the nation’s 65-and-older population has grown rapidly since 2010, driven by the aging of Baby Boomers born between 1946 and 1964. The 65-and-older population grew by over a third (34.2% or 13,787,044) during the past decade, and by 3.2% (1,688,924) from 2018 to 2019. The growth of this population contributed to an increase in the national median age from 37.2 years in 2010 to 38.4 in 2019, according to the Census Bureau’s 2019 Population Estimates.

Source - 65 - Older Population Grows

Facts: As of May 2022, the total number of professionally active physicians in the United States amounted to 1,073,616 physicians. From a state perspective, California had the most active physicians with over 117 thousand physicians, followed by New York

Source Total Active Physicians

Health spending per person in the U.S. was $11,945 in 2020, which was over $4,000 more expensive than any other high-income nation. The average amount spent on health per person in comparable countries ($5,736) is roughly half that of the U.S.

Source Health Spending U.S Compare Countries

Total national health expenditures (constant dollars) were 30% higher in 2019 ($3,453 billion) than in 2009 ($2,658 billion).

$2,937 billion dollars spent for personal health care expenditures (2012 constant dollars)

11.0% Percentage of people under age 65 who had no health insurance-as on 2018

20.2% Percentage of people under age 65 who had Medicaid

65.3% Percentage of people under age 65 who had private health insurance

Source Health Care Expenditures

Total national health expenditures (constant dollars) were 30% higher in 2019 ($3,453 billion) than in 2009 ($2,658 billion).

$2,937 billion dollars spent for personal health care expenditures (2012 constant dollars)

11.0% Percentage of people under age 65 who had no health insurance-as on 2018

20.2% Percentage of people under age 65 who had Medicaid

65.3% Percentage of people under age 65 who had private health insurance

The market size, measured by revenue, of the Medical Claims Processing Services industry is $5.1bn in 2023.

Medical Claims Processing Services United States

What is the biggest opportunity for growth in the Medical Claims Processing Services industry in the US?

Demand for medical claims processing services comes from doctors’ offices and other healthcare providers. As the number of physician visits grows, the number of insurance claims rises and trickles down to create demand for the industry. The number of physician visits is projected to grow in 2022, representing a potential opportunity for the industry.

In 2020, the United States had an estimated population of 326 million individuals. Most of those individuals had private health insurance or received health care services under a federal program (such as Medicare or Medicaid). About 8.6% of the U.S. population was uninsured.

Source IF10830 PDF

As of October 2021, the total Medicare enrollment is 63,964,675. Original Medicare enrollment is 36,045,321, and Medicare Advantage and Other Health Plan enrollment is 27,919,354.

Medicaid/CHIP enrollments- 83,195,041

Over 11 million individuals are dually eligible for Medicare and Medicaid, so are counted in the enrollment figures for both programs.

Source Medicaid Childrens Helath Insurance Program Chip

The global medical billing outsourcing market is expected to grow from $2.17 billion in 2021 to $13.56 billion in 2022 at a compound annual growth rate (CAGR) of 11.5%. The growth is mainly due to the companies resuming their operations and adapting to the new normal while recovering from the COVID-19 impact, which had earlier led to restrictive containment measures involving social distancing, remote working, and the closure of commercial activities that resulted in operational challenges. The market is expected to reach $20.98 billion in 2026 at a CAGR of 11.5%.

It is estimated that, in the US, 80% of medical bills contain errors.

Medical Billing Outsourcing Global Market Report

Equifax, a credit agency firm, found in its audit that the hospital bills ranging above $10,000 have an average error amount of $1,300.It is also estimated that doctors lose around $125 billion each year due to poor billing practices in the USA.

77% OF PROVIDERS SAY COLLECTING ANY PAYMENT TAKES MORE THAN A MONTH

ANALYSIS | BY ALEXANDRA WILSON PECCI |

Healthleaders media

Patient Collections Takes Over a Month for Most Providers revenue cycle intelligence

74% of millennials would switch providers for a better heathcare payment experience. Currently, 75% of providers still use paper statements and manual processes primarily for collection.

Revenue Cycle Management Best Practices

The Department of Health and Human Services’ Office of Inspector General audited diagnosis codes for strokes as part of an investigation into codes that are at a high risk of being miscoded. The result was that the Centers for Medicare & Medicaid Services made an estimated $14.4 million in inaccurate payments in 2015 and 2016.

In the realm of healthcare, a provider encompasses more than just physicians; it includes all individuals delivering healthcare services. This diverse group incorporates ambulance services, biofeedback technicians, social workers, as well as professionals like dentists, chiropractors, optometrists, podiatrists, and psychologists. Additionally, doctors specializing in various fields, ranging from pediatrics to geriatrics, neurology to urology, are also considered providers. Other entities like suppliers of durable medical equipment such as walkers and wheelchairs, specialists in hearing aids and prosthetic limbs, and establishments like nursing homes and hospices also fall under the category of providers, not to mention pharmacies.

“With the Certified Professional Medical Biller (CPMB) certification, you can pave your path to a fulfilling career, where every claim you process contributes to the smooth functioning of the healthcare system.”

Medical billing service charges can vary depending on the fee structure chosen by the healthcare provider and the billing company. Let’s elaborate on each method with examples:

With determination and effort, you can accomplish this by…

Image-1 Text

Complete training and certification in 3-4 months

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Invest $10,000 to start

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Networking, advertising skills

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Accuracy in work

In 3-4 months’ time, YOU COULD BE MAKING MONEY!

Sample-Projected Income per month (Percentage Billing)

** Assumption: Clinic collection per month is $50,000

HOW IT WORKS

Medical Biller Qualities:

Sarah, the Exemplary Medical Biller: A Closer Look at Her Qualities

In the dynamic world of medical billing, Sarah stands out as a shining example of a skilled and dedicated professional. Her exceptional qualities make her an invaluable asset to any healthcare organization. Let’s explore some of the qualities that set Sarah apart:

Communication Skills: Sarah interacts with various stakeholders daily, including patients, insurance companies, and healthcare providers. Her ability to communicate effectively ensures smooth coordination and timely resolution of billing-related matters.

Problem Solver: Sarah encounters complex billing issues regularly, such as claim denials and discrepancies. Her problem-solving skills enable her to identify root causes, strategize solutions, and navigate through challenges effectively.

Analytical: As a Medical Biller, Sarah must review and interpret medical codes, insurance policies, and billing guidelines. Her analytical mindset helps her accurately assess claims and optimize revenue for the healthcare facility.

Attention to Detail: Sarah knows the significance of precision in medical billing. She meticulously reviews each claim, ensuring all required information is accurate and complete to prevent claim rejections.

Integrity: Sarah upholds a high level of integrity in her work. She adheres to ethical standards, protecting patient privacy, and ensuring transparency in billing practices.

Technical Skills: Sarah is well-versed in using medical billing software and electronic health records (EHR) systems. Her technical proficiency streamlines the billing process and enhances efficiency.

Autonomous: Sarah is a self-driven individual who takes ownership of her work. She efficiently manages her tasks, meets deadlines, and seeks solutions independently when challenges arise.

Multi-Tasking: Working in a fast-paced environment, Sarah handles multiple billing tasks simultaneously. Her ability to multitask ensures she meets the demands of the healthcare facility efficiently.

Through Sarah’s exceptional qualities as a Medical Biller, she contributes significantly to the financial health of the healthcare facility. Her effective communication, problem-solving abilities, attention to detail, and technical expertise make her an invaluable asset in the medical billing department.

“Preparing for Launch: Estimating Startup Expenses in Medical Billing”

Medical Billing Business Challenges:

Medical billing businesses face some challenges in the ever-evolving healthcare landscape. Some of the key challenges like coding regulations and updates, insurance denials, paper work, software updates, privacy and security concerns etc

In conclusion,venturing into the world of medical billing offers a path to independence and empowerment. As you navigate the challenges and complexities of this dynamic field, remember that your dedication, knowledge, and passion will be the driving forces behind your success. Embrace the opportunity to be an independent force, shaping the future of healthcare revenue management. With every claim processed and every financial challenge overcome, you’ll be making a meaningful difference in the lives of patients, healthcare providers, and your own entrepreneurial journey. So, take that leap, chart your course, and let your medical billing business soar to new heights of triumph and fulfillment. Be the catalyst of change and the architect of your own destiny – an independent force in the world of healthcare billing.

DISCLAIMER: The calculations presented here are designed to assist you in estimating potential profitability for your medical billing and practice management business. It is important to note that these projection tools are not a guarantee or statement of income. They are offered as a reference to explore the business opportunity.

While we cannot assure you of achieving any specific income level, we have seen success stories from satisfied PMBA students and observed industry averages in the medical billing field. These suggest that a well-informed and dedicated medical billing business has the potential to generate substantial income, whether operating on a part-time or full-time basis.

The income you earn will be influenced by various factors, such as the number of clients you secure, the frequency and volume of claims submitted for each client, and the pricing strategy you adopt for your billing services. Your marketing efforts and business acumen will significantly shape these factors. PMBA equips you with essential tools, including software, training, marketing materials, and support, to aid in your success. Nevertheless, your financial results primarily depend on your personal efforts, akin to any business venture. As with any investment, there are inherent risks and rewards associated with running your own medical billing and practice management business.

This content is the property of the Professional Medical Billers Association USA , LLC. It cannot be reproduced for any reason without the written consent of the Professional Medical Billers Association.

Click here to download the Becoming a Health Claims Assistance Professional Guide

As the healthcare sector continues its overall growth, the demand for healthcare support occupations is expected to expand as well.

According to the U.S. Bureau of Labor Statistics (BLS), the employment of medical secretaries, which includes medical billing and coding specialists, is projected to experience an 8% increase from 2021 to 2031. This growth indicates a rising need for skilled professionals who can efficiently handle medical billing and coding tasks in the healthcare industry. As the landscape of healthcare evolves, these specialized professionals play a vital role in ensuring accurate and streamlined billing processes, contributing significantly to the overall efficiency of healthcare facilities. With such promising prospects, pursuing a career in medical billing and coding can lead to rewarding opportunities and a stable future in the healthcare field.

According to the Bureau of Labor Statistics (BLS), as of May 2021, medical secretaries, regardless of experience levels, earned a median annual wage of $47,150. This figure indicates that half of the workforce in this occupation earned more than this amount, while the other half earned less.

It is important to note that the salary for medical secretaries can vary significantly based on several factors, including geographic location, the type of healthcare facility or office they work in, and the amount of work experience they have accumulated. These variables can have a notable impact on the overall compensation for individuals in this role.

For more detailed and up-to-date information on medical secretary salaries, I recommend referring to the Bureau of Labor Statistics (BLS) website ( www.bls.gov ) or other reputable salary data websites that provide region-specific and industry-specific wage data.

Is a Career in Medical Billing and Coding a Good Fit for You?

Consider asking yourself the following questions to assess whether a career in medical billing and coding aligns well with your strengths and preferences:

• Am I proficient at meticulously following instructions and guidelines?
• Can I uphold patient privacy and confidentiality with utmost responsibility?
• Do I feel comfortable using technology and electronic systems for data management?
• Am I capable of working at a computer for extended periods without difficulty?
• Do I possess good teamwork skills and the ability to collaborate effectively with others?
• Can I remain composed and handle stressful situations, such as billing errors, with a calm demeanor?
• Do I excel at organizing and maintaining accurate records and data?
• Are my interpersonal skills strong enough to communicate effectively with colleagues, patients, and insurance providers?
• Am I naturally attentive to even the smallest details, ensuring precision in my work?

If you find yourself answering “yes” to all of the questions above, it indicates that you may be well-suited for a rewarding career in medical billing and coding. Your strengths in following guidelines, handling technology, maintaining patient confidentiality, and engaging in effective communication make you a valuable candidate for success in this field.

Skills:

As stated by the Bureau of Labor Statistics (BLS), essential qualities for medical secretaries include:

1. Decision-making skills, enabling them to analyze diagnoses and medical records to select the most appropriate codes for patients’ medical records Source : www.bls.gov

2. Organizational skills, which are indispensable for accurately recording and coding patient data. Source : www.bls.gov

3. Good communication and interpersonal abilities, particularly valuable during high-stress situations like handling billing discrepancies or dealing with rejected insurance claims. Source : www.bls.gov

4. Writing skills, encompassing grammar, professionalism, and accuracy, are significant assets to develop for effective email communications that are often part of this role. Source : www.bls.gov

Developing and honing these qualities can contribute to a successful career as a medical secretary, facilitating efficient medical record keeping and communication within the healthcare setting.

What is a Health Claims Assistance Professional?

A Health Claims Assistance Professional, also sometimes referred to as the Patient Advocate, is someone who is experienced in the medical billing/health insurance industry that helps the public with any or more of the following listed below:

A Health Claims Assistance Professional is responsible for the accurate and timely adjudication of medical claims and can process claims using practice management software. Processing of claim forms and adjudication for allocation of deductibles and co-pays, co-insurance maximums and provider reimbursements are the main responsibilities of a medical claims processor. In addition, follows adjudication policies and procedures to ensure proper payment of claims.

Should have a basic knowledge of using a computer and be able to perform data entry functions.

A health claims professional is a person who specializes in processing and managing health insurance claims. They play a crucial role in the healthcare industry, ensuring that medical claims are processed accurately, efficiently, and in compliance with the relevant rules and regulations. Their responsibilities may include:

Claims Processing: Health claims professionals receive and review medical claims submitted by healthcare providers or policyholders. They verify the accuracy and completeness of the information provided, including patient details, diagnosis codes, and procedure codes.

Coding and Billing:Health claims professionals use medical coding systems (such as ICD-10 and CPT) to translate medical procedures and diagnoses into standardized codes. These codes are essential for insurance reimbursement and accurate record-keeping.

Claims Adjudication:After reviewing the claims and verifying their accuracy, health claims professionals determine the appropriate reimbursement amount based on the insurance policy coverage and the allowed benefits.

Communication:They may communicate with healthcare providers, policyholders, or insurance company representatives to gather additional information or clarify claim-related queries.

Regulatory Compliance:Health claims professionals must stay updated with the latest healthcare regulations and insurance policies to ensure compliance with industry standards.

Claims Resolution: In cases where a claim is denied or not fully reimbursed, health claims professionals may work to resolve issues, appeal denied claims, or reprocess claims with corrected information.

Record Keeping:Accurate and organized record-keeping is vital in claims processing. Health claims professionals maintain detailed records of all processed claims and related interactions.

Fraud Detection:They may also be involved in identifying potential fraudulent activities, such as false claims or billing discrepancies.

• And also Claim appeals
• Submission of claims
• Requesting medical records Obtaining refunds
• Informing and assisting seniors with Medicare, Medicare Advantage, and choosing a plan (YOU must be experienced with Medicare to offer this service!!)

Licensing:

While licensing or certification is not mandatory for a medical claims processor, individuals looking to establish their own medical claims processing business should be aware of certain obligations. It is essential to file for a business license, similar to any other type of business. Additionally, depending on the state’s regulations, obtaining insurance coverage and bonding might be necessary.

Prospective entrepreneurs interested in starting a medical claims processing business should seek guidance from their state governments to understand the specific requirements and regulations governing this type of venture. Being informed about the necessary steps ensures compliance and helps establish a successful and legally compliant medical claims processing business.

Experience and Training:

You cannot operate this type of business without medical billing and health insurance experience and/or training. If you have no experience in this field, I recommend taking CPMB certification . If you prefer online classes, the Professional Medical Billers Association offers classes at www.pmbausa.com . If you are not experienced with Medicare and Medicare Advantage, it is imperative to become so! You must know Medicare deductibles, Medicare premium rates, and how Original Medicare differs from Medicare Advantage, as well as the role of a Medigap plan.

To become a health claims professional, individuals often need a strong understanding of medical terminology, coding systems (ICD-10, CPT, HCPCS), and health insurance procedures. Many professionals acquire certifications like Certified Professional Coder (CPC) or Certified Coding Specialist (CCS) from organizations like the American Academy of Professional Coders (AAPC) or the American Health Information Management Association (AHIMA).

Health claims professionals work in various healthcare settings, including hospitals, clinics, insurance companies, and third-party billing organizations. Their accurate and efficient processing of health insurance claims is essential for the smooth functioning of the healthcare system and ensuring that patients receive the appropriate benefits from their insurance coverage.

PMBA offers Comprehensive Medical Coding and Medical Billing Training with AAPC CPC Exam Preparation and CPMB Certification.

Starting Fresh or Adding to Your Current Services:

Health claims assistance services can be offered as a standalone business or as an additional service to an existing medical billing business. The demand for medical billers and claims assistance services has been increasing, especially during ongoing healthcare crises or times of significant changes in healthcare regulations and policies.

Starting a New Health Claims Assistance Home-Based Business

If you are registering your business name as a sole-proprietor, you may either use your social security number as your tax-id #, or register for a separate tax id# with your state.

Consult an attorney with any legal questions you may have regarding registering your business name in your state.

If claim submissions will be a service you offer, check with your state to see if you are required to register with your state’s Department of Banking and Finance, as certain states require ‘third-party billing services’ to be registered with such.

If you are registering as a Limited Liability Company, there are many websites that offer these services ex: www.legalzoom.com or you may be able to register as an LLC directly online with your state’s business website. You may also incorporate at the above listed website. If you incorporate, your tax guidelines will be different than those of other business entities, so I recommend guidance from an attorney if choosing this type of business entity.

Items/Supplies Needed to Get Started:

To get started as a health claims professional, you’ll need certain items and supplies to perform your job efficiently and effectively. Here’s a list of essential items:

• Computer: A reliable desktop computer or laptop is essential for accessing medical billing and claims processing software, as well as online resources.
• Internet Connection:A stable internet connection is necessary to communicate with clients, access medical databases, and submit electronic claims.
• Medical Billing and Claims Software:Invest in reputable medical billing and claims processing software to manage and process claims accurately and efficiently.
• Medical Coding Books/Resources:Obtain current versions of medical coding books such as ICD-10, CPT, and HCPCS, or use reputable online coding resources.
• Reference Materials:Have reference materials and guidelines related to health insurance policies, reimbursement rates, and billing regulations.
• Office Space:Set up a dedicated workspace with a comfortable chair and desk to facilitate your work and maintain organization.
• Phone:A phone with reliable service will be necessary for communicating with clients, healthcare providers, and insurance companies.
• Fax Machine/Scanner: Some healthcare facilities still use fax for documentation, so having a fax machine or scanner will be benef
• Printer:A printer is useful for generating hard copies of documents, billing statements, and other paperwork.
• Stationery and Office Supplies:Stock up on pens, notepads, folders, envelopes, and other office supplies to keep your work organized.
• CalculatorA calculator will come in handy for performing calculations related to claims processing and billing.
• Secure Storage: Invest in secure storage solutions (physical or digital) to keep patient information and records confidential and compliant with privacy regulations.
• Billing Forms: Obtain standard billing forms required for claim submissions and ensure they comply with the current regulations.( CMS-1500)
• Training and Certification:Enroll in relevant training courses and obtain certifications such as Certified Professional Medical Biller (CPMB) Certified Professional Coder (CPC) or Certified Coding Specialist (CCS) to enhance your credentials.
• Client Contracts and Agreements: Prepare clear and comprehensive contracts or service agreements outlining the terms and conditions of your health claims assistance services.
• Business Insurance:Consider obtaining professional liability insurance to protect yourself and your business in case of errors or omissions.
• Calendar/Planner:Use a calendar or planner to schedule appointments, deadlines, and important tasks.
• Email and Communication Tools:Set up a professional email account and use communication tools like Skype or Zoom for virtual meetings with clients.

As you establish yourself as a health claims professional, you may also need to adapt and expand your resources based on the specific needs of your clients and the healthcare industry’s evolving demands. It’s crucial to stay informed about industry updates and maintain a high standard of accuracy and professionalism in your work.

Website:

PMBA will provide the Medical Billing Services Website.

Having a well-developed and informative website is highly beneficial when starting as a healthcare claims professional. An informative website serves as your online presence and can be a powerful tool to attract potential clients, showcase your expertise, and provide essential information about your services. Here are some reasons why a website is important for a healthcare claims professional:

• Professional Image:A well-designed website gives a professional and credible impression to potential clients. It shows that you take your profession seriously and are committed to providing quality services.
• Information Hub:Your website can serve as a central hub for all relevant information about your healthcare claims assistance services. You can provide details about the services you offer, your experience, certifications, and contact information.
• Showcasing Expertise:Use your website to highlight your expertise in healthcare claims processing and billing. You can include case studies, success stories, and testimonials from satisfied clients to demonstrate your capabilities.
• Reach a Wider Audience:Having an online presence allows you to reach a broader audience beyond your immediate geographic location. Potential clients from various regions can find and learn about your services through your website.
• 24/7 Availability:Your website is accessible 24/7, allowing interested parties to learn about your services at any time, even outside of regular business hours.
• Contact and Inquiry Forms:You can include contact forms or inquiry forms on your website, making it easy for potential clients to reach out to you with questions or to request your services.
• Blogging and Resources:Consider incorporating a blog section where you can share industry insights, updates on healthcare regulations, and tips related to healthcare claims processing. This establishes you as an authority in your field and helps attract organic traffic to your website.
• Online Portfolio:Showcase your past work, successful claims, and notable projects to instill confidence in potential clients.
• Mobile Accessibility: Ensure that your website is mobile-friendly to accommodate users accessing it from various devices like smartphones and tablets.
• SEO and Online Visibility:Implement search engine optimization (SEO) strategies to improve your website’s visibility on search engines like Google. This can increase the likelihood of potential clients finding your website when searching for healthcare claims professionals. Having a website doesn’t have to be overly complex or expensive. There are user-friendly website builders and templates available that can help you create a professional-looking website without extensive technical knowledge. Remember to keep the content accurate, up-to-date, and user-friendly to provide the best experience for visitors to your website.

Your Potential Clients:

As a health claims professional, your potential clients can include individuals, healthcare providers, and healthcare facilities who need assistance with various aspects of medical billing and claims processing. Here are the potential clients you can target:

• Individual Patients:Many individuals may seek your services to resolve issues related to unpaid medical bills, insurance claim denials, and appeals. They may need help understanding their insurance coverage and Explanation of Benefits (EOB) statements.
• Healthcare Providers (Doctors, Hospitals, Labs, etc.):Healthcare providers often face challenges with claim submissions, coding errors, and dealing with insurance companies. They may hire your services to streamline their claims processing and increase reimbursement rates.
• Medical Billing Companies:Medical billing companies may collaborate with you to offer specialized health claims assistance services to their clients, improving their overall service offerings.
• Healthcare Facilities:Hospitals, clinics, and other healthcare facilities may seek your expertise to manage their medical billing and navigate the complexities of insurance reimbursement.
• Seniors and Medicare Beneficiaries:Elderly individuals who are eligible for Medicare may need guidance in choosing the right Medicare plan and understanding the complexities of Medicare billing.
• Insurance Agents and Brokers: Insurance agents and brokers may refer their clients to you when they need assistance with claim denials, appeals, or understanding their insurance benefits.
• Patient Advocacy Groups:Patient advocacy groups may partner with you to provide support and assistance to their members dealing with health insurance and medical billing challenges.
• Legal Firms:Legal firms involved in healthcare or insurance law may consult with you for expert advice and assistance in claims-related cases.
• Employers:Companies and employers providing healthcare benefits to their employees may seek your expertise in resolving billing disputes and ensuring accurate claims processing.
• Individuals with Complaints:Individuals who have complaints or issues with their insurance companies may approach you for guidance and assistance in filing complaints with State Departments of Insurance.

When targeting potential clients, it’s essential to tailor your marketing efforts and services to address their specific needs. Highlighting your expertise in dealing with unpaid medical bills, claim denials, appeals, and other related challenges will be crucial in attracting and retaining clients. Building a strong reputation for providing reliable and effective health claims assistance will lead to increased referrals and a loyal client base.

Marketing:

• Create a Professional Website: Develop a professional website that highlights your services, expertise, testimonials, and contact information. Optimize it for search engines (SEO) to improve online visibility.
• Utilize Social Media:Establish a presence on social media platforms such as LinkedIn, Facebook, and Twitter. Share informative content, industry updates, and success stories to engage your audience.
• Networking Events:Attend local networking events, business expos, and healthcare-related conferences to connect with potential clients and referral partners.
• Referral Program:Implement a referral program that rewards existing clients, healthcare providers, or partners who refer new clients to your services.
• Email Marketing: Build an email list of potential clients and regularly send them newsletters or updates about your services and industry trends.
• Google My Business:Set up a Google My Business profile to improve your local online presence and appear in local search results.
• Offer Free Workshops or Webinars:Organize workshops or webinars to educate the community on healthcare claims and billing topics. This can establish you as an expert in your field.
• Client Testimonials:Request satisfied clients to provide testimonials and reviews that you can showcase on your website and marketing materials.
• Community Involvement: Engage in community events and sponsor local health-related activities to build brand awareness and demonstrate your commitment to the community.
• Collaborate with Medical Professionals: Partner with doctors, clinics, and healthcare facilities to offer your services as an added benefit to their patients.
• Google Ads or Social Media Ads: Consider running targeted online advertisements on platforms like Google Ads or social media to reach a specific audience.
• Local Directories: List your business in local directories and online platforms related to healthcare services.
• Content Marketing: Create informative blog posts, articles, or videos related to healthcare claims and billing to establish yourself as an authority in your field.
• Offer Free Consultations:Provide potential clients with a free initial consultation to discuss their needs and how you can assist them.
• Participate in Online Forums: Engage in online forums and discussion groups related to healthcare and insurance to offer valuable insights and gain visibility.

Remember to tailor your marketing efforts to your target audience and continuously track the effectiveness of each strategy to refine your approach over time. Building a strong online and offline presence will help establish your health claims professional services and attract potential clients.

• Hang flyers on bulletin boards in (pharmacies, supermarkets, banks, etc.)
• Advertise in your local free community newspapers; the charge to advertise is usually very reasonable
• Send brochures to assisted living facilities (obtain facility name and address from the internet or phone book)
• Speak with the association heads of retirement villages and ask if you may post a flyer in the community clubhouse or possibly give a presentation (if you are comfortable doing so).
• Register with ACAP (Alliance of Claims Assistance Professionals – will add your Business name to website for referrals)
• Register as a member of the PMBA (Professional Medical Billers Association-will add your name to ‘members’ page on website) www.vistaprint.com
• Rent a table at local craft shows—many people, including seniors and soon-to-be seniors frequent these shows and you may just meet the person who needs you!
• Put large magnets advertising your business name on your car doors! These can be ordered from www.vistaprint.com

Authorization to act as patient advocate:

You will need to obtain an authorization from the patient to act as their patient advocate. This will be a form signed by the patient you will need to fax/send to the physician’s office and/ or insurance company to speak on their behalf.

Fee for Service:

Health Claims Assistance Professionals may charge as little as 15-20-$30 per hour, while some can charge greater than $150 per hour.

Before quoting a fee, it is important to obtain the details of the patient’s specific health claim/insurance problem/s or needs. Never quote a fee until you are aware of the client’s need and work involved in each case!

You can quote an hourly fee or a per project fee. If your services will be needed on a long-term basis, say if the client wants you to handle all medical bills and EOBs they receive on a daily basis, you will need to negotiate a fee for such.

It is crucial not to over-charge seniors. Many are on a fixed, limited income and do not have the financial resources others may have, yet they may be the ones who need you the most!

I suggest offering a free consultation to get your’ foot in the door’

Contract:

If a client wishes to hire you, you must get a signed contract outlining the specific services/fees pertaining to each client. You may have an attorney look over your contract. See sample contract # 1 below. The below is strictly a sample. You may use it; tweak it, to suit your needs!

If your are comfortable charging a retainer fee up front-let the client know there will be an ‘up-front’ fee amount required (for example if you believe it will take 2 hours to complete the assignment-you may request half of the amount before you begin the task and the remaining due balance upon completion of the task)

Client Data Sheet

If you are hired by a client, you will need the client to complete a client data sheet, much like a patient registration form.

The advice given in this guide is not legal advice. If you need legal advice, you should contact an attorney. For tax advice, contact an accountant.

You may use the sample contracts presented in this guide. Feel free to add, delete, or change text to suit your needs.

Fees you will charge may vary by project or service performed, as well as by the state you are providing services in.

Note: A Health Claims Assistance Professionalshould possess fundamental computer skills, including data entry capabilities. Since most claims are received via email, it is crucial for potential claims processors to be proficient in opening or downloading email attachments and uploading forms as necessary. Familiarity with data entry software commonly used by medical claims processors is advantageous for job qualifications. Medisoft is a prominent example of such software, extensively utilized in the healthcare industry for billing and claims processing.

Moreover, a proficient Health Claims Assistance Professionalshould have the ability to print standardized claim forms that can be customized to meet specific requirements. The use of medical billing and claims processing software aids in tracking and managing insurance claims and facilitates accurate billing with the appropriate CPT and ICD codes. Mastering these computer skills and software applications enables efficient and accurate claims processing for medical claims processors.

Healthcare continues to be one of the most rapidly expanding industries, offering numerous opportunities for job seekers. If patient care doesn’t align with your interests, you can still embark on a fulfilling career in the thriving healthcare field by becoming a Certified Professional Medical Biller.

Free online resources that can be valuable:

1. Centers for Medicare & Medicaid Services (CMS) – Healthcare Common Procedure Coding System (HCPCS):The CMS website provides access to the HCPCS, a standardized coding system used for medical services, supplies, and equipment. This resource helps medical billers assign appropriate codes to ensure accurate billing. URL: Medicare Coding MedHCPCSGenInfo

2. American Medical Association (AMA) – Current Procedural Terminology (CPT)® Code Set:The AMA offers the CPT code set, which is widely used for reporting medical procedures and services. The CPT codes facilitate proper billing and reimbursement in medical claims processing. URL: Practice Management

3. National Center for Health Statistics (NCHS) – International Classification of Diseases (ICD):NCHS provides access to the International Classification of Diseases (ICD) coding system, used for classifying and reporting diagnoses and diseases. Accurate ICD coding is crucial for medical billers to ensure proper reimbursement. URL C.D.C

4. CMS – Medicare Learning Network (MLN) Matters Articles: The MLN Matters articles contain valuable information on Medicare billing guidelines, policies, and updates. These resources are particularly useful for medical billers dealing with Medicare claims. URL: Medicare Learning Network MLN

5. American Academy of Professional Coders (AAPC) – Healthcare Business Monthly:AAPC offers a free monthly publication that covers various topics related to medical coding and billing. It provides insights, best practices, and industry updates. URL: HelathCare Business Monthly

6. HealthIT.gov – Health Information Technology Resources for Providers: HealthIT.gov provides resources on health information technology, including electronic health records (EHR) systems and related tools. Familiarity with EHR systems is essential for efficient medical billing.

7. Healthcare Financial Management Association (HFMA) Webinars and Podcasts:HFMA offers free webinars and podcasts on healthcare finance and revenue cycle management, including medical billing and claims processing topics.

8. American Health Information Management Association (AHIMA) Free Resources:AHIMA provides a collection of free resources, including articles, webinars, and toolkits related to health information management, medical coding, and billing.

9. HHS Office for Civil Rights (OCR) – HIPAA for Professionals: The HHS OCR offers a dedicated webpage with comprehensive information on HIPAA regulations and compliance guidelines for healthcare professionals, including medical billers. This resource helps medical billers understand their responsibilities under HIPAA and how to protect patient information. URL: Hipaa For Professionals.

10. U.S. Department of Health & Human Services (HHS) – HIPAA Privacy Rule: The HHS provides a comprehensive guide to the HIPAA Privacy Rule, which sets standards for the protection of individually identifiable health information. Medical billers can understand the requirements for safeguarding patient data. URL: Hipaa For Professionals Privacy

Thank you and enjoy!

Should you have any questions, please feel free to email me at support@pmbausa.com

Sincerely,

President-Professional Medical Billers Association USA

Disclaimer: The information provided in this article is for general informational purposes only and should not be construed as professional/legal advice. Readers are encouraged to seek individualized guidance from qualified professionals in the relevant field. The author and PMBA are not liable for any actions taken based on the information presented in this article. All views expressed are solely those of the author and do not necessarily reflect the views of the website

To keep medical insurance in force, a person must pay a monthly, quarterly, or annual fee called a premium. If the premium is not paid, a grace period of 10 to 30 days is usually given before insurance coverage ceases. In addition, usually a deductible (a specific amount of money) must be paid each year before the policy benefits begin. After the deductible is met, the insurance company begins to pay part of the cost usually 80%. The higher the deductible is, the lower the cost of the policy. Most policies have a coinsurance or cost-sharing requirement, which means the insured will assume a percentage of the fee (e.g., 20%) or pay a specific dollar amount (e.g., $15) for covered services. Managed care plans and state and federal programs refer to this as copayment (copay)

Click here to download Medical Billing Terminology Guide

It is not advisable to routinely waive copayments because most insurance companies do not tolerate this practice. If the provider is audited, the federal government can assess penalties for not collecting copayments for patients seen under the Medicare program. However, if copayments are waived on a case-by-case basis, as in a courtesy discount, there should not be any problems with commercial insurance carriers or Medicare. Generally, deductibles and copayments should be collected at the time of service.

Coinsurance Example:

Co-insurance refers to the portion of medical costs that is shared between the policyholder (the insured individual) and the insurance company after the deductible has been met. In health insurance, a deductible is the specified amount that the insured person must pay out of pocket before the insurance coverage begins to contribute to the expenses.

Insurance coverage is $10,000

Accepted Coinsurance Policy: 20/80

Insurance agrees to pay $8,000 and patient needs to pay $2,000.

Before his visit, insured person should make sure his doctor was in the plan network* so he could get the most coverage and pay less out of his own pocket. If visits a provider outside his plan network, he may pay more.

Deductible Example:

A typical auto insurance policy, for example, may carry a $400 deductible.

If the owner of that car accidentally hits another car while parking and both drivers agree the damage is minimal, he or she would pay the $400 repair bill out of his or her own pocket.

Insurance companies would not encourage a claim for such minor damages.

The next time, if the accident happens, insurance starts paying as the deductible has been met.

In a similar way, patients who visit the emergency room for a minor injury or procedure would have to pay out of pocket until they have reached the level of the deductible.

If their medical expenses on a visit to the hospital would exceed the deductible, then the insurance company would pay the total charges minus the deductible.

Out-of-Pocket Expenses

An out-of-pocket expense is a non-reimbursable expense paid by a patient. This could include any medical benefits that health plan doesn’t consider “covered services.” Out of pocket means, the costs borne by the member that are not covered by the healthcare plan.

Medicare:is the largest health insurance payer in the United States. It is a federally funded program legislated by the entity known as CMS (Centers for Medicare and Medicaid Services).

Abuse:An act that directly or indirectly results in unnecessary reimbursement without defined intent.

Advanced Beneficiary Notice:The Advanced Beneficiary Notice (ABN) is a report given to Medicare beneficiaries to let the patient know that Medicare is not likely to pay for certain services. The notice must be given to the patient before services are performed. CMS has modified its form and given explicit instructions how the form should be completed. According to regulations, providers include physicians, institutions such as outpatient hospitals, practitioners and suppliers paid under Part B, and hospice providers and religious non-medical health care institutions (RNHCIs) paid exclusively under Part A. The ABN form must be verbally reviewed with the beneficiary or their representative before they sign it. Once completed and the form is signed, a copy is given to the beneficiary or representative. In all cases, the notifier must retain the original notice on file. These forms are not required in emergency or urgent care situations.

Approved charges:0020Fee that Medicare decides the medical service is worth, which may or may not be the same as the actual amount billed. The patient may or may not be responsible for the difference.

Assignment For Medicare, an agreement in which a patient assigns to the physician the right to receive payment from the fiscal intermediary. Under this agreement, the physician must agree to accept the program payment as payment in full except for 20% or the reasonable (allowed or approved) charge and the deductible.

Benefit period Period of time for which payments for Medicare inpatient hospital benefits are available. A benefit period begins the first day an enrollee is given inpatient hospital care (nursing care or rehabilitation services) by a qualified provider and ends when the enrollee has not been an inpatient for 60 consecutive days. For disability insurance, it is the maximum amount of time that benefits will be paid to the injured or ill person for a disability.

Beneficiary:The term “Medicare beneficiary” refers to an individual who is eligible to receive benefits from the Medicare program. Medicare is a federally funded health insurance program in the United States that primarily provides coverage for individuals who are aged 65 and older, as well as certain younger individuals with specific disabilities or qualifying medical conditions.

Coinsurance:Co-insurance refers to the portion of medical costs that is shared between the policyholder (the insured individual) and the insurance company after the deductible has been met. In health insurance, a deductible is the specified amount that the insured person must pay out of pocket before the insurance coverage begins to contribute to the expenses.

Once the policyholder has paid the deductible amount, co-insurance comes into effect. It is expressed as a percentage, indicating the proportion of the medical costs that the insurance company and the insured individual will share. For example, if the co-insurance is 20%, the insurance company will pay 80% of the eligible medical expenses, while the policyholder will be responsible for paying the remaining 20%.

Here’s an example to illustrate how co-insurance works:

Let’s say John has a health insurance plan with a $1,000 deductible and a co-insurance rate of 20%. He incurs medical expenses of $5,000 during the coverage period.

Step 1: John pays the $1,000 deductible out of pocket first.

Step 2: After meeting the deductible, the co-insurance kicks in. The insurance company will cover 80% of the remaining $4,000 in medical expenses, which amounts to $3,200.

Step 3: John is responsible for paying the remaining 20% co-insurance, which is $800.

In this scenario, the total amount paid for medical expenses is $1,000 (deductible) + $800 (co-insurance) = $1,800. The insurance company paid $3,200.

Co-insurance helps share the financial burden of healthcare costs between the insured individual and the insurer, making healthcare more affordable and accessible. It is important for policyholders to understand their co-insurance rate and the terms of their health insurance policy to budget and plan for potential out-of-pocket expenses when seeking medical care.

Crossover claim Bill for services rendered to a patient receiving benefits simultaneously from Medicare and Medicaid. Medicare pays first and then determines the amounts of unmet Medicare deductible and coinsurance to be paid by Medicaid.

Co-payment:A fixed amount paid by the policyholder at the time of receiving medical services, typically for office visits or prescriptions.

Coordination of Benefits (COB):The process of determining which insurance plan is primary and secondary when an individual is covered under multiple insurance policies.

Clearinghouse:An electronic intermediary between healthcare providers and payors that processes and forwards medical claims to insurance companies for payment.

CMS-1500 Form:The standard paper claim form used to submit medical claims for services provided to Medicare and Medicaid beneficiaries.

Deductible:The amount that the policyholder must pay out-of-pocket before the insurance company starts covering medical expenses.

Diagnosis-Related Group (DRG)The DRG abbreviation stands for Diagnosis-Related Group. DRGs are used as a patient classification system to relate the reason a patient was seen in a hospital to the costs incurred by the hospital in the care of the patient. Patients are classified into Diagnostic, Demographic, and Therapeutic groups to analyze resource needs. Hospitals receive money for each case that falls into a specific DRG that is a preset reimbursement amount for that DRG.

Disabled:For purposes of enrollment under Medicare, individuals younger than 65 years of age who have been entitled to disability benefits under the Social Security Act or the railroad retirement system for at least 24 months are considered disabled and are entitled to Medicare.

Effective Date:The date on which an insurance policy or coverage becomes active.

Exclusion:A specific medical condition, treatment, or service that is not covered by an insurance policy.

Explanation of Benefits (EOB):A statement sent by an insurance company to a policyholder, detailing the costs, services, and payments related to a claim.

Fee-for-Service: A payment model in which healthcare providers are paid for each service or procedure they deliver.

Formulary:A list of prescription drugs that are covered by an insurance plan

End-stage renal diseaseIndividuals who have chronic kidney disease requiring dialysis or kidney transplant are considered to have ESRD. To qualify for Medicare coverage, an individual must be fully or currently insured under Social Security or the railroad retirement system or be the dependent of an insured person. Eligibility for Medicare coverage begins with the third month at the beginning of a course of renal dialysis. Coverage may begin sooner if the patient participates in a self-care dialysis training program or receives a kidney transplant without dialysis.

Fiscal intermediary (FI)An organization under contract to the government that handles claims under Medicare part a from hospitals, skilled nursing facilities, and home health agencies. Also known as fiscal agent, fiscal carrier, and claims processor.

Fraud:Intentional deception made for personal gain. Fraud is a crime, and a civil law violation.

Health Care Financing Administration (HCFA) Health Care Financing Administration, (pronounced “HICK-fah”). The preferred term is now Centers for Medicare & Medicaid Services (CMS), an agency of the US Dept. of HHS that administers Medicare, the federal part of Medicaid and oversees Medicare’s health financing; HCFA establishes standards for medical providers that require compliance to meet certification requirements.

Hospice : A public agency or private organization primarily engaged in providing pain relief, symptom management, and supportive services to terminally ill patients and their families.

Health Maintenance Organization (HMO):A type of managed care organization that provides healthcare services through a network of doctors, hospitals, and other healthcare providers.

Hospital insurance:Known as Medicare Part A. A program providing basic protection against the costs of hospital and related post-hospital services for individuals eligible under the Medicare program.

Intermediate care facilities (ICFs):Institutions furnishing health-related care and services to individuals who do not require the degree of care provided by hospitals or nursing facilities.

In-network Provider:A healthcare provider who has a contract with an insurance company to provide services at negotiated rates to policyholders.

Limiting charge: A percentage limit on fees, specified by the legislation, that nonparticipating physicians may bill Medicare beneficiaries above the fee schedule amount.

Medical necessity:Criteria used by insurance companies when making decisions to limit or deny payment in which medical services or procedures must be justified by the patient’s symptoms and diagnosis.

Medicare:A nationwide health insurance program for persons aged 65 years and older and certain disabled or blind persons regardless of income, administered by CMS. Local Social Security offices take applications and supply information about the program.

Medicare/Medicaid (Medi-Medi):Refers to an individual who receives medical and/or disability benefits from both Medicare and Medicaid programs. Sometimes referred to as a Medi-Medi case.

Medicare secondary payer (MSP): Primary insurance plan of a Medicare beneficiary that must pay for any medical care or services first before Medicare is sent a claim.

Medicare summary notice: Document received by the patient explaining amount charged, Medicare approved, deductible, and coinsurance for medical services rendered.

Medical Necessity:The criteria that must be met for a healthcare service or treatment to be covered by an insurance plan

Medigap : A specialized insurance policy device for the Medicare beneficiary that covers the deductible and copayment amounts typically not covered under the main Medicare policy written by a nongovernmental third-party payer. Also known as Medifill.

National provider identifier (NPI):A Medicare lifetime 10-digit number issued to providers.

Nonparticipating physician (Nonpar):A provider who does not have a signed agreement with Medicare and has an option regarding assignment. The physician may not accept assignment for all services or has the option of accepting assignment for some services and collecting fees from the patient for other services performed at the same time and place.

Original Medicare: Original Medicare is fee-for-service coverage under which the government pays health care providers directly for a patient’s Part A and/or Part B benefits.

Out-of-network Provider:A healthcare provider who does not have
a contract with an insurance company and may result in higher outof-pocket costs for the policyholder.

Nursing facility :A specially qualified facility that has the staff and equipment to provide skilled nursing care and related services for patients who need medical or nursing care or rehabilitation services. Formerly known as skilled nursing facility.

Participating physician (Par) :A physician who contracts with an HMO or other insurance company to provide services. A physician who has agreed to accept a plans payment for services to subscribers (e.g., some Blue plans). 80% of practicing American physicians are participating physicians.

Peer review organization (PRO)A group of practicing physicians paid by the federal government to review hospital care of Medicare patients regarding effectiveness and efficiency.

Premium :A monthly fee that enrollees pay for Medicare part B medical insurance. This fee is updated annually to reflect changes in program costs.

Pre-authorization:The process of obtaining approval from an insurance company before receiving certain medical services or treatments.

Prospective payment system (PPS) :A method of payment for Medicare hospital insurance based on DRGs (a fixed dollar amount for a principal diagnosis).

Qui tam actionAn action to recover a penalty, brought by an informer in a situation in which one portion of the recovery goes to the informer and the other portion to the state or government.

Reasonable fee A charge is considered reasonable if it is deemed acceptable after peer review even though it does not meet the customary or prevailing criteria. This would include unusual circumstances or complications requiring additional time, skill, or experience in connection with a particular service or procedure.

Relative value unit (RVU):Individual building block of RBRVS (resource-based relative value scale). For each service, there are three RVUs: for work, practice expenses, and the cost of professional liability insurance.

Remittance advice (RA) An explanation of services periodically issued to recipients or providers on whose behalf claims have been paid by the Medicare or Medicaid program. Also known in some programs as an Explanation of Benefits (EOB).

Resource-based relative value scale (RBRVS) :A system that ranks physician services by units; a Medicare fee schedule.

Respite care : Short-term hospice inpatient stay that may be necessary to give temporary relief to the person regularly assist with the care of the patient.

Supplemental Security Income (SSI): A program of income support for low-income aged, blind, and disabled persons established by Title XVI of the Social Security Act.

Supplementary Medical Insurance (SMI):Part B – medical benefits of Medicare program.

Volume performance standard Desired growth rate for spending on Medicare Part B physician services, set each year by Congress.

Third-Party Administrator (TPA):An organization that manages claims and administrative services on behalf of self-insured employers or insurance companies.

Underwriting:The process of evaluating an individual’s risk profile to determine their eligibility for insurance coverage and the associated premium rates.

Workers’ compensation (WC) insuranceA contract that ensures a person against on-the-job injury or illness. The employer pays the premium for his or her employees.

Utilization Review:The process of evaluating the necessity, appropriaten ess, and efficiency of medical services.

UB-04 Form: The standard claim form used by hospitals and healthcare facilities to bill for inpatient and outpatient services.

Disclaimer: The information provided in this article is for general informational purposes only and should not be construed as professional/legal advice. Readers are encouraged to seek individualized guidance from qualified professionals in the relevant field. The author and PMBA are not liable for any actions taken based on the information presented in this article. All views expressed are solely those of the author and do not necessarily reflect the views of the website.

Introduction:

In the intricate world of healthcare finance, accounts receivable (AR) plays a pivotal role in ensuring the financial stability of healthcare providers. Medical accounts receivable refers to the outstanding reimbursement owed to providers for the treatments and services they have rendered, whether the responsibility falls on the patient or their insurance company. It is crucial for healthcare providers to manage their accounts receivable effectively to maintain a healthy revenue cycle and ensure the financial viability of their practice. This essay explores the significance of accounts receivable in the healthcare industry, the challenges it poses, and the strategies to optimize revenue management.

Click here to download Accounts Receivable Guide

AR callingin medical billing refers to the process of contacting insurance companies, patients, or other payers to follow up on outstanding claims that have not been paid or have been denied. It is a crucial step in the revenue cycle management (RCM) process, occurring after the initial claim submission and processing.

When a claim remains unpaid or is denied, it becomes part of the accounts receivable (AR) of the medical practice. AR calling involves proactive efforts to resolve these outstanding claims and ensure timely and accurate reimbursement for the services rendered by the healthcare provider.

The responsibilities of AR calling in medical billing include:

Claim Analysis:AR specialists review the details of the denied or unpaid claim, verifying that all required information, including patient details, diagnosis codes, procedure codes, and supporting documentation, is correct and complete.

Follow-up with Insurance Companies:AR specialists contact insurance companies to inquire about the status of the claim and the reasons for the denial or non-payment. They may request additional information or clarification to address any discrepancies.

Patient Communication:In cases where the patient is responsible for a portion of the payment, AR calling may involve contacting the patient to discuss outstanding balances, co-pays, co-insurance, or deductibles. They provide information about the claim status and payment options to facilitate prompt settlement.

Resolving Claim Issues:Based on the information gathered during follow-up, AR specialists take appropriate actions to address claim issues. This may include resubmitting corrected claims, appealing denied claims, or addressing any other issues that are preventing timely payment.

Documentation and Record-keeping: Throughout the AR calling process, thorough documentation of all interactions with insurance companies, patients, and other payers is essential for accurate tracking and efficient resolution of claims.

Reporting and Analysis:AR specialists maintain records of AR aging, tracking the length of time each claim has been outstanding. They generate reports to analyze trends, identify recurring issues, and implement strategies for improving the overall AR performance.

Understanding Medical Accounts Receivable:

Accounts receivable in the medical context encompass the money owed to healthcare providers for the healthcare services they have provided to patients. When healthcare providers bill a patient or their insurance company for services rendered, it gives rise to an accounts receivable. It is important to note that although ARs represent outstanding payments, they do not qualify as assets in the traditional sense.

The longer an account goes unpaid for services rendered, the more likely it is that an account will never be paid.

Providers categorize accounts receivable based on their age, usually in the following time frames:

• 1-30 days,
• 31-60 days,
• 61-90 days, and
• 91-120 days.

Charge entry errors and patient information inaccuracies on submitted claims lead to claim denial and lengthened AR cycles.

Challenges Faced by Healthcare Providers:One of the most significant challenges faced by healthcare providers is the collection of reimbursements within a reasonable time frame. The longer an AR goes unpaid, the higher the risk of non-payment altogether. According to industry statistics, after 120 days, healthcare providers can expect to receive only ten cents per dollar owed. This highlights the urgency for timely and efficient AR management to avoid revenue leakage and financial losses.

Moreover, managing accounts receivable can be complex and time-consuming for healthcare providers. The process involves dealing with insurance companies, claims denials, appeals, and patient billing inquiries. It requires constant monitoring and follow-up to ensure that outstanding payments are collected promptly.

Optimizing Revenue Management:

Effective management of medical accounts receivable is crucial for healthcare providers to maintain a steady cash flow and financial stability. To optimize revenue management, healthcare providers should implement the following strategies:

Timely Billing: Promptly bill patients and insurance companies after providing healthcare services to minimize delays in reimbursement.

Clear Communication:Ensure clear and transparent communication with patients regarding their financial responsibilities and payment options.

Proactive Follow-Up:Implement a systematic follow-up process to track unpaid claims and address any issues or denials promptly.

Denials Management: Invest in denials management software or services to identify and address claim denials efficiently, reducing the risk of revenue loss.

Patient Engagement: Engage with patients to educate them about their insurance coverage, co-pays, and deductibles, fostering a better understanding of their financial responsibilities.

Regular Reporting:Generate regular reports to analyze the aging of accounts receivable and identify areas for improvement in the revenue cycle.

Medical accounts receivable forms the backbone of healthcare revenue management, representing the outstanding reimbursements owed to healthcare providers for the services they deliver. Efficient management of accounts receivable is essential to maintain a healthy revenue cycle, avoid revenue leakage, and ensure the financial viability of healthcare practices. By implementing proactive strategies, engaging patients, and maintaining clear communication with payers, healthcare providers can optimize their revenue management and continue providing quality care to their patients. It is through effective accounts receivable management that the healthcare industry can maintain its financial health and continue serving the needs of patients worldwide.

The AR cycle is the final segment of the revenue cycle. Issues that may occur throughout the revenue cycle, even as early as collecting patients’ personal and insurance information, threaten the success of both.

Reason:

Since the enactment of the Affordable Care Act (ACA) in 2010, many Americans have opted for high-deductible health insurance plans as a means to lower their monthly premiums. While this choice has provided cost-saving benefits for policyholders, it has also resulted in an increase in out-of-pocket expenses for patients when they seek medical care. As a consequence, medical providers have experienced a surge in patients responsible for a higher percentage of their medical bills.

For healthcare providers, this shift in patient insurance coverage has led to significant challenges in managing their accounts receivable (AR) processes. In the past, when patients had lower deductibles and insurance covered a larger portion of the medical expenses, providers could more readily rely on timely reimbursements from insurance companies. However, with the rise in high-deductible plans, the burden of recouping reimbursements has shifted from insurance companies to individual patients, placing additional strain on providers’ revenue management systems.

Challenges:

• High deductibles
• Shortage of Certified Medical Billers
• submitting incomplete insurance information
• Unverified insurance
• Errors on bills and invoices
• Missed follow-ups
• Disorganized collection process

Calculating – “Days in AR”

Calculating Days in Accounts Receivable (AR) is a vital financial metric for healthcare providers, helping them assess the efficiency of their revenue cycle and understand the average time it takes to collect outstanding payments from patients and insurance companies. To calculate Days in AR, follow these steps:

Step 1: Compute the Average Daily Charges for the Past Several Months

To begin, add up the total charges posted for the last six months. For example, let’s assume the sum of charges for the past six months is $180,000. Next, determine the total number of days in those six months. If each month had 30 days, then the total number of days would be 180 (6 months * 30 days per month).

Now, divide the total charges ($180,000) by the total number of days (180) to calculate the average daily charges. In this case, the average daily charges would be $1,000 ($180,000 / 180 days).

Step 2: Divide the Total Accounts Receivable by the Average Daily Charges

Next, determine the total accounts receivable balance at a specific point in time. Let’s assume the total accounts receivable is $60,000.

Now, divide the total accounts receivable ($60,000) by the average daily charges ($1,000) to calculate the Days in AR. In this example, the Days in AR would be 60 days ($60,000 / $1,000).

Interpreting the Result:The calculated Days in AR (60 days) represents the average number of days it takes for the healthcare provider to collect outstanding payments from patients and insurance companies. In this case, the provider takes an average of 60 days to receive payment for services rendered.

A lower number of Days in AR indicates that the provider’s revenue cycle is efficient, and outstanding payments are being collected promptly. Conversely, a higher number of Days in AR suggests that the revenue cycle may be experiencing delays in payment collection, potentially leading to cash flow challenges and impacting the financial health of the healthcare practice.

Monitoring Days in AR regularly enables healthcare providers to identify areas for improvement in their revenue management processes, enhance collection efforts, and maintain a financially stable practice. By implementing effective accounts receivable management strategies, providers can strive to reduce Days in AR and optimize their revenue cycle for sustainable financial success.

• 30 days or less for a High performing Medical Billing Department- Good or High Performance
• 40-50 days for an Average performing Medical Billing Department.
• 60 days or more for a Below Average Medical Billing Department- Good or High Performance

Monitoring the percentage of A/R that has aged beyond 90 and 120 days is a fundamental component of effective revenue cycle management for medical practices. It provides key insights into the aging of outstanding receivables and helps assess the practice’s ability to collect payments in a timely manner.

Example-2: AR Days

A/R Days = (Accounts receivable ÷ Annual revenue) x Number of days in the year

Accounts receivable for a pediatric clinic is $100,000 and its (Account receivable/total charges) X 365 days is $600,000. Then the A/R days for this clinic will be:

A/R Days = ($100,000 accounts receivable ÷ $600,000) x 365 days = 60.8 Accounts Receivable Days

Calculating – “Aging Buckets”

The percent of accounts receivable in each “aging bucket” is a crucial metric used by healthcare providers to assess the efficiency of their billing departments and the effectiveness of their accounts receivable management. Aging buckets typically categorize outstanding accounts receivable based on the number of days since the invoice or claim was issued. The standard aging buckets are often segmented as follows: 0-30 days, 31-60 days, 61-90 days, 91-120 days, and over 120 days.

To calculate the percent of accounts receivable in each aging bucket, healthcare providers generate a report that shows the dollar amount of outstanding AR in each bucket. This report helps them visualize the distribution of outstanding payments across different timeframes.

To convert each aging bucket to a percentage of the total accounts receivable, follow these steps:

Sum up the dollar amounts of AR in each aging bucket. For example, let’s assume the total AR in each aging bucket is as follows:

• 0-30 days: $50,000
• 31-60 days: $20,000
• 61-90 days: $15,000
• 91-120 days: $10,000
• Over 120 days: $5,000

Calculate the total accounts receivable by adding up the AR amounts in all aging buckets:

Total AR = $50,000 + $20,000 + $15,000 + $10,000 + $5,000 = $100,000

Convert each aging bucket to a percentage of the total AR:

• Percent in 0-30 days bucket = ($50,000 / $100,000) * 100% = 50%
• Percent in 31-60 days bucket = ($20,000 / $100,000) * 100% = 20%
• Percent in 61-90 days bucket = ($15,000 / $100,000) * 100% = 15%
• Percent in 91-120 days bucket = ($10,000 / $100,000) * 100% = 10%
• Percent in Over 120 days bucket = ($5,000 / $100,000) * 100% = 5%

Denial Rate:

Total Dollar Amount of Denied Claims ÷ Total Dollar Amount of Submitted Claims

FPRR: The First Pass Resolution Rate (FPRR) is a critical performance metric used to assess the efficiency and effectiveness of a medical practice’s Revenue Cycle Management (RCM) process. It measures the percentage of claims that are successfully paid by the insurance company on the first submission, without the need for resubmission or appeal.

A high FPRR indicates that the RCM process is streamlined, accurate, and well-managed, resulting in a higher proportion of claims being paid promptly and correctly. On the other hand, a low FPRR suggests inefficiencies or errors in the billing, coding, or claims submission process, leading to claim denials or delays in reimbursement.

FPRR Calculation:

To calculate the First Pass Resolution Rate, use the following formula:

FPRR = (Number of claims paid on the first pass / Total number of claims submitted) * 100

For example, if a medical practice submitted 100 claims to insurance companies, and 85 of those claims were successfully paid on the first submission without any need for resubmission, the FPRR would be:

FPRR = (85 / 100) * 100 = 85%

Interpreting FPRR:

A high-performance FPRR is typically considered to be 90% or higher. This means that 90% or more of the claims are successfully paid on the first submission. Achieving a high FPRR is crucial for optimizing revenue cycle operations and ensuring prompt reimbursement for services provided.

Importance of FPRR:

• A higher FPRR signifies a well-organized and efficient RCM process, leading to several benefits for the medical practice:
• Reduced Accounts Receivable (AR): A higher FPRR means fewer claims are pending, leading to a decrease in the number of outstanding accounts receivable. This, in turn, improves cash flow and financial stability.
• Faster Payments: When claims are paid on the first pass, payment turnaround times are significantly reduced, providing the practice with more timely revenue.
• Lower Administrative Costs: Rejected or denied claims require additional administrative efforts and resources for resubmission and appeals. A higher FPRR helps minimize these extra costs.
• Improved Patient Satisfaction: A streamlined billing process resulting in faster reimbursement can lead to improved patient satisfaction and trust in the medical practice.
• Enhanced Revenue Performance: An efficient RCM process with a higher FPRR contributes to overall revenue optimization and financial success.

GCR:The Gross Collection Ratio (GCR) is a significant financial metric used in medical billing to assess the efficiency and profitability of a healthcare practice. It measures the percentage of total payments received by the practice relative to the total charge amount allowed for the services rendered during a specific time period.

GCR is a critical indicator of how effectively the practice is able to collect the fees it is entitled to receive from insurance companies and patients. It helps identify how well the practice is performing in terms of revenue generation and collection efforts.

GCR Calculation:

To calculate the Gross Collection Ratio, use the following formula:

GCR = (Total Payment amount / Total Charge Amount) * 100%

For example, if a practice billed a total of $100,000 for services rendered during a specific time period, and they received $80,000 in payments from insurance companies and patients, the GCR would be:

GCR = ($80,000 / $100,000) * 100% = 80%

Interpreting GCR:

A higher GCR indicates that the practice is able to collect a larger percentage of the fees it is allowed to charge for services. This suggests that the practice is performing well in terms of reimbursement and revenue collection.

On the other hand, a lower GCR may indicate potential issues in the revenue cycle, such as claim denials, delayed payments, or write-offs. A lower GCR could also be a result of contracted fee schedules with insurance companies that allow for lower reimbursement rates.

It is important to note that GCR can vary among different healthcare practices due to factors such as the type of services offered, insurance contracts, fee schedules, patient demographics, and billing practices. Therefore, GCR is best used as an internal benchmark to monitor the practice’s financial performance over time, rather than comparing it with industry benchmarks or other practices.

Importance of GCR:

Monitoring the Gross Collection Ratio is crucial for medical practices to understand their financial health and the effectiveness of their revenue collection efforts. A high GCR indicates that the practice is successful in obtaining reimbursement for the services it provides, contributing to better financial stability and profitability.

By regularly tracking GCR, medical practices can identify trends and areas for improvement in their revenue cycle management. Analyzing GCR alongside other financial metrics allows practices to implement strategies to optimize revenue collection, improve the efficiency of billing processes, and enhance overall financial performance.

NCR:Net Collection Ratio helps to measure the overall health of the billing and collection process.

It is helpful to determine the efficiency of the practice by measuring reimbursement amount over the allowed amount.

To calculate the Net Collection Ratio (NCR), follow these steps:

Step 1: Determine the Total Charge Amount – This is the total amount that the medical practice has billed for the services rendered during a specific time period.

Step 2: Calculate the Contractual Adjustments – Contractual adjustments are the reductions in the total charge amount that result from contractual agreements with insurance companies or other adjustments made during the billing process.

Step 3: Subtract Contractual Adjustments from Total Charge Amount – Subtract the contractual adjustments from the total charge amount to get the adjusted charge amount.

Step 4: Determine the Total Payment Amount – This is the total amount that the medical practice has received in payments from insurance companies and patients for the services rendered during the same time period.

Step 5: Calculate the Net Collection Ratio – Divide the total payment amount by the adjusted charge amount and multiply by 100 to get the NCR as a percentage.

NCR Calculation: (Total Payment Amount / (Total Charge Amount – Contractual Adjustments)) * 100

For example:

Total Charge Amount: $100,000

Contractual Adjustments: $20,000

Total Payment Amount: $78,000

Adjusted Charge Amount = Total Charge Amount – Contractual Adjustments

= $100,000 – $20,000

= $80,000

Net Collection Ratio = (Total Payment Amount / Adjusted Charge Amount) * 100

= ($78,000 / $80,000) * 100

= 97.5%

In this example, the Net Collection Ratio is 97.5%, which indicates that the medical practice is collecting 97.5% of the total allowed amount for services rendered. An NCR of 98% or greater is considered a high-performance level, while an NCR below 90% is indicative of poor performance in terms of revenue collection efficiency.

CPV:Collection Per Visit (CPV) for a specific time period, follow these steps:

Step 1: Determine the Total Reimbursements – This is the total amount of money the medical practice has received in reimbursements from insurance companies and patients for all the services rendered during the specified time period.

Step 2: Determine the Total Visits – This is the total number of patient visits or appointments the medical practice has had during the same time period.

Step 3: Calculate the Collection Per Visit – Divide the total reimbursements by the total visits to get the Collection Per Visit.

Collection Per Visit Calculation: Total Reimbursements / Total Visits

For example:

Total Reimbursements: $50,000

Total Visits: 500

Collection Per Visit = Total Reimbursements / Total Visits

= $50,000 / 500

= $100 per visit

In this example, the Collection Per Visit is $100, which means that on average, the medical practice collects $100 for each patient visit or appointment during the specified time period.

Analyzing the Collection Per Visit helps the medical practice in the following ways:

Measuring Profitability: CPV allows the practice to determine how much revenue is generated per patient visit, helping to assess the financial health of the practice.

Benchmarking Against Industry Standards: By comparing the CPV with industry standards and other same-specialty practices in the same area, the practice can gauge its financial performance and identify areas for improvement.

Identifying Profitable Appointments: CPV helps in determining the most profitable appointments or cases, enabling the practice to prioritize similar cases to generate more profit.

Strategic Decision-Making: Analyzing CPV helps in making informed decisions on how to increase revenue, such as focusing on high-profit appointments or identifying areas where efficiency can be improved.

Monitoring CPV regularly and striving to increase it can lead to improved financial performance and increased profitability for the medical practice.

Please note that the accuracy and relevance of the Collection Per Visit metric depend on the completeness and accuracy of the data used for calculation. It is essential to ensure that the data used in the calculation is reliable and up-to-date to get meaningful insights into the practice’s financial performance.

Contractual Variance:Contractual Variance is the amount that is paid less by the insurance company as per the contract.

Contractual Variance Calculation: Contracted Rate – Insurance Allowed Amount

For example:

Contracted Rate: $50.00

Insurance Allowed Amount: $35.00

Contractual Variance = Contracted Rate – Insurance Allowed Amount

= $50.00 – $35.00

= $15.00

Key Reasons Medical Practices Lose Money

Medical practices can experience financial losses due to several key reasons that hinder their revenue cycle management (RCM) process. These reasons highlight the importance of implementing comprehensive policies, procedures, and internal oversight controls to ensure efficient and effective financial operations. Some of the key reasons medical practices lose money include:

Failure to Collect Patient Co-pay and Co-insurance:

When medical practices do not prioritize or effectively collect patient co-pays and co-insurance at the time of service, it can lead to a significant revenue leak. Neglecting to collect these payments upfront can result in delayed or missed payments, impacting the practice’s cash flow.

Not Having the Right Team to Manage the RCM Process:

Inadequate staffing or lack of expertise in revenue cycle management can lead to inefficiencies, errors, and delayed reimbursement. A well-trained and experienced team is essential for effective billing, coding, claims submission, and follow-up, maximizing revenue collection.

Failure to Manage Denials Effectively:

Denials from insurance companies can occur for various reasons, such as incomplete or incorrect information on claims. Failing to address and appeal denials in a timely manner can result in lost revenue and increased administrative costs.

Unnecessary Write-offs:

Incorrectly writing off patient balances without thorough investigation or attempts at collection can lead to unnecessary revenue loss. Proper tracking and follow-up on outstanding balances are crucial to avoid unjustified write-offs.

Insufficient Focus on Patient Collections:

Medical practices must proactively address patient collections by establishing clear and transparent financial policies, providing payment options, and offering financial assistance when needed. Failure to prioritize patient collections can lead to significant outstanding balances.

Not Having a Proper Insurance Eligibility Verification Process:

Lack of a robust insurance eligibility verification process can result in billing errors, claim rejections, and delayed payments. Verifying patients’ insurance coverage before providing services helps avoid potential denials and financial losses.

Not Using a Claims Edits System:

A claims edits system can identify coding errors, missing information, or billing discrepancies before claims are submitted. Without such a system, practices risk increased claim rejections and delayed reimbursements.

Inaccurate Coding:

Coding errors, whether undercoding or overcoding, can lead to claim denials and potential compliance issues. Accurate and precise coding is essential for proper reimbursement and revenue optimization.

Failure to Keep Pace with Patient Consumerism Demands:

As patients become more informed and proactive in managing their healthcare expenses, medical practices must adapt to meet their demands. Practices that do not provide transparent pricing, patient portals for billing inquiries, or convenient payment options may lose patients and revenue.

Failure to Measure Key Performance Indicators (KPIs) Consistently:

Regularly monitoring and analyzing financial performance through KPIs is crucial for identifying areas of improvement in the revenue cycle. Practices that do not consistently measure and act upon KPIs may miss opportunities to optimize revenue and reduce losses.

Addressing the key reasons medical practices lose money requires a proactive and systematic approach to revenue cycle management. By implementing comprehensive policies, efficient internal controls, and a dedicated team, practices can optimize their revenue cycle, minimize financial losses, and ensure a sustainable financial future. Regularly evaluating performance metrics and adapting to patient consumerism demands are also vital for staying financially viable in the ever-evolving healthcare landscape.

The Differences Between Denied, Pended, and Paid.

Denied Claims

Some common reasons for claim denials include:

Service Not Covered: The insurance program may not cover the specific service or treatment rendered to the patient. In such cases, the claim will be denied as the insurance policy does not provide reimbursement for that particular service.

Coding Errors: :Coding to the highest level of specificity is the best way to reduce denials. A diagnosis must be coded to the absolute highest level for that code the maximum number of digits for the code being used

Duplicate Claim:If a claim is submitted for the same service or treatment more than once, it will be considered a duplicate claim and will be denied by the insurance company.

Lack of Prior Approval:Certain medical services or procedures require prior approval from the insurance company before they can be covered. If the required prior approval is not obtained, the claim will be denied.

Invalid or Inconsistent Data: If the information provided in the claim is incorrect, incomplete, or inconsistent, the insurance company may deny the claim. This can include errors in patient demographics, diagnosis codes, procedure codes, or billing codes.

Timely Filing Limit Exceeded:Insurance companies often have specific timeframes within which claims must be submitted. If the claim is not filed within the allowed time limit, it will be denied as untimely.

Non-Covered Diagnosis or Procedure: Certain diagnoses or procedures may not be covered under the patient’s insurance policy. If the claim is related to a non-covered diagnosis or procedure, it will be denied.

Coordination of Benefits (COB) Issues:: If the patient has multiple insurance policies, the claim may be denied due to coordination of benefits issues. This occurs when the primary insurance has not been billed first, or the secondary insurance information is incorrect.

Missing or Inadequate Documentation:If the claim lacks the necessary supporting documentation, such as medical records or evidence of medical necessity, it may be denied.

Lapsed or Inactive Insurance Policy:If the patient’s insurance policy has lapsed or become inactive, the claim will be denied as there is no active coverage for the services provided.

When a claim is denied, the medical billing team must review the reason for denial and take appropriate actions to rectify the issue. This may involve appealing the denial with additional documentation, correcting errors, obtaining prior approvals, or resubmitting the claim with the correct information. Effective denial management is crucial for medical practices to optimize revenue and ensure proper reimbursement for the services they provide to patients.

Pended Claim

A claim may be pended if it contains erroneous information, does not match requires manual review to be resolved.

Some common reasons to pend a claim are:

• Recipient Number invalid
• Medical Review required
• Procedure requires manual pricing
• No Service Authorization on file

Improve:

• Implementing comprehensive patient communication and education programs to help patients better understand their insurance coverage, deductibles, and financial responsibilities.
• Investing in modern revenue cycle management tools and technology can also prove beneficial for healthcare providers.
• Streamline Claims Submissions – Hire certified professional medical billers
• Offering flexible payment options and financial assistance programs can ease the burden on patients experiencing financial difficulties.
• Implementing clear and compassionate financial policies can enhance patient satisfaction while supporting a higher rate of successful collections for medical providers.
• Evaluating process inefficiencies and oversights
• NRFT- Not right first time – collect patient information and submit correct claims on their first attempt
• Unverified insurance poses the biggest threat to medical claim reimbursement.
• Payment strategies for deductibles, copays
• Certified staff for charge entry, EOB postings
• Consistently Run A/R Reports-analyse the reports. Implement predictive analysis
• Increase the Frequency of Billing Cycles

Medical claims play a crucial role in the financial well-being of healthcare organizations. Submitting precise and error-free claims is of utmost importance to ensure a provider’s financial health and operational efficiency. According to a report from the *Kaiser Family Foundation URL : KFF claims that are submitted as out-of-network (OON) are denied approximately 18 percent of the time. This underscores the significance of staying in-network with insurance providers to minimize claim denials and maximize reimbursements.

Moreover, a report published by the *American Hospital Association (AHA) in December 2020 URL : aha.org revealed some concerning trends. The report stated that a staggering 89% of hospitalsand health systems experienced an increase in claim denials over the past three years. Even more alarming, 51%of these entities reported that the increase in claim denials was considered “significant.” Such denials can significantly impact a provider’s revenue cycle, leading to financial strain and hindering the ability to deliver quality patient care.

To address these challenges, healthcare organizations must prioritize accurate claims submission and robust denial management strategies. Staying informed about the latest industry trends and implementing effective billing practices can help reduce claim denials, streamline revenue cycles, and ensure a stable financial foundation for providers in the ever-changing healthcare landscape.

First you need to learn the following:/p>

1. Claim Adjustment Group Codes – CO, CR, OA, PI, and PR

2. CARC – Claim Adjustment Reason Codes

3. RARC – Remittance Advice Reason Codes

Resource: Code Look up

Use the Code Lookup to find the narrative for ANSI Claim Adjustment Reason Codes (CARC) and Remittance Advice Remark Codes (RARC)

Contractual Obligation (CO):Insurance companies utilize the CO code to attribute financial responsibility to medical providers based on the terms outlined in their payer contracts. Typically, healthcare organizations absorb the balances of such claims.

Corrections and Reversal (CR):This code indicates that health plan companies have made corrections or reversed a claim that was previously adjudicated. They employ the CR code alongside PR, CO, or OA to highlight updated information.

Other Adjustment (OA): Health plan organizations resort to this group code when no other code aligns with the criteria for the adjustment.

Payer Initiated Reductions (PI): Payers use this code when they believe that the adjustment should not be the responsibility of the client.

Patient Responsibility (PR):Denials accompanied by the code PR allocate financial responsibility to patients or their secondary insurance providers. PR amounts encompass deductibles, copays, and coinsurance.

Source: Claim Adjustment Reason Codes

When an insurance company cannot process a healthcare claim, they assign specific codes. To address denials and resubmit a claim, it is vital to comprehend the reason for the denial. Payers provide an Explanation of Benefits (EOB) or Electronic Remittance Advice (ERA) to explain the denial’s cause. ERAs contain various codes representing different claim statuses. Understanding these denial codes helps identify missing or unnecessary information and determine the necessary next steps for correct claim processing.

These codes describe why a claim or service line was paid differently than it was billed.

Common Claim Denial Codes:

CO-04:The procedure code is inconsistent with the modifier used. Usage: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.

Start: 01/01/1995 | Last Modified: 03/01/2020

Example: In medical billing, a procedure code is a specific code that represents a medical service or treatment provided to a patient. Procedure codes are used to communicate the services rendered to insurance companies or payers for billing and reimbursement purposes. A modifier, on the other hand, is an additional code that provides extra information about the procedure, such as additional details or specific circumstances related to the service.

Example: Let’s consider a scenario where a medical provider performs a surgical procedure to remove a mole from a patient’s skin. The procedure code used for this service is “CPT code 11400 – Excision of benign lesion, except skin tag (unless listed elsewhere), trunk, arms, or legs; lesion diameter 0.5 cm or less.”

Now, let’s assume that the patient had multiple moles removed during the same surgical session. In this case, the provider may need to use a modifier to indicate that multiple procedures were performed. The modifier used for this purpose is “Modifier 51 – Multiple Procedures.”

Problem: If the medical biller or coder assigns the wrong modifier or fails to include the modifier altogether, it can lead to an inconsistency between the procedure code and the modifier used. For example, if the biller submits the claim with “CPT code 11400” without the appropriate modifier 51, the insurance company may interpret it as a single procedure instead of multiple procedures.

Solution: To resolve this issue and ensure accurate billing, the healthcare provider should review the documentation thoroughly and assign the appropriate modifier(s) according to the services rendered. In the example above, the provider should include “Modifier 51” to indicate that multiple mole removals were performed during the same surgical session.

CO-05– The procedure code/type of bill is inconsistent with the place of service. Usage: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.

Start: 01/01/1995 | Last Modified: 03/01/2018

Example: Example: Let’s consider a scenario where a patient undergoes a surgical procedure, such as a knee arthroscopy, which is represented by “CPT code 29881 – Arthroscopy, knee, surgical; with meniscectomy (medial or lateral, including any meniscal shaving) (separate procedure).” This procedure code is typically associated with an outpatient facility setting.

Now, if the biller submits the claim with a type of bill indicating an inpatient setting, such as a hospital admission for the procedure, it would create an inconsistency between the procedure code and the place of service. In this case, the procedure code (29881) is consistent with an outpatient service, but the type of bill indicates an inpatient service.

However, upon reviewing the patient’s date of birth in the patient’s record, it is discovered that the patient is 25 years old, not within the age range specified for the flu vaccine procedure code (6-35 months of age). This presents an inconsistency between the procedure code and the patient’s age.

CO-07The procedure/revenue code is inconsistent with the patient’s gender. Usage: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.

Start: 01/01/1995 | Last Modified: 07/01/2017

Example: Let’s consider a scenario where a female patient undergoes a mammogram, which is a procedure to screen for breast cancer. The appropriate procedure code used for this service is “CPT code 77067 – Screening mammography, bilateral (2-view study of each breast).”

Now, if the biller submits the claim with the incorrect gender for the patient, such as male, it would create an inconsistency between the procedure code and the patient’s gender. In this case, the procedure code (77067) is consistent with a female patient, but the patient’s gender is recorded as male.

CO-09:The diagnosis is inconsistent with the patient’s age. Usage: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.

Start: 01/01/1995 | Last Modified: 07/01/2017

Example: A 30-year-old female patient visits a dermatologist for a skin rash and itching. The healthcare provider diagnoses the patient with “Diaper Dermatitis (ICD-10 code L22)” based on the symptoms and examination.

However, upon reviewing the patient’s date of birth in the medical record, it becomes evident that the patient is a 30-year-old adult, and diaper dermatitis is a condition primarily affecting infants and toddlers.

CO-11:The diagnosis is inconsistent with the procedure. Usage: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.

Start: 01/01/1995 | Last Modified: 07/01/2017

Example: A patient visits a healthcare provider with symptoms of knee pain and limited mobility. The healthcare provider mistakenly diagnoses the patient with “Osteoarthritis of the hip (ICD-10 code M16.0)” instead of the correct diagnosis for the patient’s knee condition.

Subsequently, the healthcare provider performs a knee arthroscopy procedure (procedure code CPT 29881) to examine and treat the patient’s knee joint.

Problem: In this example, the diagnosis “Osteoarthritis of the hip” is inconsistent with the procedure of knee arthroscopy. The medical service performed (knee arthroscopy) is not directly related to the patient’s diagnosed condition of hip osteoarthritis.

In the dynamic world of medical billing,ensuring accuracy and fairness in financial transactions is paramount. As healthcare professionals, we understand the importance of issuing refunds when necessary, ensuring transparency and trust with our patients and insurance partners.

Refunds of payments within the healthcare system may arise for various reasons, including patient overpayments, insurance company over-reimbursements, or erroneous copayment collections. As custodians of financial integrity, it is our duty to handle such situations with diligence and efficiency.

• Legal Responsibility: Healthcare facilities hold a legal obligation to issue refunds promptly and fairly for any overpayments made by patients or insurance companies. This responsibility demonstrates our commitment to ethical billing practices and fosters confidence in our services.
• Timely Refunds: Patients rightfully expect timely resolution of any overpayment issues. By promptly addressing and processing refunds, we reinforce our commitment to patient satisfaction and financial integrity.
• Ensuring Accuracy: Before issuing refunds, it is essential for our offices to thoroughly verify that the payment is genuinely an overpayment, and not a result of miscommunication or filing errors. This diligence protects both our patients and our reputation.
• Strengthening Trust: Handling refunds with professionalism and transparency builds trust with our patients and insurance partners. It assures them that we prioritize accuracy, fairness, and ethical practices in every aspect of our medical billing process.

The statute provides a definition for overpayment, stating that it refers to a payment made to an individual or entity without entitlement. This can occur in various scenarios, such as billing for services that were not actually provided, offering medically unnecessary services, billing at a higher code than the services delivered, violating the Stark Laws by providing services inappropriately, or delivering services of insufficient quality.

Scenario:A patient, John, visits a physician’s office for a medical procedure. The office collects the necessary payment at the time of service, and John pays the specified amount of $200. However, due to a system error, the payment is inadvertently recorded twice, resulting in an overpayment of $200.

Step 1 – Immediate Notification: Upon discovering the overpayment, the office must promptly notify John about the error. Open communication is vital to maintain transparency and assure John that the situation is being addressed.

Step 2 – Patient’s Choice: The office offers John two options for resolving the overpayment. He can either have the $200 applied as a credit toward his next visit or choose to receive a refund check for the overpayment amount.

Step 3 – Insurance Overpayment: In another scenario, the office receives an insurance payment for a patient’s visit, but the insurance company inadvertently overpays the claim by $100. The medical office specialist reviews the claim to ensure there are no errors from their end.

Step 4 – Contacting the Insurance Company: After verifying the claim, the medical office specialist reaches out to the insurance company to understand the reason behind the overpayment. If it is confirmed that the overpayment was made in error, the insurance company will initiate the process of reprocessing the claim.

Step 5 – Request for Return of Overpayment: Alongside reprocessing the claim, the insurance company also sends a formal request to the physician’s office, asking for the return of the $100 overpayment.

Step 6 – Handling Mistaken Overpayment Check: In some cases, the physician’s office may receive a mistaken overpayment check from the insurance company. To rectify the error, the office voids the check and promptly sends it back to the insurance company.

Step 7 – Appeals Process: In rare instances, a claim may be denied, leading to a potential overpayment situation. In such cases, the office has the option to appeal the denied claim by submitting additional clinical and pertinent information to the insurance carrier. This process aims to overturn the denial and resolve any overpayment issues.

Refunds:

Refunds in the context of medical billing and insurance occur when overpayments are made by either the insurance payer or the patient. Let’s explain this with an example:

Example:

Imagine a patient named Sarah visits a healthcare provider for a medical procedure. Sarah has both primary and secondary insurance coverage. After the visit, the healthcare provider submits the claim to both insurance companies, as is common practice. Unexpectedly, both insurance companies process the claim and pay the full amount, resulting in an overpayment for the services provided.

Overpayment by Insurance Companies:

Sarah’s primary insurance pays $500 for the medical procedure, and her secondary insurance also pays $500 for the same service. This means the healthcare provider received a total payment of $1000 for a service that should have only been reimbursed once.

Overpayments as payments made by Medicare:

• For non-covered services
• In excess of the allowed amount for an identified covered service
• In error
• As duplicate payments
• When another entity had primary responsibility for payment (63 FR 14517)

Other reason Common Reasons for Overpayment:

• Staff collected too much upfront based on an estimate
• A patient’s coverage changed in the time between the healthcare encounter and the billing process
• There was an error in the billing process
• The patient overpaid by mistake

Overpayment example:

Imagine a radiology practice that provides professional X-ray interpretations for a clinic or an independent diagnostic testing facility (IDTF). The radiologists in the practice interpret X-ray images and generate reports, which are then billed to insurance companies for reimbursement. For professional services like X-ray interpretations, a CPT code with a 26 modifier should be appended to indicate that only the professional service was provided, not the technical component of performing the actual X-ray.

Error in CPT Code Usage:

In this example, the radiology practice mistakenly bills the insurance companies using the CPT code for the global service, which includes both the professional interpretation and the technical component of performing the X-ray. Without appending the 26 modifier to indicate that only the professional interpretation was provided, the claim is processed as a global payment.

Impact of the Error:

As a result of not appending the 26 modifier, the insurance companies process the claims and generate payments based on the global service rates. The global payment includes reimbursement for both the professional interpretation and the technical component, even though the practice did not perform the X-rays themselves. This leads to significantly higher payment amounts compared to what the practice should have received for providing just the professional service.

Potential Replication of the Error:

If the radiology practice continues to submit claims without the correct 26 modifier, this error may be replicated numerous times for various patients and interpretations. Over time, the practice may inadvertently receive much higher payments for services they did not actually provide.

Identifying the Cause:

The error may arise due to various reasons, such as a problem in the billing system where the modifier is not automatically appended, or it could be a data entry error caused by insufficient staff training in proper coding procedures.

Corrective Action:

Once the radiology practice becomes aware of this issue, they must take corrective action immediately. This involves identifying the root cause of the problem, ensuring staff members are properly trained in coding procedures, and updating their billing system to include the necessary 26 modifier for professional interpretations.

Credit Balance:

• Incorrect payment posting
• Additional payment from the patient apart from the insurance amount
• Usually it happens in the form of deductibles and co-pays
• In case the patient has two insurance payers, both might have been treated as primary. Hence payment might have been double.

Issuing a Refund:

Once the healthcare provider becomes aware of the overpayment, they must issue a refund to one of the insurance companies to correct the situation. However, before doing so, they must conduct a thorough review of the claim and the payments received to ensure accuracy and avoid any potential errors.

Overpayment Refunds to Insurance

When dealing with an overpayment issue from an insurance provider, follow these steps to address and resolve the situation:

Verify the Overpayment:

Before taking any action, thoroughly review the payment received from the insurance provider to determine if it indeed constitutes an overpayment. Cross-reference the payment with the details of the claim and the services provided.

Seek Clarification:

If you believe there is an overpayment, reach out to the insurance provider to ask for a clarification of the calculated sum and the claim processing. Request them to provide a breakdown of the payment and the reasoning behind it.

Request Corrected Processing:

Once the overpayment is confirmed, ask the insurance provider to reprocess the claim with the correct and accurate amount.

Initiate the Refund Request:

The insurance provider may request a refund for the overpaid amount. Ensure you receive a written record of this refund request to avoid any misunderstandings in the future.

Issue the Refund:

After receiving the written refund request, issue a refund to the insurance provider. Prepare a check for the refund amount and send it to the insurance provider’s designated address.

Addressing Incorrect Payments:If the entire payment made by the insurance provider was faulty (for example, payment made for services not availed by the patient), void the check and explain the payment status to the provider. Provide necessary documentation or notes to support your claim, such as stating that the patient never visited the office for the particular service.

Sending the Refund Check:

Ensure that the check is accurately assigned to the refund request and appropriately labeled. If you are unsure of the insurance provider’s address, send the check to their claims department and mark the envelope with ‘Attention: Overpayments.’

****Please take note that each insurance company has its own specific rules regarding the process of refunding overpayments. In the case of the Anthem Blue Cross Provider Agreement, section 2.8 deals with adjustments for incorrect payments. If the healthcare provider receives an excessive or mistaken payment, which could result from various reasons such as billing errors, miscoding, or other billing mistakes, they are required to promptly inform Anthem or the relevant Plan. The provider must then reimburse the appropriate entity within thirty (30) days. Anthem or the Plan has the option to recover the overpayment through remittance adjustment or other recovery actions, as outlined in the provider manual.

It’s important to note that in this agreement, Anthem’s policy is particularly stringent, as they require refunding within 30 days of identifying an overpayment. This policy is even more aggressive compared to the standard 60-day requirement set by Medicare and Medicaid for overpayment refunds. Healthcare providers working with Anthem must adhere to these guidelines to ensure compliance with the agreement and to manage overpayment issues in a timely and efficient manner.

Appeal Process:In some cases, the insurance payer may request a refund from the healthcare provider. However, if the provider’s records and documentation do not align with the payer’s claim, the provider may need to appeal the refund request. This situation can arise due to discrepancies in paperwork or coding errors. The appeal process involves submitting additional documentation or clarifications to support the original payment.

Patient Overpayment Scenario:

Now, let’s consider the situation where a patient, Sarah, makes an overpayment to the physician’s office for her medical services.

Overpayment by the Patient:

After Sarah receives medical treatment, she mistakenly makes an extra payment to the physician’s office, resulting in an overpayment on her account.

Checking the Patient’s Account:

The physician’s office must carefully review Sarah’s account to confirm the overpayment and check if she has any outstanding balances.

Applying the Refund:

If Sarah has outstanding payments on her account, the physician’s office will typically apply the refund to the amount owed first. This helps to clear any existing balances before issuing any remaining refund amount to Sarah.

In both cases, whether it’s an overpayment by insurance companies or patients, it’s essential for healthcare providers to conduct thorough reviews and handle refunds accurately to maintain transparent financial practices and avoid potential billing disputes.

Rejected Claim:

When a claim is rejected, it means that errors are identified before the claim undergoes processing. In such cases, the insurance company sends the claim back to the healthcare provider, requesting corrections to be made. The purpose is to enable the corrected claim to be resubmitted and, hopefully, receive payment.

One common reason for claim rejection is when there is a discrepancy between the ICD-10-CM diagnosis code and the submitted CPT procedure code. For instance, if a patient visits the doctor with Strep throat, but the claim includes a procedure code for wart removal, it would likely lead to questions and result in the claim being rejected.

Denial Claim:

A denied claim refers to a claim that has undergone processing by the insurance payer but is marked as ineligible for payment. The denial usually arises from issues related to the coverage contract or other errors that were detected after the claim processing. The insurance payer provides an explanation for the denial in such cases. Generally, denied claims can be appealed, but the reprocessing of appealed claims often takes a significant amount of time.

It is crucial to understand that when a claim is rejected or denied, it implies that the healthcare provider did not receive reimbursement for the services rendered. If a physician’s office experiences a high number of rejected or denied claims, it can lead to cash flow challenges for the business. Consequently, healthcare providers aim to submit accurate and error-free claims during the initial filing to ensure prompt and regular reimbursement.

A denied claim refers to a claim that has been processed and the insurer has found it to be not payable. Denied claims can usually be corrected and/or appealed for reconsideration.

A rejected claim has not been processed so it cannot be appealed. Instead, rejected claims need to be researched, corrected and resubmitted.

The frequency of rejections, denials, and over payments may be high (often reaching 50%), mainly because of high complexity of claims and/or errors due to similarities in diagnosis’ and their corresponding codes. This number may also be high due to insurance companies denying certain services that they do not cover (or think they can get away without covering) in which case small adjustments are made and the claim is re-sent. Depending on the denial, filing an appeal with the appropriate documentation and proof can successfully overturn the original decision.

In conclusion, irrespective of the payer, be it Medicare, Medicaid, commercial insurance, HMO, PPPO, or an out-of-network claim, it is imperative for your practice to refund any overpayment received, regardless of whether the payer explicitly requests it. The refund should be made within the timeframes specified in the contract or within 60 days or fewer. Adhering to these refund obligations ensures your practice remains compliant with billing guidelines and minimizes the risk of legal issues, helping to maintain a smooth and reputable healthcare operation.

Source: Medicare Program Reporting and Returning Overpayments

Self Disclosure Overpayment Packet.pdf

Appeal Process:

Every claim denied by the insurance company cannot be appealed. So first segregate the denied claims according to their appealing eligibility.

When encountering medical billing disputes, the most efficient initial step in the appeals process involves placing a phone call to the payer. By doing so, you can directly communicate with a representative to discuss the issue at hand and explore potential resolutions. If the matter cannot be resolved through the call, seek guidance from the representative on how to initiate the formal appeal or reconsideration process.

Especially when dealing with commercial payers, they might provide a reconsideration form on their website, which healthcare providers can utilize to challenge a payment decision in a more structured manner.

Opting for a phone call as the first approach is advantageous for several reasons. Firstly, writing appeal letters takes time, and it further extends the timeline when the recipient needs to read the letter, verify the argument, and then take action to correct the claim. On the other hand, making a phone call allows for direct interaction, expediting the process and potentially achieving a prompt resolution.

If the issue at hand is straightforward and uncomplicated, a simple phone call to the payer might be sufficient to have the claim sent back for correction without the need for formal written communication. This approach not only saves time and resources but also showcases the importance of clear and concise communication in resolving medical billing discrepancies efficiently.

By proactively engaging with payers through phone calls and utilizing online tools like reconsideration forms, healthcare providers can take proactive steps to address medical billing disputes, ensuring timely resolution and proper reimbursement for the services they provide to patients.

Before discussing the claim with you, the provider representative — the person employed by the payer to work with you regarding disputes —verifies your need to know.

• Your name (as the person reaching out about the claim issue).
• The name of your billing company and either the tax ID number or NPI number.
• The patient’s ID, name, and date of birth.
• The date of service in question.
• The billed amount of the claim (the total dollar amount billed).

When contacting the provider representative, you can explain the reason for the claim issue, and the representative can review the claim and the contract to determine the necessary action. If necessary, they can then send the claim back to the processor with instructions for reprocessing.

Example: Imagine a ABC healthcare provider, ABC Medical Clinic, submits a batch of insurance claims to various insurance companies for services provided to their patients. Among these claims, some are denied by the insurance companies for different reasons. Now, the clinic needs to segregate these denied claims according to their appealing eligibility.

Denied Claim 1:

Patient: John Smith

Date of Service: July 15, 2023

Reason for Denial: The insurance company states that the procedure code billed is not covered under John’s insurance plan.

Appealing Eligibility: This denied claim can be appealed, as the clinic has proper documentation and evidence to support that the procedure performed was medically necessary for John’s condition.

Denied Claim 2:

Patient: Mary Johnson

Date of Service: August 5, 2023

Reason for Denial: The insurance company states that Mary’s policy has lapsed, and the services provided are not covered.

Appealing Eligibility: This denied claim cannot be appealed, as Mary’s policy was not active at the time of service, and the clinic cannot provide any evidence to prove otherwise.

Denied Claim 3:

Patient: Robert Anderson

Date of Service: September 10, 2023

Reason for Denial: The insurance company states that the diagnosis code billed does not match the procedure code submitted.

Appealing Eligibility: This denied claim can be appealed if the clinic can provide additional supporting documentation to prove that the diagnosis and procedure were accurately coded and appropriately billed.

Denied Claim 4:

Patient: Susan Lee

Date of Service: October 20, 2023

Reason for Denial: The insurance company states that the claim was submitted after the allowed filing deadline.

Appealing Eligibility: This denied claim cannot be appealed, as it was rejected due to a late submission, and the clinic cannot provide valid reasons or extenuating circumstances for the delay.

Why Claims Are Denied:

• Lack of medical necessity. Medical necessity is the determining factor for payment based on the codes submitted for the procedure and its relationship to the diagnosis.
• Therapy goals that are too ambitious (trying to take the patient to a level higher than before their injury or illness).
• The patient met goals but therapy continued.
• Noncoverage
• Incorrect codes. Errors in coding include upcoding or under coding or simply codes that do not correctly convey the meaning of the diagnosis.
• Therapy not reasonable and necessary.
• Illegible documentation.
• Skilled services not required, etc.
• Preauthorization and Precertification (Precertification is the approval of a procedure or hospital stay)
• ICD-10-CM Coding denials
• No diagnosis is provided.
• The diagnosis given is inconsistent with the service or procedure provided.
• The diagnosis doesn’t substantiate the need or level of service provided.
• CPT/HCPCS Denials
• Wrong procedure code
• Modifier error
• Unlisted procedure code
• NDC code
• NCCI Edits.

**Prevent denials in the first place.

Note:Arrange the appeals according to their value. The greater the amount of the claim, greater is the chance for it to get paid.

ABC Medical Center has submitted several insurance claims for services provided to different patients. Among these claims, some have been denied by the insurance company. Now, the medical center needs to prioritize and arrange the appeals based on the value of each claim. The general principle is that higher-value claims have a greater chance of getting paid upon appeal.

Denied Claim 1:

• Patient: John Smith
• Date of Service: July 15, 2023
• Amount of Claim: $500
• Reason for Denial: The insurance company states that the procedure code billed is not covered under John’s insurance plan.

Denied Claim 2:

• Patient: Mary Johnson
• Date of Service: August 5, 2023
• Amount of Claim: $1,200
• Reason for Denial: The insurance company states that Mary’s policy has lapsed, and the services provided are not covered.

Denied Claim 3:

• Patient: Robert Anderson
• Date of Service: September 10, 2023
• Amount of Claim: $800
• Reason for Denial: The insurance company states that the diagnosis code billed does not match the procedure code submitted.

Denied Claim 4:

• Patient: Susan Lee
• Date of Service: October 20, 2023
• Amount of Claim: $200
• Reason for Denial: The insurance company states that the claim was submitted after the allowed filing deadline.

Arranging the Appeals:

Based on the value of each denied claim, ABC Medical Center decides to prioritize and arrange the appeals as follows:

Denied Claim 2 – Mary Johnson:

• Amount: $1,200
• Appeal Priority: High
• Reason: The claim for Mary Johnson is of higher value, and it represents a significant potential reimbursement for the medical center. As such, the medical center considers this appeal as a top priority and allocates more resources to gather supporting documentation and evidence to challenge the denial.

Denied Claim 3 – Robert Anderson:

• Amount: $800
• Appeal Priority: Medium
• Reason: The claim for Robert Anderson has a substantial value, and winning this appeal would result in a significant reimbursement for the medical center. While it is not as high as Claim 2, the medical center still considers it important and dedicates adequate resources to appeal this claim.

Denied Claim 1 – John Smith:

• Amount: $500
• Appeal Priority: Medium
• Reason: The claim for John Smith represents a decent reimbursement value, and the medical center considers it worth appealing to recover the payment. While not as high as Claims 2 and 3, the medical center gives it a medium priority.

Denied Claim 4 – Susan Lee:

• Amount: $200
• Appeal Priority: Low
• Reason: The claim for Susan Lee has a relatively lower value compared to the other denied claims. While the medical center may still decide to appeal it, it assigns it a lower priority due to the lower potential reimbursement amount.

By prioritizing the appeals based on the value of the claims, ABC Medical Center can effectively allocate its resources and efforts to pursue the higher-value claims first, increasing the chances of recovering significant reimbursements and maximizing its revenue.

What information should be included in the appeal letter?

Appeal letters may vary depending on the specific type of appeal, but there are essential details that should be included in the letter to avoid any future complications. These details consist of:

• Healthcare provider’s name who provided the services.
• NPI (National Provider Identifier) number of the concerned provider.
• Tax ID of the clinic or the provider organization.
• Date of the service in question.
• Patient’s name.
• Demographic details of the patient.
• Insurance ID number of the patient.
• Amount of the medical bill stated in the original claim.
• A well-defined argument supporting the claim’s acceptance, including relevant federal or state rules applicable to the case.

There are 5 levels of appeals (Medicare Only)

• Level-1 Redetermination (submit request to the Part B contractor) 120 days from the date of receipt of the notice of the initial determination.
• Level-2 Reconsideration 180 days from the date of receipt of the redetermination.
• Level-3 Administrative Law Judge (ALJ) Hearing 60 days from the date of receipt of the reconsideration.
• Level-4 Departmental Appeals Board (DAB) Review 60 days from the date of receipt of the ALJ hearing decision.
• Level-5 Federal Court Review 60 days from the date of receipt of DAB decision or declination of review by DAB.

Appealing a denied claim or an incorrectly paid claim, for those carriers that are contracted with the Provider, can be very extensive and time consuming, hence make sure clean claims are submitted. Examples of denials are:

(1) Timely Filing

(2) Inclusive

(3) Medically Necessary

(4) Payment less than the contracted amount

(5) Retroactive Denials

Appeal letters – standard appeals for denials related to invalid code, incorrect subscriber name, or incorrect modifier, which can be found on payer websites. These should include essential details like the type and date of service for efficient processing. However, for denials related to medical necessity, a customized appeal letter might be necessary, where referencing ICD-10-CM/CPT/CMS guidelines or the payer’s guidelines could expedite the claim processing. Failing to provide all required information in the appeal letter could prolong the process, creating additional work for the billing team.

Create a spreadsheet with information about each appeal: date each appeal is submitted, payer to whom each appeal is sent, filing requirements of each payer

Example: ABC Medical Center has received multiple claim denials from different payers and needs to keep track of each appeal they submit. They decide to create a spreadsheet to manage the appeal process efficiently.

Spreadsheet Columns:

1. Appeal Date: This column records the date on which each appeal is submitted to the payer.

2. Payer Name: Here, ABC Medical Center mentions the name of the insurance company or payer to whom the appeal is sent.

3. Filing Requirements: In this column, they note the specific filing requirements of each payer, such as appeal forms, specific documentation, or guidelines that must be followed.

Sample Spreadsheet:

In this example, ABC Medical Center can easily track each appeal they submit, including the date, the payer it’s sent to, and the specific filing requirements of each payer. This organized approach helps them stay on top of their appeal process, ensuring that all necessary information is provided to the payers for prompt consideration and resolution.

Visit CMS Formsfor Medicare Level-1 Appeal form

All levels appeal forms - Forms Publication Mailing

SourceRedetermination Appeals Process

JB Claims Denials

Medicare Claims Appeal