Proposed Foundation Training for Medicall Billing

I. US Healthcare System
a. Components of Health Care System
i. Patients
ii. Providers
iii. Payers
iv. Hospitals
v. Pharmaceutical Companies
vi. Regulatory Organizations
II. Introduction to Business of Healthcare
III. Medical Terminology and Procedures
IV. Medical Office Procedures
a. Single Practioner Medical Practice
b. Group Medical Practice
c. Ambulatory Care Centers
d. Ambulatory Surgery Centers
e. Clinic
f. Urgent Care Clinic
g. Retail Clinic
h. Hospital
V. Introduction to Procedural Coding
a. Healthcare Common Procedure Coding System
i. Level 1: Current Procedural Terminology
1. Category 1
2. Category 2
3. Category 3
ii. Level 2: National Codes
b. ICD 10-CM
VI. Insurance
a. Medicare
b. Medicaid
c. Types of Healthcare Plans
i. Managed Care Plans
1. Preferred Provider Organization (PPO)
2. Point of Service (POS)
3. Health Maintenance Organization (HMO)
4. Auto Insurance and Healthcare (NF)
5. Workers Compensation
ii. Indemnity Healthcare Plans
iii. Combined Plans
I. US Healthcare System
 Not a universally accessible system:
i. Government funded – Medicare and Medicaid
ii. Privately 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.

A. Components of the US Healthcare System

 Patient
 core of the healthcare system
 responsible for the financial aspect of healthcare
 pays insurance premiums and co-payments
 decide which physician to see and choose where they will go for care

 Providers
 Gatekeepers that give access to ancillary services that the patient may
need, admit to hospital and decide which medications will best help
them
 Primary care physician are the first contact of the patient in the US
healthcare system

 Payers
 These are the insurance companies: government and private funded
 Consumers pay premium to the payers in return for the insurance
coverage
 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.

 Hospital
 Offer both inpatient and outpatient care, pharmaceuticals and ancillary
services to the healthcare consumers
 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 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 supply
the medical insurer with supporting evidence that the procedure was necessary.
 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

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.

a. Single-Practitioner Medical Practice

i. 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.
ii. Major advantage of working for a single-practitioner medical practice is the
opportunity to take on different roles on the healthcare team.
iii. 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.

b. Group Medical Practice

i. 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
ii. 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
iii. 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.

c. Ambulatory Care Center

i. 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.
ii. 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.
iii. 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.
 iv. 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.

d. Ambulatory Surgery Centers

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

e. Clinic

i. 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.
ii. Examples of clinics are baby wellness centers, sports injury clinics, women’s health
clinics, and rehabilitation facilities.

f. Urgent Care Clinic

i. 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.

g. Retail Clinic

i. Care clinics that can be found in retail stores such as pharmacies and large super stores.
A retail care clinic provides care for minor illnesses and minor preventive care such as
flu shots. Non-physician practitioner providers, such as medical assistants, nurses, and
nurse practitioners (NPs), provide care.

h. Hospital

i. Large healthcare facility that offers outpatient and inpatient care. Most hospitals offer
the same breadth of services, while some also offer specialty 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 check-ups 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).

A. 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.

a. 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.

b. 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.

B. 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

VI. INSURANCE

 a contract (policy) in which an insurer indemnifies 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 on-going payments of
money called a premium.

a. MEDICARE

Medicare government-sponsored health insurance program for people age 65 or

older. Certain people younger than age 65 can qualify for Medicare too,
including those with disabilities and those who have permanent kidney failure.

The program helps with the cost of health care, but it does not cover all medical
expenses or the cost of most long-term care

Social Security enrolls you in Original Medicare (Part A and Part B).

Types of Medicare

 Medicare Part A (hospital insurance) helps pay for inpatient care in a hospital
or limited time at a skilled nursing facility (following a hospital stay). Part A
also pays for some home health care and hospice care.

 Medicare Part B (medical insurance) helps pay for services from doctors and
other health care providers, outpatient care, home health care, durable medical
equipment, and some preventive services.

Other parts of Medicare are run by private insurance companies that follow rules
set by Medicare.

 Supplemental (Medigap) policies help pay Medicare out-of-pocket copayments,

coinsurance, and deductible expenses.
  Medicare Advantage Plan (previously known as Part C) includes all benefits
and services covered under Part A and Part B — prescription drugs and
additional benefits such as vision, hearing, and dental — bundled together in
one plan.
 Medicare Part D (Medicare prescription drug coverage) helps cover the cost of
prescription drugs.

b. MEDICAID

a joint federal and state program that provides health coverage for eligible low-income
people, families and children, pregnant women, the elderly, and people with
disabilities.

Some beneficiaries are enrolled in both Medicare and Medicaid and are referred to as
"dually eligible ."

Medicare Managed Care -optional coverage choice for people with Medicare.
Sometimes referred to as Medicare Part C or Medicare Advantage, Medicare managed
care plans are offered by private companies.

Medicaid Managed Care - a health care delivery system organized to manage cost,
utilization, and quality; provides for the delivery of Medicaid health benefits and
additional services through contracted arrangements between state Medicaid agencies and
managed care organizations (MCOs) that accept a set per member per month (capitation)
payment for these services.

c. Types of Healthcare Plans

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

1. Require the insured choose a healthcare provider from an approved

list; otherwise the insurer won’t reimburse medical costs.
2. Cover preventative care.

 Types of Managed Care Plans

o 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
 o 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.

o Health Maintenance Organization

The 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.

o 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.

o 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.

ii. Indemnity healthcare plans

1. Allow the insured to choose the healthcare provider.
2. 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.
3. Have greater flexibility in choice of healthcare providers.

iii. Combined plans

1. Combine features of managed care and indemnity healthcare plans
2. Allow the insured to choose to receive care from approved or
unapproved healthcare providers.
 Medicare and Medicaid video 5.37

Medical Billing Training - Expert Video Overview (medicalbillingandcoding.org)

Introduction to medical billing 7.16

The medical billing process 10.23
Potential billing problems and returned claims 6.13

Medical Billing Process

1. Patient Registration (IF you are on the front lines)

If the patient is new or hasn't been in for quite a while, give them a registration form.

Give the patient the HIPAA Privacy notice after the office policies in regards to Protected
Health Information have been explained (this will need to be signed by the patient)

Make a copy of the Patient's Insurance Card (front and back).

Create a new patient account or update an existing account using the information
provided by the registration form.

2. Insurance Verification/Authorization
This is to be done before the patient is seen by the doctor!

Call the number for the insurance provider; Ask to verify medical coverage.

3. Encounter Form
contains both procedural and diagnosis codes which correspond with the patient's
examination. It is filled out by the physician after the patient encounter.
Includes:
patient demographics
POS
DOS
Procedure lists
Amount Paid
Diagnosis
Doctors signature
Patient followups
Practice and Physician information

4. Coding
First identify any diagnosis listed on the encounter form

5. Demographic Entry
6. Charge Entry
7. Claims Submission
8. Reimbursement

Medical coding-  translation of medical reports into a short code used within the healthcare industry.
CPT Modifier:

 Similarly, a CPT modifier may describe whether multiple procedures were performed, why that
procedure was necessary, where the procedure was performed on the body, how many surgeons
worked on the patient, and lots of other information that may be critical to a claim’s status with the
insurance payer.