Chapter 46-47 lesson questions

1. Differentiate between accounts receivable and accounts payable. Handling Cash, Writing Checks, and Preparing Bank deposits-

Accounts Payable or Record of Cash Disbursements- · Record of payments made to cover expenses of the practice · Record of disbursements kept in addition to checkbook either manually or on computer · Usually a method to track expenses by categories Preparing a Bank Deposit- · Deposit slip must accompany any deposit o Preprinted deposit slips with account number in office check book o Slip with account number may be printed from computer accounting program · Itemization often done from deposit slip that is part of the day sheet · Copy of itemization is made for practice records Balancing the Cash Drawer- · Drawer may be moved to safe for the night · Standard sum is left in the drawer for the beginning of the day · Any additional cash should be counted and compared to the financial ledger 1. Identify various types of bank accounts. Checking Account- · Money drawn by writing a check on available funds · May pay interest o Interest: payment made by a bank for privilege of using a depositor's money o May need to keep a minimum balance to qualify for interest · Monthly service charge for account may depend on balance in checking and/or savings accounts Savings Account- •Used for money that does not need to be easily available •Interest rate is usually higher than a checking account Money Market Account- · Funds are available with a few more restrictions than an ordinary savings or checking account o Usually requires higher minimum balance o Number of checks or withdrawals per month may be limited o Minimum amount per check may be at least $500.00 o Earns higher interest o Useful to hold funds for infrequent expenses § Quarterly malpractice insurance payments § Annual dues for various organizations

1. Identify when HCPCS Level II codes should be used. ·

Additional HCPCS codes for procedures, injections, and durable medical equipment covered by Medicare Part B

Discuss the information printed on a check

Check Format- · ABA number: unique number issued by the American Banking Association to identify the bank o Usually at top right under the check number o Written as a fraction (e.g., 94-72/1224) · Magnetic ink character recognition (MICR) line: set of numbers in magnetic ink across the bottom of a check o ABA routing number: nine-digit number that identities the bank o Account number o Check number · Name and address of account holder usually in top left · Name of the bank on left side just below the middle of the check

1. Describe how to select an accurate code with the correct level of detail using ICD-10-CM codes ·

Codes are rarely three or four digits · Most codes are complete with five or six characters · Seventh character may be required

1. Describe how to select an accurate code with the correct level of detail using ICD-9-CM codes. 2. Describe the format and use of the ICD-10-CM codes

Divided into two parts o Index: list of diseases and conditions in alphabetic order o Tabular List: 21 chapters according to classification of the disease or condition (or related factors) · No Volume 3 o Volume 3 is replaced by the ICD-10-PCS (Procedure Coding System) used for inpatient procedures · FORMAT- o Three characters followed by a decimal point o First character is a letter, next two characters are digits o First three characters show where the code occurs and stand for the basic condition o Most ICD-10-CM chapters contain codes that begin with one letter of the alphabet

1. Describe the format and use of International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM) codes.

First edition of International Classification of Diseases published in 1948 o Published and continues to be managed by the World Health Organization International effort

1. Describe how to locate an accurate HCPCS Level II code.

HCPCS Level II code books are available from several publishers; can also be obtained online from CMS

1. Describe how to locate an accurate CPT code. HCPCS Coding ·

Look up procedure in alphabetic index o Do not code directly from the index o May not provide the most specific or correct code · How to locate the procedure o Name of the procedure o Anatomic location o Diagnosis 2. Identify when HCPCS Level II codes should be used. · Additional HCPCS codes for procedures, injections, and durable medical equipment covered by Medicare Part B

1. Describe how to maintain a petty cash fund.

Petty cash: cash kept in the office for incidental expenses · Established by cashing a check from the office checking account, not from patient payments · Keep a petty cash journal to record payments made from petty cash · Replenish when funds become low · Keeping records helps prevent unauthorized use of petty cash o Balance petty cash account regularly o Be sure staff members fill out a receipt each time they use money from the petty cash fund

1. Describe the information contained in a patient account ledger.

Record of charges and payments for each patient and also sometimes for each family · Linked to insurance information for billing purposes · Transactions recorded in chronological order on patient ledger screen

1. Differentiate between a simple charge slip and a charge slip with diagnosis and procedure codes (superbill). ·

The codes on a superbill could identify at the time of service / to charge and payments · Itemized charge slip called superbill or billing encounter form commonly used with computer system

1. Describe various methods to write checks

Used to authorize payments from a checking account o Business checks: written directly on the business account o Cashier's check: drawn on the bank itself o Certified check: check on a business or personal account that is guaranteed by the bank

1. Describe how charges are entered on a charge slip or superbill.

When the computerized billing system is linked to the EMR, the physician specifies the services provided and links each service to a diagnosis o Front desk staff formalizes the charge entry; creates an electronic superbill · Computerized billing programs usually contain the most commonly used codes

1. Describe manual and computerized methods of maintaining patient accounts

· Daily journal (day sheet): records transactions in chronological order each day and by physician · Accounts receivable ledger: keeps an account for each patient · Cumulative monthly records: by physician and for the practice as a whole o When a charge or payment is entered, automatically posted both to daily journal and patient account o Computer can access patient account to print statements, print insurance claims, or generate financial reports

1. Describe the process to print patient ledgers, day sheets, or other reports using a practice management computer system.

· Day sheet- Keeps a running tally of daily income · Manual day sheet may be kept even if medical billing program is used o Control for data entry o Useful if computer is temporarily unavailable · Each transaction records charges, payments, previous balance, adjustments, and new balance · New sheet used each day · Records not only patient visits but also checks received in the mail or other payments posted that day · May also be used to create an itemized deposit slip as each patient payment is entered · At end of day it is closed and no further transactions can be entered with that date o Day sheet can be printed at the end of the day o Only one day sheet can be printed for a given date

1. Describe how a bank deposit is prepared and made.

· Deposit slip must accompany any deposit o Preprinted deposit slips with account number in office check book o Slip with account number may be printed from computer accounting program · Itemization often done from deposit slip that is part of the day sheet · Copy of itemization is made for practice records

1. Perform procedural coding

· Diagnostic Coding o Reasons for development of diagnosis codes o Track diseases o Classify causes of disease o Collect data for research o Evaluation of hospital service utilization · Find the diagnosis in the alphabetic index o Look under the main word of the diagnosis o Look under the anatomic location of the problem · Always look up the code in the tabular list to compare similar codes · Do not code a condition identified as "rule out" or "R/O" because the diagnosis has not been established

1. Describe how to balance a cash drawer

· Drawer may be moved to safe for the night · Standard sum is left in the drawer for the beginning of the day · Any additional cash should be counted and compared to the financial ledger

3. Describe the type of codes included in each section of the Current Procedural Terminology (CPT) manual (Level I HCPCS codes).

· Evaluation and Management (99201-99499) · Anesthesia (00100-01999) · Surgery (10021-69990) · Radiology (70010-79999) · Pathology and Laboratory (80047-89356) · Medicine (90281-99607)

2. Describe the levels of Healthcare Common Procedure Coding System (HCPCS) codes

· Level I Codes o First level of HCPCS codes (95%-98% of codes used for Medicare Part B) includes the current CPT codes Annually updated by AMA, who publishes code books and electronic code sets · Level II Codes o Additional HCPCS codes for procedures, injections, and durable medical equipment covered by Medicare Part B o HCPCS Level II code books are available from several publishers; can also be obtained online from CMS

1. Identify the information contained on a fee schedule and describe how it is used.

· List of charges for each procedure performed in the office · When computer billing program is used, the charge usually comes up when a procedure is selected · Office may have more than one fee schedule due to limits set by insurance companies

1. Discuss methods to transfer funds electronically

· Money transferred from one bank account to another · Includes credit and debit card payments, direct deposit payments, direct debit payment, and online bill payment

1. Describe precautions to take when accepting checks, credit cards, or debit cards

· Must check carefully that check is valid and legal · Checks accepted only for outstanding amount · Credit or debit card transactions must show actual card · Identification can be required to ensure they are cardholder

1. List the steps to post charges, payments, and/or adjustments to the patient account

· Payments by patients o Cash, check, or credit card at the time of the visit o Checks received in the mail o Online payments through the practice website · Payments by insurance companies o Checks received in the mail o Electronic transfer of payments · All payments must be posted to each individual patient account o Insurance companies often pay several claims with the same payment o Patients may pay for all accounts in one family · Payments posted to individual accounts must balance with total payments received · Adjustment: change to a patient account that is neither a charge nor a payment o Credit (negative) adjustments are subtracted from the balance § Discounts such as for payment in full at time of visit § Professional courtesy to other physicians or their families § Discounts to insurance companies (if a separate fee schedule is not used) · Debit (positive) adjustments are added to the balance o Returned check

1. Describe how entries are made in the cash disbursement journal.

· Record of payments made to cover expenses of the practice · Record of disbursements kept in addition to checkbook either manually or on computer · Usually a method to track expenses by categories

1. Describe the history and rationale for using coding systems in medical card.

· The first comprehensive disease classification system published in the U.S. in 1869 o Called American Nomenclature of Disease o Published by the American Medical Association · To turn a classification system into a coding system, each element must be given a code

1. Perform diagnostic coding 2. Explain how procedure and diagnosis coding are used by third-party payors to validate medical necessity. ·

· Third-party payers make payment decisions based on medical necessity · Tests and procedure must be justified based on diagnosis · Upcoding: when incorrect medical codes are used to obtain a higher level of reimbursement · Down coding: when medical codes do not reflect a high enough level of service