Transcript (RA/EOB) (Continued)

CHAPTER
14
Payments
(RAs/EOBs), Appeals,
and Secondary Claims
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14-2
Learning Outcomes
When you finish this chapter, you will be able to:
14.1
14.2
14.3
14.4
14.5
14.6
Describe the steps payers follow to adjudicate
claims.
Describe the procedures for following up on claims
after they are sent to payers.
Identify the types of codes and other information
contained on an RA/EOB.
List the points that are reviewed on an RA/EOB.
Explain the process for posting payments and
managing denials.
Describe the purpose and general steps of the
appeal process.
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14-3
Learning Outcomes (Continued)
When you finish this chapter, you will be able to:
14.7
14.8
14.9
Discuss how appeals, postpayment audits, and
overpayments may affect claim payments.
Describe the procedures for filing secondary claims.
Discuss procedures for complying with the Medicare
Secondary Payer (MSP) program.
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14-4
Key Terms
•
•
•
•
•
•
•
•
•
aging
appeal
appellant
autoposting
claim adjustment group
code (CAGC)
claim adjustment reason
code (CARC)
claimant
claim status category
codes
claim status codes
•
•
•
•
•
claim turnaround time
concurrent care
determination
development
electronic funds transfer
(EFT)
• explanation of benefits
(EOB)
• grievance
• HIPAA X12 835 Health
Care Payment and
Remittance Advice
(HIPAA 835)
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
Key Terms (Continued)
• HIPAA X12 276/277
Health Care Claim
Status Inquiry/Response
(HIPAA 276/277)
• insurance aging report
• medical necessity denial
• Medicare Outpatient
Adjudication (MOA)
remark codes
• Medicare
Redetermination Notice
(MRN)
14-5
• Medicare Secondary
Payer (MSP)
• overpayments
• pending
• prompt-pay laws
• RA/EOB
• reconciliation
• redetermination
• remittance advice (RA)
• remittance advice remark
code (RARC)
• suspended
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14-6
14.1 Claim Adjudication
• Payers follow five steps in order to adjudicate
claims:
1. Initial processing – payers first perform initial
processing checks on claims, rejecting those with
missing or clearly incorrect information
2. Automated review – claims are processed through
the payer’s automated medical edits
3. Manual review – a manual review is done if required
4. Determination – the payer makes a determination of
whether to pay, deny, or reduce the claim
5. Payment – payment is sent with a remittance
advice/explanation of benefits (RA/EOB)
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14.1 Claim Adjudication (Continued)
14-7
• Concurrent care—situation in which a patient
receives independent care from two or more
physicians on the same date
• Suspended—claim status when the payer is
developing the claim
• Development—process of gathering information
to adjudicate a claim
• Determination—payer’s decision about the
benefits due for a claim
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14.1 Claim Adjudication (Continued)
14-8
• Medical necessity denial—refusal by a plan to
pay for a procedure that does not meet its
medical necessity criteria
• Remittance advice (RA)—document describing
a payment resulting from a claim adjudication
• Explanation of benefits (EOB)—document
showing how the amount of a benefit was
determined
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14.1 Claim Adjudication (Continued)
14-9
• RA/EOB—document detailing the results of
claim adjudication and payment
• HIPAA X12 835 Health Care Payment and
Remittance Advice (HIPAA 835)—electronic
transaction for payment explanation
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14.2 Monitoring Claim Status
14-10
• Medical insurance specialists monitor claims by
reviewing the insurance aging report and
following up at properly timed intervals based on
the payer’s promised turnaround time
– Insurance aging report—report grouping unpaid
claims transmitted to payers by the length of time they
remain due
– Prompt-pay laws—states’ laws obligating carriers to
pay clean claims within a certain time period
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14.2 Monitoring Claim Status (Continued) 14-11
• Monitoring claims (continued):
– Aging—classification of accounts receivable by
length of time
– Claim turnaround time—time period in which a
health plan must process a claim
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14.2 Monitoring Claim Status (Continued) 14-12
• The HIPAA X12 276/277 Health Care Claim
Status Inquiry/Response (276/277) is used to
track the claim progress through the adjudication
process
– HIPAA X12 276/277 Health Care Claim Status
Inquiry/Response—standard electronic transaction
to obtain information on the status of a claim
– The inquiry is the HIPAA 276
– The payer’s response is the HIPAA 277
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14.2 Monitoring Claim Status (Continued) 14-13
• The HIPAA X12 276/277 Health Care Claim
Status Inquiry/Response (276/277) (continued)
– Claim status category codes—used on a HIPAA
277 to report the status group for a claim
– Pending—claim status when the payer is waiting for
information
– Claim status codes—Used on a HIPAA 277 to
provide a detailed answer to a claim status inquiry
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14.3 The Remittance Advice/Explanation
of Benefits (RA/EOB)
14-14
• Electronic and paper RAs/EOBs contain the
same essential data:
– A heading with payer and provider information
– Payment information for each claim, including
adjustment codes
– Total amounts paid for all claims
– A glossary that defines the adjustment codes that
appear on the document
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14.3 The Remittance Advice/Explanation
of Benefits (RA/EOB) (Continued)
14-15
• To explain the determination to the provider,
payers use a combination of codes:
– Claim adjustment group codes (CAGC)—used on
an RA/EOB to indicate the general type of reason
code for an adjustment
– Claim adjustment reason codes (CARC)—used on
an RA/EOB to explain why a payment does not match
the amount billed
– Remittance advice remark codes (RARC)—explain
payers’ payment decisions
– Medicare Outpatient Adjudication remark codes
(MOA)—explain Medicare payment decisions
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14-16
14.4 Reviewing RAs/EOBs
• The unique claim control number reported on
the RA/EOB is first used to match up claims sent
and payments received, and then:
– Basic data are checked against the claim
– Billed procedures are verified
– The payment for each CPT is checked against the
expected amount
– Adjustment codes are reviewed to locate all unpaid,
downcoded, or denied claims
– Items are identified for follow-up
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14.5 Procedures for Posting
14-17
• The process for posting payments and managing
denials:
– Payments are deposited in the practice’s bank
account, posted in the practice management program,
and applied to patients’ accounts
– Rejected claims must be corrected and re-sent
– Missed procedures are billed again
– Partially paid, denied, or downcoded claims are
analyzed and appealed, billed to the patient, or written
off
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14.5 Procedures for Posting (Continued)
14-18
• Electronic funds transfer (EFT)—electronic
routing of funds between banks
• Autoposting—software feature enabling
automatic entry of payments on a remittance
advice
• Reconciliation—process of verifying that the
totals on the RA/EOB check out mathematically
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14-19
14.6 Appeals
• An appeal process is used to challenge a
payer’s decision to deny, reduce, or otherwise
downcode a claim
– Appeal—request for reconsideration of a claim
adjudication
– Claimant—person/entity exercising the right to
receive benefits
– Appellant—one who appeals a claim decision
– Each payer has a graduated level of appeals,
deadlines for requesting them, and medical review
programs to answer them
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14-20
14.6 Appeals (Continued)
• Medicare participating providers have appeal
rights, that involve five steps:
1. Redetermination—first level of Medicare appeal
processing
– Medicare Redetermination Notice (MRN)—
resolution of a first appeal for Medicare fee-forservice claims
2. Reconsideration
3. Administrative law judge
4. Medicare appeals council
5. Federal court (judicial review)
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14.7 Postpayment Audits, Refunds, and
Grievances
14-21
• Filing an appeal may result in payment of a
denied or reduced claim
– Postpayment audits are usually used to gather
information about treatment outcomes, but they may
also be used to find overpayments, which must be
refunded to payers
– Overpayments—improper or excessive payments
resulting from billing errors
– Refunds to patients may also be requested
• Grievance—complaint against a payer filed with
the state insurance commission by a practice
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14.8 Billing Secondary Payers
14-22
• Claims are sent to patient’s additional insurance
plans after the primary payer has adjudicated
claims
• Sometimes, the medical office prepares and
sends the claims
– In other cases, the primary payer has a coordination
of benefits (COB) program that automatically sends
the necessary data to secondary payers
• If a paper RA/EOB is received, the CMS-1500 is
used to bill the secondary health plan
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14.9 The Medicare Secondary Payer
(MSP) Program, Claims, and Payments
14-23
• Medicare Secondary Payer (MSP)—federal
law requiring private payers to be the primary
payers for Medicare beneficiaries’ claims
• The medical insurance specialist is responsible
for identifying the situations in which Medicare is
the secondary payer and for preparing
appropriate primary and secondary claims
© 2012 The McGraw-Hill Companies, Inc. All rights reserved.
14.9 The Medicare Secondary Payer
14-24
(MSP) Program, Claims, and Payments (Cont.)
• Under the MSP program, Medicare is the
secondary payer in any of these instances:
– Patient is covered by an employer group health
insurance plan or is covered through an employed
spouse’s plan
– Patient is disabled, under age sixty-five, and covered
by an employee group health plan
– Services are covered by workers’ compensation
insurance
– Services are for injuries in an automobile accident
– Patient is a veteran who chooses to receive services
through the Department of Veterans Affairs
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