A Project Report On

“AR MEDICAL BILLING”

At
OMEGA HEALTHCARE

Project Report Submitted to the Bharathiar University in partial fulfilment of the requirements
for the Award of the Degree of
Bachelor of Business Administration

Submitted By
B.Ma.Satyaa Suthan
(15O25A0016)

Project Guide
Prof. Ms. N. NANDINI
Faculty & Coordinator, IIKM Business School
COIMBATORE
June 2018

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 DECLARATION

I hereby declare that the project entitled “AR Medical Billing” at Omega Healthcare submitted
for the BBA Degree at Bharathiar University is my original work and the dissertation has not
formed the basis for the award of any degree, associate ship, fellowship or any other similar titles.

Place:

Date:

(B.Ma.Satyaa Suthan)

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 CERTIFICATE

This is to certify that the project entitled “AR Medical Billing “at Omega Healthcare is a bonofide
research work carried out by Ms.B.Ma.Satyaa Suthan student of BBA, BHARATHIAR
UNIVERSITY, Coimbatore, during the year 2015 – 2018 in partial fulfilment of the requirements
for the award of the Degree of Bachelor of Business Administration and that the project has not
formed the basis for the award previously of any degree, diploma, associate ship, fellowship or any
other similar title.

…………………………. …………………………………………………………………………
Prof. N. NANDINI Dr. M. Ramki Murugan
Project Guide Director (Academics)
IIKM Business School IIKM Business School
……………………………………………………………………………………………………..

…………………..
External Examiner

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 ACKNOWLDGEMENT

It gives me great pleasure in presenting the project report that gives the details on “AR Medical
Billing “at Omega healthcare.

In the first place, I thank the Management of IIKM Business School, Chennai for giving me an
opportunity to work on this Project. I would like to thank my guide Prof. Ms. N. NANDINI,
Faculty & Coordinator, IIKM Business School, Chennai for having given me her valuable
guidance for the Project. Without her help it would not have been possible for me to complete the
Project.

I wish to place my sincere gratitude to Mr.Jayshankar (DGM) and Mr.

Dinesh.c.Kumar(Sr.Manager) at Omega Healthcare without whom this internship would not
have been possible. Their timely guidance and all other technical support helped me immensely to
bring out a very successful project.

I also extend my thanks to the entire TEAM of Omega Healthcare for furnishing me various
inputs and guidance required for my internship.

I would be failing in my duty if I do not acknowledge with a deep sense of gratitude the sacrifices
made by MY PARENTS and thus have helped me in completing the Project work successfully.

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 ABSTRACT

This project is aimed at showcasing the growth or Medical Billing Sector and the resolution
involved in getting payments for the claim. Going to the doctor may seem like a one-to-one
interaction, but in reality it’s part of a large, complex system of information and payment. While
the insured patient may only have direct interaction with one person or healthcare provider, that
check-up is actually part of a three-party system.

The first party is the patient. The second party is the healthcare provider. The term ‘provider’
includes hospital, physicians, physical therapists, emergency rooms, outpatient facilities, and any
other place where medical services are performed. The third and final party is the insurance
company, or payer.

It’s the medical biller’s job to negotiate and arrange for payment between these three parties.
Specifically, the biller ensures that the healthcare provider is compensated for their services by
billing both patients and payers. We bill because healthcare providers need to be compensated for
the services they perform.

In order to do this, the biller collects all of the information (found in a “superbill”) about the patient
and the patient’s procedure, and compiles that into a bill for the insurance company. This bill is
called a claim, and it contains a patient’s demographic information, medical history, and insurance
coverage, in addition to a report on what procedures were performed and why.

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 TABLE OF CONTENTS

S.NO TITLE PAGE

1 Title Page 1
2 Declaration 2
3 Certificate 3
4 Acknowledgement 4
5 Abstract 5
6 Table of contents 6
Chapter 1-Introduction
7 1.2-Company profile. 7

Chapter 2-Stages of Medical Billing

2.1 -Initial Evaluation
2.2 -Analysis and Prioritizing
2.3 -Collection
8 2.4 - Roles and Responsibilities of A/R Specialists 11

Chapter-3 Overview Medical Billing

3.1-Types of health insurance
3.2-Parties in Medical Billing
3.3-Types of insurance coverage
9 3.4-Types of insurance plans 15
Chapter-4 Denial Overview
10 4.1- Types of Denials 23
11 Chapter-5 Industry scale 28
12 Conclusion 34
13 Webliography 35

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 CHAPTER 1

INTRODUCTION

A/R Follow-up Crucial in Medical Billing

The number of services provided by physicians, hospitals, and

nursing homes are continuously increasing. Each time patients are given treatment and care,
they owe a certain amount to the physicians or hospitals.

An effective insurance model helps healthcare organizations in recovering over -due

payments from insurance carriers easily and on time. This is when accounts receivable (A/R)
follow-ups come into the picture. It helps the healthcare service providers run their practice
smoothly and successfully, while ensuring the owed amount is refunded back in as short a
time as possible.

Why is it Necessary to Have A/R Team for Healthcare Services?

The accounts receivable follow-up team in a healthcare organization is responsible for

looking after denied claims and reopening them to receive maximum reimbursement from
the insurance companies. Medical billing A/R and revenue cycle management handled by an
in-house team is a thing of the past. Today, it demands billing professionals with a
specialized skill-set to look after the A/R follow-ups.

It must be noted that along with A/R follow-ups, there are several other important processes
such as charge entry, verification, and payment posting that need to be completed first.
During these procedures a medical billing specialist determines the exact procedure code
and diagnosis code based on the treatment plan. There are chances that the insurance
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company will deny claims if they don't adhere to the rules, therefore it is crucial to have a
dedicated A/R team who can follow-up with the insurance firm to resolve your denied
claims.

Why Choose Outsource2india for Medical Billing & Coding Services?

Drastic reduction in the number of denials - Flaws in coding or inaccuracies in data are the main
causes for claims getting denied. With the skilled Outsource2india billing and coding team
handling your claims, you will see a sharp reduction in the number of denials in just a few days.

Regular reports - Our team will keep you updated about the status of your claims, by providing you
with daily, weekly and monthly progress reports. The reports will include details about
productivity, procedure code analysis, projections and pending problems, if any.

Process-driven approach - We follow a process that includes steps such as Insurance Eligibility
Verification, Patient Demographic Entry, CPT/ ICD-10 Coding, Charge Entry, Claims
Submission, Accounts Receivables Follow-up, Payment Posting, Denial Analysis and Accounts
Receivables Management.

Customized solutions - We are very flexible and can provide you with customized medical billing
and coding services to meet your specific requirements.

Medical billing and coding for varied specialties - At O2I, we have expertise in working with
multiple specialties, such as microbiology, ophthalmology, radiology, pulmonary, obstetrics and
gynecology, neurology, anesthesiology, cardiology, critical care, endocrinology, emergency
surgery, general surgery and gastroenterology, amongst others.

Get Our Experts to Work for You

One of our major differentiators is our skilled team of billing and coding experts who have
in-depth knowledge and hands-on experience on working with Medicare, HIPAA and Medicaid
regulations. Our team has a thorough understanding of procedural and diagnostic coding, accounts
payable management and electronic medical claims submission.

Our skilled medical billing and coding experts are proficient with -

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ICD-10, CPT and HCPCS codes across different specialties

Payer-specific medical coding requirements

Governmental, regulatory and insurance requirements

Our certified medical coders (CPC) keep themselves updated with constantly-changing trends in
the medical industry, especially in ICD-10, CPT and HCPCS codes. We also stay current with the
latest versions of medical coding software such as Encoder Pro and Flash Code.

1.2 COMPANY PROFILE

ABOUT OMEGA HEALTH CARE

Vision

Our Vision is to be the global leader and provider of choice for healthcare business and knowledge
process outsourcing services.

Mission

Be an ally to third party revenue cycle management companies, by never selling directly to
physicians or hospitals

Improve the bottom line for our customers. Your success is our success

Focus on healthcare verticals only, to become the best at what we do

Respond proactively to change in order to be an agile and cutting-edge organization

Ensure our growth is planned and predictable by using robust planning tools and methodologies

Corporate Values

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Omega prides itself on a culture rooted in the following fundamental principles. These values
guide our actions and decisions every day.

Customer service : We operate with the highest level of ethics and take pride in exceeding
customer expectations by focusing on service quality

Respect for the Individual : We treat people with dignity and the highest level of respect

Transparency : We encourage all Omega team members to express their views openly and
honestly

Equal opportunity for all : We value diversity and provide equal opportunity for employment,
learning, and growth within the organization

Collaboration : We encourage a participatory workplace by promoting team spirit and celebrating

team accomplishments

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 CHAPTER-2

Stages of Medical Billing

The 3 Stages of Medical Billing A/R Follow-up

Most of the medical billing specialists perform the A/R follow-up in a very systematic
manner, which is usually conducted in three stages:

2.1 Initial Evaluation

2.2 Analysis and Prioritizing

2.3 Collection

2. 1: Initial Evaluation

This stage involves the identification and analysis of the claims listed on the A/R aging
report. The team reviews the provider's policy and identifies which claims need to be
adjusted off.

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2. 2: Analysis and Prioritizing

This phase is initiated once the claims are identified which are marked as uncollectible or for
claims where the carrier has not paid according to its contracted rate with the healthcare
provider.

2.3: Collection

The claims identified to be within the filing limit of the carrier are re-filed after verifying all
the necessary billing information such as claims processing address and conformation to
other medical billing rules. After completing the posting of payment details for outstanding
claims, patient bills are generated as per the client guidelines and then followed up with the
patients for payments.

2.4 : Roles and Responsibilities of A/R Specialists

There is a massive amount of work to be done before the physician can claim an amount from
the insurance firm. Ideally an A/R team comprises of two departments -

A/R analytics

A/R follow-up

The A/R analytics team is responsible for studying and anal yzing denied claims as well as
partial payments. Also, if any claim is found to have a coding error, the A/R team corrects it
and resubmits the claim.

The A/R follow up team on the other hand constantly communicate with patients, healthcare
service providers, and the insurance firms and take necessary actions based on their
feedback or responses. The skills and quality of services delivered by the A/R team
eventually helps in determining the financial health of a healthcare practice.

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6 Reasons Why A/R Follow-up is Important in Medical Billing Process

The major challenge most companies face in the medical billing process is A/R follow -up
management. So why is it so important? Here are some of the more popular reasons:

1. Financial Stability of the Hospital: The financial stability of any healthcare service
provider is highly dependent on maintaining a positive cash flow. The hospital has to
maintain a steady flow of revenue to cover expenses so as to provide patient care services,
and the A/R department ensures this is taken care of.

2. Helps in Recovering Overdue Payments: A/R follow-up helps all hospitals, physicians,
nursing homes, etc. to recover the over-due payments without any hassle. When there is a
team which is constantly involved in the claims follow-up procedure, it becomes easier for
the healthcare providers to receive payments on time.

3. Minimize Time for Outstanding Accounts: The primary objective of A/R management is
to minimize the amount of time that accounts are allowed to remain outstanding. The team
tracks accounts that have not been paid, assesses a suitable action required to secure
payment, and implements procedures for secure payment.

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4. Claims Never Go Missing: The biggest reason for delay in payments is due to the claim
not being received. This usually happens when paper claims are lost. To avoid this, it is wise
to send the claims in the electronic form. If the claim has been followed -up and you are
aware that the claim hasn't been received, then it becomes easier to send another request for
the claim soon.

5. Claims Denied can be Followed Up: Depending on the denial reason, you can actually
send a new claim request with the required corrections made. By calling the insurance
companies and finding out the denial reason instead of waiting for the denial reason on mail,
the A/R department can ensure that all claims are followed through till the end.

6. Recover Claims Kept Pending for Information: Sometimes claims are kept pending for a
certain amount of time due to additional information needed for the member. By
following-up properly the A/R team can inform the member about the situation and then a
suitable action is taken so that the process can be sped up.

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 CHAPTER-3

OVERVIEW MEDICAL BILLING

3.1 Medical Billing:

Gone are the days when the physician used to accept entire amount due from all the patients
directly and immediately after the services was rendered. In those days medical expenses was
affordable. But it is a different scenario now. Costs of medical expenses are so high that a normal
middle class people will not be able to afford the entire cost of medical expense. Here is where the
insurance company comes into picture. When patient takes policies with a health insurance
company, the insurance takes the responsibility of all the financial risks undergone by the patient
in relation to medical treatment for himself or is dependants during the tenure of the policy. Since
insurance companies carry financial risks they are also referred as carriers

The terms and conditions of a patient ‘s medical policy clearly define its scope. The scope may be
limited to a given set of benefits or subject to certain conditions. Only if the services are within the
scope of the policy and only if the conditions, if any, are met will the services will be covered
and reimbursed by the carrier. In recent times insurance sector has come along way in health care
reimbursement.

As discussed above, the physician does not get paid for his services immediately after they are
rendered. Majority of the patients has insurance coverage and details of such coverage are
provided to the physician before treatment. It is the responsibility of the physician to submit claims
to the insurance company and get paid for his services. Submitting claims and getting paid is not as
simple as it looks. It is a lengthy process and involves a lot of rules and regulations, systems and is
very complicated. The physician cannot provide his entire attention to this activity. Hence the
concept of Medical Billing arose.

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3.2 Parties in Medical Billing

There are three parties in Medical Billing Process. The PHYSICIAN, The INSURANCE
COMPANY and The PATIENT. The Physician in order to attain his objective both should comply
with the rules and regulations spelt out by various insurance companies in submitting claims and at
the same time do not penalize the patient.

WHAT IS HEALTH INSURANCE?

The dictionary defines Insurance as: “Protection against risk, loss or ruin by a contract in which an
insurer (The Insurance company) guarantees to pay a sum of money to the insured (you) in the
event of some contingency (a random occurrence) such as an accident, a death, or illness, in return
for the payment of a premium”. Among the many types of insurance are health, disability, liability,
malpractice, property, auto and life insurance. Health Care Insurance is a contract between a
policyholder* and an insurance carrier (or government program) to reimburse the policyholder for
all or a portion of the cost of medically necessary treatment rendered by health care professionals.
In some policies the contract can include preventive care as well as medically necessary
treatment.(*A policyholder is an individual in most cases. In Group health insurance the
policyholder will be the employer the individual works for who holds the contracted with the
insurance company. )As a medical biller, you need to recognize the various ways in which a
patient may obtain health insurance coverage. There are three way a person may obtain health
insurance coverage:

1. Group Health Plan: a plan arranged by an employer or special interest group for the benefit of
members and their eligible dependents. This plan provides maximum benefit packages based on
desired coverage and cost factors. Group policies are often benefits of employment that are
provided by the employer with little or no cost to the insured(employee).

2. Individual or : a plan issued to an individual. This type of coverage has a high premium with
benefits based on the needs and financial factors of the individual policyholder.

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3. Government programs are designed to provide benefits and health care for individuals who
would not otherwise be able to afford them. These programs are Medicare, Medicaid, and
CHAMPUS programs. Health insurance was designed to assist the patient with the expenses
incurred for medical treatment. The insurance company did not design their policies to alleviate
the patient of the financial burden of medical care.The carrier cannot be expected to provide
reimbursement for which coverage has not been purchased. This refers to a benefit that is not in the
contract, such as an individual who purchases a policy with only hospital coverage, the carrier
cannot be expected to reimburse the physician’s charges.

WHO IS THE INSURANCE CARRIER

The insurance company, which writes and administers the policy, is commonly referred to as the
CARRIER. It is also known as the insurer, underwriter or administrative agent. Carriers
are responsible for providing coverage as outlined in the contract between the company and the
insured (an individual person) or contracting group (an employer group or corporate group). So
who are the insurance carriers by name? There are so many I can’t name them all. A few examples
are BlueCross/Blue Shield, Aetna Health Plans, Cigna Health Plans, Health Choice, etc. Currently
there are over 2000 health insurance carriers in the United States. There is a book that can be
purchased, Health Insurance Carrier Directory, by PMIC. This book is updated every year, it lists
each company address and phone numbers and it can be purchased at most bookstores. Each
insurance carrier offers many different types of plans and will at times customize a plan for a large
corporation. It is also known that the major insurance companies (except for Medicaid programs,
which are managed, by data processing companies) administer most government health care
programs. Thus a single carrier may sell individual policies and group plans, and administers a
government program such as Medicare.

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3.3 TYPES OF HEALTH INSURANCE COVERAGE

The major types of health insurance coverage fall neatly into seven categories: Commercial, Blue
Cross and BlueShield, Medicare, CHAMPUS, Medicaid, Worker’s Compensation and Health
Maintenance Organizations (HMOs).This is not to say that the following seven health insurance
types are the only types of insurance coverage.

COMMERCIAL CARRIER

Commercial carriers offer contracts to individuals and groups, mostly groups, under which
payments are made to the beneficiary (or to the providers if they have accepted assignment of
benefits) according to an indemnity table or schedule of benefits for medical services. Commercial
plans generally do not have special contract agreements with physicians. In commercial plans it up
to the patient to file their claims. It should be noted that not every service is covered under
commercial plans; each one has it own benefits and exclusions. In general, most commercial plans
use UCR as a basic for maximum payment cost. Most commercial plans conform to one of three
basic types:

Major Medical Plans

These policies are designed for catastrophic situations only, and there is no payment under such
plans for minor health problems. They usually take up where basic plans leave off, and almost
always have large deductibles and co-payments.

Comprehensive Medical Plans

These plans consist of combinations of Basic and Major Medical benefits. It combines the best of
both plans, giving the insured a small benefit payable at 100% for the minor illness’ that occur
with the balance of all charges being applied to the major medical portion of the plan, where its
subject to the deductible and a coinsurance.

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THE BLUE’S Blue Cross

Blue Cross pertains to inpatient hospital services, nursing homes, and home health care services to
their subscribers. Independent, generally non-profit community service organizations that provide
prepaid health care services to their

subscribers. They are called “prepayment” plans because individuals pay in advance for the health
services they may need. In many states the Blues’ (Blue Cross and Blue Shield) have merged, to
provide comprehensive coverage for hospital and non-hospital services. Some Blue Cross plans
have over time converted to “for profit”.

Civilian Health and Medical Program of the Uniformed Services. This program that makes health
care benefits available to dependents of active military personnel, as well as retired military
personnel and their families. These people can go non-military doctors for medical services and
have part of the cost paid by the Federal government. At age 65, all CHAMPUS beneficiaries are
transferred to the Medicare program. CHAMPUS is similar to Medicare, but there are differences
in the deductible and co-payments.

WORKER’S COMPENSATION

This covers medical expenses and disability benefits for workers whose injuries or illnesses are the
result of doing their jobs. All employer with over a specific number of employees is required to
carry Workers Compensation insurance

with a carrier of the employer’s choice. Worker’s Compensation insurance and its billing are
highly specialized and it is not covered in this textbook.

HEALTH MAINTENANCE ORGANIZATIONS

The previous six lists deal with organizations which pay for medical services but do not provide it.
Health Maintenance Organizations (HMO) are prepaid group practice plans where the patient or

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patient’s employer pays monthly premiums. When services are rendered to the patient the patient
does not pay any additional payments, co-payment or deductibles. There are four types of HMO’s:

Prepaid group Practice Model

This type of HMO delivers medical services at one or more locations through a group of
physicians who contract with the HMO to provide care or thorough its own physicians, who are
employees of the HMO. Kaiser-Permanente is the most well known HMO of this type.

Staff Model

This type hires physicians directly and pays them a salary instead of contracting with a medical
group. Independent Practice Association (IPA)In this type of plan the physicians are not
employees and are not paid salaries. They are paid fees for their services out of a fund drawn from
the premiums collected by the organization that markets the health plan. An IPA makes
contractual arrangements with physicians in the community who provide services from their own
offices. Network HMO In this type of plan the HMO contracts with two or more group practices to
provide health care services to its members.

3.4 TYPES OF INSURANCE PLANS

Each insurance carrier offers many different types of plans, many carriers will customize a plan for
a large groups and/or corporation. There are many forms of health insurance plans currently in
effect in the United States. Some examples of these are, Blue Shield who has hundreds of plans
throughout the U.S., or Alliance and Alliance Plus, who is part of a PPO network that Blue Shield
pays 90% of the allowed charge and the patient paying a 10% co-payment. Blue Choice is an HMO
program incorporated by Blue Shield in 1988. Plus Blue Shield has numerous comprehensive
commercial programs known as fee-for-service programs. There are Central Certification
Programs that cover major corporations with employees all across America. This program allows

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these employees to receive benefits of the contract regardless of the state where the service
is performed. Each and every insurance carrier has their own versions of IPA’s, PPO’s,
HMO’s, Comprehensive plans, major medical and basic plans.

What does this mean to you as a medical biller?

As a medical biller you should be aware that not all insured’s under Blue Cross or Blue Shield has
the exact same coverage. Each of these policies will have different rules and regulation sit is
governed by, with different Exclusions and Limitations. This goes for any insurance carrier, each
having hundred’s of plans all with different individual Exclusions and Limitations. If you are a
medical biller in a provider’s office, request a copy of the patient’s policy handbook. This
handbook is always given by the insurance carrier or the patient’s employer (if a Group Plan).
Photocopy the policy provisions and benefits, write down phone numbers of where benefits are
to be verified and if pre-authorizations are required. I know this all sounds so overwhelming right
now. But by the end if this text book it will all make sense. All these details will be presented and
covered in later chapters.

If you plan on being an independent biller for several providers, knowing the patient’s exact
benefits is not a major necessity, the pre-authorizations, benefits, deductibles and request for
additional information are the responsibility of the provider’s office staff, since they are the ones
receiving the payments and EOB’s directly.

WHAT IS A CONTRACT?

The contract (or policy) is the document that describes the plan benefits, eligibility, effective date,
termination of coverage and Exclusions. Basic health insurance coverage includes benefits for
hospital, surgical and other medical expenses. These contracts or policies are designed to offset
large medical expenses caused by prolonged illness or serious injury. When a policy is issued, the
applicant becomes part of the insurance contract or plan. An insurance policy is a legal document
between the insured, which can be an individual person or an employer group. Each party must

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abide by the terms set forth in the contract. The insured receives a formal written policy from the
insurance carrier in legal language that needs an attorney to interpret. Whereas, most insurance
carriers also give the insured a coverage booklet, this is especially true in the case of an employer
group. The booklet is a simplified explanation or interpretation of the actual policy or contract.
The booklet gives general information of the contract or policy.

THE PLAN

The contract is also known by other terms such as ‘plan’ or ‘policy’. The insurance carriers
structure the contract or plan to ‘spell-out’ the benefits available to the insured and his dependents.
The insurance carrier uses this contract or plan as a guideline to determine a patient’s benefits and
payments. But where it comes to specialized procedures and services, questionable types of
providers, and individual insurance carrier rules and regulations, these areas are not always “so
exact” and sometimes not even mentioned in the plan. When verifying patients’ insurance benefits
the insurance carrier is very important. In Appendix II you will find several types of Insurance
Benefits forms. These forms are used by the doctors’ office to verify the patients’ insurance
benefits. Asking question such as plan deductibles, maximums, percentages, and second
surgical opinions.

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 CHAPTER-4

DENIAL OVERVIEW

Insurance claim denials and rejections are one of the biggest obstacles affecting healthcare
reimbursements. Too often the terms “claim rejection” and “claim denial” are used
interchangeably in the billing world.

This misunderstanding can create very costly errors and can have a significant, negative impact on
your overall revenue cycle. Proper education and management of accounts receivable and
workflow are essential for timely cash flow.

Let’s spend a little time defining the terms and differences between a claim rejection and a claim
denial.

Claim Rejections

Claims Rejections are claims that do not meet specific data requirements or basic formatting that
are rejected by insurance according to the guidelines set by the Centers for Medicare and Medicaid
Services.

These rejected medical claims can’t be processed by the insurance companies as they were never
actually received and entered into their computer systems. If the payer did not receive the claims,
then they can’t be processed.

This type of claim can be resubmitted once the errors are corrected. These errors can be as simple
as a transposed digit from the patient’s insurance ID number and can typically be corrected
quickly.

Claim Denials

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Denied claims are altogether a different issue. Denied claims are defined as claims that were
received and processed (adjudicated) by the payer and a negative determination was made. This
type of claim cannot just be resubmitted. It must be researched in order to determine why the claim
was denied so that you can write an appropriate appeal or reconsideration request.

If you resubmit this type of claim without an appeal or reconsideration request it will most likely
be denied as a duplicate, costing you even more time and money the claim remains unpaid.

4.1 Types of Denials :

1. Coding is not specific enough.

Each diagnosis must be coded to the highest level for that code (the maximum number of digits for
the code being used). For example, In ICD-9, essential hypertension was coded using 401.0
(malignant), 401.1 (benign), or 401.9 (unspecified). In ICD-10 the code is I10. Essential (primary)
hypertension in ICD-9, 401.0 includes “high blood pressure” but does not include elevated blood
pressure without a diagnosis of hypertension, which in ICD-10 would be R03.0

Similarly, in ICD-9 the code for diabetes was 250.0, and the fifth digit indicates the type of
diabetes (e.g., 250.00 diabetes mellitus type one). In ICD-10 the equivalent code is E10.649.

2. Claim is missing information.

Any missing information may be cause for a denial, but the most common missing items are: date
of accident, date of medical emergency and date of onset. Be sure to scrutinize all claims for
missed fields and required supporting documentation.

3. Claim not filed on time.

If a proper claim is submitted, but it’s not within the timing window, it may result in a
denial. Medicare providers should be aware that the Affordable Care Act reduced the
claims-submittal period from between 15 and 27 months down to 12 months. The start date for a
Medicare claim is the date the service is provided to the patient or the “From” date on the claim

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form. The claim must be received by the appropriate Medicare claims processing contractor prior
to the end date (exactly one calendar year after the start date). If a claim is sent prior to the end date
but received after, it will be denied.It is vital that you understand the process in addressing timely
issues.The understanding of what to submit for supporting documentation to receive
reimbursement is critical to appealing timely issues. You will not be reimbursed for the services
denied timely if you do not understand how to handle them. Commercial and Medicare have
different guidelines that are considered timely filing. Per Section 6404 of the Patient Protection
and Affordable Care Act (ACA), Medicare fee-for-service (FFS) claims for services furnished on
or after January 1, 2010, must be filed within one calendar year after the date of service. Claims
with dates of service January 1, 2010, and later received more than one calendar year (12 months)
beyond the date of service will be denied and/or rejected as being past the timely filing deadline.
Other Key Points of Medicare Change Request 7080:

For institutional claims that include span dates of service (i.e., a “From” and “Through” date span
on the claim), the “Through” date on the claim will be used to determine the date of service for
claims filing timeliness.

For professional claims (CMS-1500 Form and 837P) submitted by physicians and other suppliers
that include span dates of service, the line item “From” date will be used to determine the date of
service and filing timeliness. (This includes supplies and rental items).
BE AWARE: If a line item “From” date is not timely, but the “To” date is timely, Medicare
contractors will split the line item and deny untimely services as not timely filed.

4. Incorrect patient identifier information.

To avoid this error, make sure the patient’s name is spelled correctly, the date of birth and sex are
accurate, the correct insurance payer is entered and the policy number is valid. It’s also a good idea
to check whether or not the claim requires a group number, the patient’s relationship to the insured
is accurate, and the diagnosis code matches the procedure performed. Finally, make sure the
primary insurance is listed as such in the case of multiple insurances.

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5. Coding issues.

If you are using an outdated codebook or your coder or biller enters the wrong code, your claim
could be denied. The use of outdated coding books either CPT (Current Procedural Terminology),
ICD-9 (International Classification of Diseases) or (Healthcare Common Procedure Coding
System) HCPCS and/or super bills will result in loss of revenue. Insufficient documentation
occurs when documentation is inadequate to support payment for the services billed or when a
specific required documentation element is missing. When coding and submitting claims it is
imperative that what is documented is billed. If it is not documented carriers, consider the
service(s) were not performed. However, denials related to insufficient documentation, no
documentation, and medical necessities are more complicated because providers must be involved
in improving the process. Coders unequivocally play a key role in denials avoidance, and they are
best suited to proactively identify process deficiencies by using a proactive not reactive approach.
The follow ruling is important to understand how carriers look at errors in billing. Striving to be
proactive not reactive to any concerns and wanting to be sure that practices do not ever fall into the
violation of 18 U.S.C. § 1347. Under that code section, it is a felony to knowingly defraud any
health benefit program or to fraudulently receive payment from any health benefit program, and/or
under 18 U.S.C. § 1035, which makes it a felony to willfully make fraudulent statements or
representations in connection with the receipt of payments for health care benefits. This is nothing
that a practice would ever knowingly do but not using correct billing, procedures and protocols
could put you at risk. The practice should take no comfort in claiming lack of knowledge or that
they were mistaken about the law should audits occur. The statutes governing health care fraud do
not provide leniency for a provider’s lack of knowledge therefore protocols should be in place for
your office to make sure should you have an audit that you have mitigated your risk and liability.

6. Duplicate billing.

Many times, a duplicate bill is the result of human error. However, duplicate bills can result from
resubmitting a claim instead of a follow up or cancelling a procedure or test but not removing it
from the patient account. All claims processing systems contains criteria to evaluate all claims

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received for potential duplication. The claims are placed into two categories: exact duplicate or
suspect duplicate. Due to the nature of the service, some claims may only appear to be
duplicates. Proper coding of the service with the applicable condition codes or modifiers will
identify the claim as a separate payable service, not a duplicate.Exact duplicate claims will contain
the following:

HIC number

Provider number

From date of service

Through date of service

Type of service

Procedure code

Place of service

Billed amount

7. Upcoding or unbundling.

Upcoding refers to intentionally using a higher-paying code on a claim to receive a higher

reimbursement or billing a covered Medicare service in place of a not-covered service.
Unbundling refers to submitting bills piecemeal to maximize reimbursement for tests or
procedures that are required to be billed together. Upcoding refers to a provider’s use of CPT
Codes to bill a health insurance payer (private, Medicaid or Medicare) for providing a
higher-paying service than was performed. It is critical to understand that upcoding is illegal. It is
considered fraudulent practice used by providers who bill for additional services not documented
and/or performed. Another common example of improper coding called “unbundling,” also known
as “fragmentation.” Some health care providers seeking to increase profits will “unbundle” the
tests and/or procedures and bill separately for each component of the group, which totals more

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than the special reimbursement rates. We must be aware that doing this by adding modifiers does
not make this practice acceptable or legal. Medicare reimburses surgeries based on a package of
care (global surgery package). When unbundling for the purpose of receiving additional payments
although may seem profitable is illegal. It is very important to understand the usage of modifiers
and there purpose in the role of coding. Surgeries are designated in the CMS Medicare Physician
Fee Schedule Database (MPFSDB) with 0, 10, or 90 global days.

8. Further documentation requested to support medical necessity.

Sometimes a payer requires medical records before it can adjudicate a claim. This may include the
patient’s medical history, physical reports, physician consultation reports, discharge summaries,
radiology reports and/or operative reports. Medicare and private payers recognize medical
necessity as a deciding factor for claims payment and processing. Each payer might have its own
definition but the outcome is the same. The best way to stay within the bounds of medical
necessity is to think of each element of the history and physical exam as a separate procedure
performed only if there is a clear medical reason to do so. The key is always to have
documentation to support level of service should records be requested. No documentation equals
no services performed. According to section 1862(a)(1)(A) of the Social Security Act, Medicare
will not cover services that “are not reasonable and necessary for the diagnosis or treatment of
illness or injury or to improve the functioning of a malformed body member.”

9. Referral or prior authorization required.

Some payers require you to obtain authorization or a referral from another physician prior to
certain services or procedures being performed. There is a referral and prior authorization that is at
times required and it is important to understand the difference. The primary care physician, who
sends the patient to another healthcare provider for treatment or tests, issues a referral. The payer
to perform the necessary service(s) issues a prior authorization. It is understood by carriers that
obtaining prior authorization is still not a guarantee of payment. The submitted claim must still be
1) supported by medical necessity, 2) filed within the timely filing requirements, and 3) filed by
the provider mentioned in the referral or authorization.
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10. Services not covered/coverage terminated.

Because insurance information can change at any time, it’s critical to verify eligibility every time
services are provided. Make sure the patient’s coverage has not been terminated, their maximum
benefit has not been met (for things like physical therapy and behavioural health) and the service
you’re providing is covered by their plan. Understanding the patients plan and the services you are
providing is important. Some plans the services have a cap although if following correct guidelines
and supporting documentation these services will still be covered. Some examples of these are
physical therapy, speech or occupational therapy and the use of correct modifiers. Coverage can
change therefore it is important to verify and receive updated coverage from your patients. Ask
them each time – they will forget to tell you. Again, a proactive approach is needed. It is also very
important to verify before doing procedures and services requiring precertification under the terms
of a member’s plan. If authorization is required then it needs to be supplied when filing the claim.

CHAPTER-5

INDUSTRY SCALE

The billing outsourcing was valued at USD 6.3 billion in 2015 and is anticipated to reach a value
of USD 16.9billion by 2024, according to a new report Large amount of medical code
representation for diagnosis and treatment coupled with the presence of multiple payers renders
medical billing an intricate part of any medical practice, posing significant challenges. The
challenge mounts when this process mandates adherence to the International Classification of
Diseases-10th revision (ICD-10) code along with dealing with rising healthcare costs and
declining reimbursements. Challenges in managing in-house billing processes include setbacks
experienced in the IT structure, untrained staff, billing errors, and lack of proper financial policy in
place. In order to curb or alleviate these challenges, several healthcare providers, such as acute
care hospitals and clinics/physician offices, prefer outsourcing their medical billing process.

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According to studies, in 2015, 95% of independent physicians have acknowledged that
outsourcing revenue management is the right decision

Healthcare providers face certain challenges in ascertaining the disadvantages of in-house

operation or benefits of outsourcing revenue management operations; hence, they arrived at this
decision by implementing thorough assessment and evaluation of the revenue percentage they
spend on several billing operations. Currently, the healthcare system is witnessing a subsequent
increase in outsourcing of medical billing services by hospitals and physicians. This increase is
attributed to factors such as obligatory implementation of complex ICD-10 coding system,
increasing healthcare costs, and federal mandate to implement electronic medical records (EMR)
to maintain reimbursement levels.

Furthermore, clinics/physician offices are gradually outsourcing their revenue management to cut
unnecessary costs and prevent the burden of managing an administrative team to ensure effective
handling of in-house billing functions.

Further Key Findings From the Study Suggest:

North America reported highest revenue growth in this market. The U.S. is witnessing rapid
changes in healthcare structure reflected by implementation of new medical coding system known
as the ICD-10 coding as well as pressure from the government to implement EMR management
system. These changing regulations coupled with rising healthcare costs are major growth drivers
for the market in this region.

Multispecialty medical groups are implementing consolidation requiring electronic health record
(EHR) integration and building large healthcare networks This integration creates a need for
Revenue Cycle Management (RCM), which in turn demands additional expertise and trained
personnel to manage the same. Consolidation of large healthcare practices is expected to be a one
of the factors that will help in the growth of the market.

Hospitals end-use segment accounts for the largest market share in the medical billing outsourcing
market. The ability to gain total control over billing procedures and minimize loss is the main

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focus of these providers. As healthcare costs rise and profits are decline, RCM outsourcing is
expected to be the best practice considered by these care facilities to manage their revenue.

Grand View Research has segmented the medical billing outsourcing market by component,
service and end user:

Component Outlook (Revenue, USD Million, 2013 - 2024)

In-House

Outsourced

Service Outlook (Revenue, USD Million, 2013 - 2024)

Front End

Middle End

Back End

End User Outlook (Revenue, USD Million, 2013 - 2024)

Hospitals

Physician Offices

Others

Regional Outlook (Revenue, USD Million, 2013 - 2024)

North America

U.S.

Canada

Europe

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Germany

UK

Asia Pacific

Japan

India

China

Latin America

Brazil

Mexico

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33
 CONCLUSION

The researcher completed the entire study and came to the conclusion about the AR Medical
Billing process on how to resolve the claim to get payments as adopted by Omega Healthcare:

The accounts receivable follow-up team in a healthcare organization is responsible for looking
after denied claims and reopening them to receive maximum reimbursement from the insurance
companies. Medical billing A/R and revenue cycle management handled by an in-house team is a
thing of the past.

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 Webliography

 https://capturebilling.com/medical-claim-denials-and-rejections-in-medical-billing/
 https://www.healthinsurance.org/glossary/denial-of-claim/
 https://www.slideshare.net/jvsprasad/medical-billing-ar-manual
 https://www.scribd.com/doc/6437344/Medical-Billing-Simple-Manual

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