PROCESS TRAINING

Billing Cycle
The U S health care system revolves under 3P’s
 Patient : - One who is sick / injured
 Provider: - One who is treat a sick person
 Payer: - are the insurance company pay to the provider on behalf
of patient‘s policy.

The verticals of AR
 A R: - Account Receivable
 A R. R C M: - Account Receivable (Revenue cycle management )
Billing Cycle
1) Patient: - One who is sick / injured.
2) Pre-registration: - The patient before consulting the doctor will
register his or her personal details (demographic details) like name, date
of birth, phone number etc.
3) Demo entry : - department will receive the scanned image of demo
entry details from the demo entry team they will enter demographic
details in the claim form once they receive scanned document of
demographic details from the pre-registration dept.
4) Encounter: - Once pre-registration is done the patient will consult
the doctor.
The conversation with patient and doctor is encounter which is recorded
in an instrument called as Dictaphone.
5) Medical transcription: -the voice file from the Dictaphone is
converted to text format by medical transcriptionist.
This process is called as medical transcription. This is also called
medical records. (MR)
 Text format is called as M R.
 Digital format of medical records is called as E M R.
6) Coding: - the coding team or codes will convert the disease and the
treatment into codes.
 The Disease codes is called as diagnosis codes. (DX codes)
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 The Treatment codes are called as procedure codes. (PX codes)

7) Charge posting: - CP team will post the charge for all the
treatments rendered by the provider by using an inbuilt software as
CMD.
 CDM : - Charge Description Master it’s an in built software where
all the billed amount or procedure codes are listed.
8) Claim forms: - There are two types of form
i) CMS 1500: - (centres of Medicare and Medicaid service)
ii) UB04 / CMS 1450: - (uniform billing)
 CMS1500 is used for professional it has 33 blocks it is also
called doctor claims.
 UB-04/CMS 1450is used for hospital billing it has 81
blocks
There are two types of submission
 Electronic
 Paper / manual
Electronic Paper / manual
Reaches faster Slow
Chance of error is less More
No paper consumption Paper consumption
9) Clearing house: - when the claim is submitted electronically to the
insurance company it reaches clearing house first.
 The clearing house will do the front end edit of the claim to check
weather all the block are filled are not. The claim which passes the
front end edit is called as clean claim
 If there is any rejection then it is called front end rejection
10) Scrubber report: - once the front end edit is done the clearing
house will produce scrubber report explaining or mentioning or
indicating whether it is clean claim or rejected claim. (the report will
also mention the reason of rejection)
11) Insurance company: - the clean claim or manual claim reaches
company. Once the insurance c company receive the claim they will
review the claim

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12) EOB/RA (Explanation of Benefits / Remittance

Advice) it’s a letter or notice sent by insurance company to
both patient and provider after processing the claim explaining the
status.
 Electronic version of EOB called as ERA(Electronic Remittance
Advice)
13) Payment posting or correspondence: - The payment
posting team will post the payment as well as denials if any on that
particular claim
14) AR (Account Receivable):- AR will work on unresolved
claim most of the time to get the payment to the providers.
Sometimes they even work on fresh claims. (Need to call and get the
claim status.)
15) Collection agency: - if there is any patients responsibility
towards the provider and the patient is not paid yet 3 dunning letters
will be sent to the patient in the period of 90 days.
 If the patient has not made the payment to the provider even after
receiving 3 dunning letters then the collection agency located in US
will collect the unpaid bills from the patient legally.

TERMINOLIGIES
I. Patients - One who is injured or suffering from a disease or illness
II. Provider – any person (doctor, nurse, dentist) or institution (hospital
and clinic) that provides medical care.
Providers are classified into 2 types

PROVIDER

INDIVIDUAL FACILITY
III. Insurance company– An organisation contracted with patient to
pay for his health care expenses. Also known as insurer / payer /
carrier.
IV. Premium – An amount paid periodically to purchase health
insurance plan and also to keep policy active.

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V. Enrolee / Guarantor / Subscriber / Member / Policy holder /

Insured / Beneficiary– A person who is covered by health
insurance.
i. Beneficiary is term used only in Medicare.
VI. AMA – American Medical Association. The AMA is largest
association of doctors in the United States. They publish the journal
of American Medical Association which is one of the most widely
circulated medical journals in the world.
VII. Centre’s for Medicare And Medicaid Services (CMS)– A
government agency that oversees the Medicare programs
VIII. HCFA – Health Care Financing Administration. Former name CMS
IX. HIPAA – Health Insurance Portability and Accountability Act. This
federal act sets standard for protecting the privacy of your health
information and established in august-21-1996.
X. Account number – Number given by the doctor or hospital for a
medical visit and unique for all the visits.
XI. Pre-registration – In the hospital where the patient admits his / her
demographic details such as Name, DOB, Address, Phone number
etc. (necessary for filing a claim) before consulting doctor.
XII. Assignment of benefits (AOB) – A written consent signed by the
policy holder / patient (in absence of the policy holder) to an
insurance company, to pay benefits directly to the hospital
 13th block in the claim form will indicate patient to sign
 27th block in the claim form will indicate acceptance by the
provider
 If AOB is not signed by the patient or not accepted by the
provider in either case the claim will be given to patient
XIII. Release of Information (ROI) – A signed statement from patient or
Guarantor that will allows doctor and hospitals to release medical
information so that insurance companies can pay claims.
 12th block in the claim form will indicate ROI
 If ROI is not signed by the patient the health records cannot
not be released to the insurance company as per HIPPA Act.
XIV. Advanced beneficiary notice (ABN) – A notice the hospital or
doctor gives the patient before treatment, telling patient that
Medicare will pay for some treatment or services. The notice is

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given to the patient so that the patient may decide whether to have
the treatment and how to pay for it.
XV. Coordination of benefits (COB) – A way to decide which
insurance company is responsible for payment if the patient has
more than one insurance plan.
XVI. Primary Insurance Company – The insurance company who is
responsible for paying the claim first has another insurance
company, it is referred to as the Secondary Insurance Company.
XVII. Secondary insurance – The insurance plan that is billed after
primary has paid or denied payment. And it is called as
Supplemental Insurance.
XVIII. Cross over claim –when claim information is automatically sent
from Medicare to secondary insurance such as Medicaid.
XIX. Outpatient (OP) – Services performed at facility where the patient
stays less than 24 hours and is not admitted to the facility.
XX. Inpatient (IP) - A patient who has been admitted to a hospital and
stay 24 hours or more.
XXI. Beneficiary Eligibility Verification (BEV) – A way for doctors
and hospitals to get information about the patient’s insurance
coverage / benefits.
XXII. Covered Charges / Expenses – Covered services are those medical
procedures the insurer agrees to pay for. They are listed in the
policy.
XXIII. Limited Policy – A policy that covers only specified accidents or
sickness.
XXIV. NonCovered Charges – Service or procedure not listed as covered
benefit in the payer’s master benefits list. These may or may not be
billable to the patient.
XXV. Exclusions – Specific conditions or circumstances for which the
policy will not provide benefits.
XXVI. Charity Care – free or reduced – fee care provided due to financial
situation of patients.
XXVII. Ambulatory Surgery – Outpatient surgery or surgery that does not
require an overnight hospital stay. Also known as day surgery or
‘Same Day Surgery’ (SDS).
XXVIII. Allowed Amount / Considered Amount – The dollar amount an
insurance company deems fair a specific service or procedure.

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XXIX. Appeal – Steps used when the payer denies a service the patient
thinks is needed or refuses to pay for care that the patient has already
received.
XXX. Appeal limit – The time frame that the insurance company gives to
the provider to submit the claim and get reimbursed after the claim
has been denied. The appeal limit starts from date of denial (DOD).
For Medicare it is 120 days and it varies
XXXI. Authorization Number / Prior Authorization – To be obtained by
the provider from insurance company (UMR – Utilization
Management Review) before medical services are rendered to the
patient. It relates not only whether a service or the procedure is
covered but also to find out whether it is medically necessary. 23rd
block in the claim form will indicate the authorization if in case of
emergency provider will render the treatment after rendering
treatment with in 72 hrs. Medical provider has to take retro
authorization number the dept. in insurance company which
authorizes is called pre certification dept. / UM. The hospital staff
who gets authorization from insurance company on behalf of
provider is called utilization review (UR).
XXXII. Mother baby clause – Mother Baby clause is rule in which a new
born baby is covered under the policy of the mother for the period of
30 days from the date of birth.
XXXIII. Birthday rule – Birthday rule is a rule determining the primary and
secondary insurance for a child when the parents are insured.
XXXIV. CMD (Charge Description Master) – Inbuilt software where all
billed amount for procedure codes are listed.
XXXV. Claim – A medical bill / invoice sent to the insurance company.
XXXVI. CMS 1500 – This is the form that doctors use to submit a claim to
the insurance company.
XXXVII. UB-04 (Uniform Billing–04)/ CMS 1450 – A form used by
hospitals to file insurance claims for medical services. Only used for
hospital charges.
XXXVIII. Clearinghouse – An entity that forwards claims to insurance payer
electronically.
XXXIX. Electronic Claim – Claim information is sent electronically from
the billing software to the clearing house or directly to the insurance

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carrier. The claim file must be in standard electronic format as

defined by the receiver.
XL. Clean Claim – A claim is one which will pass through all front-end
edits.
XLI. Self-pay – Payment made at the time of service by the patient.
XLII. Difference between premiums and Out-Of-Pocket Costs
Premiums Out-Of-Pocket Costs
It is to keep the insurance active It is to avoid unwanted visits.
Patient has to pay monthly, Starts or it should be paid once he
quarterly, annually or life time visits the provider
XLIII. Out-Of-Pocket Costs – The patient’s share of the cost of health care
services. This includes co-payment, co-insurance and deductible.
XLIV. Co - Pay – A flat fee the patient pays each time for medical services.
This is associated with managed care plans.
XLV. Co – Insurance – A percentage of the cost that the patient is
responsible to pay for the medical services received. Co – insurance
percentages vary depending on the health plan.
XLVI. Deductible – usually an annual fixed amount that the patient is
responsible to pay for the services; before any payment is issued by
the insurance company. If the deductible is zero then the insurance
company will pay the remaining billed amount. There are two types
of deductible.
 Annual
 Lifetime
XLVII. Explanation of Benefits / Remittance Advice (EOB/RA)– The
notice sent to the provider and patient from the patient’s
insurance company after processing claims explaining the status.
XLVIII. ERA – Electronic Remittance Advice; this is an electronic
version of insurance EOB that provides details of the claim status.
XLIX. Collection agency – A business that collects money for unpaid
bills.

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There are two types of providers in insurance company

Insurance Comapny

participating providers / par non-participating providers /

providers / innetwork non par providers / out
providers network providers
L. Participating Provider (In Network Provider/ Par Provider) – A
doctor or hospital who is contracted with the insurance company, has
agreed to certain terms and payment conditions set by the insurance
plan.
LI. Non-Participating Providers (Out Network Providers/ Non Par
Providers) – A doctor, hospital or other healthcare provider who is
not a part of an insurance plan’s doctor or hospital network.

Payment Methodology
Non-Participating Providers (Out Participating Provider (In Network
Network Providers/ Non Par Provider/ Par Providers)
Providers)
UCR Bundled
Fee Schedule
(Usual Customary Capitation
And Reasonable Rate) Case Rate

LII. Credentialing – The process used by the health insurance

companies to examine and verify the medical qualifications of health
care provider who wants to participate in the network.
LIII. Fee schedule – A listing of the maximum fee that an insurer or
health plan will pay for a service based on the CPT code.
LIV. Capitation – Fixed payments paid to the contracted provider
periodically for each patient assigned to the provider. The provider is
paid regardless of whether the patient is ever seen. The most
common arrangement is Per Member Per Month (PMPM).

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LV. Case rate – it is a lump sum amount paid by the insurance company
to the participation provider to a case for entire episode. Ex
pregnancy.
LVI. Bundle – Bundle (doctor) and technical charge will be clubbed
together and paid by insurance company to par providers.
LVII. Contractual Adjustment (Discount) – The part of the bill that
doctor or hospital must waive-off (not charge patient) because
agreements with patient’s insurance company.
LVIII. UCR – Usual Customary and Reasonable Rate – The payment
scale used in paying Non-Participating Providers. Providers are paid
according to the provider’s usual fee, the customary fee of other
providers is the area, the reasonable fee for the service.
LIX. Date of service (DOS) – The date/s when the patient was treated.
LX. Place of service (POS) – This code indicated the location of the
service; whether the patient was treated at home, hospital, office,
clinic.

LXI. Policy Number / Member Identification Number / Health

Insurance Claim Number (Medicare) – A number that the
insurance company gives the policy holder to identify the insurance
contract.
LXII. Federal Tax Identification Number – A 9 digit number assigned
by the federal government to doctors and hospitals for tax purpose.
(TIN format : 3-2-4 / 2-7)
LXIII. Provider Identification Number – Assigned by the insurance
company / health plan to their contracted provider. (PIN format :
insurance specific)
LXIV. National provider identifier – Single block off 10 digits,
intelligence-free, numeric identifier for providers and suppliers
issued by CMS. HIPAA mandates the usage of NPI. (It was earlier
known as UPIN (unique provider identification number)).
LXV. W–9 form – A tax form which certifies an individual’s tax
identification number. (Par providers only have to submit the form if
the address is to be changed with required documents and name,
speciality and address).
LXVI. Taxonomy code –Speciality standard codes use to indicate a
provider speciality, this is sometimes require to process a claim.

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LXVII. Fraud – To purposely bill for services that were never given or to
bill for a service that has higher reimbursement than the service
produced. Fraud includes offering and accepting kickbacks.
LXVIII. Abuse – The misuse of a person, substance, services such that harm
is caused. Some of the healthcare abuses include excessive or
unwarranted use of technology, pharmaceuticals and services, abuse
of authority, abuse of privacy, confidentiality or duty to care.
PROVIDERS IDENTIFICATIONS
ID ISSUED BY ISSUED FORMAT
TO
TIN Federal government All Individual facility
(TAX for tax identification providers
IDENTIFICATION purpose 3-2-4 2-7
NUMBER)
PIN Insurance company Par Insurance specific
(PROVIDER providers
IDENTIFICATION
NUMBER)
NPI Issued by CMS and All 10 digits
mandatory by providers (xxxxxxxxxx)
(NATIONAL HIPPA
PROVIDER
IDENTIFIER

LXIX. Global days – All surgical services have been assigned a “global
time period”, lasting up to maximum of 90days, for post- operative
care. All follow-up care for the surgery performed within the
assigned global period will be considered part of the surgical
reimbursement and not paid separately.
LXX. Group insurance – An insurance that covers a group of people;
usually availed through employment.
LXXI. Insured Group Number – A number that your insurance company
uses to identify a group insurance plan.
LXXII. Insured Group Name – Name of the group insurance plan that
insures the patient.

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LXXIII. Internal Control Number (ICN) (Medicare) / Document Control

Number (DCN) (Medicaid) / Claim Number – A number that is
assigned to claim form by the insurance company or their agent.
LXXIV. Aging – One of the medical billing terms referring to the unpaid
Insurance Claims or Patients balance that are due past 30 days. Most
medical billing software’s have the ability to generate a separate
report for insurance aging and patient aging. These reports typically
list balances by 30, 60, 90 and 120 days increments.
LXXV. In Process – A term used when the claim is received by the
insurance company and is being reviewed.
LXXVI. Fiscal Intermediary (FI) – A Medicare representatives who process
Medicare claims.
LXXVII. Itemised Bill / I Bill – An itemized statement provides a complete
listing or detailed account of every service posted to a patient
account. It includes the DOS, description of service, service code,
charge amount, estimated insurance amounts and totals.
LXXVIII. Late charges – charges discovered and processed after the initial
final bill has been released.
LXXIX. Late charges – charges discovered and processed after the initial
final bill has been released.
There are two types of late charge
a. Penalty charge – if the insurance company not processing the
claim with in general processing time (TAT) if the claim will
be paid in future then insurance company will assure that they
will settle the payment to the provider with penalty charge.
LXXX. Lock box – lock box is a banking term used when a hospital has a
‘lock-box’ number at the bank for the checks to come in.
LXXXI. Primary care physician (PCP) – A physician trained in general
medicine who treats routine problems.
LXXXII. Specialitycare physician (SCP) – A physician who specialized in
treating certain parts of the body or specific medical conditions. Ex:
cardiologists only treat patients with heart problems.
LXXXIII. Referral – Permission obtained from the primary care physician to
seek services from a specialist for evaluation, training and treatment.
Managed care plans require this.

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LXXXIV. Managed Care –ways to manage costs use and quality of the health
care system. All HMOs, PPOs and POSs and many fee- for –service
plans. have managed care.
LXXXV. Health Maintenance Organisation (HMO) – A plan in which
patients must use the doctors and hospitals designed by the HMO.
LXXXVI. Preferred provider organisation (PPO) – A combination of
traditional fee-for-service and an HMO. When you see the doctors
and hospitals that are part of the PPO, you can have a larger part of
your medical bills covered. You can visit other doctors, but at a
higher cost.
LXXXVII. Point of Service (POS) Plan – A plan offered by managed care. The
primary care doctor usually make referrals to other providers in the
plan. But in POS plan, members can refer themselves outside the
plan and still get some coverage.

The plans that patients can choose

Managed Care Organization (MCO)
Premiu Plan Par Non Par Referral from Primary
m Providers Providers care physician (PCP)

Less Health Maintenance Yes No Mandatory to referred by

Organisation (HMO) PCP
High Preferred provider Yes Yes Not mandatory to
organisation (PPO) referred by PCP
Average Point of Service Yes Yes Optional if the patient is
(POS) visiting par providers
referral is mandatory or
not for non-par

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LXXXVIII. Medically Necessary – Many insurance policies will pay only for
the treatment that is deemed “medically necessary” to restore a
person’s health. For instance, many health insurance policies will not
cover routine physical exams or plastic surgery for cosmetic
purpose. For justification patient MR (medical records) can be given
to insurance company.
LXXXIX. Medical Necessity – medical information justifying that the service
rendered or item provided is reasonable and appropriate for the
diagnosis or treatment of a medical condition or illness.
XC. EMR (Electronic Medical Records) – This is a medical record in
digital format of a patient’s hospital or provider’s treatment.
XCI. Medical Record Number (MRN) – The number assigned by the
doctor or hospitals that identified a patient’s medical records.
XCII. Observation – Type of service used by doctors and hospitals to
decide whether the patient needs inpatient hospital care or can
recover at home or in an outpatient area. It is usually charged by the
hour.
XCIII. Over – The – Counter Drugs – Drugs that do not require a doctor’s
prescription and could be bought at a pharmacy or drug store.

XCIV. Offset – when insurance company a wrong or an excess payment to

a provider, it would adjust the amount in the subsequent claims. This
is called an offset. If the provider is already en-cashed the check then
insurance company will adjust amount in next Claim.
XCV. Recoup – if the insurance provider has not en-cashed the check then
insurance company will recoup the excess amount in the same
payment.
XCVI. Pre – Existing Condition – A health condition or a medical
problem that the insured has before singing up to receive insurance
coverage. Some health insurers may not pay for these health

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conditions; usually for a certain period of time known as a waiting

period. It varies from insurance to insurance start from policy
effective date.
 Obama rule – According to this act there is no waiting period
for any Pre – Existing Condition for all the claim Date of
Service (DOS) from April 04th 2014.
XCVII. Rebill – Means to resubmit a claim.
XCVIII. Super Bill – a form that lists procedures, services and diagnosis
code; this records the services performed for the patient for a given
visit.
XCIX. Supplemental – Another name for secondary insurance. A
supplemental plan; this usually picks up the patient’s Deductible and
/ or Co – Insurance.
C. Timely filling limit (TFL) – The time frame that payer give to
providers to submit the claims and get reimbursed. TFL start from
DOS and the TFL for Medicare is 1 year from DOS and it is
insurance specific.
CI. Units of service – Measures of medical services, such as the number
of hospital days, pints of blood, kidney dialysis treatment, etc.
CII. (UR) – Hospital staff who work with doctors to ensure appropriate
level of care for the patient’s condition, arrange appointments with
the primary Utilization review and specialty physicians, obtain
authorization #s, advise the patient of discharge, assist with appeals
with appeals process for denials received when applicable etc.
CIII. Write off – Write off is the amount that is waived off by the
provider. This is usually a loss borne by the provider due to various
reasons.

Payment calculations
Short codes Abbreviations
BA Billed Amount
AA Allowed Amount
PA Paid Amount
PTR Patient’s Responsibility
CA Contractual Agreement

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 BA = AA + CA
 AA = PA + Ptr (if there is any patient’s responsibility)
 AA = PA (if there is no patient responsibility)
 AA = BA – CA
 PA = AA – Ptr

Codes
Diagnosis codes (Dx codes)
There are 2 types of codes are diagnosis codes and procedure codes
 Diagnosis codes will be indicating the injury or illness codes of the
patient. Diagnosis are coded by using ICD – CM Book.
 International classification of diseases (clinical modification).
ICD – 9 – CM Version
This version is used to code the diseases for all the claims till date of
service September 30th 2015
ICD – 10 – CM Version
This version is used to code the disease for all the claims from October 1st
2015.
Types of ICD – 9 – CM codes
 V codes
 E codes

Description

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 V codes: - services / visits not related to diseased injury ex: baby

check-up is V20.2 and annual physical is V70.0.
 E codes: - external cause of injury and poising ex: a child fall
while running around bases at a baseball game and broke his
wrist. The code would be E498.4 indicating the location where
the injury occurred.
Standard format of ICD – 9 (Dx) – 3 numeric characters along or
followed by a decimal point with one or two digits
Ex:
o 959 – Injury Unspecified
o 959.0 – Head, Face And Neck
o 959.09 – Injury of Face and Neck (Check Ear, Nose, Throat and
Etc.)
Difference between ICD – 9 and ICD – 10
ICD – 9 ICD – 10
ICD – 9 is used for date of service ICD – 10 is used for date of service
claims until September 30th 2015. claims from October 01st 2015.
Approximately 13, 000 codes. Approximately120, 000 codes.
Code book contain 17 chapters. Code book contain 21 chapters.
Consists of 3 to 5 characters. Consists of 3 to 7 characters.
Limited space for adding new Flexible to add new codes.
codes.
1st character is alpha or numeric. 1st character is alpha.
Lack details. Very specific.
Only utilizes letters E and V. Utilizes all letter (except U because it
defines unknown condition).
Lacks laterality (will not indicate Has laterality (identify right or left).
left or right).
Second, Third, Fourth And Fifth Second Character Is Always Numeric
Characters Are Always Numeric. Third, Fourth, Fifth, Sixth And Seventh
Characters Can Be Alpha Or Numeric.
Shorter code description because Longer code description because of
of lack of specificity and greater specificity and full code tittles.
abbreviated codes titles.

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ICD – 9 Structure ICD – 10 Structure

Digit 1is alpha or numeric. Digit 1 is alpha.
Digit 2 always numeric Digit 2 is numeric
Digit 3,4 and 5 are always numeric Digit 3 is alpha or numeric and
Digit 4 to 7 are alpha or numeric
Ex Ex
959 – Injury Unspecified 543.001A (fracture of unspecified
959.0 – Head, Face And Neck part of Right clavicle initial
959.09 – Injury of Face and encounter, for closed fracture).
Neck (Check Ear, Nose, Throat and
Etc.)

Procedure codes (Px codes)

Procedure codes used to describe the treatment provided by the doctor /
hospital.
HCPCS code Healthcare Common Procedures Coding System
CPT code Current Procedural Terminologies.
The HCPCS coding system levels
A. Level 1 CPT codes
a. 5digits.
b. Numeric in character.
c. Used to report service by physicians.
d. Ex – 99201 – E and M for new patients.
B. Level 2 national code
a. 4 digits codes with an alpha prefix (A – V)
b. Used to report services or supplies that include DME
injections and drugs.
c. Ex – D5810 – denture and E1240 – wheel chair.

C. Level 3 local codes (w, x, y, z)

a. No longer in use
b. Ex experimental codes

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Modifiers
 CPT modifier
o Numeric character.
o 2digit.
o Can be used in CPT codes.
o Ex –50 is bilateral and 26 is professional component.
 HCPCS modifier
o Alphabetic or alpha numeric characters.
o 2 digits.
o Can be used in CPT level 1 and national level 2.
o Ex
 TC – Technical Component
 LT – Left Side
 RT – Right Side
 Diagnosis code – This code indicates the illness of the patient. The
conclusion reached about a patient’s ailment by thorough review of
the patient’s history, examination, and review of laboratory data.
 E codes – codes used to describe external cause of injury, poisoning,
or other adverse reaction affecting the patient’s health. E.g.: - a child
falls running around the base at the baseball field. Code is E498.4
 V codes – codes assigned for preventive medicine services and for
reasons other than disease or injuries. E.g.: - baby check-up code is
V20.2
 HCPCS (Healthcare Common Procedure Coding System) – A
coding system used to report procedure, services, supplies, medicine,
and durable medical equipment.
 Procedure code – The code used to describe the services / treatment
provided by the doctor / hospital.
 Current procedural terminology (CPT) code – the code used to
describe the services / treatment provided by the physicians. These
are level I codes under HCPCS.

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 National code – Four digits with a prefix (A-V) used to report

services / supplies that include DME, injections and drugs. These are
level II under HCPCS.
 Modifier – A modifier provides the means by which the reporting
physician can indicate that performed service or procedure
performed has been altered by some specific circumstances, but not
changed by definition or code assigned.
 CPT Modifier – A two-character numeric descriptor used with CPT
codes.
 HCPCS Modifier – A two-character alphabetic or alphanumeric
descriptor used with both CPT level 1 and level 2 National codes.
 Emergency care –Care given for medical emergency when the
patient’s health is in serious danger; when every second counts.
Durable Medical Equipment (DME) – Medical equipment that can be
used many times, or special equipment ordered by the doctor, usually for
use at home.

General Billing
Providers
The providers are mainly classified into 2 types
 Individual
 Facility
Further classified according to their operations
 Individual
 Primary Physician Care (PCP)
 Specialty Physician Care (SPC)
 Facility
 Hospital
 Ambulatory Surgery Center
 Skilled Nursing Facility (SNF)
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 Home Health
 Hospice

The definitions are

 Primary Physician Care (PCP): - A physician trained in general
medicine who treats routine problems.
 Specialty Physician Care (SPC): - A physician who is specialized in
treating certain parts of the body or specific medical conditions. Ex:
cardiologists only treat patients with heart problems.
Further classifications of facility
 Hospital
 Ambulatory Surgery Center
 Skilled Nursing Facility (SNF)
 Home Health
 Hospice

The definitions are
 Hospital are classified into 3 types
 Acute care hospital
 Intensive care for short term basis.
 Could include overnight stay.
 Chronic care
 Long term.
 Care not as intensive.
 Emergency care: - care given for medical emergency when the
patient’s health is serious danger where every second counts.
 Skilled Nursing Facility (SNF)
 Primary providers in patient treatment.
 Lesser intensity than acute facility.
 Usually for long term basis.
 Less expensive.
 They are called as visiting doctors or doctor on call.
 They cannot prescribe drugs to patients.
 Home Health

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 Preventive, supportive, rehabilitative or therapeutic care is

provided to a patient at home.
 A physician must certify that patient’s home bound.
 Provider’s medical, nursing, social or therapeutic treatment
and/ or assistance with essentials.
 Activities of daily living with an established plan of care.
 Hospice
 For terminally ill person (patient with life expectancy of not
more than 6months)
 Treatment for terminal illness ceases only symptoms
management and treatment for any other illness.
 Ex: Cancer, HIV, ESRD (End Stage Renal Disease)
 Renal is kidney

Payer
The payer are mainly classified into 3 types.
A. Federal.
B. Private.
C. Liability.
Further classified according to their companies.
A. Federal
a. Medicare
b. Medicaid
c. Tricare
d. CHAMPVA
B. Private
a. BCBS (Blue Cross Blue Shield)
b. Management Care Organization
c. Commercial Insurance
C. Liability
a. Auto Liability
b. Workers Compensation

Federal

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Medicare
The Medicare program is currently the world’s largest insurance program.
It is administered by CMS. Medicare id is also called HIC# (Health
Insurance Number).
Possible HIC numbers format is 9digit+1alpha
Ex: -123456789A
Most of the HIC numbers are social security numbers.
Medicare # can be prefix and suffix.
Terms and conditions of Medicare are
i. The person should be above 65 years or more.
ii. Some people with disabilities under age 65.
iii. People with end stage renal disease
Medicare has 4 parts
I. Part A :- Inpatient
II. Part B :- Outpatient
III. Part C :- Medicare Advantage Plans
IV. Part D :- Prescribed Drugs
Part A (Hospital Insurance / Inpatient)
 If the person has been above 65 years automatically part A will
be received (if the person has paid 40 quarters of tax).
 Part A deductible for 2015 is $1260 and 2016 is $1288 as per
benefit period.
 Need not purchase Part A.
 Covers hospital expenses.
 There is no premium for Part A.
Part B (medical Insurance / Outpatient)
o Part B must be purchased.
o Part B deductible for 2015 is $147 and 2016 is $166 per calendar
year.
o Covers the outpatient health care and other services not covered by
Part A.

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o To purchase Part B one should have Part A coverage.

o The premium for Part B for 2016 is $104.90.
o Part A andPart Bare both called original Medicare plan
Part C (Medicare Advantage Plans)
 Medicare Advantage Plans are sometimes called Medicare Part C.
 Medicare Part C is covered by private insurance companies that are
approved by Medicare.
 The private insurance companies are paid a fixed amount each
month to cover Medicare beneficiaries.
 These plan must follow rule set by Medicare.

Premium Plan In Out Referral number from

network network Primary Physician Care
provider provider (PCP)
Less Health maintenance Yes No Referral number is
organization (HMO) mandatory
High Preferred provider Yes Yes Not mandatory
organization (PPO)
Average Point of service Yes Yes Yes if the patient is visiting
(POS) In network provider or not
mandatory for Out network
provider
 There are presently 3 types of Medicare Advantage Plans
 If the Medicare Part C is purchased Part A and Part B will be
deactivated.

What does Medicare pay for?

1. Part A pays for
a. Care in hospitals as an inpatient
b. Critical access hospitals
c. Skilled nursing facilities (SNF)
d. Hospice
e. Some home health care
2. Some services that Part B helps pay for
a. Ambulance service.

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b. Artificial limbs and eyes.

c. Arms, leg, back and neck braces
d. Emergency care
e. Preventive service
f. Telemedicine in some rural areas etc.
g. Durable Equipment Service
Note part D helps pay for prescription drugs.
Rail road Medicare
It is a program offered to retired railway employees who are above 65
years
For rail road Medicare Identification format is alpha prefix and digits
Ex A123456789
General Medicare plan alpha will be suffix and digits
Ex 123456789A
Alphabets of Medicare are
A – self
B – Spouse
C – Child
D – Widow / Widower / 1st Widow / 2nd Widow
The timely filling limit of Medicare is 1year from Date of Service (DOS)
Appeal limit for Medicare is 120 days from Date of Denial (DOD)
Medigap
Medigap policy is also known as Medicare supplemental insurance. It is
offered by private insurance companies to fill in the gaps in the coverage
of the original Medicare plan. It helps pays for Medicare deductible, co
insurance and copayments and also covers some benefits that Medicare
doesn’t cover.

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The Medigap policy only works with original Medicare plan. The Medigap
policy will not pay deductibles co pay or co insurance if the beneficiary
joins Medicare advantage plan.
The beneficiary must have both part A and B to obtain Medigap coverage.
The Medigap policy will cover only one person.

MSP {Medicare Secondary Payer}

Medicare secondary payer is the term used when Medicare is not
responsible paying first Medicare is secondary for the following payers.
The insurance companies who is primary and Medicare will act as
secondary are
1) Worker’s compensation.
2) Federal black lung.
3) Automobile medical, no fault or liability insurance.
4) Beneficiaries with ESRD during the first 30months
5) Working aged
6) Veteran’s administration disabled patients under 65 covered by
LGHP{ large Group Health Plan}

Medicaid
Medicaid is a federal state program each state operates its own Medicaid
program with certain federal guidelines.
 For individuals and family with low income and resources.
 There is no patient responsibility in most cases. In some cases
“spend – down – charges and co pay are applied.
 Members are needed to renew their policy every month.
 Medicaid is always the payer of last resort.
 Medicaid id format is state specific.

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Spend – down - charges – A percent of amount which the Medicaid

policy holder has to spend for his / her medical expenses. If he / she
earns more than the fixed amount set by the Medicaid.
Dual eligibility
Individual who are entitled to Medicare part A and part B and
eligible for Medicaid coverage is called Dual eligibility.
Tricare
It is originally managed health care program for active and retired
members of the uniformed services their families and survivors.
The Tricare managed health care replaces the former name CHAMPUS
(Civilian Health and Medical Program of the Uniformed Services)
program.
Eligible beneficiaries must be listed in the DEERS {Defense Enrollment
Eligibility Reporting System}.
Who is eligible for Tricare?
 Active duty service members
 Eligible family of active duty service member military retirees and
their eligible family members.
 Surviving eligible family member of deceased active or retired
service member.
 Wards and legally adopted children. (wards are guardians)
 Some former spouses of active or retired service member.
Tricare plans
A. Tricare Prime – for active military personals.
B. Tricare Standard – for retired military personals.
C. Tricare Extra – for non-active military personals.
D. Tricare life – for military retirees and their spouse
a. Must have both part A and part B.
b. Dependent parents and parents – in – laws
are not eligible.
c. Tricare for life will act as the secondary for
Medicare and covers out of pocket costs

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CHAMPVA {Civilian Health and Medical Program of the

veteran administration}
CHAMPVA is a comprehensive health care program in which the
veteran’s administration shares the cost of health care service and supplies
with eligible beneficiaries.
Eligibility
o The spouse or child a veteran who has been rated permanently and
totally disabled for service connected disability.
o The surviving spouse or child off veteran who died from service
connected disability.

Private
BCBS [blue cross blue shield]
BCBS [blue cross blue shield] is largest private insurance company in US.
Which covers nearly 100 million or 1 in 3 American.
Blue cross handles hospital claims and Blue shield handles professional
claims.
Type of BCBS are
 Commercial BCBS
 Federal BCBS
Description
Commercial BCBS is normal insurance plan and id format is both alpha
and numeric characters 6 to 17 digits (including alpha prefix).
Ex – xyz123456789
Federal BCBS is a plan which is only for federal government employees
and id format is ‘R’ followed by 8 digits.
Ex – R12345678
Types of BCBS cards
 Blue card – when travelling inside the US.
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 Blue card worldwide – when travelling outside the US.

 Blue card expat – working and living outside US
Types of BCBS plan
1. Home plan – usually refers to the plan by the patient his / her state
where he resides and pay premium.
2. Local plan – usually refer to the plan or state by the patient taken
treatment beside his / her home plan.

Liability insurance
There are two types of liability insurance
I. Auto liability
II. Worker’s compensation
Description
 Bodily injury to you and others damage to someone else’s car or
property.
 Collision damage (covers damage to your car).
 The cost to repair your vehicles that are damaged in a car accident.
 The cost to rent, replacement vehicle while your damaged vehicle is
being repaired.
Auto liability are two types
I. No – fault: - The drivers involved would submit a claim to their own
auto insurance companies and receive compensation from them.
a. No fault insurance is offered in no fault states each state has
own coverage stipulation and regulations
b. The system is simplified
c. Immediate compensation is guaranteed
II. Non – no – fault: - Both parties involved in the accident file a case in
the court to determine the fault once the case is settled and the fault
is proved.
a. The auto insurance of the party at fault pay both the parties.
b. There is no immediate compensation received.

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Note: There are 12 states as no fault states and 38 states as non –

no – fault states.

Workers compensation
The plan covers only work – related – problems
 No premium for employees.
 No patient’s responsibility.
 Regulated by the government but varies by state to state.
 The policy in the name of employer.
 Policy # for employer and this is common for all employees.
 Each injury reported by an employer will be claim #
 Claim # is unique to each person for each injury.
 Claim is handled via claim # not by policy #.
 Claim to be submitted along with medical records.
 Role of an adjustor.
Diagnosis pointer
Diagnosis pointer will indicate for which disease the particular
treatment was rendered.( Software Training)
COBRA (Consolidated Omnibus Budget
Reconciliation Act)
This act was introduced in year 1985 by US congress on
reconciliation basis signed by President Ronald Reagan according to
this act the employee have the ability to continue with health
insurance coverage after leaving the employment for certain period
of time until he gets the next employment. Reconciliation means
renewal.
Revenue code
Revenue code are 3-digit numbers that are used on hospital bills to tell the
insurance companies either where the patient was when they received

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treatment, or what type of item a patient might have received as a patient.

A medical claim will not be paid if this is missing from a [Link]
codes go along with procedure codes.
Ex: emergency room visit of low to moderate severity, and revenue code
450.
Codify
The encoder pro is a tool which is used to know the detailed desperation of
procedure codes and diagnosis codes and also used to check compatibility
between two procedure codes.
Modifiers list is also available in encoder pro. Encoder pro is also known
as CCI edits (Correct Coding Initiative edits)

Codes of place of service

Place of service (POS) codes Place of service (POS)
11 Office visit
12 Home
21 Inpatient
22 Outpatient
23 Emergency
24 Ambulatory
31 Skilled nursing staff
34 Hospice

Codes of modifier
Modifier Reason
24/25/26 Professional component
59 Distinct modifier
76 Same DOS, same treatment and same provider
77 Same DOS, same treatment and different provider
LT Left
RT Right
50 Bilateral

Procedure codes
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Px Treatment
1 to 6 Surgical
7 Radiology
8 Laboratory procedures
9 E and m services (Established and management service)

States, codes and capital

State code Capital State code capital
Alabama AL Montgomery Alaska AK Juneau
Arizona AZ Phoenix Arkansas AR Little Rock
California CA Sacramento Colorado CO Denver
Connecticut CT Hartford Delaware DE Dover
Florida FL Tallahassee Georgia GA Atlanta
Hawaii HI Honolulu Idaho ID Boise
Illinois IL Springfield Indiana IN Indianapolis
Iowa IA Des Moines Kansas KS Topeka
Kentucky[D] KY Frankfort Louisiana LA Baton Rouge
Maine ME Augusta Maryland MD Annapolis
Massachusetts[E] MA Boston Michigan MI Lansing
Minnesota MN St. Paul Mississippi MS Jackson
Jefferson
Missouri MO City Montana MT Helena
Nebraska NE Lincoln Nevada NV Carson City

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New Hampshire NH Concord New Jersey NJ Trenton

New Mexico NM Santa Fe New York NY Albany
North Carolina NC Raleigh North Dakota ND Bismarck
Oklahoma
Ohio OH Columbus Oklahoma OK City
Oregon OR Salem Pennsylvania[F] PA Harrisburg
Rhode Island[G] RI Providence South Carolina SC Columbia
South Dakota SD Pierre Tennessee TN Nashville
Texas TX Austin Utah UT Salt Lake City
Vermont VT Montpelier Virginia[H] VA Richmond
Washington WA Olympia West Virginia WV Charleston
Wisconsin WI Madison Wyoming WY Cheyenne

Navy call list

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Letter Code word

A Alfa
B Bravo
C Charlie
D Delta
E Echo
F Foxtrot
G Golf
H Hotel
I India
J Juliet
K Kilo
L Lima
M Mike
N November
O Oscar
P Papa
Q Quebec
R Romeo
S Sierra
T Tango
U Uniform
V Victor
W Whiskey
X X-ray
Y Yesterday
Z Zebra

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