RCM
Module 1
Three main entities in US Healthcare Industry
Payer
Payer
Patient
Patient Provider
2
Introduction to US Healthcare
The Payer provides coverage the Insurance will process the claim and
coverage to the patient for a particular make payment to the Provider based
period, particular amount, particular type on the Patient’s coverage.
of medical conditions and treatments. Payer
Patient pays the premium to For patients who have insurance
the Payer to get a policy coverage, providers will submit
coverage from the the claim to the Patient’s
payer. insurance.
Treatment
Patient Insurance details
Provider
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Outsourcing
Delegation of tasks from one entity to another entity
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Outsourcing
Outsourcing is a process, where a company contracts with another
company to provide services that might otherwise be performed by in-
house employees .
Types of Outsourcing: Advantages:
• On-shore • Cost effective.
• Off-shore • Time zone advantage.
• Near-shore
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Client & Sub-client
Provider Vertical Payer Vertical
Dell BPO Dell BPO
Dell’s Client US Billing Office US Insurance Co.
Physicians Groups
Dell’s Sub-
client
Hospitals
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Healthcare – Key Terms
Term Explanation
Patient A person who receives health care service.
Provider A person or entity which provides medical service.
Payer Insurance or anyone who pays for the medical service.
Physician Doctor
Insured A person who is covered by insurance
Insurer Insurance company
Subscriber/Policy holder Owner of the policy
Dependent Family member covered under the subscribers policy
Participating Provider A Provider who has a contract with an insurance
Non-participating Provider A Provider who does not have contract with insurance
Client Customer
Sub-Client Our Client’s Client
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US Healthcare Billing
Process
Dell - Restricted - Confidential
US Healthcare Billing Process
Hospitals, Independent Physicians, Radiologists,
Pharmacists, etc., bill the insurance for the healthcare
services provided to the insurance policy holders.
US
Healthcare In-house billing office or outsourced billing
companies help providers to handle their
Revenue cycle efficiently.
Standardized forms in which medical conditions
and procedures/services are represented with the
help of pre-defined codes.
Insurance decides on payment or denial of a claim
based on various factors pertaining to its contract
with policy holders and providers.
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Learning check/ Try it yourself
• What is Outsourcing?
• Why does a provider hire a billing office?
• What are the other names of Insured?
• Who can be called as a payer?
• What is role of adjudication in US medical
billing process?
• Who is considered as a provider?
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"All administrative and
clinical functions that
contribute to the capture,
management, and
collection of patient
service revenue.“
- Definition of Revenue cycle by Healthcare Financial
Management Association (HFMA)
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Revenue Cycle Management
RCM is a term that includes the Revenue cycle includes various
entire life of a patient account processes that flow into and affect
from creation to payment. one another.
The process includes keeping
track of claims in the system,
RCM encompasses everything
making sure payments are
from determining patient
collected and addressing denied
insurance eligibility and properly
claims, which can cause up to 90
coding claims.
percent of missed revenue
opportunity
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Revenue Cycle Management
It includes four main entities:
1 Patient
2
4
Provider’s Office
3 Medical Billing Office
4 Health Insurance Company
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Revenue cycle management – Overview
Provider’s
Patient
office
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Pre-Determination
Patient Scheduling Patient’s Registration & Prior-Authorization Medical encounter
Patient’s demo- Medical
Patient billing
graphic & Insurance Records
and treatment
Medical billing office details
Charge
sheet
Payment posting Accounts Receivable Demographics Entry Charge Entry Medical Coding
Payment
E – claims /
EOBs / Denial
Paper claims
EOBs
Heath insurance company
Claims Adjudication Pre-Audit Claims entry
Let us discuss the processes at each entity in detail:
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RCM - Patient
Scheduling
• Patient calls the Patient
providers front desk to 23
fix date & time for their
visit or admission . Patient Scheduling
• Patient’s personal
information and
insurance information
are also collected by
the front desk staff
during scheduling.
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RCM - Provider’s Office
Processes at provider's office includes:
Provider’s office
Pre-Determination
Patient’s Registration & Prior-Authorization Medical encounter
• Pre-determination
• Prior Authorization
• Patient’s Registration
• Medical Encounter
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RCM - Provider’s Office
Pre determination
Provider’s office
Pre-Determination
Patient’s Registration & Prior-Authorization Medical encounter
• Provider's office contacts the Insurance Company to verify the Patient’s
policy coverage details, in all possible cases.
• This is not compulsory, but a proactive step which all providers do to
reduce billing error and denials.
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RCM - Provider’s Office
Prior Authorization
Provider’s office
Pre-Determination
Patient’s Registration & Prior-Authorization Medical encounter
• Provider’s need to take permission from insurance before providing certain
services listed by insurance. This process is called Prior authorization.
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RCM - Provider’s Office
Registration: Information collected
• Patient’s demographic details
− Name, Age, Address, Sex, Phone number
• Insurance details
− Policy #. Insurance name, Address, Phone number
• Guarantor’s details
− compulsory if the Patient is minor
• Employer’s details
− Important if the medical condition is related to work
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Learning check/ Try it yourself
• What does a providers office collect patient
information ?
• Is prior authorization applicable to a non-
participating provider?
• How does pre-determination helps a
provider in reimbursement of his /her
medical claims?
• Is it appropriate, if a claim is denied by
insurance company stating the services
billed are medically not necessary?
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Sample 1 – Demographic Sheet – Part1
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Sample 1 – Demographic Sheet – Part 2
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Sample 2 – Demographic Sheet
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Sample 3 – Demographic Sheet with declarations
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Sample 1 – Insurance card
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Sample 2 – Insurance card
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Sample 3 – Insurance card
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RCM - Provider’s Office
Encounter: Provider performing diagnosis & procedure
Provider’s office
Pre-Determination
Patient’s Registration & Prior-Authorization Medical encounter
Diagnosis
• Disease or medical condition of the patient (or) Reason for Patient’s visit
Procedures
• Treatment or Check up done by the doctor
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POP Quiz!
Identify True or False. Substantiate
• A patient cannot meet a healthcare provider
without prior appointment.
• It is mandatory for a patient to have a health
insurance policy to meet a provider
• Billing address of an insurance company can be
verified during pre-determination.
• Insurance company can deny an prior
authorization request, if there is no medical
necessity.
• A provider cannot bill a patient’s insurance, if
AOB is not signed.
• Patient is responsible to pay the provider, if she
/he is not willing to sign ROI.
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RCM – Medical Billing Office
Processes before claims submission:
Medical billing office
Charge
sheet
Payment posting Accounts Receivable Demographics Entry Charge Entry Medical Coding
• Medical Coding
• Demo Entry
• Charge Entry
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RCM – Medical Billing Office
Medical Coding: Diagnosis codes & Procedure codes
Medical billing office
Charge
sheet
Payment posting Accounts Receivable Demographics Entry Charge Entry Medical Coding
• Towards standardizing and simplifying the billing process,
predefined numeric and alpha numeric codes are assigned to
diagnosis (Diagnosis Codes) and procedure (Procedure Codes).
• These codes are added to/on the charge sheet.
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RCM – Medical Billing Office
Demo & Charge entry
Medical billing office
Charge
sheet
Payment posting Accounts Receivable Demographics Entry Charge Entry Medical Coding
• Demo Entry - Entering of demographic and insurance information
in provider’s billing software.
• Charge Entry - Entering of Codes and treatment details from
charge sheet in provider’s billing software.
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Sample 1 – Charge Sheet
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Sample 2 – Charge Sheet
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Sample 2 – Charge Ticket
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RCM – Medical Billing Office
Demo & Charge entry
Medical billing office
Charge
sheet
Payment posting Accounts Receivable Demographics Entry Charge Entry Medical Coding
• Billing office will prepare claim form with demographic
information, insurance information and charge information
available in the billing software. Claim is a document like bill, that
includes details of the Patient, his insurance, medical condition
and treatment with the charges
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Learning check/ Try it yourself
• Medical coding simplifies the process of
claims submission. Substantiate.
• What are demographic details?
• Identify the process of entering patient‘s
demographic details into billing software.
Why is it done?
• What are the different details available in a
charge sheet?
• Identify the process of entering patient‘s
treatment details into billing software. Why
is it done?
• What is Patient account number?
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RCM - Claim submission
E-claims
• Electronic claims are sent to Clearing House software instead of
sending to Insurance Processing.
• The following functions happen in the clearing house.
− Claims will be checked for errors and if there is any error that claim will be
Rejected .
− Clean claims (error free) are sent to Insurance Pre-Audit Process.
− Scrubber report – A report available in the clearing house software, that
contains the details of the Clean Claims and Rejected Claims . Based on
this report, errors are corrected and then claims are resubmitted.
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RCM - Claim submission
Paper Claims
• Paper claims are directly sent to Insurance Processing.
• Separate claim forms need to be used for billing physician
charges and hospital charges.
− Physician billing (Professional component) - CMS 1500 or HCFA
− Hospital Billing (Technical component) - UB 04 (old name UB 92)
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POP Quiz!
Identify True or False. Substantiate
• Paper claims and electronic claims are sent
through clearing house.
• Clearing house would correct the errors on a e-
claim before forwarding it to insurance
company.
• Insurance company can deny an prior
authorization request, if there is no medical
necessity.
• A provider cannot bill a patient’s insurance, if
AOB is not signed.
• Patient is responsible to pay the provider, if she
/he is not willing to sign ROI.
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RCM – Insurance Company
Processes at insurance company includes:
Heath insurance company
Claims Adjudication Pre-Audit Claims entry
• Claims Entry
• Pre-edit/Pre-Audit
• Claims Adjudication
• Communication of Decision
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RCM - Insurance Company
Claims Entry
Heath insurance company
Claims Adjudication Pre-Audit Claims entry
• Paper claims received by insurance will be scanned and
uploaded in to the insurance system.
• Information from the scanned claim forms are entered by the
Claims Entry team in to the Insurance software.
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Insurance Company
Pre-edit/Pre-Audit
Heath insurance company
Claims Adjudication Pre-Audit Claims entry
• E-claims received from clearing house will be audited by the
insurance software. Claims with incorrect and missing
information will be rejected here by insurance.
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Insurance Company
Claims Adjudication
Heath insurance company
Claims Adjudication Pre-Audit Claims entry
• Insurance decides whether to pay or to deny the claim during the
adjudication process
• This is done by comparing the providers and the patient contracts.
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Insurance Company
Communication of Decision
Heath insurance company
Claims Adjudication Pre-Audit Claims entry
• Decision made by insurance is communicated to provider and the
patient through a document called Explanation of Benefits.
• If it is a payment EOB, there will be a check attached.
• If it is a denial EOB the denial reason will be mentioned in the
EOB.
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Learning check/ Try it yourself
• Claims entry is not required for e-claims.
Substantiate
• What is claims adjudication.
• List out a few parameters for which a claim
can be denied during adjudication?
• Why should the insurance company send
EOB to the patient and the provider.
• Can insurance companies make payment to
the providers through Electronic Fund
Transfer (EFT)?
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Sample 1 – Payment EOB
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Sample 2 – Denial EOB
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POP Quiz!
Identify True or False. Substantiate
• Insurance company can deny a claim for
inappropriate diagnosis or procedure codes.
• Adjudicators verify only the patient’s treatment
details during claims adjudication.
• Insurance company may request additional
information like medical records, proof of timely
filing, student status certificate, for processing a
claim.
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RCM – Medical Billing Office
Processes after claims submission:
Medical billing office
Charge
sheet
Payment posting Accounts Receivable Demographics Entry Charge Entry Medical Coding
• Payment Posting
• Account Receivable Management
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RCM : Medical Billing Office
Payment Posting Process
Medical billing office
Charge
sheet
Payment posting Accounts Receivable Demographics Entry Charge Entry Medical Coding
• Process of entering payment and denial information from EOB
into client software is called Payment posting or Cash posting
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Accounts Receivable Management
A R Management
Medical billing office
Charge
sheet
Payment posting Accounts Receivable Demographics Entry Charge Entry Medical Coding
• The A/R follow up process involves checking the status of unpaid
claims with insurance companies, and taking necessary action to
accelerate reimbursements.
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Revenue cycle management
Patient Provider’s office
23
Pre-Determination
Patient Scheduling Patient’s Registration & Prior-Authorization Medical encounter
Patient’s demo- Medical Records
Patient billing
graphic & Insurance and treatment
details
Medical billing office
Charge
sheet
Payment posting Accounts Receivable Demographics Entry Charge Entry Medical Coding
Payment EOBs /
Denial EOBs E – claims /
Paper claims
Heath insurance company
Claims Adjudication Pre-Audit Claims entry
53
Learning check/ Try it yourself
• Payment posting is done only for claims
paid by the insurance company.
• How does AR process help in accelerating
claim reimbursements?
• What is the role of a medical billing office in
revenue cycle management?
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Activity:
Identify the
samples.
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Thank you
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