Health Care Claim Preparation and Transmission

1. 8 Health Care Claim Preparation and Transmission

2. 8-2 Learning Outcomes When you finish this chapter, you will be able to: 8.1 Distinguish between the electronic claim transaction and the paper claim form. 8.2 Discuss the content of the patient information section of the CMS-1500 claim. 8.3 Compare billing provider, pay-to provider, rendering provider, and referring provider. 8.4 Discuss the content of the physician or supplier information section of the CMS-1500 claim. 8.5 Compare required and situational (required if applicable) data elements on the HIPAA 837 claim.

3. 8-3 Learning Outcomes (Continued) When you finish this chapter, you will be able to: 8.6 Identify the five sections of the HIPAA 837 claim transaction and discuss the data elements that complete it. 8.7 Explain how claim attachments and credit-debit transactions are handled. 8.8 Define a clean claim. 8.9 Identify the three major methods of electronic claim transmission.

4. 8-4 Key Terms • administrative code set • billing provider • carrier block • claim attachment • claim control number • claim filing indicator code • claim frequency code (claim submission reason code) • claim scrubber • clean claim • CMS-1500 • CMS-1500 (08/05) • condition code • data element • destination payer • HIPAA X12 837 Health Care Claim or Equivalent Encounter Information • HIPAA X12 276/277 Health Care Status Inquiry/Response

5. 8-5 Key Terms (Continued) • individual relationship code • legacy number • line item control number • National Uniform Claim Committee (NUCC) • other ID number • outside laboratory • pay-to provider • place of service (POS) code • qualifier • rendering provider • required data element • responsible party • service line information • situational data element • taxonomy code

6. 8-6 8.1 Introduction to Health Care Claims • The HIPAA-mandated electronic transaction for claims is the HIPAA X12 837 Health Care Claim or Equivalent Encounter Information—used to send a claim to primary and secondary payers • The electronic HIPAA claim is based on the CMS-1500, which is a paper claim form

7. 8-7 8.1 Introduction to Health Care Claims (Continued) • National Uniform Claim Committee (NUCC)– organization responsible for claim content • CMS-1500 (08/05)—current paper claim approved by the NUCC • Legacy number—provider’s identification number issued prior to the National Provider Identification system

8. 8-8 8.2 Completing the CMS-1500 Claim: Patient Information Section • The CMS-1500 claim has a carrier block and thirty-three Item Numbers (INs) • Carrier block—data entry area in the upper right of the CMS-1500 • Condition code—two-digit numeric or alphanumeric codes used to report a special condition or unique circumstance

9. 8-9 8.2 Completing the CMS-1500 Claim: Patient Information Section (Continued) • The upper portion of the CMS-1500 claim form (Item Numbers 1-13): • Lists demographic information about the patient and specific information about the patient’s insurance coverage • Information is entered based on the patient information form, insurance card, and payer verification data

10. 8-10 8.3 Types of Providers • It may be necessary to identify four different types of provider: • Pay-to provider—person or organization that will be paid for services on a HIPAA claim • Rendering provider—term used to identify an alternative physician or professional who provides the procedure on a claim • Billing provider—person or organization sending a HIPAA claim • Referring provider

11. 8-11 8.4 Completing the CMS-1500 Claim: Physician/Supplier Information Section • This part identifies the health care provider, describes the services performed, and gives the payer additional information to process the claim • Other ID number—additional provider identification number • Qualifier—two-digit code for a type of provider identification number other than the NPI • Outside laboratory—purchased laboratory services

12. 8-12 8.4 Completing the CMS-1500 Claim: Physician/Supplier Information Section (Cont.) • Service line information—information about services being reported • Place of service(POS) code—administrative code indicating where medical services were provided • Taxonomy code—administrative code set used to report a physician’s specialty • Administrative code set—required codes for various data elements

13. 8-13 8.4 Completing the CMS-1500 Claim: Physician/Supplier Information Section (Cont.) • The lower portion of the CMS-1500 claim form (Item Numbers 14-33): • Contains information about the provider or supplier and the patient’s condition, including the diagnoses, procedures, and charges • Information is entered based on the encounter form

14. 8-14 8.5 The HIPAA 837 Claim • Data element—smallest unit of information in a HIPAA transaction • Example: a patient’s name • Required data element—information that must be supplied on an electronic claim • Situational data element—information that must be on a claim in conjunction with certain other data elements

15. 8-15 8.6 Completing the HIPAA 837 Claim • The five sections of the HIPAA 837 claim transaction include: • Provider information • Subscriber information • Payer information • Claim information • Service line information

16. 8-16 8.6 Completing the HIPAA 837 Claim (Continued) • Responsible party—other person or entity who will pay a patient’s charges • Claim filing indicator code—administrative code that identifies the type of health plan • Individual relationship code—administrative code specifying the patient’s relationship to the subscriber • Destination payer—health plan receiving a HIPAA claim

17. 8-17 8.6 Completing the HIPAA 837 Claim (Continued) • Claim control number—unique number assigned to a claim by the sender • Claim frequency code (or claim submission reason code)—administrative code that identifies the claim as original, replacement, or void/cancel action • Line item control number—unique number assigned to each service line item reported

18. 8-18 8.7 Handling Claim Attachments and Credit-Debit Transactions • Claim attachment—additional data in printed or electronic format sent to support a claim • Examples include lab results, specialty consultation notes, and discharge notes • Patient credit-debit transactions are carefully processed and recorded by the practice • The amount charged is reported to the patient once billed

19. 8-19 8.8 Checking Claims Before Transmission • Claims are carefully reviewed before transmission • Clean claim—claim accepted by a health plan for adjudication • Properly completed and contains all the necessary information • HIPAA X12 276/277 Health Care Claim Status Inquiry/Response—electronic format used to ask payers about claims

20. 8-20 8.9 Clearinghouses and Claim Transmission • Practices handle the transmission of electronic claims with three major methods: • In the direct transmission approach, providers and payers exchange transactions directly • The majority of providers use clearinghouses to send and receive data in correct EDI format • Some payers offer online direct data entry (DDE) to providers, which involves using an Internet-based service into which employees key the standard data elements • Claim scrubber—software that checks claims to permit error correction