Chapter 5 - Lesson 12, 13

The Future of Medical Billing: Electronic Claims Submissions

Imagine you are working as a medical claims and billing specialist. Joanne comes in and is seen by the doctor. You take the encounter form from Joanne’s appointment and use it to generate an insurance claim. However, you do not fill out the HCFA-1500 claim form-at least, not exactly. Instead, you turn on your computer, start your billing software application and enter the required information. You type in the appropriate information. Then you use a modem and press a few buttons and, voila, the claim is filed! The doctor gets paid with in 7 – 21 days and only 2% of all the claims are rejected compared to the current normal 45-120 days to get paid and 30% rejection rate.

Does that scenario sound a little far-fetched or futuristic? It is not. Electronic claims submission is rapidly gaining popularity. In fact, some insurance programs, including certain government programs, will make it mandatory that all claims be filed electronically in the very near future. This shouldn't alarm you, however. You will soon learn what you need to know about electronic claims to jump in and intelligently operate in the computerized world of electronic claims.

This lesson begins by explaining the overall electronic billing picture. You will learn about software, modems and clearinghouses. You will also see a few examples where electronic billing can save time and money. Next, we will cover additional electronic billing concepts, including how to use the clearinghouse and other advances to ease the filing process.

You won't stop with just learning about electronic claims submissions. We will go on into records management-explaining how to properly keep track of your files-as well as how to find the forms you need to conduct business.

When you have completed the instruction in this lesson, you will be able to:

1. Explain the electronic billing process, from encounter form to clearinghouse.

2. Talk about the basic concepts used in electronic billing.

3. Describe how to properly keep track of records.

Read this introduction to Electronic Claims.

In the past 20 years, we have gone from a nation of paper and written words to a nation filled with electronic mail, computer databases, and the Internet. It is no surprise, then, that the medical records world is following this trend. Up to the present, most medical insurance claims have been filled out by hand or typewriter and then physically mailed to the insurance company for processing. This process will continue to be commonplace for a few more years. However, the medical billing field is starting to move away from paper claims and toward electronic claims. Electronic claims are digitized insurance claims transmitted from a computer using a modem and received by a clearinghouse (a company that processes and sorts electronic claims and passes each claim on to the correct insurance carrier for reimbursement).

This new world of electronic claims presents many opportunities for the medical claims and billing specialist. Software is available that will allow you to keep track of all your medical records - from the doctors you work with all the way down to every single claim you file. This can help eliminate errors, track claims and generally make your life as a medical claims and billing specialist easier.

When you file an electronic claim, you also save valuable time. When a paper claim is filed, the U.S. mail may take a few days to deliver the claim. The insurance company must digitize the information, then it must process the claim and, finally, the company has to mail an EOB and reimbursement back to you. With electronic claims, you send the claim through a modem in a computer. This takes as much time as picking up the telephone and calling the company. The insurance carrier instantly receives the claim, the claim is already digitized and the company can process the claim immediately. Some insurance carriers even handle reimbursements electronically through a process known as direct deposit.

Direct Deposit is a process by which money is electronically deposited into a bank account. In this case, the insurance company authorizes its bank to transfer funds into the physician's account. This is done electronically, via computers, with no actual cash or checks changing hands.

In most cases, when you file claims electronically, you will not send them directly to an insurance company. Instead, you will utilize a clearinghouse.

Clearinghouses

A clearinghouse is a business that takes electronic claims, filed by claims specialists all across the country, sorts them, puts them into the correct format for the insurance company and forwards them to the appropriate agency or carrier. For example, let's say you are filing a claim electronically for Dr. Johnson, one of your clients. You complete the claim and then send it via your computer to the clearinghouse. The clearinghouse's computer reads the claim and checks it for accuracy. When the clearinghouse's computer accepts the claim as valid, it then sorts the claim and sends it to the correct insurance carrier. If there is an obvious mistake on the claim, the clearinghouse computer usually discovers it and rejects the claim instantly. This saves you time because you can immediately fix the error and refile the claim. If you had sent the claim in on paper, it would have taken 2 weeks or more for it to make it back to you for a correction.

The clearinghouse can receive electronic files in many ways. We've already talked about sending files via modem. The modem enables you to use a computer to call the clearinghouse’s computer, using a phone line. Then your computer transmits the data over the phone line, and the clearinghouse's computer sends back a confirmation that it received the entire transmission.

Clearinghouses are not free. They charge to submit claims to insurance companies (everyone has to stay in business right?). Usually, the clearinghouse charges a one-time set-up fee for each of your client doctors. A nominal fee is also charged for each claim you submit. As an independent claims specialist, you can, in many cases, pass the set-up charge along to the doctor. The per-claim charge, however, should be considered when you establish your own fees. As a member of the Electroniclaim network, you may set up as many doctors as you like with our clearinghouse without any fees.

Although you now understand the basic process for filing claims electronically, there are some other things you should know. For example, how does the software available get the information from you and into its database? What kinds of forms do you need and where do you get them? Let's look at the next section to learn about working with electronic claims.

Working with Electronic Claims

The clearinghouse is not the only place where knowledge about electronic claims is important. When you file a claim electronically, you must know what information is being transmitted. This means you must be sure you are entering the right information into the computer. In addition, if you are simply using the computer to fill out the insurance form and then printing out copies, you need to know what kind of forms to buy and what printers to use.

Using the Computer to Complete a Claim

The computer is a useful tool when it comes to medical claims and billing. It is not essential by any means, but it certainly helps by storing records and enabling you to complete, retrieve and review individual claims.

In order to fill out an insurance claim using the computer, you need to have the appropriate software. Software is the computer term used to describe a program. Programs instruct the computer to perform certain functions. The instructions that make up medical claims and billing software enable the computer to accept and process information about medical claims. This includes the fields on the HCFA-1500 form. For any questions regarding software, call our software consultants at 262-240-9700.

Although the software will accept information that is used to fill out the HCFA-1500 form, the information on your screen will rarely look like the form itself. Instead, the computer software uses its own entry screen and your inputed information produce a completed HCFA-1500 form from the printer.

The particular printer you use, along with the software you choose, will dictate what forms you need to have available. If you decide to print out your HCFA-1500 forms on your printer you can buy HCFA-1500 forms through a variety of office supply stores.

When you file electronically, you will need to supply the same information that you would normally put on the HCFA-1500 form. The software included in this course will give you the ability to electronically produce forms using the computer and a printer, and will interact with our clearinghouse and allow you to file the claims electronically. This software is designed to give the entry-level medical claims and billing specialist a jump-start into the world of electronic billing. You also can expand and upgrade your software package at a latter date as your billing business and demands expand.

Setting Up An Electronic Claims Contract

When you are filing claims electronically, you must be sure to have a contract with the physician regarding the claims process. This contract should cover items such as payment, set-up costs and signature status. The signature status is the form that the physician signs indicating his approval of all electronic claims. It is, after all, impossible for the physician to actually sign an electronic claim. As the claim specialist, you should keep the signature status agreement on file to make sure all claims are considered valid. On the electronic signature field, you may have to mark whether or not you have the physician's signature on file. If you have a signature status agreement, you can mark the Yes, you do have the signature on file.

The physician's signature is not the only one required on a medical claim form. Remember, the patient must also sign. This is an area where the physician's office must have the patient's signature on a piece of paper along with a sentence giving the doctor permission to release to the insurance carriers all medical records necessary for any claim. If the physician you are working with has such a form and it is completed, then you can mark the Yes box when you are answering the question, "Patient signature on file?" If you have software that asks you to enter information at the patient signature file field, then you should type SOF or Signature on file.

Medicare has a specific form you must complete and have the patient sign in order to electronically file Medicare claims. This form, a type of patient release form, comes in two formats: the monthly release and a one-time release. The monthly release form authorizes the reimbursement from Medicare for claims during the designated month. The one-time release allows action only on the one specific claim listed on the card.

Managing Records

When you electronically file medical claims, you open yourself up to a new set of potential stumbling blocks. These potential obstacles are not major, and you can avoid them by being thorough and organized with your records. As you can imagine, when you file electronically, you might not have any paper record of the claim you sent in. Nothing to photocopy and file, as the case may be. However, you can keep copies of what you file, even if you file electronically. In fact, it is absolutely essential you keep such records.

How can you keep records of digital information, information that has not ever appeared on a written form? You will have to keep data copies. Data Copies are exact copies of the claims you filed, and the copies are stored digitally on a computer disk. If you keep your records on disk, and you should remember to have at least two copies of each record. These copies should be on separate disks, and you should keep the two disks in two separate places. Preferably, one copy should be safe no matter what happens to the other.

Imagine that your office is destroyed or damaged. Would you have copies of everything you need? If you follow strict, appropriate record management techniques, you will have no problems finding the data. You can simply go to the second set of disks and retrieve the files. You can imagine how much trouble it would be if you had only one set of copies, and that set was in the drawer in the desk in your office.

Facts About Keeping Records

Whether you file electronically or manually, it is important to keep copies of everything you file.

1. If you file electronically, keep data copies on two separate disks, in two separate places.

2. If you use a computer to print out forms and then you file the forms manually, copy all claims to a disk for storage; also print out copies of all claims and file them.

Confidentiality

We will cover ethics, confidentiality and responsibility lightly in this section. Medical records are confidential. That means they cannot be released to anyone who is not specifically authorized to see them. When working with a doctor you might be required to sign a confidentiality contract. This helps put the doctor at easy about releasing confidential information from the doctors practice.

Be extremely careful at all times were you leave any confidential information and patient reports.

Do not leave papers in your car or laying around the house. If possible lock them up in a drawer or filing cabinet that only you have a key to.

If you ever have a question about releasing information, be sure to contact us for advice.

This concludes the material that will be covered on the comprehensive final exam. You may request practice HCFA forms by emailing technical support.

Congratulations and good luck on your exams!

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How to use ElectroniClaim

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(Last modified: July 5, 1999)
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