Proposed Foundation Training for Medicall Billing

I. US Healthcare System
 Not a universally accessible system:
o Government funded – Medicare and Medicaid
o Private funded
 Americans are covered both by public and private health insurance, where
majority are covered by private insurances through their employers.
 A consumer or patient pays an upfront premium to a health insurance
company for.

Components of the US healthcare system:

 Patients:
o core of the healthcare system
o responsible for the financial aspect of healthcare
o pays insurance premiums and copayments
o decide which physician to see and choose where they will go for care
 Providers
o Gatekeepers that give access to ancillary services that the patient may need,
admit to hospital and decide which medications will best help them
o Primary care physician are the first contact of the patient in the US healthcare
system
 Payers
o These are the insurance companies: government and private funded
o Consumers pay premium to the payers in return for the insurance coverage
o They are important because the hold the money, make decision which drugs
and procedures to pay for and how much they will reimburse hospitals,
doctors and ancillary services.
 Hospitals
o Offer both inpatient and outpatient care, pharmaceuticals and ancillary
services to the healthcare consumers
o Hospital bills for services are paid by the insurance companies.
 Pharmaceutical companies
 Provides medication to the health consumers
 Costs are paid by insurance companies
 Provider chooses which medications to prescribe
 Hospital decides which medication to stock in their formularies
 Regulatory organizations
  Protect the rights and ensure the safety of the patient
 Physicians and other healthcare providers must be licensed to practice by
their respective boards in each state they practice.
 Joint Commission accreditations is required in order for the hospitals to
receive Medicare and Medicaid reimbursements
 Federal Drug Administration: regulates the pharmaceutical corporations

II. Introduction to the Business of Healthcare

 In the US, they don’t pay for medical care directly; instead the medical insurer
pays for it.
 Visit physician’s office or hospital and provide information about the health
insurance and pay for a certain amount (co-pay) of a fraction of total medical
bill
 After treatment, healthcare providers, including physicians, hospitals, and
other healthcare facilities, submit our medical bill to the medical insurer. If the
bill is approved, the medical insurer pays our healthcare provider directly for
all or a portion of our services
 Medical insurers reimburse healthcare providers according to necessary
procedures performed on the patient. It is up to the healthcare provider to sup-
ply the medical insurer with supporting evidence that the procedure was nec-
essary.
 The healthcare provider doesn’t get paid unless the supporting documents
accompany the bill.
III. Medical terminology and Procedures
 Medical terms are built using prefix, root word, suffix and combining forms to
define the word.
E.g. Muscle heart inflammation. “Heart inflammation” makes sense. Myocarditis
Inflammation of the heart muscle.
Pericarditis. This means an inflammation of the layer around the heart.

 Each major part of the body is identified by one or more root words. These words are
derived from Greek or Latin words that describe the body parts
*** copy of common medical test pp: 54**

IV. MEDICAL OFFICE PROCEDURES

A medical practice is a relatively small business that is owned and operated by one or more
practitioners. A practitioner opens a medical practice after completing 4 years of medical school
and 3 years of closely supervised training in a hospital, known as a residency.

After completing their residency, some practitioners join an existing medical practice as an
employee before opening their own medical practice. Others partner with fellow practitioners to
open a group medical practice.

Single-Practitioner Medical Practice

owned and operated by a practitioner who is responsible for the healthcare of his/her patients and
for running the medical practice as a profitable business. The practitioner might provide family
care; focus on a specialty such as geriatrics; or provide a combination of family care and a
specialty.

 major advantage of working for a single-practitioner medical practice is the opportunity

to take on different roles on the healthcare team.
 major disadvantage of working for a single-practitioner medical practice is the lack of
structure that is found in a group practice or larger healthcare organization.

A Group Medical Practice

owned and operated by two or more practitioners who are responsible for patient care. They
delegate the business aspects of the practice to an office manager whose job is to create a
structure for the medical practice to run efficiently and profitably

 major advantage of working for a group medical practice is its structure and stability and
ability to focus on one area of the medical practice
 major disadvantage of working for a group medical practice is the inflexibility for
support, training, and career advancement. Staff members are expected to perform their
job accurately and independently with little or no support.

Ambulatory Care Center

owned and operated by a corporation, such as a medical insurer or healthcare maintenance

organization, and might be part of a chain of centers in a state, metropolitan region, or across the
nation.
An ambulatory care center operates similar to an emergency room, a clinic, or other department
of a hospital. Practitioners are their full-time or per diem employees and probably don’t have a
financial interest in the center.

 major advantage of working for an ambulatory care center is the greater structure and
stability than is found in a group practice plus there is the opportunity for career
development and job transfer especially in centers that are part of a chain.
 major disadvantage of working for an ambulatory care center is its inflexibility.
Operating decisions and procedures are typically set for the entire chain of centers by off-
site managers who are focused on the bottom line.

Ambulatory Surgery Centers

 are modern health care facilities focused on providing same-day surgical care, including
diagnostic and preventive procedures.

Clinic

a specialized practice that can be owned and operated by a group of practitioners or by a large
healthcare organization such as a hospital. Practitioners who work at a clinic have the same
medical interests. Examples of clinics are baby wellness centers, sports injury clinics, women’s
health clinics, and rehabilitation facilities.

Urgent Care Clinic

walk-in clinic that delivers ambulatory care and provides an alternative to relatively minor care
handled by traditional emergency room. Urgent care centers treat injuries and illnesses that
require immediate care but not emergency care.

Retail Clinic
A retail (or convenient) care clinic can be found in retail stores such as phar-macies and large
super stores. A retail care clinic provides care for minor ill-nesses and minor preventive care
such as flu shots. Non-physician practitioner providers, such as medical assistants, nurses, and
nurse practitioners (NPs), provide care.

Hospital
large healthcare facility that offers outpatient and inpatient care. Most hospitals offer the same
breadth of services, while some also offer spe-cialty care such as cardiac surgery, burns, and
major trauma care
 V. Introduction to Procedural Coding
 billing codes are used to pay for medical procedures, such as checkups by your
doctor, and medical services such as the ambulance ride to your hospital.
 physician, the pathology laboratory, her surgeon, and the hospital need to get paid
for the patient’s care.
 In order to be paid, healthcare providers must submit a claim form to the health
insurer.
i. Each claim is prepared by a medical insurance specialist and must state the
date the care was given, the code that represents the procedure or service
rendered, and the rate, which is the price charged by the healthcare
provider.
ii. Each procedure and service is identified by a unique code, which makes it
easy for healthcare providers to submit claims and for insurers to process
claims.
iii. These codes are defined in the Healthcare Common Procedure Coding
System (HCPCS).

VI. The Healthcare Common Procedure Coding System

 standardized coding system used to process Medicare and health insurance claims
for payment. It consists of two subsystems referred to as Level I and Level II.

Level I is referred to as the Current Procedural Terminology (CPT) and associates the
descriptions of procedures and services performed by physicians and other healthcare providers
with a unique five-digit numeric code. CPT is maintained by the American Medical Association
(AMA).

Current Procedural Terminology (CPT) is a medical code set that is used to report medical,
surgical, and diagnostic procedures and services to entities such as physicians, health insurance
companies and accreditation organizations. 

3 Types of CPT codes

Category 1: Procedures and contemporary medical practices

 covers procedures and contemporary medical practices that are widely performed.
are five-digit numeric codes that identify a procedure or service that is approved by the Food and
Drug Administration (FDA), performed by healthcare professionals nationwide, and is proven
and documented.

Evaluation and management 99201–99499

Anesthesia 00100–01999, 99100–99140
Surgery 10021–69990
Radiology 70010–79999
Pathology and laboratory 80048–89356
 Medicine 90281–99199, 99500–99600

Category 2: contains optional measures used to treat a patient such as tracking the patient’s blood
pressure, weight management, or tobacco intervention

 Diagnostic and screening processes or results

 Therapeutic, preventive, or other interventions
 Follow-up or other outcomes and patient safety

Category 3: used for collecting information about those procedures and services rather than
for billing

CPT Two-Digit Modifier

A two-digit modifier can be placed at the end of the code to indicate that something
unusual occurred.
For example, modifier -62 indicates a primary surgeon and modifier -80 indicates an
assisting surgeon.

Level II National Codes

National codes are used for procedures and services that are not covered by CPT codes.
These include procedures and services performed by dentists, orthodontists, and allied healthcare
providers such as ambulance services.

ICD-10-CM

a system used by physicians and other healthcare providers to classify and code all
diagnoses, symptoms and procedures recorded in conjunction with hospital care in the
United States

2021 ICD-10-CM Codes

A00-B99 Certain infectious and parasitic diseases

C00-D49 Neoplasms
D50-D89 Diseases of the blood and blood-forming organs and certain disorders
involving the immune mechanism
E00-E89 Endocrine, nutritional and metabolic diseases
F01-F99 Mental, Behavioral and Neurodevelopmental disorders
G00-G99 Diseases of the nervous system
H00-H59 Diseases of the eye and adnexa
H60-H95 Diseases of the ear and mastoid process
I00-I99 Diseases of the circulatory system
J00-J99 Diseases of the respiratory system
K00-K95 Diseases of the digestive system
L00-L99 Diseases of the skin and subcutaneous tissue
M00-M99 Diseases of the musculoskeletal system and connective tissue
N00-N99 Diseases of the genitourinary system
O00-O9A Pregnancy, childbirth and the puerperium
P00-P96 Certain conditions originating in the perinatal period
Q00-Q99 Congenital malformations, deformations and chromosomal abnormalities
R00-R99 Symptoms, signs and abnormal clinical and laboratory findings, not elsewhere
classified
S00-T88 Injury, poisoning and certain other consequences of external causes
U00-U85 Codes for special purposes
V00-Y99 External causes of morbidity
Z00-Z99 Factors influencing health status and contact with health services

What Is Insurance?
 a contract (policy) in which an insurer indemnifies (covers) another against losses from specific
contingencies or perils.

insured, is at a potential financial loss from the possibility that certain events will occur.
insurer, agrees to cover this financial loss in exchange for ongoing payments of money called a
premium.

Coinsurance. The percentage of costs of a covered health care service you

pay (20%, for example) after you've paid your deductible. Let's say your
health insurance plan's allowed amount for an office visit is $100 and your
coinsurance is 20%. If you've paid your deductible: You pay 20% of $100, or
$20. The insurance company pays the rest.

Types of Healthcare Plans

Managed care plans - have contracts with health care providers and medical facilities to provide
care for members at reduced costs.

Advantages of Managed Care Plan:

 It lowers the costs of health care for those who have access.
 People can seek out care from within their network
 Information moves rapidly within a network. In the past, a patient would need to
take copies of their medical records with them when referred to a specialist. With
the modern structures of managed care, one single authorization allows the
network to access your file when seeing a provider
  Busy networks can have long wait times.(Disadvantage)
 Require the insured choose a healthcare provider from an approved list;
otherwise the insurer won’t reimburse medical costs.

Cover preventative care.

Indemnity healthcare plans

Allow the insured to choose the healthcare provider.

• Require the insured pay the healthcare provider and then submit a claim to the insurer
for reimbursement. Today many people authorize their healthcare provider to submit
claims directly to and be reimbursed by the insurer.
• Have greater flexibility in choice of healthcare providers.

Combined plans

Combine features of managed care and indemnity healthcare plans

Allow the insured to choose to receive care from approved or unapproved healthcare
providers.

Types of Managed Care Plans

Preferred Provider Organization

the insured can choose to go to a healthcare provider who is in-network or out-of-
network. There is a higher out-of-pocket expense when going out-of-network. This means that
the insured can consult any specialist without first having to see her primary-care practitioner

Unlike HMOs, users of PPOs are required to pay for services at the time rather than on a prepaid,
fixed-rate basis and are reimbursed at a later date. Since the cost is arranged by the sponsor and healthcare
provider ahead of time, patients are able to know what they will be expected to pay.

Point of Service
requires the insured to choose a primary-care practitioner who is responsible for managing
the insured healthcare. The primary-care practitioner must be with the POS network of
healthcare providers.

Health Maintenance Organization

insured selects a primary-care practitioner from practitioners within the HMO who then is
responsible for his healthcare, treatment approval, and referrals to specialists
Except for emergencies, the insured must use healthcare providers and healthcare
facilities that are part of the HMO. Care received outside the HMO that is not approved by the
primary care practitioner isn’t reimbursed.

Auto Insurance and Healthcare

reimburses for accidental bodily injury and other medical expenses related to an automobile
accident.

liability protection of an auto insurance policy reimburses medical expenses of those injured in
an accident caused by the insured. Many auto insurance policies also offer personal injury
protection (PIP). PIP reimburses the insured for medical expenses regardless of who caused the
accident.

Workers’ Compensation

an insurance policy purchased by an employer who pays an employee’s medical expenses for
work-related injuries and diseases. The injury must have occurred as a result of employment.

Medicare is the federal health insurance program for:

 People who are 65 or older

 Certain younger people with disabilities
 People with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a
transplant, sometimes called ESRD)

What are the parts of Medicare?

The different parts of Medicare help cover specific services:

 Medicare Part A (Hospital Insurance)

Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some
home health care.
 Medicare Part B (Medical Insurance)
Part B covers certain doctors' services, outpatient care, medical supplies, and preventive services.
 Medicare Part D (prescription drug coverage)
Helps cover the cost of prescription drugs (including many recommended shots or vaccines).

Medicaid
Continue pp 54

References:

https://evidencenetwork.ca/backgrounder-making-sense-of-the-u-s-health-care-system-a-primer-
2/

https://vaden.stanford.edu/insurance/health-insurance-overview/how-us-health-insurance-works