Medicare Payment – Medical Office Billing Department Operations By Samuel Kohan Knowledge of Medicare’s Guidelines is a Must A medical Practice’s billing personnel must have a detailed knowledge of Medicare’s guidelines for reimbursement in order to receive correct remittance by Medicare. Medicare’s guidelines correspond to coding as well as helping with the administrative process of claims review and payment. Incorrect billing of procedures can be considered by Medicare as fraud, which can be avoided by carefully preparing the claims. Medical office billing professionals can prevent potential claims denials by remitting a timely and clean claim. What is or is not Covered by Medicare Medical Office billing employees must be educated about the breadth of services covered by Medicare. It can be helpful for billing professionals to create a chart listing services covered by Medicare. It is important to notify patient up front of fees for procedures not covered by Medicare. The amount not covered by Medicare should be collected at the time of service or alternatively by a secondary insurer. A practice administrator should know how Medicare fee schedules are calculated. The formula is: Payment = ([RVU work x GPCI] + [RVU practice expense x GPCI] + [RVU malpractice x GPCI malpractice]) x Conversion Factor. GPCI indicates geographic practice cost indicates; RVU, relative value units. The Medicare fee schedule for each geographic area is updated annually and posted on the CMS website at www.cms.hhs.gov/physicianfeesched. Clean Claim The first step to claim payment from Medicare is to submit a clean claim to Medicare. A “clean claim” means that all fields in the CMS-1500 claim form are completed, ICD-9 codes ate accurately derived, and all current CPT codes represent services rendered. If Medicare returns a claim unpaid, it should be corrected and refilled, if allowed. Otherwise, an appeal can be filed. The Medicare Appeal Process The title 42 Code of Federal Regulations, Part 405, subpart I, provides the appeal process, which is in four levels. The level one provides 120 days from the date of the decision for a beneficiary to file an appeal for a redetermination by the Medicare contractor. 1|Page
by Samuel Kohan, All Rights Reserve d. Neva, Inc. 2012
Following the contractor's redetermination, the beneficiary may request, and the Qualified Independent Contractor (“QIC”) will perform, a reconsideration of the claim if the requirements for obtaining a reconsideration are met. Following the reconsideration, the beneficiary may request, and the Administrative Law Judge (“ALJ”) will conduct a hearing if the amount remaining in controversy and other requirements for an ALJ hearing are met. If the beneficiary is dissatisfied with the decision of the ALJ, he or she may request the Medicare Appeals Council (“MAC”) to review the case. If the MAC reviews the case and issues a decision, and the beneficiary is dissatisfied with the decision, the beneficiary may file suit in Federal district court if the amount remaining in controversy and the other requirements for judicial review are met. Electronic Data Interchange To expedite submittal of claims and payment, Electronic Data Interchange (“EDI”) is available for providers as a preferred alternative to filling paper forms and mailing claims. Claims may be electronically submitted to a Medicare carrier, Durable Medical Equipment Medicare Administrative Contractor (DME MAC), or a fiscal intermediary (FI) from a provider's office using a computer with software that meets electronic filing requirements as established by the HIPAA claim standard and by meeting CMS requirements contained in the provider enrollment & certification category area of this web site and the EDI Enrollment page in this section of the web site. Providers that bill FIs are also permitted to submit claims electronically via direct data entry screens. Providers can purchase software from a vendor, contract with a billing service or clearinghouse that will provide software or programming support, or use HIPAA compliant free billing software that is supplied by Medicare carriers, DME MACs and FIs. Medicare contractors are allowed to collect a fee to recoup their costs up to $25 if a provider requests a Medicare contractor to mail an initial disk or update disks for this free software. Medicare contractors also maintain a list on their providers' web page that contains the name of vendors whose software is currently being used successfully to submit HIPAA compliant claims to Medicare. This is done for the benefit of providers interested in purchasing electronic billing software for the first time or in changing their current software. How Electronic Claims Submission Works? The claim is electronically transmitted in data "packets" from the provider's computer modem to the Medicare contractor's modem over a telephone line. Medicare contractors perform a series of edits. The initial edits are to determine if the claims in a batch meet the basic requirements of the HIPAA standard. If errors are detected at this level, the entire batch of claims would be rejected for correction and resubmission. Claims that pass these initial edits, commonly known as front-end edits or pre-edits, are then edited against implementation guide 2|Page
by Samuel Kohan, All Rights Reserve d. Neva, Inc. 2012
requirements in those HIPAA claim standards. If errors are detected at this level, only the individual claims that included those errors would be rejected for correction and resubmission. Once the first two levels of edits are passed, each claim is edited for compliance with Medicare coverage and payment policy requirements. Edits at this level could result in rejection of individual claims for correction, or denial of individual claims. In each case, the submitter of the batch or of the individual claims is sent a response that indicates the error to be corrected or the reason for the denial. After successful transmission, an acknowledgement report is generated and is either transmitted back to the submitter of each claim, or placed in an electronic mailbox for downloading by that submitter. Compliance Compliance should be a top priority in every medical practice billing department coupled with continuing education on compliance for all billing professionals. Physicians and administrators who fail to fully comply with laws may be vulnerable to government investigations and prosecutions. For instance, under the HIPAA, physicians may be liable for false claims regardless of existence of intent to defraud.
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by Samuel Kohan, All Rights Reserve d. Neva, Inc. 2012