Understanding an Electronic Remittance Advice (ERA)

Health Assets Management, Inc.465 BroadwayKingston, NY 12401P. (845) 334-3680F. (845) 340-7314www.healthassets.cominfo@healthassets.com Understanding an Electronic Remittance Advice (ERA) Health Assets Management, Inc. 2012

What is an ERA? • An electronic explanation of payment from the insurance company. • ERAs explain: the amount allowed by the insurance company (with respect to the charged amount), the amount paid by the insurance company, the amount deemed to be covered by another payer, and much, much more. • ERAs may be sent in place of, or in addition to, “standard” paper remittances that you may receive. Health Assets Management, Inc. 2012

Reading an ERA Health Assets Management, Inc. 2012

Insurance Company, Check, and Pay-To (Provider) Information Patient and Insurance Payment Information Adjustment Code Explanations Health Assets Management, Inc. 2012

About the provider and payor Insurance Company, Check, and Pay-To (Provider) Information Health Assets Management, Inc. 2012

Insurance Company Name Insurance company name, from which the payment is being made. Payment may say it’s from a larger insurance company, yet is actually from a smaller insurance company [i.e. AARP or UBH Optum “being paid” under the UHC umbrella.] Health Assets Management, Inc. 2012

Check Information The date shown is the date of the check. If you are not enrolled in automatic deposits (Electronic Funds Transfers), this is the date that the check is cut. The check may take up to three weeks to be mailed to you. The check number shown on the ERA will correspond exactly with the number on the actual check. This is important for reconciling accounts. The total amount of the check includes payment for all dates of service which are in the particular ERA. In this example, a $20.00 secondary insurance payment was made for one date of service. Health Assets Management, Inc. 2012

Pay-To (Provider) Information Name and billing address of the rendering provider. This is not necessarily the location where services were performed, rather where the check is being sent. Health Assets Management, Inc. 2012

About the Patient Patient and Insurance Payment Information Health Assets Management, Inc. 2012

Patient Name This is the name of the patient for whom this payment is being made. If an ERA contains more than one claim, the names will always be in alphabetical order by the patient’s last name. Health Assets Management, Inc. 2012

Patient HIC Number (Insurance Identification Number) The patient’s unique, identifying number for this insurance company. The number may contain any combination of letters and/or numbers. Health Assets Management, Inc. 2012

Claim Status Health Assets Management, Inc. 2012

Claim Status – “Processed as Primary” • This payment is coming from the patient’s primary insurance company. • There is no secondary insurance that the primary is aware of, in order to “auto-cross” the claim. This does not mean that the patient only has one insurance. Health Assets Management, Inc. 2012

Claim Status – “Processed as Primary, forwarded to Additional Payer(s)” • This payment is coming from the patient’s primary insurance company. • The primary insurance company is “auto-crossing” the claim to the secondary insurance company for processing. Health Assets Management, Inc. 2012

Claim Status – “Processed as Secondary” • This payment is coming from the patient’s secondary insurance company. • Secondary insurance companies will not “auto-cross” claims to tertiary insurances, even if the patient has one. Health Assets Management, Inc. 2012

Date of Service • This is the date that the patient was seen. • You are being paid for this patient, for the services that you performed on this date. Health Assets Management, Inc. 2012

CPT Code • This is the CPT (procedure) code which was billed for this date of service. • Common CPTs are 90801 (for the initial evaluation) and 90806 or 90862(for follow-up visits). Many more are used for specific purposes. Health Assets Management, Inc. 2012

Charged Amount This is the amount charged for this date of service, according to the CPT code. The higher the intensity of the procedure, the higher the charged amount. Insurance companies will decide exactly how much of the charged amount to “allow.” Health Assets Management, Inc. 2012

Allowed Amount The allowed amount is how much of the charged amount that the insurance company deems payable/collectable. This is the absolute maximum amount of money for which the insurance companies (primary/ secondary/ tertiary), or the patient can be held responsible. Health Assets Management, Inc. 2012

Deductible Amount This is the amount which was applied to the patient’s insurance deductible, if applicable. Some secondary insurances will cover the deductible, but others will not. Secondary insurances can have a deductible as well. If the secondary and/or tertiary insurances do not cover this deductible amount, this amount should be expected directly from the patient. Health Assets Management, Inc. 2012

Coinsurance This is the amount that should be covered by the patient’s secondary insurance, if there is any. If the patient only has one insurance, this amount should be expected directly from the patient. Patient responsibility (without another insurance company covering the amounts) includes deductible and coinsurance. Health Assets Management, Inc. 2012

Adjustment Code/Adjustment Amount This code (referring to both the letters and numbers) will tell you exactly why this amount of money is being adjusted off by the insurance company. The most common examples of adjustment reasons/amounts will be covered later in the presentation. Health Assets Management, Inc. 2012

Payment Amount This is the net amount that this particular insurance company is paying for this date of service. Payment always correlates directly with the charged amount, allowed amount, and any deductible/ coinsurance. Health Assets Management, Inc. 2012

Real World Examples Health Assets Management, Inc. 2012

This is how the patient’s primary insurance processed the claim. • For date of service 03/09/2011: $100.00 was charged, and the primary insurance company allowed $85.00. A payment of $85.00 (the full allowed amount) was made by the primary insurance. • There is no deductible, coinsurance, or patient responsibility. • No other insurance company, or the patient, is responsible for any other payment. Health Assets Management, Inc. 2012

This is how the patent’s primary insurance processed the claim. • For date of service 03/22/2011: $100.00 was charged, and the primary insurance company allowed $100.00. A payment of $80.00 was made by the primary insurance, and a coinsurance of $20.00 should be billed to the secondary insurance. • This is the patient’s secondary insurance covering the balance which the primary had left over. • This claim has been completely paid by the patient’s two insurance companies, and there is no direct patient responsibility. Health Assets Management, Inc. 2012

This is how the patient’s primary insurance processed the claim. • For date of service 02/04/2011: $100.00 was charged, and the primary insurance company allowed $97.14. A payment of $44.86 was made by the primary insurance. $10.71 was applied to the patient’s deductible, and there is a coinsurance of $41.57. • A balance of $52.28 ($10.71 applied to deductible and $41.57 coinsurance) has been forwarded on to the secondary insurance. • This secondary insurance covered the amount applied to the deductible, as well as the coinsurance. • There is no direct patient responsibility. Health Assets Management, Inc. 2012

This is how the patient’s primary insurance processed the claim. • For date of service 01/21/2011: $100.00 was charged, and the primary insurance allowed $97.14. There is no actual payment, but $66.78 was applied to the patient’s deductible and there is a coinsurance of $30.36. • The patient has no other insurance, so the full allowed amount of $97.14 is direct patient responsibility. Health Assets Management, Inc. 2012

Adjustment Codes Adjustment Code Explanations Health Assets Management, Inc. 2012

CO 45 • “Charges exceed your contracted/ legislated fee arrangement.” • The most common of all adjustment codes. • Charged Amount - Adjusted Amount = Allowed Amount Health Assets Management, Inc. 2012

OA 23 • “Payment Adjusted due to the impact of prior payer(s) adjudication including payments and/or adjustments.” • The previous payer was responsible for this amount. Health Assets Management, Inc. 2012

OA 204 • “This service/ equipment/ drug is not covered under the patient’s current benefit plan.” • This insurance company will not cover this procedure code. This amount is direct patient responsibility. Health Assets Management, Inc. 2012

Questions? • Please feel free to contact: Brett Jones bjones@healthassets.com (845) 334-3680 x306 Or Claudia Partin cpartin@healthassets.com (845) 334-3680 x314 Health Assets Management, Inc. 2012

Payment, Billing, CredentialingMental Health Experts Health Assets Management, Inc. 465 Broadway Kingston, NY 12401 P. (845) 334-3680 F. (845) 340-7314 Health Assets Management, Inc. 2012

Understanding an Electronic Remittance Advice (ERA)