Meds by mail champva cheyenne wy

Healthcare Reimbursement

BILLING CODING REIMBURSEMENT

3rdEdition

Vines Braceland Rollins Miller

330 Hudson Street, NY, NY 10013

Deborah Vines, cham, crcr Ann Braceland, ncics

Elizabeth Stager Rollins, ncics Susan Miller, ncics

Comprehensive Health Insurance

Billing, Coding, and Reimbursement

Third Edition

Vice President, Health Science and TED: Julie Levin Alexander Director of Portfolio Management: Marlene McHugh Pratt Development Editor: Joan Gill Portfolio Management Assistant: Emily Edling Vice President, Content Production and Digital Studio: Paul DeLuca Managing Producer, Health Science: Melissa Bashe Content Producer: Faye Gemmellaro Project Monitor: Meghan DeMaio Operations Specialist: Mary Ann Gloriande Creative Director: Blair Brown Creative Digital Lead: Mary Siener Managing Producer, Digital Studio, Health Science: Amy Peltier Digital Studio Producer, REVEL and e-text 2.0: Jeff Henn

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Credits and acknowledgments for content borrowed from other sources and reproduced, with permission, appear at the end of this textbook.

Copyright © 2018, 2013, 2009 by Pearson Education, Inc. All rights reserved. Manufactured in the United States of America. This publication is protected by Copyright and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. To obtain permission(s) to use material from this work, please submit a written request to Pearson Education, Inc., Permissions Department, One Lake Street, Upper Saddle River, New Jersey 07458 or you may fax your request to 201-236-3290.

Library of Congress Cataloging-in-Publication Data

Names: Vines, Deborah, author. | Braceland, Ann, author. | Rollins, Elizabeth (NCICS) author. | Miller, Susan (Susan R.), author. Title: Comprehensive health insurance : billing, coding, and reimbursement / Deborah Vines, Ann Braceland, Elizabeth Rollins, Susan Miller. Description: Third edition. | Boston : Pearson, [2017] | Preceded by: Comprehensive health insurance / Deborah Vines ... [et al.]. 2nd ed. 2013. | Includes bibliographical references and index. Identifiers: LCCN 2017001573| ISBN 013445877X (pbk.) | ISBN 9780134458779 (pbk.) Subjects: | MESH: Forms and Records Control—methods | Insurance, Health, Reimbursement | Insurance Claim Reporting | Patient Credit and Collection—methods Classification: LCC R728.5 | NLM W 80 | DDC 368.38/2—dc23 LC record available at https://lccn.loc.gov/2017001573

1 17

ISBN-10: 0-13-445877-X ISBN-13: 978-0-13-445877-9

https://lccn.loc.gov/2017001573
iii

I have had the privilege watching students of all ages dedicate time and effort to train and seek employment in the ever-changing healthcare industry. It brings great gratifica- tion to watch students complete their training, find employment, and be proud of their accomplishments. I dedicate this book to my students to express my gratitude in allow- ing me to share in their successes. I have benefited professionally and personally from their feedback and collaboration on the content of this textbook. Thank you.

—Deborah Vines

To My Family and Students With special gratitude to the best caregiver, friend, and the love of my life—Norbs. And my blessings for Lisa, Robert and Chris, each of whom have a special place in

my heart.

—Ann B. Braceland

I can’t think of a better field to work in than the healthcare field. Yes, things are chang- ing constantly and there is always more to learn. There is no stagnation. This textbook gives a foundation for learning, and the students whom we have taught and who have used it have given us direction with their questions and insight. We could not have writ- ten this without them. I, too, dedicate this to all students, past and present, young or old, career changers or just starting out. Believe in yourself. You can do it!

I with to thank my fellow authors, Deborah, Ann, and Susan, who have continued to make this is a great experience.

And of course, a huge thank you to my husband and my entire family for their never-ending faith and support.

—Elizabeth Stager Rollins

To my children, Abram, Aleisha and Aaron Their love and support assisted me through writing, and completing the third edi-

tion of this book.

—Susan Miller

Dedication

Section II The Relationship between the Patient, Provider, and Carrier 21

Chapter 2 Understanding Managed Care: Insurance Plans 24 The History of Healthcare in America 26 Healthcare Reform 28 Managing and Controlling Healthcare Costs 29

Discounted Fees for Services 30 Medically Necessary Patient Care 32 Care Rendered by Appropriate Provider 32 Appropriate Medical Care in Least Restrictive

Setting 33

Withholding Providers’ Funds 33

Types of Managed Care Organizations 34 Health Maintenance Organization (HMO) 34 Preferred Provider Organization (PPO) 36 Point-of-Service (POS) Options 36 Exclusive Provider Organization 37 Criticism of MCOs 37

Integrated Healthcare Delivery Systems 39 Independent Physician Association 40 Physician-Hospital Organization 40 Self-Insured Plan 40

Contents

iv

Section I A Career in Healthcare 1

Chapter 1 Introduction to Professional Billing and Coding Careers 2 Employment Demand 4 Facilities 4

Physician’s Practice 4 Multispecialty Clinic 5 Hospital 5 Centralized Billing Office 5

Job Titles and Responsibilities 6 Medical Office Assistant 6 Medical Biller 6 Payment Poster 7 Medical Collector 7 Refund Specialist 7 Insurance Verification Representative 7 Admitting Clerk or Front Desk Representative 8

Certifications 8 Medical Coder 10

Privacy Compliance Officer 11

Registered Health Information Administrator (RHIA) 11

Registered Health Information Technician (RHIT) 12 Health Information Clerk 12 Medical and Health Services Manager 12

Listing of Certifications 12 Medical Office Assistant Certifications 12 Medical Billing Certifications 13 Medical Coding Certifications 13 Medical Records Certification 14

Professional Memberships 14 Chapter Summary 15 Chapter Review 15 Resources 18

Preface xii About the Authors xv Acknowledgments xvi

Contents v

Insurance Plans 41 Commercial Health Insurance 41

Types of Insurance Coverage 42 Indemnity Plan/Fee for Service 42 Hospital Insurance 42 Hospital Indemnity Insurance 42 Medical Insurance 42 Surgical Insurance 43 Outpatient Insurance 43 Major Medical Insurance 43 Special Risk Insurance 43 Catastrophic Health Insurance 43 Short-Term Health Insurance 43 COBRA Insurance 43 Long-Term Care Insurance 44 Supplemental Insurance 44

Health Savings Accounts 44 HSA 44 HRA 45 FSA 45 Affordable Care Act 45 The Provider’s View of Managed

Care 46 Patient Care 47 Facility Operations 47

Verifying Insurance Coverage 47 Collecting Insurance Payments 49

Assignment of Benefits 49

Chapter Summary 49 Chapter Review 50 Resources 53

Chapter 3 Understanding Managed Care: Medical Contracts and Ethics 54 Purpose of a Contract 56 A Legal Agreement 57 Compensation and Billing Guidelines

for a MCO 57 Covered Medical Expenses 58 Payment 59

Ethics in Managed Care 60 Changes in Healthcare Delivery 60 MCO and Provider Credentialing 62 Ethics of the Medical Office Specialist 62

Contract Definitions 64 Compensation for Services 65 Patient’s Bill of Rights 65 Concierge Contract 68 Chapter Summary 72 Chapter Review 73 Resources 75

Chapter 4 Introduction to the Health Insurance Portability and Accountability Act (HIPAA) 76 HIPAA Privacy Rule 78

Omnibus Rule 79 Legal Request 80

Pharmacies and Durable Medical Equipment 82 Language Barrier 82 Patient Access and Corrections 84

Transactions and Code Set Rule 84 Uniform Code Sets 85 Security Rule 85

Electronic Medical Record 85 Electronic Health Record 85

Unique Identifiers Rule 87 National Provider Identifier 88

HIPAA Enforcement Rule 88 Civil Penalties 88 Federal Criminal Penalties 88

Hitech Act 88 Meaningful Use 89

Privacy and Security Protection 91 Healthcare Reform 91 Chapter Summary 92 Chapter Review 92 Resources 95

vi Contents

Section III Medical Coding 97

Chapter 5 ICD-10-CM Medical Coding 100 Definition of Diagnosis Coding 102 ICD-10-CM Guidelines 103 The Alphabetic Index 104 Neoplasm Table 104 Table of Drugs and Chemicals 104 External Causes Index 105 Structure of ICD-10-CM 105 Hyphen Usage (-) 106 √ Checkmark 106 The Tabular List 106 Placeholder 108 Laterality 108

Coding Condition 110 Body Mass Index 110 Correct Coding Steps 110 Abbreviations 114 Surgical Coding 118 Coding Late Effects 119 Acute and Chronic Conditions 120 Combination Codes: Multiple Coding 120

Chapter Summary 122 ICD-10-PCS 122 Chapter Review 124 Resources 127

Chapter 6 Introduction to CPT® and Place of Service Coding 128 Current Procedural Terminology (CPT) 130 CPT Categories 131

CPT Category I 131 CPT Category II 132 CPT Category III 132

CPT Nomenclature 133 Symbols 134 Guidelines 134

CPT Modifiers 134 Evaluation and Management Modifiers 135

Coding to the Place of Service 136 Other Services Provided in the E/M Section 137

Office versus Hospital Services 137 Emergency Department Services 138 Preventive Medicine Services 138

Type of Patient 138 New Patient 138 Established Patient 138 Referral 139 Consultation 139

Level of E/M Service 139 Extent of Patient’s History 141 Extent of Examination 143 Complexity of Medical Decision Making 144 Additional Components 145 Assigning the Code 148

Chapter Summary 148 Chapter Review 148 Resources 151

Chapter 7 Coding Procedures and Services 152 Organization of the CPT Index 154

Instructions for Using the CPT Index 155 Code Range 155

Formatting and Cross-References 155 Formatting 155 Cross-references 157

Section Guidelines 157 Modifiers 158 Add-on Codes (+) 163 Coding Steps 164

Coding for Anesthesia 164

Surgical Coding 166 Separate Procedure 169 Surgical Package or Global Surgery Concept 170 Supplies and Services 172 Radiology Codes 172 Pathology and Laboratory Codes 174 Medicine Codes 175

Contents vii

Chapter Summary 176 Chapter Review 176 Resources 181

Chapter 8 HCPCS and Coding Compliance 182 History of HCPCS 184 HCPCS Level of Codes 185

Level I: CPT Codes 185 Level II: HCPCS National Codes 185

HCPCS Modifiers 185 Use of the GA Modifier 186

HCPCS Index 186 Coding Compliance 188 Code Linkage 188 Billing CPT Codes 189

Fraudulent Claims 189 Physician Self-Referral (Stark Law) 190 Government Investigations and Advice 194 Errors Relating to Code Linkage and Medical

Necessity 195 Errors Relating to the Coding Process 196 Errors Relating to the Billing Process 196

National Correct Coding Initiative 196 Fraudulent Actions 198 Federal Compliance 198

How to Be Compliant 198

Benefits of a Compliance Program 199 Ethics for the Medical Coder 199

Chapter Summary 200 Chapter Review 200 Resources 203

Chapter 9 Auditing 204 Purpose of an Audit 206 Types of Audits 207

External Audit 207 Internal Audit 208 Accreditation Audits 208

Private Payer Regulations 209 Medical Necessity for E/M Services 209 Audit Tool 212 Key Elements of Service 212

History 213 Examination 216 Medical Decision Making 219

Tips for Preventing Coding Errors with Specific E/M Codes 227

Chapter Summary 229 Chapter Review 229 Resources 231

Section IV Medical Claims 233

Chapter 10 Physician Medical Billing 236 Conversion to Electronic Health Records 238 Patient Information 238 Superbills 241 Types of Insurance Claims: Paper versus

Electronic 244 Optical Character Recognition 248 CMS-1500 Provider Billing Claim Form 248 Completing the CMS-1500 Claim Form 250

Form Locators for the CMS-1500 Form 252

Physicians’ Identification Numbers 263 Practice Exercises 264

Common Reasons for Delayed or Rejected CMS-1500 Claim Forms 280

HIPAA Compliance Alert 284 Filing Secondary Claims 284

Determining Primary Coverage 285 Practice Exercises 286

Chapter Summary 299 Chapter Review 299 Resources 302

viii Contents

Chapter 11 Hospital Medical Billing 304 Inpatient Billing Process 306 Charge Description Master 307 Types of Payers 308 Coding and Reimbursement Methods 308 Diagnosis Related Group System 309

Cost Outliers 310

UB-04 Hospital Billing Claim Form 312 Instructions for Completing the UB-04

Claim Form 315 Codes for Use on the UB-04 Claim Form 322

Type of Bill Codes (Form Locator 4) 322 Sex Codes (Form Locator 11) 324

Admission/Discharge Hour Codes (Form Locators 13 and 16) 324

Admission Type Codes (Form Locator 14) 324 Source of Admission (Form Locator 15) 325 Discharge Status Codes (Form Locator 17) 325 Condition Codes (Form Locators 18–28) 326 Occurrence Code Examples (Form

Locators 31–34) 326 Value Codes (Form Locators 39–41) 328 Revenue Codes (Form Locator 42) 328 Patient Relationship (Form Locator 59) 330 Practice Exercises 330

Chapter Summary 338 Chapter Review 339 Resources 342

Section V Government Medical Billing 343

Chapter 12 Medicare Medical Billing 346 Medicare History 348

Medicare Administration 348

Medicare Part A Coverage and Eligibility Requirements 350

Inpatient Hospital Care 351 Skilled Nursing Facility 351 Home Healthcare 351 Hospice Care 351 Blood 352 Organ Transplants 352 Inpatient Benefit Days 352

Medicare Part B Coverage and Eligibility Requirements 354

Telemedicine 354 Medicare Part C 356 Medicare Part D 356 Services Not Covered by Medicare

Parts A and B 357 Medigap, Medicaid, and Supplemental

Insurance 358 Requirements for Medical Necessity 359 Medicare Coverage Plans 359

Fee-for-Service: The Original Medicare Plan 359 Medicare Advantage Plans or Medicare Part C 359

Value-Based Payment Modifier Program 360

Medicare Providers 360 Part A Providers 360 Part B Providers 360 Participating versus Nonparticipating Medicare

Part B Providers 361

Limiting Charge 362 Patient’s Financial Responsibility 362 Determining the Medicare Fee and Limiting

Charge 362

Patient Registration 366 Copying the Medicare Card 366 Copying the Driver’s License 367 Obtaining Patient Signatures 367 Determining Primary and Secondary Payers 367 Plans Primary to Medicare 368 Consolidated Omnibus Budget Reconciliation

Act of 1985 369 People with Disabilities 369 People with End-Stage Renal Disease 369 Workers’ Compensation 369 Automobile, No-Fault, and Liability Insurance 369 Veteran Benefits 369 Medicare Coordination 369 Medicare as the Secondary Payer 370 Conditional Payment 370

Medicare Documents 371 Medicare Development Letter 371 Medicare Insurance Billing Requirements 372 Completing Medicare Part B Claims 372

Contents ix

Filing Guidelines 374 Local Coverage Determination 374

Medicare Remittance Notice 374 Medicare Fraud and Abuse 376

Medicare Fraud 376 Medicare Abuse 377 Protecting Against Medicare Fraud and Abuse 378

Chapter Summary 380 Chapter Review 381 Resources 383

Chapter 13 Medicaid Medical Billing 384 Medicaid Guidelines 387 Eligibility Groups 387

Categorically Needy 387 Medically Needy 388 Special Groups 389

Children’s Health Insurance Program Reauthorization Act (CHIPRA) 389

Scope of Medicaid Services 390 PACE 391

Amount and Duration of Medicaid Services 391 Payment for Medicaid Services 392 Medicaid Growth Trends 393

Affordable Care Act Projections 394

The Medicaid–Medicare Relationship (Medi-Medi) 394

Medicaid Managed Care 395 Medicaid Verification 395 Medicaid Claims Filing 396

Time Limits for Submitting Claims 396

Appeal Time Limits 396 Claims with Incomplete Information and

Zero Paid Claims 397 Newborn Claim Hints 397

Completing the CMS-1500 Form for Medicaid (Primary) 397

Practice Exercises 398

Chapter Summary 407 Chapter Review 407 Resources 411

Chapter 14 TRICARE Medical Billing 412 TRICARE 414

TRICARE Eligibility 414 Patient’s Financial Responsibilities 415 Timely Filing 415 Penalties and Interest Charges 415 Authorized Providers 415 Preauthorization 416

TRICARE Standard and TRICARE Extra 417 TRICARE Prime 418 TRICARE Prime Remote 418 TRICARE Senior Prime/TRICARE for Life 420

TRICARE Reform 420

CHAMPVA 420 Submitting Claims to TRICARE 421 Completing the CMS-1500 Form for

TRICARE (PRIMARY) 422 Confidential and Sensitive Information 424 Chapter Summary 425 Chapter Review 425 Resources 427

Section VI Accounts Receivable 429

Chapter 15 Explanation of Benefits and Payment Adjudication 432 Steps for Filing a Medical Claim 434 Claims Process 437 Determining the Fees 439

Charge-Based Fee Structure 439 Resource-Based Fee Structures 439

History of the Resource-Based Relative Value Scale 439

The RBRVS System 440 The Medicare Conversion Factor 441 Determining the Medicare Fee 441 Allowed Charges 443 Payers’ Policies 444

x Contents

Capitation 449 Value-based Reimbursement 450 Calculations of Patient Charges 450

Deductible 450 Copayments 451 Coinsurance 451 Excluded Services 451

Balance Billing 453 Processing an Explanation of Benefits 453

Information on an EOB/ERA 454

Reviewing Claims Information 463 Adjustments to Patient Accounts 464

Processing Reimbursement Information 464 Confirming Amount Paid, Making Adjustments,

and Determining Amount Due from Patient 464

Methods of Receiving Funds 478 Check by Mail 478 Electronic Funds Transfer 478 Lockbox Services 478

Chapter Summary 479 Chapter Review 479 Resources 483

Chapter 16 Refunds, Follow-Up, and Appeals 484 Electronically Filing Claims 486 Claims Rejection Follow-Up 486 Rebilling 487 Denied or Delayed Payments 488 Answering Patients’ Questions about Claims 489

Claim Rejection Appeal 490 Peer Review 492 State Insurance Commissioner 492 Carrier Audits 494 Documentation 494

Documentation Guidelines 494 SOAP Record-Keeping Format 495

Necessity of Appeals 495 Registering a Formal Appeal 496 The Appeals Process 496

Reason Codes That Require a Formal Appeal 498

Employee Retirement Income Security Act of 1974 498

Waiting Period for an ERISA Claim 499 Appeal to ERISA 499

Medicare Appeals 499 Redetermination 499 Second Level of Appeal 500 Third Level of Appeal and Beyond 500

Appeal Letters 500 Closing Words 501

Appeals and Customer Service 503 Appeals Require Perseverance and Attitude 505 Do Not Settle for “Denial Upheld” 505

Refund Guidelines 506 Avoid Excessive Overpayments 508 Guidelines for Insurance Overpayments and

Refund Requests 508 Practice Exercises 509

Chapter Summary 514 Chapter Review 514 Resources 517

Section VII Injured Employee Medical Claims 519

Chapter 17 Workers’ Compensation 522 History of Workers’ Compensation 524 Federal Workers’ Compensation Programs 525 State Workers’ Compensation Plans 525 Overview of Covered Injuries, Illnesses,

and Benefits 526 Occupational Diseases and Illnesses 527 Work-Related Injury Classifications 527

Injured Worker Responsibilities and Rights 528 Treating Doctor’s Responsibilities 529

Selecting a Designated Doctor and Scheduling an Appointment 530

Communicating with the Designated Doctor 530 What the Designated Doctor Will Do 531 Disputing the Designated Doctor’s Findings 531

Disputing Maximum Medical Improvement or Impairment Rating 531

Contents xi

Ombudsmen 531 Types of Workers’ Compensation Benefits 533

Income Benefits 534 Death and Burial Benefits 535

Eligible Beneficiaries 535 Benefits and Compensation Termination 535

Types of Government Disability Policies 536

Verifying Insurance Benefits 537 Preauthorization 537

Requirements for the Preauthorization Request 537

Filing Insurance Claims 538 Completing the CMS-1500 for Workers’

Compensation Claims 538 Independent Review Organizations 539

How to Obtain an Independent Review 541 The IRO Decision 541

Medical Records 541 Fraud 542

Penalties 543 Medical Provider Fraud 543

Calculating Reimbursements 544

Chapter Summary 548 Chapter Review 549 Resources 551

Appendix A Completing the CMS-1500 Form for Physician Outpatient Billing 553

Appendix B Completing the CMS-1500 Form for Physician Outpatient Billing Plus Determining the Correct Diagnostic and Procedure Codes 616

Appendix C Completing the UB-04 Form for Hospital Billing 658

Appendix D Medical Forms 700 Appendix E Acronyms and Abbreviations 735 Appendix F Medical Terminology Word Parts 737

Glossary 750

Credits 763

Index 765

Preface

This textbook was written to provide students with the knowledge and skills necessary to work in a variety of registration (front end revenue cycle management), billing (back end revenue cycle management), and coding positions in the healthcare field. Many textbooks have been written on this subject; however, daily feedback from students has allowed the author to develop the material in this text relevant to what a medical office specialist actu- ally experiences. The student will learn the process of billing and how to properly manage the account from the initial encounter with the patient through the resolution of the claim. In addition to submitting claims to insurance carriers, the process of billing may include reviewing medical records, verifying patient benefits, estimating patient’s finan- cial responsibility, requesting authorization, submitting a primary and/or secondary claim, posting payments, and appealing the insurance carrier’s decision.

This book has been written so that it is easy to read and comprehend. It is designed for students who have not previously worked in the medical field as well as students who have worked in the field but have only been exposed to certain aspects of the reg- istration and billing process. An ideal employee at a healthcare facility has a clear under- standing of how each element in the process affects all other steps, which is the underlying concept of this textbook. Practice exercises presented throughout the text allow students to test their knowledge of the concepts presented. This hands-on practice supplements lecture content and allows for better understanding of the skills presented.

The Development of This Text This textbook originated as a result of healthcare students and instructors expressing their concern about the complexity and flow of textbooks being used in the classroom. Students routinely expressed dismay that the required textbooks did not provide a clear understanding of the order of the steps involved in the life of the account, from the time a patient is scheduled for an appointment to the resolution of the patient’s account. As a result, workbooks were developed for each course in addition to the required read- ing material. The workbooks ultimately became the chapters in this textbook. Students also stated that the required reading in their textbooks was outdated. Therefore, this textbook has a MyHealthProfessionsLab and a MyHealthProfessionsKit that will provide the student and instructor with updated information and URLs where they can review current changes in the healthcare industry.

Organization of the Text A great deal of time has been spent researching the material in this text in order to address the most frequently asked student questions and to clearly illustrate the key concepts of the medical billing and coding processes. The textbook provides a unique presentation of content, exercises, examples, and professional tips within each chapter.xii

Preface xiii

Features of the Text The following special features appear in this text:

Chapter Objectives: Each chapter begins with a list of key learning objectives that students should master on completion of the chapter.

Key Terms: A list of key terms appears at the beginning of each chapter, and the terms are highlighted where they are first introduced in the text. A comprehen- sive glossary is provided at the end of the text.

Case Studies with Critical Thinking Questions: A thought-provoking case study is presented at the beginning of each chapter along with critical thinking ques- tions. Students must rely on the content in the text and their own critical think- ing skills to answer the questions.

Introduction: Each chapter includes introductory material that explains to read- ers what they will encounter within the chapter.

Examples: Numerous examples are provided throughout the text to stress the correct use of the billing and coding guidelines that are discussed.

Professional Tips: Professional Tips appear throughout the text and provide addi- tional information related to billing and coding processes that the student might use on the job.

Practice Exercises: Practice Exercises appear in most of the chapters to allow for student practice and mastery of skills.

Chapter Summary: The chapter summary serves as a review of the chapter content. Chapter Review: End-of-chapter questions that help reinforce learning are pro-

vided in true/false, multiple-choice, and completion formats. The review ques- tions measure the students’ understanding of the material presented in the chapter. These tools are available for use by the student or by the instructor as an outcomes assessment.

For Additional Practice: These additional case studies and billing and coding exercises allow for additional student practice and mastery of skills.

Resources: This listing provides additional information (organization contact information, websites, etc.) related to the chapter content.

New to This Edition The healthcare industry is always a whirlwind of change, prompting government, insur- ance organizations, and healthcare providers to look for ways to make healthcare afford- able. The Affordable Care Act is the most recent government sponsored regulation that is discussed in the text.

In Chapter 13, changes in Medicaid are discussed that were implemented by the Affordable Care Act, allowing states to opt in or opt out of the Medicaid expansion pro- gram. This will help drive consolidation, as it will add millions of new individuals and billions in new premiums to the Medicaid market.

Concierge Medicine and Telemedicine are new methods of healthcare treatment and cost-saving programs.

ICD-10 finally was implemented after many delays. All coding information and exercises in this text use 2017 codes. Chapter 5 addresses the new way to code the International Classification of Diseases using 4–7 alpha characters for more specificity of the patient’s health problem.

The new CMS-1500 form is reviewed in detail and all related exercises and exam- ples include the (02-2012) form.

Technology advances and consumer demands have increased automation of health- care, such as electronic health records (EHR), patient portals, and real time eligibility verification and claim submission.

■■ New Figures and Tables have been added to this third edition to illustrate key concepts.

■■ Content has been updated throughout the text to reflect current information on healthcare changes, trends, and the movement of healthcare in the future.

■ Ten trends for the next decade are evident: 1. more patients 2. more technology 3. more information 4. the patient as the ultimate consumer 5. development of a different delivery model 6. innovation driven by competition 7. increasing costs 8. increasing numbers of uninsured 9. less pay for providers 10. the continued need for a new healthcare system.

■■ The 2017 code sets are used throughout the text. ■■ ICD-9 has been eliminated. ■■ ICD-10 has been added. ■■ The previous chapter about completing manual claims has been eliminated, as electronic medical claims are standard practice in today’s medical office.

The Learning Package The Student Package

■■ Textbook ■■ MyHealthProfessionsLab: Designed to reach students in a personal way. Engaging learning and practice opportunities lead to assessments that create a personalized study plan.

■■ Student Workbook: The Student Workbook contains key terms, chapter objec- tives, chapter outlines, critical thinking questions, practice exercises, review questions, and end-of-workbook tests/case study–type problems that test stu- dent knowledge of the key concepts presented in the core textbook.

The Instructional Package ■■ Instructor’s Resource Manual: The Instructor’s Resource Manual contains chap- ter learning objectives; lesson plans for each learning objective with a custom- izable section for instructor notes, teaching tips, concepts for lecture; PowerPoint lecture slides that correspond to each concept for lecture; and suggestions for classroom activities.

■■ MyTest: This electronic test generator contains more than 1,500 test questions. ■■ PowerPoint Slides: The slides can be used during daily lectures.

xiv Preface

xv

Deborah Vines has worked extensively for more than 30 years in the healthcare industry as a practice administrator and manager in physical therapy, dermatopathology, and pediatrics. She has also held senior leadership positions in the hospital setting. As director of operations for a national healthcare staffing corporation, she has traveled across the United States, working directly with physicians and medical human resources personnel to secure jobs for individuals in the medical billing, coding, and collection fields. One of Ms. Vines’s notable achievements is that in one fiscal year, through men- toring and training, she assisted 300 recruits to find employment in the medical billing industry. This achievement led her to opening Allied Career Center in Dallas, Texas, a successful vocational school specializing in medical office specialist training.

Ann Braceland has been working in the medical field since graduating from Gwynedd Mercy College with an associate’s degree in nursing science. As a practice manager, her extensive work in the field of managed care and medical billing and cod- ing have allowed her to research and find means to inform others through her teaching of the changes and challenges that arise in the medical field. Ann Braceland has estab- lished and managed satellite offices in physical and occupational medicine. She is a Medicare representative with a vast spectrum of knowledge that she uses to train staff and physicians in compliance coding and billing. As director of training for the instruc- tors of Allied Career Center in Dallas, Texas, her presentation of the material for stu- dents led to the publication of this book. Ann Braceland is a National Certified Insurance and Coding Specialist.

Elizabeth Rollins has been in the medical billing and coding industry for 30 years, handling coding, insurance and patient billing, medical appeals, physician appeals, phy- sician credentialing, and new employee training. She was the Vice President of Allied Career Center, where she also taught for seven years. She has been instrumental in plac- ing hundreds of people into medical field jobs.

Susan Miller has worked in the healthcare Industry for 25 years, managing and supervising medical billing processes. She has lectured in a classroom setting, providing students with knowledge and skills on medical billing and coding. Ms. Miller continues her healthcare career in medical billing, providing support to staff members on billing and coding guidelines.

About the Authors

Acknowledgments

xvi

We would like to thank our publisher, Pearson, Marlene Pratt, Faye Gemmellaro, execu- tive editor, and Joan Gill, developmental editor; and the following reviewers, who used their personal time to provide feedback for our project. Without your hard work and guidance, none of this would have been possible:

First Edition Reviewers Vanessa Armor, RHIT

Instructor Ivy Tech Community College, Michigan

City Campus, Indiana

Robin Berenson, Ed.D. Spartanburg Community College,

South Carolina

Dorothy Burney Adjunct Professor Allied Health/

Certified Coding Specialist City College, Florida

Barbara Dahl, CMA, CPC Medical Assisting Program Coordinator

and Department Chair Whatcom Community College,

Washington

Susan DeGirolamo, RMA, NCPT, NCICS Instructor

Pennsylvania Institute of Technology, Pennsylvania

Annette Derks, CPC, CHI Instructor

Canyon College, Florida

Shirley Jelmo, CMA, RMA Medical Assisting Instructor

PIMA Medical Institute, Colorado

Kathy Kneifel Instructor

Everett Community College, Washington

Tiffany Rosta, CMA Medical Instructor

Kaplan Career Institute, Pennsylvania

Lorraine M. Smith Instructor

Fresno City College, California

Teresa Williamson Medical Coding and Billing Professor

Chaffey Community College, California

Acknowledgments xvii

Second Edition Reviewers Cindy Brassingon, MS, CMA

Professor of Allied Health Quinebaug Valley Community College,

Connecticut

Linda H. Donahue, RHIT, CCS, CCSP, CPC

Assistant Professor, Health Information Technology

Delgado Community College, Louisiana

Lurrean Bentley, RMA, CMRS Instructor for Medical Assisting and

Billing/Coding Programs Remington College, Tennessee

Michelle Edwards, CPMB, CMRS, CBCS, CCP

Medical Billing and Coding Lead University of Antelope Valley, California

Sandra E. Fender Instructor Southern Crescent Technical

College, Georgia

Gail High, AA Program Coordinator, Medical Billing

and Coding Program YTI Career Institute, Pennsylvania

Deborah McGichen, BS Medical Billing and Coding Instructor

Allstate Career, Allied Health Division,

Maryland

Angela Mitchell, Master of Technical Education

Instructor Akron Institute of Herzing

University, Ohio

Julia Steff, RHIA, CCS, CCS-P Assistant Professor, Department Chair

Palm Beach State College, Florida

Nerissa Tucker, MHA, CPC Professor, Program Director Allied Health Institute, Texas

Third Edition Reviewers Lisa Mayberry

Licensed Nursing Home Administrator Pennsylvania Institute of Technology

Grace Dimarco, CBCS, RMA McCann School of Business

and Technology

Diana Wilcox, CPC, CPMA, CPC-1

Blue Cliff College

Deborah Malay-Hunt The College of Healthcare Professions

Angela Campbell, RHIA, AHIMA- approved ICD-10 CM/PCS

Trainer Northwestern College

Kiyoe Irikura, CPC, CMBS IMBC College

Rolando Russell, CPC Ultimate Medical Academy

Robert Pezillo, CPC, CPC-1, CPPM, CPB

Community College of Rhode Island

Karlene Richardson, DHA Mandl School

Bonnie Aspiazu, JD, FACHE, RHIA St. Vincent Health System

xviii

Chapter Opener Features

Chapter Objectives Each chapter opens with a list of learning objectives, which can be used to identify the material and skills the student should know upon successful completion of the chapter.

384

categorically needy Children’s Health

Insurance Program (CHIP)

Children’s Health Insurance Program Reauthorization Act (CHIPRA)

Early and Periodic Screening, Diagnostic,

and Treatment (EPSDT)

Federal Medical Assistance Percentages (FMAP)

medically needy Medi-Medi payer of last resort restricted status spend-down program

State Children’s Health Insurance Program (SCHIP)

Supplemental Security Income (SSI)

Temporary Assistance for Needy Families (TANF)

Welfare Reform Bill

Key Terms

Chapter Objectives After reading this chapter, the student should be able to:

1 Understand the requirements for qualifying to receive Medicaid benefits.

2 Determine the schedule of benefits the Medicaid recipient will receive.

3 Discuss the method of verifying Medicaid benefits.

4 Submit a Medicaid claim and decipher claim status.

Chapter 13 Medicaid Medical Billing

CPT-4 codes in this chapter are from the CPT-4 2017 code set. CPT® is a registered trademark of the American Medical Association. ICD-10 codes in this chapter are from the ICD-10-CM 2017 code set from the Department of Health and Human Services, Centers for Disease Control and Prevention.

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Key Terms The Key Terms section appears at the beginning of each chapter. The terms are listed in alphabetical order, and the terminology appears in boldface on first introduction in the text. All terms are defined in the comprehensive glossary that appears at the back of the book.

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categorically needy Children’s Health

Insurance Program (CHIP)

Children’s Health Insurance Program Reauthorization Act (CHIPRA)

Early and Periodic Screening, Diagnostic,

and Treatment (EPSDT)

Federal Medical Assistance Percentages (FMAP)

medically needy Medi-Medi payer of last resort restricted status spend-down program

State Children’s Health Insurance Program (SCHIP)

Supplemental Security Income (SSI)

Temporary Assistance for Needy Families (TANF)

Welfare Reform Bill

Key Terms

Chapter Objectives After reading this chapter, the student should be able to:

1 Understand the requirements for qualifying to receive Medicaid benefits.

2 Determine the schedule of benefits the Medicaid recipient will receive.

3 Discuss the method of verifying Medicaid benefits.

4 Submit a Medicaid claim and decipher claim status.

Chapter 13 Medicaid Medical Billing

CPT-4 codes in this chapter are from the CPT-4 2017 code set. CPT® is a registered trademark of the American Medical Association. ICD-10 codes in this chapter are from the ICD-10-CM 2017 code set from the Department of Health and Human Services, Centers for Disease Control and Prevention.

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Case Study with Critical Thinking Questions Thought-provoking case studies provide scenarios that help students understand how the material presented in the chapter relates to the medical billing and coding profession. Critical thinking questions appear after each case study, and students must rely on the content in the text and their own critical thinking skills to answer the questions.

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The office manager, Darla, had received notification from the state Medicaid program that fraudulent use of Medicaid cards was on the rise. As a result, all patients were to show a picture I.D. along with their Medicaid card. Darla had announced this new policy at the last staff meeting.

While Ginger was working as the receptionist, a patient arrived and showed her Medicaid card. Ginger explained that she needed to see a picture I.D. because of increased fraud. The patient became indignant and refused to comply because she felt she was being accused of doing something illegal. Ginger asked Darla to explain the situation to the patient.

Questions

1. Should the patient be required to comply with the new policy in order to be seen by the physician? Why?

2. Could Ginger have handled the situation differently?

3. What should Darla tell the patient in order to calm her down?

Case Study Medicaid

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Additional Features

Professional Tips Helpful billing and coding tips are inter- spersed throughout the text and provide additional information the student might use on the job.

252 Section IV Medical Claims

We now take a detailed look at how to complete a CMS-1500 claim form by reviewing how to fill out the infor- mation required for each form locator.

Form Locators for the CMS-1500 Form Form Locator 1: Type of Insurance Form locator 1 identifies what type of insurance the patient carries. The form lists five government plans: Medicare, Medicaid, TRICARE/CHAMPUS, CHAMPVA, and FECA Black Lung. There

are two other options: Group Health Plan and Other. These are used depending on which type of plan the insured is enrolled.

Form Locator 1a: Insured’s I.D. Number Form locator 1a asks for the insured’s insurance I.D. number as reflected on the insur- ance card. The insured could be the patient or someone else, such as a spouse, mother, or father.

Form Locator 2: Patient’s Name In form locator 2, enter the name of the patient who received services. This information is input as full last name, first name, and middle name or initial. The spelling should match the insurance card exactly. Do not use periods within the name.

If the patient’s name is the same as the insured’s name (i.e., the patient is the insured), then it is not necessary to report the patient’s name. If the name on the card is misspelled, then the name in the computer should be misspelled until the patient provides a new card with the correct spelling.

The “Patient’s Name” is the name of the person who received the treatment or supplies.

Form Locator 3: Patient’s Date of Birth/Gender In form locator 3, enter the patient’s date of birth and gender. The date of birth is entered using the eight-digit format: MMDDYYYY. The patient’s gender is identified as either male or female.

Form Locator 4: Insured’s Name Form locator 4 asks for the name of the person who is the insured. This may or may not be the patient. If the patient is the insured, the word “Same” should be entered. The insured’s name should be entered full last name, first name, and middle name or initial. Use commas to separate the last name, first name, and middle initial. A hyphen can be used for hyphenated names. Do not use periods within the name. If Medicare is pri- mary, leave the field blank.

Form Locator 5: Patient’s Address Enter the patient’s home address and telephone number in form locator 5. This infor- mation is taken from the patient information form when the patient registers in the office. The address should include the street name and number, city, state (two-letter abbreviation), and zip code. Do not use commas, periods, or other symbols in the address. When entering a nine-digit zip code, include the hyphen. Do not use a hyphen

When completing the CMS-1500 form, the medical office specialist should always be consistent in the way he enters the required dates when com- pleting certain form locators. Providers and suppliers have the option of enter- ing either a six- or eight-digit date for- mat. Medicare and many insurance carriers will not accept claims if the date formats are not consistent. In other words, they cannot be used intermittently.

Professional Tip

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Examples Numerous examples are provided throughout the text to stress the correct billing and coding guidelines.

Chapter 16 Refunds, Follow-Up, and Appeals 497

■■ A claim is denied because accident details are not available. An E code should be used when submitting an accident claim along with a CPT code. In the case of an auto accident, the medical office specialist may also receive a request to submit a police report. If the insurance company requests the police report, the medical office specialist can usually fax it. The same applies to the opera- tive report for surgery and office notes.

■■ An insurance company might routinely deny coverage for well-person care for a patient. This can be appealed by phone also. Simply ask the insurance repre- sentative to review the policy documentation.