Revenue Cycle Management
April 08, 2011
WSOPP
Presented by:
Carrie Romandine
Chris Duprey
Agenda
Revenue Cycle Management
 Business Processes
 Behind the Scenes at the Insurance Carrier
 Estimating Coverage
 Explanation of Remittances
 Summary

Revenue Cycle Management
Patient
Demographics,
Insurance &
Financial
Verification
Coding &
Billing
Accounts
Receivable
Business Processes
Registration
Collecting Patient Demographics
and Financial Responsibility
 Obtaining a clear and legible copy
of the patient’s insurance card
(front and back)
 Documentation of each insurance
the patient has (Primary,
Secondary, Tertiary, etc.)
 Having the appropriate forms
signed

Verifying Benefits
The insured benefit is the coverage they have for allowable services provided.
Verifying benefits:
◦ Verifies eligibility
◦ Verifies whether you are an in-plan provider or not
◦ Verifies whether pre-certification is needed for the
services
◦ Allows estimation of benefit payment
◦ Allows pre-calculation estimation of insured
responsibility
◦ Does not guarantee payment of the claim
Verify benefits on every patient for every service that will be provided!
Calling for Verification
Verification is critical to the process.
Correct verification can:




Decrease the amount of refunds that are issued due to
incorrect dollars being collected for co-pays and
coinsurance.
Decrease the patient dollars outstanding.
Decrease the revenue cycle timeframe by ensuring all
appropriate information is on the bill for timely
adjudication.
Increase the amount of first pass or clean claims going
to the insurance company.
Eligibility Vs. Benefits

Eligibility verification indicates whether or not
the patient is eligible for coverage, do they have
insurance that is active at this time.
◦ Eligibility should be checked on all patients as close to
the service date as possible
◦ Realize eligibility changes frequently (Medicaid - 1st of
the month; group insurance – July 1st and January 1st)

Benefits refers to the services that are covered
under the current active insurance plan.
◦ Always verify the benefits with the specific HCPCS
code or service description (DME vs. O&P)
Authorizations
An authorization is a “permission of service” from the payer that informs the
provider whether or not the benefits will cover the service they are performing.
Many plans require prior authorization prior to
treatment or no benefits may apply
 Payers may assess a penalty if the prior
authorization requirements have not been met
 Payers may require the claim be submitted with
the approval or authorization number in order for
the claim to be paid

Timely Filing Requirements




Some states have a mandated
timeframe that indicates how long after
the date of service that a provider can
bill for a claim.
In states where no mandate exists,
payers may institute timely filing
policies.
No payment can be received if you did
not bill within this timeframe
Typically government and commercial
carriers will not allow you to bill the
patient if you as the provider missed
the timely filing period.
Super Bill
Purpose of a super bill is to enable the
Practitioner to indicate what services were
performed for what diagnosis.
 Ensures consistent coding is used throughout
the practice
 Serves as a communication tool to the Billing
staff
 Reflects what the record contains for
documentation

If your organization does not utilize a Super Bill today, it is
recommended that you think about introducing one as a first step to
better billing.
Behind the Scenes at the Insurance
Carriers
Insurance Knowledge? Why?

To ensure you:
◦ Ask and receive correct benefits
◦ Understand what the insured owes
◦ Bill properly

To help you:
◦ Problem solve when incorrect benefits are paid
◦ Read the Explanation of Remittances
◦ Position an appeal when necessary
Insurance Plan Designs

Plan designs determine:
◦
◦
◦
◦
What benefits are available
How the benefits will be paid
How much the patient will owe
What type of questions to ask prior to performing the
service
 Network participation
 Provider Referrals
Insurance Definitions
Insured - A person or organization that receives insurance coverage.
Insurer - An organization that sells an insurance coverage.
Deductible – The amount of covered expenses that must be incurred
and paid by the insured before benefits become payable by the
insurer.
Co-payment – A flat dollar amount that the insured pays each time a
certain kind of service is received.
Co-insurance – The arrangement by which the insurer and the
insured each pay a percentage of covered losses.
Out-of-pocket Maximum – Maximum cost the insured will pay in a
calendar year (normally excludes co-pays, non-covered items, and
over U&C charges). Can sometimes exclude deductible as well.
Once the insured has met the out-of-pocket amount, the plan pays
at 100%.
Premiums - Payments made by the insured to the insurer in
exchange for coverage.
Insurance Definitions (cont.)
Benefit - A payment made by an insurer to an insured to
compensate for a loss covered by their contractual
agreement.
Claim - A demand by an insured for payment of a benefit.
Coverage - A contractual arrangement that states that the
insurer will make a payment to the insured if a certain
event occurs.
Limitations- An expense that may be limited due to
certain conditions or circumstances which will allow
benefits at a reduced rate, up to a specific dollar amount
or limited to the number of services/items allowed p/yr.
Exclusions- An expense the insurer will not reimburse and
under what circumstances it will not pay benefits for
expenses that would usually be reimbursed.
Insurance - Points to Remember
Non-covered items do not apply
to deductible, coinsurance limits,
or out-of-pocket limits.
 Some plans may have a
combination of a co-pay,
deductible and coinsurance on
the same benefit.
 Co-pay may still apply even after
out-of-pocket limits are met.

Overall Issues
Many payers have many different claims
payment systems adding confusion and
complexity
 Provider file accuracy is a major concern
for payers
 Inaccurate benefits can be given based on
what questions are asked during the
verification of benefits process

Claims Payment
Claims are paid based on how a benefit plan is
loaded into the payer system
 CPT, HCPC’s, Revenue and ICD-9 codes are
used to determine level of payment for a
service
 Place of service can change the way a benefit
will pay
 Every code combination means a particular
payment

Quoting Benefits
Benefits are quoted by determining how
the system will pay for the services
requested
 Payers need place of service, type of
service (by HCPCS code if possible), and
diagnosis to quote the benefits
 Errors occur when the quoted benefits
are actually a different “code
combination” than what is actually billed
for

Electronic versus Paper
Submitting claims electronically means to pass
the data needed to process a claim.
electronically from the provider to the payer.
 Use a clearinghouse to handle this
transmission to ensure it is in the proper
format needed and all data has been captured.
 The claim is paid electronically by the payer
without a paper bill needed.
 Electronic claims are paid within a few days by
most payers. Paper claims normally have a 3-4
week cycle.

Estimating Coverage
Estimating Coverage
The proper codes outline what service
was done, where it was done, and for
what diagnosis.
 The contract that is in place outlines what
the allowed amount will be for services
provided.
 The insured’s benefit plan outlines what
level of payment will be paid for the
eligible service.

Determination of Insurer and Patient
Payment Responsibility
First calculate the total allowed amount possible
to collect based on the contracted amounts in
place (deal amounts).
Second take the allowed amounts and apply the
benefit calculations to determine what the
insurer/insured will pay.
Understand that the proper codes must be used
to bill for services to ensure the benefits are
applied correctly.
Calculation Worksheet
Built to assist the staff with the
calculations so up front communication
can be given to the customers for their
responsibility portion
 Determines what to collect from the
patient at the point of service
 Will be used to review the Explanation of
Remittance when received if the amounts
do not match

Coordination of Benefits
Many individuals have a Primary and Secondary
carrier some even have a third or tertiary carrier
 Medicare in some cases can be the primary
carrier and in others be secondary, it is important
to understand the Medicare COB rules to
determine primary carrier appropriately
 Medicaid is always the last payer when more than
one carrier is present
 If there are two commercial carriers, generally the
patient’s coverage (where they are the employee)
is first, their spouse’s is secondary

Explanation of Remittances
EOR’s
EOR’s are sent from the payer to the
provider to explain what was paid on the
claim.
 EOR’s will indicate reason code(s) for the
denial when a service was not paid.
 Understanding the terminology will ensure
you understand how a claim was processed
and what your next steps will be.
 The reason codes will provide you with the
information you need to appeal or resubmit the claim.

EOR’s
Which reason codes listed would a provider have
the ability to collect from the insured/patient?
◦
◦
◦
◦
◦
Deductible
Co-payment
Co-insurance
Not covered
Provider discount
EOR’s
Answer: Deductible, Co-payments, Co-insurance, and Not Covered
items


You cannot bill the insured for the provider discount
amount per your contract with the payer.
For Medicare patients – special rules apply to services
typically covered but not covered for a particular
patient because they did not meet the criteria – An
ABN form must be on file to collect dollars from the
patient.
Steps to Review the EOR’s
1.
2.
3.
Determine what the contract states is
the allowable amount for the service
provided.
Using the plan benefits, determine what
the insurer/insured should pay off of the
contract allowed amount.
Review the EOR to ensure the claim
was paid according to your calculations.
Incorrect EOR’s
“Don’t be left with empty pockets”
If the EOR is incorrect:
1.
Determine what was different from your calculations.
2.
Review any denial codes.
3.
Determine if maximums or deductibles were met prior
to your claim that you were unaware of.
4.
Determine if it was a contract issue or a benefit
payment issue.
5.
If benefit payment issue, call insurer’s claim customer
service to discuss.
6.
If it was a contract issue, call the contract provider
representative to ensure the contract has been loaded
and interpreted correctly.
EOR’s (cont.)
Should you call if it is only a couple of dollars?
YES!
Those couple of dollars add up fast!
 Contracting issues mean that something is
wrong with how the contract is loaded and
you will see errors on every claim
potentially.

EOR’s that are Correct
1.
2.
3.
With the right process in place a correct
calculation leads to happy customers, they
understand what they are paying for and how
much they are responsible for prior to the
service being completed.
If the EOR indicates what you previously
collected and all dollars are accounted for;
transaction is complete.
If the EOR indicates the insured owes more
than what you anticipated, and after review it is
correct, you must bill the insured the remaining
amount.
Summary





Revenue cycle begins with registration and
follows through to receiving payment
Understanding insurance will assist you in
verifying benefits and estimating payment.
Having a solid process upfront will increase
payment accuracy and timing
Reviewing EOR’s is essential to ensuring all
dollars are collected.
Using the knowledge you learned throughout
this training in your day to day functions is
the true test.
Questions