Copyright © 2008 Delmar Learning. All rights reserved. Chapter 11 Essential CMS-1500 Claim Instructions

Copyright © 2008 Delmar Learning. All rights reserved.

Chapter 11

Essential

CMS-1500 Claim Instructions


2

Introduction

• This chapter gives basic instructions needed to be considered before entering data on CMS-1500 claim.

• It also shows common errors, guidelines for insurance and processing assigned claims, and the Federal Privacy act of 1974.


3

Introduction

• When processing insurance claims, health care professionals must ensure that the patient signed the “Authorization for Release of Medical Information”– They can sign Block 12 or sign a special

release form and enter Signature on file in block 12

– Claim begins when patient contacts health provider


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Insurance Billing Guidelines

1. Provider services for inpatient care are billed on a fee for service basis

2. Report observation services when appropriate

3. Inpatient/Outpatient surgeon charges are billed to a global fee


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4. Complications after surgery requiring a return visit are billed as additional procedure

5. Patients admitted as a medical case but require surgery are claimed with appropriate ICD-9-CM codes


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6. Some claims require attachments in determining if the insurance company covers the claim – Letters should be in clear English not

“medicalese” – Experienced insurance specialists say

write your appeals and attachments as if the recipient has a sixth grade education


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7. Paper-generated claims must be done carefully so the data prints well on designated blocks on the form.


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When to Use a “Letter” for a Claim

• Inpatient procedure performed at an Ambulatory Surgical Center (ASC)

• Surgery categorized as an office or outpatient performed at an ASC or hospital inpatient

• Prolonged hospital stay because of complications


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When to Use a “Letter” for a Claim

• An office or outpatient procedure performed as an inpatient due to high-risk

• Explanation of why a fee is higher than health care provider’s normal fee

• An “unlisted procedure” CPT code number is required before reimbursement can be determined


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Optical Scanning Guidelines

• CMS-1500 paper claim was created to accommodate optical scanning

• It uses a device to convert printed/handwritten into text that can be viewed by an optical character reader (OCR)


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• All data must be entered within the guidelines of the data field

• Use Pica type– Computer font Courier 10 or OCR 10

• Enter all alpha characters in capital letters

• Don’t enter the alpha character “O” for 0


12


• Use a space for dollar sign or decimal in charges or totals

• Use a space for decimal point in a code number

• Use a space for parentheses surrounding the area code


13


• Do not enter a hyphen between CPT or HCPS and modifiers– Use spaces

• Do not enter hyphens or spaces for SSN or employer ID number

• Enter commas between the last name, first name, and middle initial


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• Do not enter Sr., Jr., II, or III unless printed on the patient’s insurance ID card

• Enter two zeros when a fee or monetary total is a whole dollar amount

• Birth dates are eight digits with spaces between them (MM DD YYYY)


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• All corrections on typewriter claims must be made using permanent correction tape and pica type

• Hand written claims must be manually processed

• Extraneous data should be placed as an attachment


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• Borders of pin-fed claims should be removed evenly at the side and forms should be separated

• Nothing should be written or typed in the upper right-hand of the claim

• One procedure per line starting at Block 24


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Entering Patient and Policyholder Names

• With entering patient’s name in Block 2– Use commas to separate last name, first

name, and middle initial


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Entering Provider Names

• When entering the provider on the CMS-1500 claim– Enter the first name, middle initial (if

available), last name and credentials with no punctuation


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Entering Mailing Address and Telephone Numbers

• When entering patient’s/policyholder mailing address and telephone number– Enter street address on line 1– City and state on line 2– Zip code and telephone number on line 3


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Practices that Bill “Incident to”

• When a nonphysician practitioner (NPP or PA) bills “incident to” a physician, and the MD provider is out for the day:– NPP or PA treats the patient under another

physician’s supervision to meet the “incident to” requirements


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Entries Made for “Incident to”

• Block 17– Enter ordering physician’s name

• Block 17b – Enter ordering physician’s NPI


22

Entries Made for “Incident to”

• Block 17i– Enter supervising physician’s NPI

• Block 31 – Enter supervising physician’s name


23

National Provider Identifier

• NPI is a 10-digit number given to individual and health care organizations

• NPI is required for large health plans– Health care clearinghouses and small

health plans


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National Provider Identifier

• NPI will identify the provider throughout his/her career – Except when health care provider does not

want to continue with previously used NPI


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Application Process

• National Plan and Provider Enumeration System (NPPES) – Developed to assign health care providers

and health plan identifiers– Serve as a database to extract data


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Applying for an NPI

• Submit web-based application

• Paper-based application

• Electronic file


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HIPAA Mandated Standard of Identifiers

• Employers (EIN)

• Health care providers (NPI)

• Health plans (planID)

• Individuals


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Assignment of Benefits Versus Accept Assignment

• Area of confusion for specialists– To identify the difference between

assignment of benefits and accepting assignment


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Reporting Diagnoses: ICD-9-CM codes

• Diagnoses codes are entered in block 21– If more than four diagnoses are needed to

prove the procedures on the claim• Add more claims

• In these cases– Make sure to prove the diagnoses are

justified


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Sequencing Multiple Diagnoses

• First-listed code should be the major reason the patient is being treated

• Secondary diagnoses codes are entered in numbers 2-4 on block 21 – Should be included on the claim, if they are

necessary to justify the services reported in block 24


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Accurate Coding

• For physician office and outpatient claims processing– Never report a code for diagnoses that

include such terms as:• “Rule out,” “suspicious for,” “probable,” “ruled out,”

“possible,” or “questionable”


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Accurate Coding

• Make sure to code to the highest degree of the diagnosis reported for that time


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Reporting Procedures and Services HCPCS/CPT Codes

• Instructions in this section are for those blocks that are universally required


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Block 24A- Dates of Service

• When the claim was designed there was a space put in between the six-digit year (MM DD YY)


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Block 24B- Place of Service

• All payers require a place of service code on the claims


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Block 24C- EMG

• Check with the payer for their definition of emergency treatment

• If the payer requires completion of Block 24C, and EMG treatment was provided, enter a Y for yes, otherwise leave blank.


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Block 24D- Procedures and Services

• You report procedure codes and modifiers

• Identical procedures or services can be reported on the same line if the following circumstances apply – Procedures were performed on

consecutive days in the same month


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Block 24D- Procedures and Services

• Same code is assigned to the procedures/services reported

• Identical charges apply to the assigned code

• Block 24G (Days or Units) is completed


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Modifiers

• There are up to three CPT/HCPCS modifiers that can be entered in Block 24D on the claim


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Block 24E- Diagnosis Pointer

• Are the item numbers 1-4 preprinted in Block 21?


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Block 24F Charges

• Careful alignment of the charges in Block 24F– As well as the totals in Blocks 28 through

30, is critical


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Block 24G- Days or Units

• Report number of encounters, units of service or supplies, amount of drugs injected and so on.


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When Reporting Multiple Days/Units

• Anesthesia time

• Multiple procedures

• Inclusive dates of similar services

• Radiology services


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Reporting the Billing Entity

• Billing entity is the business name of the practice – Last line of Block 33 is for entering the

provider and/or group practice numbers, if one is assigned by the payer


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Signature of Physician or Supplier

• Provider signs in Block 31– Confirms that the services were billed

properly– Provider is taking responsible for the billing


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Processing Secondary Claims

• Secondary claim is filed after the remittance advice generated as a result of processing the primary claim has been received.


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Processing Secondary Claims

• Payer requires primary insurance information to be entered in blocks 11-11c

• Secondary policy is identified in blocks 1 and1a


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Supplemental Plans

• Cover the deductible and co-pay or co-insurance

• Block 10 indicates whether the condition treated is a employment, auto, or other form of accident


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Common Errors that Delay Processing

• After claims have been finished, check for these common mistakes:– Keyboarding errors – Procedure code number– Diagnosis code number– Policy ID numbers


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• Dates of service

• Federal employer tax ID number (EIN)

• Total amount due on a claim

• Incomplete/incorrect name of the patient or policyholder


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• Omission of current diagnosis

• Required fourth and/or fifth ICD-9-CM digits

• Procedure service dates

• Hospital admission/discharge dates


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• Name of the provider

• Required prior treatment

• Authorization numbers

• Units of service


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• Attachments without patient and policy identification

• Failure to properly align the claim form to ensure that each item fits within the proper field

• Handwritten items on the claim other than signatures


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Final Steps in Processing Claims

• Step 1 – Double check each claim for errors and

omissions

• Step 2 – Add any necessary attachments


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• Step 3 – If required by the payer, obtain the

provider’s signature

• Step 4– Post submission of the claim on the

patient’s account


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• Step 5 – Place a copy of the claim in the practice’s

claims files

• Step 6 – Submit the claim to the payer


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Maintaining Claim Files

• Medicare requires providers to keep copies of any government claims and copies of attachments for a period of five years– Unless state law specifies a longer period


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Insurance File Set-up

• Organize files in these four steps:

1. File open cases by month and payer

2. File closed cases by year and payer

3. File batched remittance advice notices

4. File unassigned or nonparticipating claims by year and payer


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Processing Assigned Paid Claims

• When remittance advice arrives from the payer– Pull the claim and review the payment


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• If an error is found after remitting a claim the following steps should be taken:– Step 1:

• Write an immediate appeal for reconsideration of the payment

– Step 2: • Make a copy of the original claim, the remittance

advice notices, and the written appeal


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• Make a new CMS-1500 claim, and attach it to the remittance advice notices and the appeal. Make sure the dates match.

– Step 4: • Mail the appeal and the claim to the payer.


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• Make a notation of the payment on the office copy of the claim.

– Step 6: • Refile claim and attachments in the assigned

open claims file.


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Federal Privacy Act

• Federal Privacy Act of 1974 – Prohibits a payer from notifying the provider

about payment or rejection of unassigned claims or payments sent directly to the patient/policyholder


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Federal Privacy Act

• “The letter is to be signed by the patient and policyholder, to give the payer permission to allow the provider to appeal the unassigned claim.”


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Federal Privacy Act

• “Congress is now considering repealing the legislation that prohibits sending EOBs to the provider on unassigned claims.This would all the provider to appeal processing errors on unassigned government claims.”

Documents

Copyright © 2008 Delmar Learning. All rights reserved. Chapter 11 Essential CMS-1500 Claim Instructions