BlueCross and BlueShield

I would like to make a summary of these points on Power Point as follows from the attached insurance book.

Chapter 13

History of Blue Cross and Blue Shield ……………… … . .466

Blue Cross Blue Shield Insurance. . . . . . . …………………. .469

Billing Notes. . . . . . . . …………. . . . . . . . . . . . . . . .474

Claims Instructions. . . . ……………. . . . . . . . . . . . . .476

BlueCross BlueShield Secondary Coverage. . … … … .484

All of these are all guaranteed by each title and in total all 12 Power Point slides without the reference segment

Chapter 14

Medicare. . . . . ………………………………. . . . . . . . . . .493

Medicare Eligibility. . . . . . . . . . . ………………………………………. . . . . . . .495

Medicare Enrollment. . . . . . . ………………………………………. . . . . . . . . .496

All of these are all guaranteed by each title and in total all 8 Power Point slides without the reference slice

I will attach the book to you

Objectives Upon successful completion of this chapter, you should be able to:

1. Define key terms.

2. Explain the history of BlueCross and BlueShield.

3. Differentiate among BlueCross BlueShield plans.

4. Apply BlueCross BlueShield billing notes when completing CMS-1500 claims.

5. Complete BlueCross BlueShield primary and secondary claims.

Key terms Away From Home Care® Program BCBS basic coverage BCBS major medical (MM)

coverage BlueCard® BlueCard Worldwide® BlueCross BlueCross BlueShield (BCBS) BlueGeo® BlueShield coordinated home health

and hospice care

Federal Employee Health Benefits Program (FEHBP)

Federal Employee Program (FEP) for-profit corporation Government-Wide Service Benefit

Plan Healthcare Anywhere indemnity coverage medical emergency care rider Medicare supplemental plans member member hospital nonprofit corporation

outpatient pretreatment authoriza- tion plan (OPAP)

PPN provider precertification preferred provider network (PPN) prepaid health plan prospective authorization rider second surgical opinion (SSO) service location special accidental injury rider usual, customary, and reasonable

(UCR)

chapter Outline

History of BlueCross and BlueShield

BlueCross BlueShield Plans

Billing Notes

Claims Instructions

BlueCross BlueShield Secondary Coverage

BlueCross BlueShield

chapter 13

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Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

Chapter 13466

intrOductiOn BlueCross and BlueShield plans are perhaps the best known medical insurance pro- grams in the United States. They began as two separate prepaid health plans selling contracts to individuals or groups for coverage of specified medical expenses as long as the premiums were paid. BCBS offer a number of products to subscribers.

History of Bluecross and BluesHield Origin of BlueCross The forerunner of what is known today as the BlueCross plan began in 1929 when Baylor University Hospital in Dallas, Texas, approached teachers in the Dallas school district with a plan that would guarantee up to 21 days of hospi- talization per year for subscribers and each of their dependents, in exchange for a $6 annual premium. This prepaid health plan was accepted by the teachers and worked so well that the concept soon spread across the country. Early plans specified which hospital subscribers and their dependents could use for care. By 1932 some plans modified this concept and organized community- wide programs that allowed the subscriber to be hospitalized in one of several member hospitals, which had signed contracts to provide services for special rates.

The blue cross symbol was first used in 1933 by the St. Paul, Minnesota, plan and was adopted in 1939 by the American Hospital Association (AHA) when it became the approving agency for accreditation of new prepaid hospi- talization plans. In 1948 the need for additional national coordination among plans arose, and the Blue Cross Association was created. In 1973 the AHA deeded the right to both the name and the use of the blue cross symbol to the Blue Cross Association. At that time the symbol was updated to the trademark in use today.

Origin of BlueShield The BlueShield plans began as a resolution passed by the House of Delegates at an American Medical Association meeting in 1938. This resolution supported the concept of voluntary health insurance that would encourage physicians to coop- erate with prepaid health care plans. The first known plan was formed in Palo Alto, California, in 1939 and was called the California Physicians’ Service. This plan stipulated that physicians’ fees for covered medical services would be paid in full by the plan if the subscriber earned less than $3,000 a year. When the sub- scriber earned more than $3,000 a year, a small percentage of the physician’s fee would be paid by the patient. This patient responsibility for a small percentage of the health care fee is the forerunner of today’s industry-wide required patient coinsurance and copayment requirements.

The blue shield design was first used as a trademark by the Buffalo, New York, plan in 1939. The name and symbol were formally adopted by the Associ- ated Medical Care Plans, formed in 1948, as the approving agency for accredi- tation of new BlueShield plans adopting programs created in the spirit of the California Physicians’ Service program. In 1951 this accrediting organization changed its name to the National Association of BlueShield Plans. Like the BlueCross plans, each BlueShield plan in the association was established as

Note: Instructions for complet- ing CMS-1500 claims in this chapter are for BlueCross and BlueShield (BCBS) fee-for-service claims only.

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BlueCross BlueShield 467

a separate, nonprofit corporate entity that issued its own contracts and plans within a specific geographic area.

BlueCross BlueShield Joint Ventures BlueCross plans originally covered only hospital bills, and BlueShield plans covered fees for physician services. Over the years, both programs increased their coverage to include almost all health care services. In many areas of the country, there was close cooperation between BlueCross and BlueShield plans that resulted in the formation of joint ventures in some states where the two corporations were housed in one building. In these joint ventures, BlueCross BlueShield (BCBS) shared one building and computer services but maintained separate corporate identities.

BlueCross BlueShield Association In 1977 the membership of the separate BlueCross and BlueShield national asso- ciations voted to combine personnel under the leadership of a single president, responsible to both boards of directors. Further consolidation occurred in 1986 when the boards of directors of the separate national BlueCross and BlueShield associations merged into a single corporation named the BlueCross BlueShield Association (BCBSA).

Today, BCBSA consists of independent, community-based, locally operated BlueCross BlueShield plans that collectively provide health care coverage to more than 100 million Americans. The BCBSA maintains offices in Chicago, Illinois and Washington, D.C. and performs the following functions:

● Owns and manages the BlueCross and BlueShield trademarks and names ● Operates several business initiatives in support of the BlueCross and BlueShield companies

● Represents BlueCross and BlueShield in national forums

The Changing Business Structure Strong competition among all health insurance companies in the United States emerged during the 1990s and resulted in the following:

● Mergers occurred among BCBS regional corporations (within a state or with neigh- boring states) and names no longer had regional designations.

ExAMPlE: Care First BCBS is the name of the corporation that resulted from a merger between BCBS of Maryland and Washington, D.C., BCBS.

● The BlueCross BlueShield Association no longer required plans to be nonprofit (as of 1994).

Nonprofit and Profit Corporations Regional corporations that needed additional capital to compete with commer- cial for-profit health insurance plans petitioned their respective state legisla- tures to allow conversion from their nonprofit status to for-profit corporations. Nonprofit corporations are charitable, educational, civic, or humanitarian organi- zations whose profits are returned to the corporation rather than distributed

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to shareholders and officers of the corporation. Because no profits of the organization are distributed to shareholders, the government does not tax the organization’s income. For-profit corporations pay taxes on profits generated by the corporation’s enterprises and pay dividends to shareholders on after-tax profits.

Although some BCBS plans have converted to for-profit companies, state regulators and courts are scrutinizing these transactions, some on a retroactive basis, to ensure that charitable assets are preserved. For example, Empire BCBS in New York State publicly acknowledges its nonprofit obligations and agrees to preserve 100 percent of its assets for nonprofit charitable purposes as part of proposed conversions to for-profit corporations.

BCBS Distinctive Features The “Blues” were pioneers in nonprofit, prepaid health care, and they possess features that distinguish them from other commercial health insurance groups.

1. They maintain negotiated contracts with providers of care. In exchange for such contracts, BCBS agrees to perform the following services:

● Make prompt, direct payment of claims. ● Maintain regional professional representatives to assist participating provid- ers with claim problems.

● Provide educational seminars, workshops, billing manuals, and newsletters to keep participating providers up to date on BCBS insurance procedures.

2. BCBS plans, in exchange for tax relief for their nonprofit status, are for- bidden by state law from cancelling coverage for an individual because he or she is in poor health or BCBS payments to providers have far exceeded the average. Policies issued by the nonprofit entity can be can- celed, or an individual unenrolled, only:

● When premiums are not paid ● If the plan can prove that fraudulent statements were made on the applica- tion for coverage

3. BCBS plans must obtain approval from their respective state insurance commissioners for any rate increases and/or benefit changes that affect BCBS members within the state. For-profit commercial plans have more freedom to increase rates and modify general benefits without state approval when the premium is due for annual renewal if there is no clause restricting such action in the policy.

4. BCBS plans must allow conversion from group to individual coverage and guarantee the transferability of membership from one local plan to another when a change in residency moves a policyholder into an area served by a different BCBS corporation.

Participating Providers As mentioned earlier, the “Blues” were pioneers in negotiating contracts with providers of care. A participating provider (PAR) is a health care provider who enters into a contract with a BCBS corporation and agrees to:

● Submit insurance claims for all BCBS subscribers. ● Provide access to the Provider Relations Department, which assists the PAR pro- vider in resolving claims or payment problems.

Note: For-profit commercial plans have the right to cancel a policy at renewal time if the patient moves into a region of the country in which the company is not licensed to sell insurance or if the person is a high user of benefits and has purchased a plan that does not include a noncancellation clause.

Note: The insurance claim is submitted to the BCBS plan in the state where services were rendered. That local plan forwards the claim to the home plan for adjudication.

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BlueCross BlueShield 469

● Write off (make a fee adjustment for) the difference or balance between the amount charged by the provider for covered procedures/services and the approved fee established by the insurer. (For noncovered procedures/services, the patient is billed by the provider.)

● Bill patients for only the deductible and copay/coinsurance amounts that are based on BCBS-allowed fees and the full charged fee for any uncovered service.

In return, BCBS corporations agree to:

● Make direct payments to PARs. ● Conduct regular training sessions for PAR billing staff. ● Provide free billing manuals and PAR newsletters. ● Maintain a provider representative department to assist with billing/payment problems.

● Publish the name, address, and specialty of all PARs in a directory distributed to BCBS subscribers and PARs.

Preferred Provider Network (PPN) PARs can also contract to participate in the plan’s preferred provider network (PPN), a program that requires providers to adhere to managed care provisions. In this contractual agreement, the PPN provider (a provider who has signed a PPN con- tract) agrees to accept the PPN allowed rate, which is generally 10 percent lower than the PAR allowed rate. The provider further agrees to abide by all cost- containment, utilization, and quality assurance provisions of the PPN program. In return for a PPN agreement, the “Blues” agree to notify PPN providers in writ- ing of new employer groups and hospitals that have entered into PPN contracts and to maintain a PPN directory.

Nonparticipating Providers Nonparticipating providers (nonPARs) have not signed participating provider contracts, and they expect to be paid the full fee charged for services rendered. In these cases, the patient may be asked to pay the provider in full and then be reimbursed by BCBS for the allowed fee for each service, minus the patient’s deductible and copayment obligations. Even when the provider agrees to file the claim for the patient, the insurance company sends the payment for the claim directly to the patient and not to the provider.

Bluecross BluesHield insurance BlueCross BlueShield includes the following types of insurance:

● Fee-for-service (traditional coverage) ● Indemnity ● Managed care plans

° Coordinated home health and hospice care

° Exclusive provider organization (EPO)

° Health maintenance organization (HMO)

° Outpatient pretreatment authorization plan (OPAP)

° Point-of-service (POS) plan

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° Preferred provider organization (PPO)

° Second surgical opinion (SSO) ● Federal Employee Program (FEP) ● Medicare supplemental plans ● Healthcare Anywhere

Fee-for-Service (Traditional Coverage) BCBS fee-for-service or traditional coverage is selected by (1) individuals who do not have access to a group plan and (2) many small business employers. These contracts are divided into two types of coverage within one policy:

● Basic coverage ● Major medical (MM) benefits

Minimum benefits under BCBS basic coverage routinely include the following services:

● Hospitalizations ● Diagnostic laboratory services ● X-rays ● Surgical fees ● Assistant surgeon fees ● Obstetric care ● Intensive care ● Newborn care ● Chemotherapy for cancer

BCBS major medical (MM) coverage includes the following services in addition to basic coverage:

● Office visits ● Outpatient nonsurgical treatment ● Physical and occupational therapy ● Purchase of durable medical equipment (DME) ● Mental health encounters ● Allergy testing and injections ● Prescription drugs ● Private duty nursing (when medically necessary) ● Dental care required as a result of a covered accidental injury

Major medical services are usually subject to patient deductible and copayment requirements, and in a few cases the patient may be responsible for filing claims for these benefits.

Some of the contracts also include one or more riders, which are special clauses that stipulate additional coverage over and above the standard contract. Common riders include special accidental injury and medical emergency care coverage.

The special accidental injury rider covers 100 percent of nonsurgical care sought and rendered within 24 to 72 hours (varies according to the policy) of the acci- dental injury. Surgical care is subject to any established contract basic plan

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BlueCross BlueShield 471

deductible and copayment requirements. Outpatient follow-up care for these accidental injuries is not included in the accidental injury rider, but will be covered if the patient has supplemental coverage.

The medical emergency care rider covers immediate treatment sought and received for sudden, severe, and unexpected conditions that if not treated would place the patient’s health in permanent jeopardy or cause permanent impair- ment or dysfunction of an organ or body part. Chronic or subacute conditions do not qualify for treatment under the medical emergency rider unless the symptoms suddenly become acute and require immediate medical attention. Special attention must be paid to the ICD-10-CM coding (Blocks 21 and 24D) on the CMS-1500 claim to ensure that services rendered under the medical emer- gency rider are linked to diagnoses or reported symptoms generally accepted as conditions that require immediate care. Nonspecific conditions such as “acute upper respiratory infection” or “bladder infection” would not be included on the medical emergency diagnosis list.

Indemnity Coverage BCBS indemnity coverage offers choice and flexibility to subscribers who want to receive a full range of benefits along with the freedom to use any licensed health care provider. Coverage includes hospital-only or comprehensive hospital and medical coverage. Subscribers share the cost of benefits through coinsurance options, do not have to select a primary care provider, and do not need a refer- ral to see a provider.

Managed Care Plans Managed care is a health care delivery system that provides health care and controls costs through a network of physicians, hospitals, and other health care providers. BCBS managed care plans include the coordinated home health and hospice care program, exclusive provider organizations, health maintenance organizations, outpatient pretreatment authorization plans, point-of-service plans, preferred provider organizations, and second surgical opinions.

The coordinated home health and hospice care program allows patients with this option to elect an alternative to the acute care setting. The patient’s physician must file a treatment plan with the case manager assigned to review and coor- dinate the case. All authorized services must be rendered by personnel from a licensed home health agency or approved hospice facility.

An exclusive provider organization (EPO) is similar to a health maintenance organization that provides health care services through a network of doctors, hospitals, and other health care providers, except that members are not required to select a primary care provider (PCP), and they do not need a referral to see a specialist. However, they must obtain services from EPO providers only or the patient is responsible for the charges. A primary care provider (PCP) is a physi- cian or other medical professional who serves as a subscriber’s first contact with a plan’s health care system. The PCP is also known as a personal care physician or personal care provider.

All BCBS corporations now offer at least one health maintenance organiza- tion (HMO) plan that assumes or shares the financial and health care delivery risks associated with providing comprehensive medical services to subscrib- ers in return for a fixed, prepaid fee. Some plans were for-profit acquisitions; others were developed as separate nonprofit plans. Examples of plan names are Capital Care and Columbia Medical Plan. Because familiar BCBS names are

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Chapter 13472

not always used in the plan name, some HMOs may not be easily recognized as BCBS plans. The BCBS trademarks, however, usually appear on the plan’s ID cards and advertisements.

The outpatient pretreatment authorization plan (OPAP) requires preauthorization of outpatient physical, occupational, and speech therapy services. In addi- tion, OPAP requires periodic treatment/progress plans to be filed. OPAP is a requirement for the delivery of certain health care services and is issued prior to the provision of services. OPAP is also known as prospective authorization or precertification.

A point-of-service (POS) plan allows subscribers to choose, at the time medical services are needed, whether they will go to a provider within the plan’s network or outside the network. When subscribers go outside the net- work to seek care, out-of-pocket expenses and copayments generally increase. POS plans provide a full range of inpatient and outpatient services, and sub- scribers choose a primary care provider (PCP) from the payer’s PCP list. The PCP assumes responsibility for coordinating subscriber and dependent medical care, and the PCP is often referred to as the gatekeeper of the patient’s medi- cal care. The name and telephone number of the PCP appear on POS plan ID cards, and written referral notices issued by the PCP are usually mailed to the appropriate local processing address following the transmission of an elec- tronic claim. Because the PCP is responsible for authorizing all inpatient hos- pitalizations, a specialist’s office should contact the PCP when hospitalization is necessary and follow up that call with one to the utilization control office at the local BCBS plan office.

A preferred provider organization (PPO) offers discounted health care services to subscribers who use designated health care providers (who contract with the PPO) but also provides coverage for services rendered by health care providers who are not part of the PPO network. The BCBS PPO plan is sometimes described as a subscriber-driven program, and BCBS sub- stitutes the terms subscriber (or member) for policyholder (used by other com- mercial carriers). In this type of plan, the subscriber (member) is responsible for remaining within the network of PPO providers and must request refer- rals to PPO specialists whenever possible. The subscriber must also adhere to the managed care requirements of the PPO policy, such as obtaining required second surgical opinions and/or hospital admission review. Failure to adhere to these requirements will result in denial of the surgical claim or reduced payment to the provider. In such cases, the patient is responsible for the difference or balance between the reduced payment and the normal PPO allowed rate.

The mandatory second surgical opinion (SSO) requirement is necessary when a patient is considering elective, nonemergency surgical care. The initial surgical recommendation must be made by a physician qualified to perform the antici- pated surgery. If a second surgical opinion is not obtained prior to surgery, the patient’s out-of-pocket expenses may be greatly increased. The patient or sur- geon should contact the subscriber’s BCBS local plan for instructions. In some cases, the second opinion must be obtained from a member of a select surgical panel. In other cases, the concurrence of the need for surgery from the patient’s PCP may suffice.

Federal Employee Program The Federal Employee Health Benefits Program (FEHBP) is an employer-sponsored health benefits program established by an Act of Congress in 1959. The BlueCross BlueShield Federal Employee Program® (FEP) (Figure 13-1) began covering federal

Note: When subscribers go outside the network for health care, the approval of the PCP is not required, and costs are usually higher. When subscribers undergo procedures/services that are not covered by their policy, they are responsible for reimbursing the provider for such care.

Note: The federal government’s Office of Personnel Management (OPM) oversees administration of the FEHBP, and BCBS is just one of several payers who reim- burse health care services. Oth- ers include the American Postal Workers Union (APWU) Health Plan, Government Employee Hos- pital Association (GEHA), Mail Handlers Benefit Plan (MHBP), and National Association of Let- ter Carriers (NALC).

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BlueCross BlueShield 473

employees on July 1, 1960, and now provides benefits to more than 5 million federal enrollees and dependents. FEP is underwritten and administered by BlueCross BlueShield plans that are called local plans. Claims are submitted to local plans that serve the location where the patient was seen (called a ser- vice location), regardless of the member’s FEP plan affiliation. FEP cards contain the phrase Government-Wide Service Benefit Plan under the insurance company’s trademark.

Medicare Supplemental Plans BCBS corporations offer several federally designed and regulated Medicare supplemental plans (described in Chapter 14), which augment the Medicare pro- gram by paying for Medicare deductibles and copayments. These plans are bet- ter known throughout the industry as Medigap Plans and are usually identified by the word Medigap on the patient’s plan ID card.

Healthcare Anywhere Healthcare Anywhere coverage allows “members of the independently owned and operated BCBS plans [to] have access to health care benefits throughout the United States and around the world, depending on their home plan benefits. Generally, the BlueCard® and BlueCard Worldwide® programs (Figure 13-2) enable such members obtaining health care services while traveling or living in another BCBS plan’s service area (within the USA or in another country) to receive the benefits of their home plan contract and to access local provider networks. As instructed by their home BCBS plan, members call the phone number on their Plan ID card to arrange for pre-certification or prior authori- zation number, if necessary. The Away From Home Care® Program allows the par- ticipating BCBS plan members who are temporarily residing outside of their home HMO service area for at least 90 days to temporarily enroll with a local HMO. Such members usually include dependent students attending school out-of-state, family members who reside in different HMO service areas, long- term travelers whose work assignment is in another state, and retirees with a dual residence.” GeoBlue provides global medical coverage for active employ- ees and their dependents who spend more than six months outside the United States. Any U.S. corporation, with new or existing Blue coverage, that sends members to work and reside outside the United States for six months or more

FIGURE 13-1 Mock-up of an insurance FEP PPO plan identification card.

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Chapter 13474

is eligible for GeoBlue. (BlueCard, Away From Home Care, and BlueGeo are registered trademarks of the BlueCross BlueShield Association and are used with permission.)

Billing notes A summary follows of nationwide billing issues for traditional BCBS fee-for- service claims. PAR providers are required to submit claims for subscribers.

Claims Processing Claims for BCBS patients are submitted to the local BCBS payer for processing (and not to the patient’s “home” BCBS plan).

ExAMPlE: Mary Smith’s “home” health insurance coverage is an employer group health plan (EGHP) through Western New York (WNY) BCBS, which is located in Buffalo, New York. She receives health care services from her local physician in Syracuse, New York, because that is the city in which Mary works and resides. Her physician’s office submits claims to Central BCBS in Syracuse, which contacts WNY BCBS to determine contractual coverage and reimbursement rates for treatment provided to Mary.

Deadline for Filing Claims The general deadline is customarily one year from the date of service, unless otherwise specified in the subscriber’s or provider’s contracts. (Some BCBS pay- ers require claims to be submitted as soon as 120 days from the date of service, while others allow as long as 18 months from the date of service.)

Form Used BCBS payers currently accept the CMS-1500 claim.

FIGURE 13-2 Mock-up of a national account PPO identification insurance card.

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BlueCross BlueShield 475

Inpatient and Outpatient Coverage Inpatient and outpatient coverage may vary according to the plan. Many plans require second surgical opinions and prior authorization for elective hospital- izations. Information on the individual program requirements can be obtained from your BCBS payer(s).

Deductible The deductible will vary according to the BCBS plan. Consult the BCBS bill- ing manual or eligibility status computerized phone bank for specific patient requirements. Patients enrolled in PPO plans may have no applicable deduct- ibles for certain preventive medicine services.

Copayment/Coinsurance Patient copayment/coinsurance requirements vary according to the patient plan. The most common coinsurance amounts are 20 percent or 25 percent, although they may be as high as 50 percent for mental health services on some policies. (The subscriber is allowed a pre-established number of mental health visits.)

Allowable Fee Determination The allowable fee varies according to the plan. Many corporations use the physician fee schedule to determine the allowed fees for each procedure. Other plans use a usual, customary, and reasonable (UCR) basis, which is the amount commonly charged for a particular medical service by providers within a particular geographic region for establishing their allowable rates. Participating providers must accept the allowable rate on all covered services and write off or adjust the difference or balance between the plan-determined allowed amount and the amount billed. Patients are responsible for any deductible and copay/coinsurance described in the policy, as well as full charges for uncovered services.

The remittance advice sent to PAR and PPN providers clearly states the patient’s total deductible and copayment/coinsurance responsibility for each claim submission.

NonPARs may collect the full fee from the patient. BCBS payments are then sent directly to the patient.

Assignment of Benefits All claims filed by participating providers qualify for an assignment of benefits to the provider. This means that payment is made directly to the provider by BCBS.

Special Handling The following special handling guidelines should be followed:

1. Make it a habit and priority to retain a current photocopy of the front and back of all patient insurance plan ID cards in the patient’s file.

2. Resubmit claims not paid within 30 days.

3. Some mental health claims are forwarded to a third-party administra- tor (TPA) that provides administrative services to health care plans and

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Chapter 13476

specializes in mental health case management. Check the back of the ID card and billing manual for special instructions.

Before working with BCBS claims, complete the Review located at the end of this chapter.

claims instructions The claims instructions (Table 13-1) in this section are used for completing primary BCBS claims. (At the end of the chapter, you will find instructions for completing secondary and supplemental claims.)

BCBS primary claim status is determined when the patient is:

● Covered by only one BCBS policy ● Covered by both a government-sponsored plan and an employer-sponsored BCBS plan

● Covered by a non-BCBS plan that is not employer-sponsored ● Designated as the policyholder of one employer-sponsored plan and is also listed as a dependent on another employer-sponsored plan

Your instructor may substitute local requirements for specific CMS-1500 blocks. Enter these local instructions in the margins of this text for quick refer- ence when working with case study assignments that are to be graded by the instructor.

Note: As you review the CMS- 1500 claims instructions in Table 13-1, refer to the John Q. Public case study (Figure 13-3) and completed CMS-1500 claim (Figure 13-4). The completed claim will also assist you when you begin work on Exercise 13-1.

Note: Insurance companies frequently change billing rules and instructions. Obtain updates from a variety of sources (e.g., professional publications, Internet-based listservs, and payer websites).

TABLE 13-1 CMS-1500 claims completion instructions for BCBS fee-for-service plans

BLOCK INSTRUCTIONS

1 Enter an x in the Other box if the patient is covered by an individual or family health plan. Or, enter an x in the Group Health Plan box if the patient is covered by a group health plan.

1a Enter the BCBS plan identification number as it appears on the patient’s insurance card. Do not enter hyphens or spaces in the number.

2 Enter the patient’s last name, first name, and middle initial (separated by commas) (e.g., DOE, JANE, M).

3 Enter the patient’s birth date as MM DD YYYY (with spaces). Enter an x in the appropriate box to indicate the patient’s gender. If the patient’s gender is unknown, leave blank.

4 Enter the policyholder’s last name, first name, and middle initial (separated by commas).

5 Enter the patient’s mailing address and telephone number. Enter the street address on line 1, enter the city and state on line 2, and enter the five- or nine-digit zip code and phone number on line 3.

6 Enter an x in the appropriate box to indicate the patient’s relationship to the policyholder. If the patient is an unmarried domestic partner, enter an x in the Other box.

Note: Refer to Chapter 11 for clarification of claims completion (e.g., entering names, mailing addresses, ICD-10-CM codes, diagnosis pointer letters, NPI, and so on).

Note: The patient is covered by a group health plan if a group number is printed on the patient’s insurance identification card (or a group number is included on case studies located in this textbook, workbook, and SimClaimTM software).

(continues)

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BlueCross BlueShield 477

TABLE 13-1 (continued)

BLOCK INSTRUCTIONS

7 Enter the policyholder’s mailing address and telephone number. Enter the street address on line 1, enter the city and state on line 2, and enter the five- or nine-digit zip code and phone number on line 3.

8 leave blank.

9, 9a, 9d leave blank. Blocks 9, 9a, and 9d are completed if the patient has secondary insurance coverage (discussed later in this chapter).

9b–9c leave blank.

10a–c Enter an x in the appropriate boxes to indicate whether the patient’s condition is related to employment, an automobile accident, and/or another accident. If an x is entered in the YES box for auto accident, enter the two- character state abbreviation of the patient’s residence.

10d leave blank.

11 Enter the policyholder’s BCBS group number if the patient is covered by a group health plan. Do not enter hyphens or spaces in the policy or group number. Otherwise, leave blank.

11a Enter the policyholder’s birth date as MM DD YYYY (with spaces). Enter an x in the appropriate box to indicate the policyholder’s gender. If the policyholder’s gender is unknown, leave blank.

11b leave blank. This is reserved for property and casualty or worker’s compensation claims.

11c Enter the name of the policyholder’s BCBS health insurance plan.

11d Enter an x in the NO box. Block 11d is completed by entering an X in the YES box if the patient has secondary insurance coverage (discussed later in this chapter).

12 Enter SIGNATURE ON FIlE. leave the date field blank. (The abbreviation SOF is also acceptable.)

13 leave blank. Assignment of benefits is a provision of BCBS contracts signed by policyholders, which authorizes BCBS to reimburse providers directly for plan benefits.

14 Enter the date as MM DD YYYY (with spaces) to indicate when the patient first experienced signs or symptoms of the present illness, actual date of injury, or the date of the last menstrual period (lMP) for obstetric visits. Enter the applicable qualifier to identify which date is being reported: 431 (onset of current symptoms/illness or injury) or 484 (last menstrual period). If the date is not documented in the patient’s record, but the history indicates an appropriate date (e.g., three weeks ago), simply count back to the approximate date and enter it on the claim.

15–16 leave blank.

17 If applicable, enter the first name, middle initial (if known), last name, and credentials of the professional who referred, ordered, or supervised health care service(s) or supply(ies) reported on the claim. Do not enter any punctuation. In front of the name, enter the applicable qualifier to identify which provider is being reported, as follows: DN (referring provider), DK (ordering provider), or DQ (supervising provider). Otherwise, leave blank.

17a leave blank.

17b Enter the 10-digit national provider identifier (NPI) of the provider entered in Block 17. Otherwise, leave blank.

18 Enter the admission date and discharge date as MM DD YYYY (with spaces) if the patient received inpatient ser- vices (e.g., hospital, skilled nursing facility). Otherwise, leave blank. If the patient has not been discharged at the time the claim is completed, leave the discharge date blank.

(continues)

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Chapter 13478

19 leave blank.

20 Enter an x in the NO box if all laboratory procedures reported on the claim were performed in the provider’s office. Otherwise, enter an x in the YES box and enter the total amount charged by the outside laboratory in $ CHARGES. Also enter the outside laboratory’s name, mailing address, and NPI in Block 32. (Charges are entered without punctuation. For example, $1,100.00 is entered as 110000 below $ CHARGES.)

21 Enter the ICD-10-CM code for up to 12 diagnoses or conditions treated or medically managed during the encoun- ter. lines A through l in Block 21 will relate to CPT/HCPCS service/procedure codes reported in Block 24E. In the ICD Ind (ICD indicator) box, enter 0 for ICD-10-CM (or 9 for ICD-9-CM).

22 leave blank. Reserved for resubmitted claims.

23 Enter prior authorization number, referral number, mammography precertification number, or Clinical laboratory Improvement Amendments (ClIA) number, as assigned by the payer for the current service. Do not enter hyphens or spaces in the number. Otherwise, leave blank.

24A Enter the date the procedure or service was performed in the FROM column as MM DD YY (with spaces). Enter a date in the TO column if the procedure or service was performed on consecutive days during a range of dates. Then, enter the number of consecutive days in Block 24G.

24B Enter the appropriate two-digit place-of-service (POS) code to identify the location where the reported procedure or service was performed. (Refer to Appendix II for POS codes.)

24C leave blank.

24D Enter the CPT or HCPCS level II code and applicable required modifier(s) for procedures or services performed. Separate the CPT/HCPCS code and first modifier with one space. Separate additional modifiers with one space each. Up to four modifiers can be entered.

24E Enter the diagnosis pointer letter from Block 21 that relates to the procedure/service performed on the date of service.

24F Enter the fee charged for each reported procedure or service. When multiple procedures or services are reported on the same line, enter the total fee charged. Do not enter commas, periods, or dollar signs. Do not enter negative amounts. Enter 00 in the cents area if the amount is a whole number.

24G Enter the number of days or units for procedures or services reported in Block 24D. If just one procedure or ser- vice was reported in Block 24D, enter a 1 in Block 24G.

24H leave blank. This is reserved for Medicaid claims.

24I leave blank. The NPI abbreviation is preprinted on the CMS-1500 claim.

Note: The shaded area in each line is used to enter supplemental information to support reported services if instructed by the payer to enter such information. Data entry in Block 24 is limited to reporting six services. Do not use the shaded lines to report additional services. If additional services were provided, generate new CMS-1500 claim(s) to report the additional services.

Note: When completing CMS-1500 claims for case studies in this textbook, its workbook, and SimClaim software, enter just one diagnosis pointer letter on each line of Block 24E.

TABLE 13-1 (continued)

BLOCK INSTRUCTIONS

(continues)

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BlueCross BlueShield 479

24J Enter the 10-digit NPI for the: ● Provider who performed the service if the provider is a member of a group practice. (leave blank if the provider is a solo practitioner.)

● Supervising provider if the service was provided incident-to the service of a physician or nonphysician practitio- ner and the physician or practitioner who ordered the service did not supervise the provider. (leave blank if the incident-to service was performed under the supervision of the physician or nonphysician practitioner.)

● DMEPOS supplier or outside laboratory if the physician submits the claim for services provided by the DMEPOS supplier or outside laboratory. (leave blank if the DMEPOS supplier or outside laboratory submits the claim.)

Otherwise, leave blank.

25 Enter the provider’s Social Security number (SSN) or employer identification number (EIN). Do not enter hyphens or spaces in the number. Enter an x in the appropriate box to indicate which number is reported.

26 Enter the patient’s account number as assigned by the provider.

27 Enter an x in the YES box to indicate that the provider agrees to accept assignment. Otherwise, enter an x in the NO box.

28 Enter the total charges for services and/or procedures reported in Block 24.

29–30 leave blank.

31 Enter the provider’s name and credential (e.g., MARY SMITH MD) and the date the claim was completed as MMD- DYYYY (without spaces). Do not enter any punctuation.

32 Enter the name and address where procedures or services were provided if at a location other than the provider’s office or the patient’s home, such as a hospital, outside laboratory facility, skilled nursing facility, or DMEPOS sup- plier. Otherwise, leave blank. Enter the name on line 1, the address on line 2, and the city, state, and five- or nine- digit zip code on line 3. For a nine-digit zip code, enter the hyphen.

32a Enter the 10-digit NPI of the facility entered in Block 32.

32b leave blank.

33 Enter the provider’s billing name, address, and telephone number. Enter the phone number in the area next to the block title. Do not enter parentheses for the area code. Enter the provider’s name on line 1, enter the address on line 2, and enter the city, state, and five- or nine-digit zip code on line 3. For a nine-digit zip code, enter the hyphen.

33a Enter the 10-digit NPI of the billing provider (e.g., solo practitioner) or group practice (e.g., clinic).

33b leave blank.

Note: If multiple claims are submitted for one patient because more than six procedures or services were reported, be sure the total charge reported on each claim accurately represents the total of the items on each submitted claim.

Note: If Block 18 contains dates of service for inpatient care and/or Block 20 contains an X in the YES box, enter the name and address of the facility that provided services.

TABLE 13-1 (continued)

BLOCK INSTRUCTIONS

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Chapter 13480

Case StudyERIN A. HELPER, M.D.101 Medic Drive, Anywhere, NY 12345 (101) 111-1234 (Office) (101) 111-9292 (Fax) EIN: NPI:

PATIENT INFORMATION: INSURANCE INFORMATION:

Name: Public, John Q. Patient Number: 13-1

Address: 10A Senate Avenue Place of Service: Office

City: Anywhere Primary Insurance Plan: BlueCross BlueShield

State: NY Primary Insurance Plan ID #: WW123456

Zip Code: 12345-1234 Group #: 50698

Telephone: (101) 201-7891 Primary Policyholder: Public, John Q.

Gender: Male Policyholder Date of Birth: 03-09-1945

Date of Birth: 03-09-1945 Relationship to Patient: Self

Occupation: Supervisor Secondary Insurance Plan:

Employer: Legal Research Inc Secondary Insurance Plan ID #:

Secondary Policyholder:

Patient Status Married Divorced Single Student

DIAGNOSIS INFORMATION

Diagnosis Code Diagnosis Code

1. Bronchopneumonia J18.0 5.

2. Urinary frequency R35.0 6.

3. 7.

4. 8.

PROCEDURE INFORMATION

Description of Procedure or Service Date Code Charge

1. Established patient office visit, level III 01-12-YYYY 99213 75.00

2. Urinalysis, dipstick, automatic microscopy 01-12-YYYY 81001 10.00

3. Chest x-ray, 2 views 01-12-YYYY 71020 50.00

SPECIAL NOTES: Recheck 01-19-YYYY. Referring Physician: Ivan Gooddoc, M.D. (NPI 3456789012).

11-1234523 1234567890

FIGURE 13-3 John Q. Public case study.

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BlueCross BlueShield 481

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FIGURE 13-4 Completed John Q. Public claim.

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Chapter 13482

Completing the Mary S. Patient BCBS CMS-1500 Claim 1. Obtain a blank claim by making a copy of the CMS-1500 claim form in Appendix III.

2. Review the Mary S. Patient case study (Figure 13-5).

3. Select the information needed from the case study, and enter the required information on the claim using optical scanning guidelines.

4. Review the completed claim to be sure all required blocks are completed accurately.

5. Compare your claim with the completed Mary S. Patient claim (Figure 13-6).

exercise 13-1

ERIN A. HELPER, M.D. 101 Medic Drive, Anywhere, NY 12345 (101) 111-1234 (Office) (101) 111-9292 (Fax) EIN: NPI:

PATIENT INFORMATION: INSURANCE INFORMATION:

Name: Patient, Mary S. Patient Number: 13-2

Address: 91 Home Street Place of Service: Office

City: Nowhere Primary Insurance Plan: BlueCross BlueShield

State: NY Primary Insurance Plan ID #: WWW1023456

Zip Code: 12367-1234 Primary Policyholder: Mary S. Patient

Telephone: (101) 201-8989 Policyholder Date of Birth: 10-10-1959

Gender: Female Relationship to Patient: Self

Date of Birth: 10-10-1959 Secondary Insurance Plan:

Occupation: Manager Secondary Insurance Plan ID #:

Employer: Happy Farm Day Care Secondary Policyholder:

Patient Status X Married Divorced Single Student

DIAGNOSIS INFORMATION

Diagnosis Code Diagnosis Code

1. Strep throat J02.0 5.

2. Type 1 diabetes mellitus E10.9 6.

3. 7.

4. 8.

PROCEDURE INFORMATION

Description of Procedure or Service Date Code Charge

1. Office visit, level II 01-12-YYYY 99212 65.00

2. Strep test 01-12-YYYY 87880 12.00

SPECIAL NOTES:

Case Study 11-1234523 1234567890

FIGURE 13-5 Mary S. Patient case study.

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BlueCross BlueShield 483

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FIGURE 13-6 Completed Mary S. Patient claim.

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Chapter 13484

Bluecross BluesHield secondary coverage Modifications are made to the CMS-1500 claim when patients are covered by primary and secondary or supplemental health insurance plans. Second- ary health insurance plans provide coverage similar to that of primary plans, whereas supplemental health plans usually cover only deductible, copayment, and coinsurance expenses.

When the same BCBS payer issues the primary and secondary or supplemen- tal policies (Table 13-2), submit only one CMS-1500 claim (Figure 13-7). If BCBS payers for the primary and secondary or supplemental policies are different (Table 13-3), submit a CMS-1500 claim to the primary payer. After the primary payer processes the claim, generate a second CMS-1500 claim (Figure 13-8) to send to the secondary or supplemental payer and include a copy of the primary payer’s remittance advice.

TABLE 13-2 Modifications to BCBS primary CMS-1500 claims completion instructions when patient is covered by same BCBS payer for primary and secondary or supplemental plans (Refer to Table 13-1 for primary CMS-1500 claims completion instructions.)

BLOCK INSTRUCTIONS

9 Enter the secondary or supplemental policyholder’s last name, first name, and middle initial (if known) (separated by commas).

9a Enter the secondary or supplemental policyholder’s policy or group number.

9d Enter the name of the secondary or supplemental policyholder’s commercial health insurance plan.

11d Enter an x in the YES box.

Filing a Claim When a Patient Is Covered by the Same BCBS Payer for Primary and Secondary Policies 1. Obtain a blank claim by making a copy of the CMS-1500 claim form in Appendix III.

2. Underline Blocks 9, 9a, 9d, 11d, and 26 on the claim.

3. Refer to the case study for Mary S. Patient (Figure 13-5). Enter the following information in the appropriate blocks for the secondary policy (Table 13-2): BlueCross BlueShield POLICY NO. R152748 Policyholder: James W. Patient Birth date: 03/01/48 Relationship: Spouse Employer: NAVAL STATION Add BB to the patient account number in Block 26, entering 13-2BB (to indicate two BCBS policies).

4. Complete the secondary claim on Mary S. Patient using the data from the case study (Figure 13-5), entering claims information in the blocks indicated in step 2.

5. Review the completed claim to be sure all required blocks are properly completed. Compare your claim with Figure 13-7.

exercise 13-2

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BlueCross BlueShield 485

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FIGURE 13-7 Completed Mary S. Patient claim (same BCBS payer for primary and secondary policies).

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Chapter 13486

TABLE 13-3 Modifications to BCBS secondary CMS-1500 claims completion instructions when patient is covered by BCBS secondary or supplemental plan (and primary payer is not BCBS)

BLOCK INSTRUCTIONS

1a Enter the secondary or supplemental policyholder’s BCBS identification number as it appears on the insurance card. Do not enter hyphens or spaces in the number.

4 Enter the secondary or supplemental policyholder’s last name, first name, and middle initial (if known) (separated by commas).

7 Enter the secondary or supplemental policyholder’s mailing address and telephone number. Enter the street address on line 1, enter the city and state on line 2, and enter the five- or nine-digit zip code and phone number on line 3.

9 Enter the primary policyholder’s last name, first name, and middle initial (if known) (separated by commas).

9a Enter the primary policyholder’s policy or group number. Do not enter hyphens or spaces in the number.

9d Enter the name of the primary policyholder’s health insurance plan (e.g., commercial health insurance plan name or government program).

11 Enter the secondary or supplemental policyholder’s policy or group number. Do not enter hyphens or spaces in the policy or group number.

11a Enter the secondary or supplemental policyholder’s birth date as MM DD YYYY (with spaces). Enter an x in the appropriate box to indicate the policyholder’s gender. If the policyholder’s gender is unknown, leave blank.

11c Enter the name of the secondary or supplemental policyholder’s BCBS health insurance plan.

11d Enter an x in the YES box.

29 Enter the reimbursement amount received from the primary payer.

Note: If the primary and secondary/supplemental payers are the same, do not generate a second CMS-1500 claim. Refer to Table 13-2 instructions.

Filing BCBS Secondary Claims When Patient Is Covered by BCBS Secondary or Supplemental Plan, and Primary Payer Is Not BCBS 1. Obtain a blank claim by making a copy of the CMS-1500 claim form in Appendix III.

2. Underline Blocks 1a, 4, 7, 9, 9d, 11, 11a, 11c, 11d, and 29, and note the entries discussed in Table 13-3. Add an “S” to the patient’s account number in Block 26 (e.g., 13-3S).

3. Review Figure 13-8. Complete the BCBS secondary claim for this case using data from the case study.

4. Review the completed claim to be sure all required blocks are properly completed.

5. Compare your claim with Figure 13-9.

exercise 13-3

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BlueCross BlueShield 487

Additional BCBS claim case studies are found in Appendices I and II. Case studies in Appendix II require reading the case study chart entries

and selecting and coding diagnostic/procedural information. Necessary clinic, hospital, and physician data are included in the case studies patient records in Appendix II.

Case StudyERIN A. HELPER, M.D.101 Medic Drive, Anywhere, NY 12345 (101) 111-1234 (Office) (101) 111-9292 (Fax) EIN: NPI:

PATIENT INFORMATION: INSURANCE INFORMATION:

Name: Cross, Janet B. Patient Number: 13-3

Address: 1901 Beach Head Drive Place of Service: Hospital Inpatient

City: Anywhere Primary Insurance Plan: Medicare

State: NY Primary Insurance Plan ID #: 191266844A

Zip Code: 12345-1234 Primary Policyholder: Cross, Janet B.

Telephone: (101) 201-1991 Policyholder Date of Birth: 11-01-1934

Gender: Female Relationship to Patient: Self

Date of Birth: 11-01-1934 Secondary Insurance Plan: BlueCross BlueShield

Occupation: Retired Secondary Insurance Plan ID #: WWW191266844

Employer: Secondary Policyholder: Cross, Janet B.

Relationship to Patient: Self

Patient Status X Married Divorced Single Student

DIAGNOSIS INFORMATION

Diagnosis Code Diagnosis Code

1. Intracranial hemorrhage I62.9 5.

2. Dysphasia R47.02 6.

3. 7.

4. 8.

PROCEDURE INFORMATION

Description of Procedure or Service Date Code Charge

1. Initial hospital visit, level III 01-13-YYYY 99223 150.00

2. Discharge management, 60 minutes 01-14-YYYY 99239 100.00

SPECIAL NOTES: Patient transferred to University Medical Center via ambulance. Place of service: Goodmedicine Hospital, Anywhere Street, Anywhere, NY 12345 (NPI: 2345678901) Remittance advice received from Medicare indicated payment of $75.00.

11-1234523 1234567890

FIGURE 13-8 Janet B. Cross case study.

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Chapter 13488

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FIGURE 13-9 Completed Janet B. Cross secondary payer claim.

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BlueCross BlueShield 489

summary

BlueCross plans were initiated in 1929 and originally provided coverage for hospital bills, whereas BlueShield was created in 1938 and originally covered fees for physician services. BlueCross and BlueShield (BCBS) plans entered into joint ventures that increased coverage of almost all health care services, and the BlueCross BlueShield Association (BCBSA) was created in 1986 when the sepa- rate BlueCross association merged with the BlueShield association. The BCBS plans were pioneers in nonprofit, prepaid health care; and competition among all health insurance payers in the United States resulted in further mergers. BCBS negotiates contracts with providers who are designated par- ticipating providers (PARs). PARs are eligible to contract with preferred provider networks, and they qualify for assignment of benefits.

Nonparticipating providers do not sign such contracts, and they expect to be reimbursed the complete fee. They collect payment from the patient, and the patient receives reimbursement from BCBS. BCBS plans include fee-for-service, indemnity, managed care, Federal Employee Program, Medicare supplemental, and Healthcare Anywhere plans.

When completing BCBS CMS-1500 claims for case studies in this text (including SimClaim software) and the Workbook, the following special instructions apply:

● Block 12—Enter SIGNATURE ON FILE, and leave date blank. ● Block 20—Enter an X in the NO box. ● Block 23—Leave blank. ● Block 24E—Enter just one diagnosis pointer on each line. ● Block 26—Enter the case study number (e.g., 13-4). If the patient has both primary and secondary

coverage, enter a P (for primary) next to the case study number (on the primary claim) and an S (for secondary) next to the number (on the secondary claim); if the same BCBS plan provides both primary and secondary coverage, enter a BB next to the case study number.

● Block 27—Enter an X in the YES box. ● When completing secondary claims, enter REMITTANCE ADVICE ATTACHED in the top margin

of the CMS-1500 claim (to simulate the attachment of a primary payer’s remittance advice with a claim submitted to a secondary payer).

internet linKs ● BCBS Federal Employee Program www.fepblue.org

● BlueCross BlueShield Association www.bcbsa.com

study checKlist

Read this textbook chapter and highlight key concepts.

Access SimClaim software at the online companion, and complete BlueCross BlueShield claims using the software’s case studies.

Complete CMS-1500 claims for each chapter case study.

Answer the chapter review questions, verifying answers with your instructor.

Complete the Workbook chapter, verifying answers with your instructor.

Form a study group with classmates to discuss chapter concepts in preparation for an exam.

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Chapter 13490

review

Multiple Choice Select the most appropriate response. 1. One of the requirements that a participating provider must comply with is to

a. maintain a provider representative department to assist with billing and payment problems for submitted claims.

b. make fee adjustments for the difference between amounts charged to patients for services provided and payer-approved fees.

c. purchase billing manuals and newsletters published by the payer and pay registration fees to attend payer training sessions.

d. write off deductible and copay/coinsurance amounts and accept as payment in full the BCBS- allowed fees.

2. Which is a program that requires providers to adhere to managed care provisions? a. fee-for-service

b. indemnity

c. preferred provider network

d. traditional coverage

3. One of the expectations that a nonparticipating provider has is to _____ for services rendered. a. file the CMS-1500 claim on behalf of the patient

b. obtain payment for the full fee charged

c. receive reimbursement directly from the payer

d. waive patient deductibles and copay/coinsurance

4. Which is considered a minimum benefit under BCBS basic coverage? e. hospitalizations

f. office visits

g. physical therapy

h. prescription drugs

5. Which is considered a service reimbursed by BCBS major medical coverage? a. assistant surgeon fees

b. chemotherapy for cancer

c. diagnostic laboratory services

d. mental health visits

6. Which is a special clause in an insurance contract that stipulates additional coverage over and above the standard contract? a. coinsurance

b. copayment

c. deductible

d. rider

7. BCBS indemnity coverage is characterized by certain limitations, including a. hospital-only or comprehensive hospital and medical coverage.

b. the requirement that patients identify and select a primary care provider.

c. provision of care by participating licensed health care providers.

d. the requirement that patients obtain a referral before seeing a provider.

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BlueCross BlueShield 491

8. Prospective authorization or precertification is a requirement of the _____ BCBS managed care plan. a. coordinated home health and hospice care

b. outpatient pretreatment authorization

c. second surgical opinion

d. point-of-service

9. Which phrase is located on a Federal Employee Program plan ID card? a. Family, High Option Plan

b. Government-Wide Service Benefit Plan

c. Office of Personnel Management

d. Preferred Provider Organization

10. The plan ID card for a subscriber who opts for BCBS’s Healthcare Anywhere PPO coverage uniquely contains the _____ logo. a. dental

b. eyeglass

c. prescription drug

d. suitcase

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47428_ch13_ptg01.indd 492 23/11/15 5:38 PM

Chapter 14

Medicare

Chapter Outline

Medicare Eligibility

Medicare Enrollment

Medicare Part A

Medicare Part B

Medicare Part C

Medicare Part D

Other Medicare Health Plans

Employer and Union Health Plans

Medigap

Participating Providers

Nonparticipating Providers

Mandatory Claims Submission

Private Contracting

Advance Beneficiary Notice of Noncoverage

Experimental and Investigational Procedures

Medicare as Primary Payer

Medicare as Secondary Payer

Medicare Summary Notice

Billing Notes

Claims Instructions

Medicare and Medigap Claims

Medicare-Medicaid (Medi-Medi) Crossover Claims

Medicare as Secondary Payer Claims

Roster Billing for Mass Vaccination Programs

ObjeCtives

Upon successful completion of this chapter, you should be able to: 1. Define key terms. 2. Explain Medicare eligibility guidelines. 3. Describe the Medicare enrollment process. 4. Differentiate among Medicare Part A, Part B, Part C, and Part D coverage. 5. Define other Medicare health plans, employer and union health plans, Medigap, and

private contracting.

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Chapter 14494

6. Calculate Medicare reimbursement amounts for participating and nonparticipating providers.

7. Determine when a Medicare advance beneficiary notice of noncoverage is required. 8. Explain the Medicare mandatory claims submission process. 9. List and explain Medicare’s experimental and investigational procedures.

10. Differentiate between Medicare as primary payer and Medicare as secondary payer. 11. Interpret a Medicare Summary Notice. 12. Apply Medicare billing notes when completing CMS-1500 claims. 13. Complete Medicare primary, Medigap, Medicare-Medicaid (Medi-Medi) crossover,

secondary, and roster billing claims.

Key terms advance beneficiary notice

of noncoverage (ABN) benefit period conditional primary payer status coordinated care plan demonstration/pilot program diagnostic classification system

hierarchical condition code (DCG/HCC) model

general enrollment period (GEP) hospice initial enrollment period (IEP) lifetime reserve days medical necessity denial Medicare Advantage (Medicare Part C) Medicare Cost Plan Medicare fee-for-service plan Medicare Hospital Insurance

(Medicare Part A)

Medicare Medical Insurance (Medicare Part B)

Medicare Part A Medicare Part B Medicare Part C Medicare Part D coverage gap Medicare Part D “donut hole” Medicare Prescription Drug Plans

(Medicare Part D) Medicare private contract Medicare SELECT Medicare special needs plans Medicare Supplementary Insurance

(MSI) Medicare-Medicaid (Medi-Medi)

crossover Medication Therapy Management

Programs Medigap

original Medicare plan private fee-for-service (PFFS) Programs of All-Inclusive Care for

the Elderly (PACE) qualified disabled working

individual (QDWI) qualified Medicare beneficiary

program (QMBP) qualifying individual (QI) respite care risk adjustment data validation (RADV) roster billing special enrollment period (SEP) specified low-income Medicare

beneficiary (SLMB) spell of illness

intrOduCtiOn Medicare, the largest single health care program in the United States, is a federal program authorized by Congress and administered by the Centers for Medicare and Medicaid Services (CMS, formerly HCFA). CMS is responsible for the operation of the Medicare program and for selecting Medicare administrative contractors (MACs) to process Medicare fee-for-service Part A, Part B, and durable medicine equipment (DME) claims. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) created Medicare administrative contractors (MACs), which replaced carriers and fiscal intermediaries and process both Medi- care Part A and Part B claims. Medicare is a two-part program:

● Medicare Part A reimburses institutional providers for inpatient, hospice, and some home health services. ● Medicare Part B reimburses institutional providers for outpatient services and physicians for inpatient and

office services.

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Medicare 495

Medicare eligibility General Medicare eligibility requires:

1. Individuals or their spouses to have worked at least 10 years in Medicare-covered employment

2. Individuals to be the minimum of 65 years old

3. Individuals to be citizens or permanent residents of the United States

Individuals can also qualify for coverage if they are younger than 65 and have a disability or End-Stage Renal Disease. The Social Security Administration (SSA) (an agency of the federal government) bases its definition of disability on an individual’s ability to work; an individual can be considered disabled if unable to do work as before and if it is determined that adjustments cannot be made to do other work because of a medical condition(s). In addition, the disability must last or be expected to last a year or to result in death. There is no premium for Part A if individuals meet one of these conditions; however, they do pay for Part B coverage. The Part B monthly premium changes annually and is deducted from Social Security, Railroad Retirement, or Civil Service Retirement checks.

Medicare Part A coverage is available to individuals age 65 and over who:

● Are already receiving retirement benefits from Social Security or the Railroad Retirement Board (RRB)

● Are eligible to receive Social Security or Railroad benefits but have not yet filed for them

● Had Medicare-covered government employment

The Medicare program includes the following: ● Medicare Hospital Insurance (Medicare Part A) pays for inpatient hospital critical care access; skilled

nursing facility stays, hospice care, and some home health care. (Submit UB-04 [CMS-1450] claim for services.)

● Medicare Medical Insurance (Medicare Part B) pays for physician services, outpatient hospital care, durable medical equipment, and some medical services that are not covered by Part A. (Submit CMS- 1500 claim for services.)

● Medicare Advantage (Medicare Part C), formerly called Medicare+Choice, includes managed care and private fee-for-service plans that provide contracted care to Medicare patients. Medicare Advantage is an alternative to the original Medicare plan reimbursed under Medicare Part A. (Submit CMS-1500 or UB-04, depending on type of services provided.)

● Medicare Prescription Drug Plans (Medicare Part D) add prescription drug coverage to the Original Medicare Plan, some Medicare Cost Plans, some Medicare Private Fee-for-Service Plans, and Medicare Medical Savings Account Plans. (Medicare beneficiaries present a Medicare prescription drug discount card to pharmacies.)

Medicare beneficiaries can also obtain supplemental insurance, called Medigap, which helps cover costs not reimbursed by the original Medicare plan. Depending on the region of the country, more than one Medicare health plan may be available to enrollees.

The billing instructions in this chapter cover Medicare Part B services only. Medicare Part A claims are not filed by insurance specialists working in health care provider offices; the UB-04 is filed by hospitals, hospices, and home health care providers.

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Medicare Part A coverage is available to individuals under age 65 who have:

● Received Social Security or RRB disability benefits for 24 months ● End-stage renal disease and meet certain requirements

Provider Telephone Inquiries for Medicare Eligibility Information The standard method for providers to obtain Medicare eligibility information is through electronic data interchange (EDI). EDI is the most efficient and cost- effective way to make eligibility information available because provider agree- ments ensure privacy safeguards. Instructions regarding provider EDI access to limited eligibility information can be found in Chapter 3 (Provider Inquiries) of the Medicare Contractor Beneficiary and Provider Communications Manual.

Eligibility information is also available over the telephone, subject to condi- tions intended to ensure the protection of the beneficiary’s privacy rights. The eligibility information that can be released by telephone is limited to that infor- mation available via EDI.

The provider’s name and identification number must be verified and the fol- lowing information obtained about each beneficiary:

● Last name and first initial ● Date of birth ● HICN (health insurance claim number) ● Gender

Medicare enrollMent Medicare enrollment is handled in two ways: either individuals are enrolled automatically, or they apply for coverage. Individuals age 65 and over do not pay a monthly premium for Medicare Part A if they or a spouse paid Medi- care taxes while they were working. Individuals who are age 65 and over and who have not paid Medicare taxes (e.g., overseas workers who were exempt from paying Medicare taxes) can “buy in” to Medicare Part A by paying monthly premiums. The Medicare Part A buy-in premiums for 2015 are up to $407 per month.

Medicare Part B premiums are based on the modified adjusted gross income reported on an individual or joint tax return (Table 14-1).

Note: The Privacy Act of 1974 prohibits release of information unless all the listed required information is accurately provided.

TABLE 14-1 Medicare Part B monthly premiums based on annual income (2015)

INDIVIDUAL TAX RETURN (SINGLE)

JOINT TAX RETURN (MARRIED) MONTHLY PREMIUM

$85,000 or less $170,000 or less $104.90

$85,001–$107,000 $170,001–$214,000 $146.90

$107,001–$160,000 $214,001–$320,000 $209.80

$160,001–$213,000 $320,001–$426,000 $272.70

Over $213,000 Over $426,000 $335.70

Courtesy of the Centers for Medicare & Medicaid Services, www.cms.gov

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Automatic Enrollment Individuals not yet age 65 who already receive Social Security, Railroad Retire- ment Board, or disability benefits are automatically enrolled in Part A and Part B effective the month of their 65th birthday. About three months before the 65th birthday, or the 24th month of disability, individuals are sent an initial enroll- ment package that contains information about Medicare, a questionnaire, and a Medicare card. If the individual wants both Medicare Part A (hospital insur- ance) and Part B (supplemental medical insurance), he or she just signs the Medicare card and keeps it in a safe place.

Individuals who do not want Part B coverage (because there is a monthly premium associated with it) must follow the instructions that accompany the Medicare card; these instructions direct the individual to mark an “X” in the refusal box on the back of the Medicare card form, sign the form, and return it with the Medicare card to the address indicated. The individual is then sent a new Medicare card showing coverage for Part A only.

Applying for Medicare Individuals who do not receive Social Security, Railroad Retirement Board, or disability benefits must apply for Medicare Part A and Part B by contacting the Social Security Administration (or Railroad Retirement Board) approximately three months before the month in which they turn 65 or the 24th month of disability. A seven-month initial enrollment period (IEP) for applying provides an opportunity for the individual to enroll in Medicare Part A and/or Part B. Those who wait until they actually turn 65 to apply for Medicare will cause a delay in the start of Part B coverage, because they will have to wait until the next general enrollment period (GEP), which is held January 1 through March 31 of each year; Part B coverage starts on July 1 of that year. The Part B premium is also increased by 10 percent for each 12-month period during which an individual was eligible for Part B coverage but did not participate.

Under certain circumstances, individuals can delay Part B enrollment with- out having to pay higher premiums:

● Individuals age 65 or older who are working, or whose spouse is working, and who have group health insurance through the employer or union

● Disabled individuals who are working and who have group health insurance or who have group health insurance coverage from a working family member

This is the patient’s health insurance number. It must be shown on all Medicare claims exactly as it is shown on the card, including the letter at the end.

This shows hospital insurance coverage.

This shows medical insurance coverage.

The effective date of the insurance policy is shown here.

1-800-MEDICARE (1-800-633-4227)

NAME OF BENEFICIARY

JANE DOE

MEDICARE CLAIM NUMBER

123-45-6789A

HOSPITAL (PART A) MEDICAL (PART B)

SEX

FEMALE

EFFECTIVE DATE

01-01-1995

SIGN HERE

IS ENTITLED TO

01-01-1995

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Chapter 14498

If Part B enrollment is delayed for one of these reasons, individuals can enroll anytime during the special enrollment period (SEP), a set time when they can sign up for Medicare Part B, if they did not enroll in Part B during the initial enrollment period. For individuals who enroll in Medicare Part B while covered by a group health plan or during the first full month after group health plan coverage ends, coverage starts on the first day of the month of enrollment. Individuals can also delay the start date for Medicare Part B coverage until the first day of any of the subsequent three months. If the individual enrolls during any of the seven remaining months of the special enrollment period, coverage begins the month after enrollment. If an individual does not enroll during the special enrollment period, he or she must wait until the next general enrollment period (January 1 through March 31 of each year), and then may be required to pay a higher Medicare Part B premium.

Dual Eligible Medicare Beneficiary Groups Medicare Savings Programs help people with low income and asset levels pay for health care coverage, and certain income and asset limits must be met to qualify for the following programs:

● Qualified Medicare beneficiary program (QMBP) (helps individuals whose assets are not low enough to qualify them for Medicaid by requiring states to pay their Medi- care Part A and B premiums, deductibles, and coinsurance amounts)

● Specified low-income Medicare beneficiary (SLMB) (helps low-income individuals by requiring states to pay their Medicare Part B premiums)

● Qualifying individual (QI) (helps low-income individuals by requiring states to pay their Medicare Part B premiums)

● Qualified disabled working individual (QDWI) (helps individuals who received Social Security and Medicare because of disability, but who lost their Social Security benefits and free Medicare Part A because they returned to work and their earn- ings exceed the limit allowed, by requiring states to pay their Medicare Part A premiums)

The asset limits are the same for all programs. Personal assets (e.g., cash, money in the bank, stocks, bonds, and so on) cannot exceed $4,000 for an indi- vidual or $6,000 for married couples. Exclusions include a home, household goods and personal belongings, one car, a life insurance policy up to a cash value of $1,500 per person, a prepaid burial plan (unlimited if irrevocable; up to $1,500 if revocable), a burial plot, and retroactive Social Security or SSI benefits (for six months after qualification in a Medicare savings program).

Medicare Part a Medicare Part A (Medicare Hospital Insurance) helps cover inpatient care in acute care hospitals, critical access hospitals, and skilled nursing facilities. (Physician services provided to patients during an inpatient stay are covered by Medicare Part B.) It also covers hospice care and some home health care services.

Hospitalizations Medicare pays only a portion of a patient’s acute care and critical access hospital (CAH) inpatient hospitalization expenses, and the patient’s out-of-pocket expenses are calculated on a benefit-period basis. A benefit period begins with the first day of hospitalization and ends when the patient has been out of the hos- pital for 60 consecutive days. (Some Medicare literature uses the term spell of

Note: The original Medicare plan (or Medicare fee-for-service plan) includes Medicare Part A and Medicare Part B and is available nationwide to anyone who is eligible for Medicare coverage. Original Medicare plan subscribers also subscribe to Medigap supplemental insurance coverage, which helps pay for health care costs not covered by the original Medicare plan (e.g., deductible and coinsurance amounts).

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illness instead of benefit period.) After 90 continuous days of hospitalization, the patient may elect to use some or all of the allotted lifetime reserve days, or pay the full daily charges for hospitalization. Lifetime reserve days (60 days) may be used only once during a patient’s lifetime and are usually reserved for use dur- ing the patient’s final, terminal hospital stay. The 2015 Part A deductibles per benefit period are:

A person who has been out of the hospital for a period of 60 consecutive days will enter a new benefit period if rehospitalized, and a new benefit period is started. Persons confined to a psychiatric hospital are allowed 190 lifetime reserve days instead of the 60 days allotted for a stay in an acute care hospital.

Skilled Nursing Facility Stays Individuals who become inpatients at a skilled nursing facility after a three-day- minimum acute hospital stay, and who meet Medicare’s qualified diagnosis and comprehensive treatment plan requirements, pay 2015 rates of:

Home Health Services Individuals receiving physician-prescribed, Medicare-covered home health ser- vices have no deductible or coinsurance responsibilities for services provided. Patients must be confined to the home, but they do not have to be hospitalized in an acute care hospital before qualifying for home health benefits. The patient is responsible for a 20 percent deductible of the approved amount for durable medical equipment.

Hospice Care All terminally ill patients qualify for hospice care. Hospice is an autonomous, centrally administered program of coordinated inpatient and outpatient pallia- tive (relief of symptoms) services for terminally ill patients and their families. This program is for patients for whom the provider can do nothing further to stop the progression of disease; the patient is treated only to relieve pain or other discomfort. In addition to medical care, a physician-directed interdisciplinary team provides psychological, sociological, and spiritual care. Medicare coverage includes:

● $0 for hospice care, and there is no deductible ● Copayment of up to $5 per prescription for outpatient prescription drugs for pain and symptom management

● 5 percent of the Medicare-approved amount for inpatient respite care (short-term care given by another caregiver, so the usual caregiver can rest)

Days 1–60 $1,260 total Days 61–90 $315/day Days 91–150 Patient pays total charges, or elects to use

lifetime reserve days at $630/day 150+ continuous days Patient pays total charges

Days 1–20 Nothing

Days 21–100 $157.50 per day

Days 101+ Full daily rate

Note: Medicare Part B also covers some home health services if the patient is not covered by Medicare Part A.

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