Chapter 1-Lesson 1, 2, 3, 4

Introduction

Welcome to the Electroniclaim Tutorial and Certifications web site! Thank you for your participation. It is our sincere hope that together we can assist medical providers in processing electronic claims using state-of-the-art technology with the maximum degree of cost effectiveness.

Your enrollment in this course shows that you are interested in getting ahead in the fast growing, home-based work environment. You have just taken a big step forward in your career development. This course will give you the skills you need to effectively operate your home based medical billing business.

Medical claims processing is an exciting and essential profession in the medical field. You will be working with people who save lives. Currently, the medical industry is a 900 billion dollar industry with a growth rate of over ten percent every year. As a network of "at home" medical billers, it is our goal to accommodate the growing need for cost-effective billing.

Electroniclaim will continue to assist you upon certification and completion of this training program. We will operate as your clearinghouse in handling all of your electronic claims processing. It is for this reason that we have an interest in your future success. We also offer consultation to help you begin your billing service.

You may be completely new to the medical billing profession, or you may already have the necessary skills and experience in medical billing. If you are new to this field, we are ready to teach you all the skills you need to operate your medical billing center. If you already have experience in the medical billing field, this course will be a review of information already used, making this training a "breeze." Regardless of your experience and knowledge, you will be required to pass the tests associated with each chapter, as well as a final examination.

To complete the course and run a profitable billing service, you will need the following tools:

1. a Windows 95/98 based computer with a modem and printer;
2. access to our clearinghouse server;
3. a list of doctors filing paper claims with a form letter; and
4. billing software.

From the very first page of this course until your successful completion of the training, Electroniclaim is dedicated to your success. Our dedication to you extends throughout the establishment of your business. Please remember that we do not make money in our clearinghouse until you are making money.

Course Structure

This course is divided into chapters and lessons. Each lesson contains a new skill which you will master on your way to graduation. The lessons are constructed in an easy-to-follow, step-by-step instruction method that makes learning easy and fun.

As you go through these first lessons, take a minute to look at the basic order of the lesson. After the lesson preview, you will read new material and then take a progress check in the form of a self-graded review.

After you finish the new material in each lesson, you will be ready to take the quiz. The quizzes are designed to highlight what is important in the course in order for you to remember the most significant points.

Nothing in this course is designed to trick you. You will remember many of the items on the quiz without looking back at the chapter material. You may go back to the information in the lesson if you are not certain of an answer. If you still need assistance, you can e-mail our educational support team twenty-four hours a day.

Introduction to Medical Billing

Obviously, the field of medical claims interests you; otherwise, you wouldn’t have enrolled in this course. As a medical claims specialist, you will be dealing with medical bills, helping doctors and other health care providers get paid for their services.

This section will give you an overview of medical bills. You will learn about charges for medical care and how the doctors and insurance companies figure these charges. You will see how a bill is generated from a patient’s first contact all the way through processing and payment. Finally, we will show you a common document in many doctors’ offices, hospitals, and other medical care facilities: The Patient Encounter Form.

What is a Medical Bill?

The medical bill is a document that is generated when a patient receives medical care. This bill usually begins its life as a questionnaire. You have probably seen this questionnaire when visiting your own doctor’s office. The form asks about the patient’s medical history, insurance coverage and other important facts. When this form is complete, the receptionist enters the information into the doctor’s database, either on a computer or manually in a file cabinet. The receptionist then creates the patient’s medical file containing all medical history related to that doctor and his or her office.

For example, if you went to Dr. Weiler annually for a physical, your medical history file at this office would contain all the information from all of your previous visits. This information would include your physical condition, each diagnosis made, and all treatments provided. But how does all of this apply to the medical claims professional? For the medical claims specialist to do a good job, it is very important for the medical files to be complete and accurate. It is from these documents that bills and claims are generated. Medical bills and claims are invoices that list all procedures performed, any diagnosis made, all medicines administered, and all other office charges.

Because all of the items mentioned above cost money to the doctor’s office, hospital or clinic, the doctor’s office will then charge the patient or insurance company for the visit. When all information is correct on the bill, the patient can pay all charges due without worrying about being overcharged. This will also prevent the medical provider from being underpaid, which can result when medical procedures are mistakenly omitted from a patient’s file.

Life Cycle of a Medical Bill

Imagine you are visiting a particular doctor’s office for the first time. When you check in with the front desk, the receptionist asks you to complete a questionnaire requesting your name, address, telephone number, medical history and insurance information. After completing this form, you then return it to the receptionist. By following this procedure, you have begun the life cycle of a medical bill.

The receptionist then enters the information you have provided into the office computer. This information enables the computer to produce a Patient Encounter Form to be used by your doctor. This standard form contains a list of the most common procedures that are performed by that doctor. Usually, an Encounter Form lists various procedures, including office visits, physical examinations, x-rays, cast applications, and many more. Based upon the information you have provided on the questionnaire, the computer can now print your name, billing address, insurance company, and policy number on the Patient Encounter Form. You can then be taken to the examination room, and the form now becomes part of the medical file with which the doctor works as he or she examines you.

After your examination, the doctor will indicate on the Patient Encounter Form the procedures performed. Usually, there is more than one procedure performed. For example, the doctor must circle the Physical Exam/New Patient procedure and the X-ray/Lower Leg Series procedure if x-rays were taken. By noting the items circled, the receptionist can knowledgeably and accurately charge you or your insurance company for your visit.

Now that a bill has been created, what happens to it? It is processed.

Processing the Bill

Once the bill is created, it goes through several stops on its way to being paid. There are three common ways that a patient and medical facility handle bills for medical care:

1. The insurance company may require the patient to pay the entire bill at the medical facility and then to submit a claim to the insurance company for reimbursement.

2. The patient may be required to pay only a co-payment (a pre-set amount) before leaving the medical facility. The doctor’s office then bills the patient’s insurance company by submitting a claim for the remainder of the bill.

3.The patient may not be required to pay anything at the time of the visit. Instead, the medical facility submits a claim to the patient’s insurance company for the bill. After being reimbursed for covered charges from the insurance company, the doctor’s office sends a bill to the patient for the remaining costs not covered by insurance.

The method of processing a bill may vary, depending upon the required manner of payment.

If the entire bill must be paid on the day of treatment, it is the responsibility of the patient to pay on that day and then submit the bill and receipt directly to the insurance company, who then pays the patient directly for all covered charges. If, for example, the bill is $1,000 and the insurance company pays 90% of that amount, the patient is then reimbursed for $900.

If the medical bill is submitted to the insurance company directly by the doctor’s office, the patient may then leave the office without making any payment on that visit. The insurance company receives the doctor’s request for payment and pays the amount covered, which may vary according to the patient’s particular insurance policy. After receiving payment from the insurance company, the doctor’s office will bill the patient for any balance due. For example, if the bill is $100, and the insurance company covers 90% of the bill, the doctor will receive $90 from the insurance company and bill the patient for the remaining $10.

When the insurance company pays for covered services, it will reimburse either the patient or the doctor’s office directly. Reimbursement is the process of paying someone back for services or payments already performed.

A common Reimbursement Chart is shown below:

Medical Bill Owed: $100

Patient pays the entire bill at the time of service. Patient pays flat-rate co-payment. Insurance billed by doctor’s office. Patient sends bill to insurance company. Doctor’s office bills insurance company for remaining amount. Insurance pays doctor for covered charges. Insurance company reimburses patient for covered charges. Insurance company reimburses doctor for covered charges. Doctor’s office bills patient for remaining charges.

A significant role played by the medical claims processor is to submit insurance claims. These are bills submitted to insurance companies requesting payment in accordance with the appropriate insurance policies. Some medical claims specialists work in the doctor’s offices, hospitals, or clinics. Others work at home or for outside claims services. Wherever you work as a medical specialist, this course will give you the knowledge to be accurate and thorough, two essential qualities of a good medical claims processor.

The Importance of Being Accurate and Thorough

When a medical claim is correctly completed and submitted, payments come quickly, and the doctors are happy. A mistake made on the bill can delay payments and result in an expense to the doctor in the form of denied claims, resubmission costs and reduced payments.

You may be required to review bills as they come through your service. This usually means making sure that the diagnosis matches the treatment and that all of the patient’s information (name, address, social security number, etc.) have been completed correctly. When you review this information, you ensure timely and accurate payments.

If a claim is processed with an incorrect treatment or diagnosis, the insurance company may reduce its reimbursement to the doctor. The insurance company will normally return the claim to the doctor’s office for any necessary corrections. This additional step can delay payment to the doctor for many months or result in a complete refusal by the insurance company to pay the claim. Currently, up to 30% of paper claims are rejected by insurance companies for errors or unreadable claims. Doctors need medical claims processors who are accurate in order to insure that claims are completed correctly the first time.

Lesson 1 Review

You need to become familiar with the life cycle of the medical bill. The above overview examines only one part of the routine in a medical office, the New Patient Questionnaire. There are many more activities that occur in the medical office everyday. Lesson 2 examines a typical day in the medical office.

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(Last modified: July 5, 1999)
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