Chapter 4

clean claim

a correctly completed standardized claim (e.g., CMS-1500 claim).

common data file

abstract of all recent claims filed on each patient.

bad debt

accounts receivable that cannot be collected by the provider or a collection agency.

delinquent claim cycle

advances through various aging periods (30 days, 60 days, 90 days, and so on), with practices typically focusing internal recovery efforts on older delinquent accounts (e.g., 120 days or more).

coinsurance

also called coinsurance payment; the percentage the patient pays for covered services after the deductible has been met and the copayment has been paid.

day sheet

also called manual daily accounts receivable journal; chronological summary of all transactions posted to individual patient ledgers/accounts on a specific day.

patient account record

also called patient ledger; a computerized permanent record of all financial transactions between the patient and the practice.

patient ledger

also called patient ledger; a computerized permanent record of all financial transactions between the patient and the practice.

manual daily accounts receivable journal

also called the day sheet; a chronological summary of all transactions posted to individual patient ledgers/accounts on a specific day.

Fair Credit and Charge Card Disclosure Act

amended the Truth in Lending Act, requiring credit and charge card issuers to provide certain disclosures in direct mail, telephone, and other applications and solicitations for open-end credit and charge accounts and under other circumstances; this law applies to providers that accept credit cards.

deductible

amount for which the patient is financially responsible before an insurance policy provides coverage.

ANSI ASC X12

an electronic format standard that uses a variable-length file format to process transactions for institutional, professional, dental, and drug claims.

pre-existing condition

any medical condition that was diagnosed and/or treated within a specified period of time immediately preceding the enrollee's effective date of coverage.

noncovered benefit

any procedure or service reported on a claim that is not included on the payer's master benefit list, resulting in denial of the claim; also called noncovered procedure or uncovered benefit.

downcoding

assigning lower-level codes than documented in the record.

accounts receivable management

assists providers in the collection of appropriate reimbursement for services rendered; includes functions such as insurance verification/eligibility and preauthorization of services.

primary insurance

associated with how an insurance plan is billed?the insurance plan responsible for paying health care insurance claims first is considered primary.

secondary insurance

billed after primary insurance has paid contracted amount.

two-party check

check made out to both patient and provider.

delinquent claim

claim usually more than 120 days past due; some practices establish time frames that are less than or more than 120 days past due.

closed claim

claims for which all processing, including appeals, has been completed.

value-added network (VAN)

clearinghouse that involves value-added vendors, such as banks, in the processing of claims; using a VAN is more efficient and less expensive for providers than managing their own systems to send and receive transactions directly from numerous entities.

claims adjudication

comparing a claim to payer edits and the patient's health plan benefits to verify that the required information is available to process the claim; the claim is not a duplicate; payer rules and procedures have been followed; and procedures performed or services provided are covered benefits.

electronic data interchange (EDI)

computer-to-computer exchange of data between provider and payer.

outsource

contract out.

participating provider (PAR)

contracts with a health insurance plan and accepts whatever the plan pays for procedures or services performed.

birthday rule

determines coverage by primary and secondary policies when each parent subscribes to a different health insurance plan.

chargemaster

document that contains a computer-generated list of procedures, services, and supplies with charges for each; chargemaster data are entered in the facility's patient accounting system, and charges are automatically posted to the patient's bill (UB-04).

appeal

documented as a letter, signed by the provider, explaining why a claim should be reconsidered for payment.

nonparticipating provider (nonPAR)

does not contract with the insurance plan; patients who elect to receive care from nonPARs will incur higher out-of-pocket expenses.

out-of-pocket payment

established by health insurance companies for a health insurance plan; usually has limits of $1,000 or $2,000; when the patient has reached the limit of an out-of-pocket payment (e.g., annual deductible) for the year, appropriate patient reimbursement to the provider is determined; not all health insurance plans include an out-of-pocket payment provision.

Electronic Funds Transfer Act

established the rights, liabilities, and responsibilities of participants in electronic funds transfer systems.

Fair Credit Billing Act

federal law passed in 1975 that helps consumers resolve billing issues with card issuers; protects important credit rights, including rights to dispute billing errors, unauthorized use of an account, and charges for unsatisfactory goods and services; cardholders cannot be held liable for more than $50 of fraudulent charges made to a credit card.

encounter form

financial record source document used by providers and other personnel to record treated diagnoses and services rendered to the patient during the current encounter.

unassigned claim

generated for providers who do not accept assignment; organized by year.

litigation

legal action to recover a debt; usually a last resort for a medical practice.

claims attachment

medical report substantiating a medical condition.

delinquent account

one that has not been paid within a certain time frame (e.g., 120 days); also called delinquent account.

past-due account

one that has not been paid within a certain time frame (e.g., 120 days); also called delinquent account.

Electronic Healthcare Network Accreditation Commission (EHNAC)

organization that accredits clearinghouses.

suspense

pending.

clearinghouse

performs centralized claims processing for providers and health plans.

guarantor

person responsible for paying health care fees.

covered entity

private sector health plans (excluding certain small self-administered health plans), managed care organizations, ERISA-covered health benefit plans (Employee Retirement Income Security Act of 1974), and government health plans (including Medicare, Medicaid, Military Health System for active duty and civilian personnel; Veterans Health Administration, and Indian Health Service programs); all health care clearinghouses; and all health care providers that choose to submit or receive transactions electronically.

Equal Credit Opportunity Act

prohibits discrimination on the basis of race, color, religion, national origin, sex, marital status, age, receipt of public assistance, or good faith exercise of any rights under the Consumer Credit Protection Act.

Fair Credit Reporting Act

protects information collected by consumer reporting agencies such as credit bureaus, medical information companies, and tenant screening services; organizations that provide information to consumer reporting agencies also have specific legal obligations, including the duty to investigate disputed information.

accept assignment

provider accepts as payment in full whatever is paid on the claim by the payer (except for any copayment and/or coinsurance amounts).

coordination of benefits (COB)

provision in group health insurance policies that prevents multiple insurers from paying benefits covered by other policies; also specifies that coverage will be provided in a specific sequence when more than one policy covers the claim.

Provider Remittance Notice (PRN)

remittance advice submitted by Medicare to providers that includes payment information about a claim.

electronic remittance advice (ERA)

remittance advice that is submitted to the provider electronically and contains the same information as a paper-based remittance advice; providers receive the ERA more quickly.

electronic flat file format

series of fixed-length records (e.g., 25 spaces for patient's name) submitted to payers to bill for health care services.

electronic media claim

series of fixed-length records (e.g., 25 spaces for patient's name) submitted to payers to bill for health care services.

unauthorized service

services that are provided to a patient without proper authorization or that are not covered by a current authorization.

accounts receivable aging report

shows the status (by date) of outstanding claims from each payer, as well as payments due from patients.

claims processing

sorting claims upon submission to collect and verify information about the patient and provider.

Fair Debt Collection Practices Act (FDCPA)

specifies what a collection source may and may not do when pursuing payment of past due accounts.

open claim

submitted to the payer, but processing is not complete.

unbundling

submitting multiple CPT codes when one code should be submitted.

electronic funds transfer (EFT)

system by which payers deposit funds to the provider's account electronically.

superbill

term used for an encounter form in the physician's office.

accounts receivable

the amount owed to a business for services or goods provided.

allowed charge

the maximum amount the payer will reimburse for each procedure or service, according to the patient's policy.

beneficiary

the person eligible to receive health care benefits.

assignment of benefits

the provider receives reimbursement directly from the payer.

source document

the routing slip, charge slip, encounter form, or superbill from which the insurance claim was generated.

claims submission

the transmission of claims data (electronically or manually) to payers or clearinghouses for processing.

Consumer Credit Protection Act of 1968

was considered landmark legislation because it launched truth-in-lending disclosures that required creditors to communicate the cost of borrowing money in a common language so that consumers could figure out the charges, compare costs, and shop for the best credit deal.

Truth in Lending Act

was considered landmark legislation because it launched truth-in-lending disclosures that required creditors to communicate the cost of borrowing money in a common language so that consumers could figure out the charges, compare costs, and shop for the best credit deal.