Texas Society of the American College of Osteopathic Family Physicians

Practice Management Tutorials

Quick Tutorial on the Basics of Medical Claims Filing

As a general rule, you have 90 (ninety) days from the date a service is provided to submit your claim.  The few exceptions would be Medicare and Workers Compensation claims which allow you one year from the date of service to submit a claim.

Most physician offices and hospitals now submit claims electronically and the vast majority of major insurance companies are set up to accept claims this way.  Very few HCFA 1500 or “paper claims” are used these days.  The benefit is that claims are paid much faster which increases your daily cash flow.

If you have never looked at the HCFA 1500-the form created by the HealthCare Finance Administration for use in submitting claims for medical services, you will want to do this.  Making yourself familiar with the information on this form will let you know what fields you must fill in as you use your medical billing software.  You will also be able to more easily identify billing errors as you read your explanation of benefits (EOB) sent by insurance companies in response to the claims you file with them.

Claims must be “clean” according to the criteria determined by the insurance company which is also addressed in Texas Senate Bill 418.  Texas enjoys some of the best claims payment laws in the United States.

Clean claims are those who have all the required patient demographic information in its proper place, an appropriate ICD-9 code coded to the highest level of specificity and appropriate for the service to which it is linked.

Tips for Your Electronic Claims Submissions

I strongly recommend sending your offices electronic claims daily as a part of your normal routine.  This helps establish stability in the office cash flow.  Some money coming in daily is easier to manage than money that comes in a large quantity once or twice a month.  This makes posting of payments and handling unpaid claims much more manageable and less over whelming.

When claims as sent electronically, they are transmitted to a claims clearing house where they are viewed for an initial edit; if they as considered “clean” they are then forwarded on to the appropriate insurance company which is determined by the number which is assigned to each company.  If the claim in not “clean” it will be rejected by the clearing house.

Reports

Your electronic claims clearing house is responsible for keeping your office updated as to the progression of the claims through the adjudication process.  This is done through electronic reports you will receive as you send your claims.

If your claim is not “clean” it will be rejected by the clearing house and will be denoted on your submission reports.  This means it never went past the clearing house to the insurance company.  The problem will be identified in the electronic report so that it can be corrected in your billing software program and you can re-flag it for another submission.

Once your claim passes the initial edit at the clearing house it is forwarded on to the appropriate insurance company where it will be edited again and either rejected or accepted into the adjudication system for processing.  You will receive notice of this as well on your electronic reports. 

Consider saving these reports onto your computer’s hard drive (check first to make sure you have adequate space for this first!).  You can “copy and save” them into a document such as “Word”. 

You can create a file folder on your computer for the year with sub-folders for each month.  Then when saving the reports you can title the report for the day that they were received such as June 20, 2006. 

You can also opt to copy and paste the rejected claims into a separate document, save that and work on correcting those without having to sift through all the information in the report.

Most medical billing software will mark your patient’s account to show what day the claim was submitted electronically.  Then if you discover an unpaid claim, you can easily go back to the Word document saved on your computer for a day or two after it was initially submitted and find the place in the report that mentions that claim.  This be printed out and sent in to the insurance company as proof of timely filing, getting your claim paid past the 90 day filing deadline imposed by most commercial insurance companies.

Most Medical billing software will also have a way to allow you to identify and re-submit those claims that are unpaid.  You can make it a part of your routine to re-file those that are more than 30 days old and remain unpaid at some point each month.  Being consistent is the key; doing this will keep claims from “falling through he cracks”.

Tips for Working Outstanding Accounts Receivables

Offices vary widely in size and scope.  Sometimes there is only one person who takes care of data entry, claims submission, posting payments, statements etc. or there may be separate departments for these tasks.  Either option poses its own challenges.

If you are the entire billing department, you will have a great working knowledge of what it takes to get a claim paid and what does not get paid. 

If you have separate departments in your office for data entry and for billing/accounts receivable, then I highly recommend cross-training for better efficiency and a greater understanding of the claims payment process.

In either case, I highly recommend creating a personal routine for your job.  Identify and list all the tasks that you are responsible for.  Working all the components into your routine such as sending statements, identifying and following up on unpaid claims can be difficult to fit into your busy schedule.  Having a daily routine that encompasses all the aspects of your job will allow you to address each of your assigned tasks.

If there is a separate department for data entry, consider having them correct data entry mistakes.  While it may seem less time consuming to “do it yourself” in the long run, taking the time to properly train everyone who is part of the claims submission process will significantly decrease your workload allowing you to be more productive in other areas.

Some tasks can be done daily such as data entry, posting payments etc., while some tasks can be broken down into weekly or monthly tasks such as sending statements and following up on unpaid medical claims.

Divide and Conquer Patient Statements

Consider using the “divide and conquer” method for your patient statements.  There are typically four weeks per month.  Divide the alphabet equally so that you can print and send a portion of statements each week and have them all sent out by the end of the month. Doing this improves cash flow into the business and makes this task more manageable. 

Posting payments on a daily basis will also help cut down on sending unnecessary statements as well as keep your accounts receivable (A.R.) current.  Then as you review your unpaid claims your data is as accurate as it can be.

I recommend placing a copy of the patient’s statement in their chart or some other method of identifying those patients who have outstanding balances.  This will also allow the front office personnel to assist you in collection efforts.

I strongly recommend training your patients to pay their co-insurance payments prior to seeing the physician.  It is frustrating and expensive to send out multiple statements for a $10 copay!

Divide and Conquer Unpaid Claims

I recommend the “divide and conquer” method for following up on unpaid medical claims.  This can easily be the most time consuming and frustrating part of the billing job.

Print out an aging report which typically shows unpaid claims in several categories such as zero to 30 days, 31 to 60 days, 60 to 90 day and 90 days and over or something similar.

Attack the 31-60 day unpaid claims with vigor.  This will yield the best results because these are still eligible for insurance payment.

If you re-submit unpaid claims to insurance at some point each month then you have a good chance of getting any unpaid claims submitted twice during the acceptable submission period.  Again, consistency in your daily routine is key here.

If a claim is unpaid because the insurance company has “pended” the claim, you can know that in the state of Texas there is no such thing.  “Clean” claims must be paid or denied within 45 days of having been received.

If the claim was pended for information requested from the patient such as “other possible health insurance coverage” or for “accident details” etc, then I suggest marking that claim in your software as now being patient responsibility so that they receive a monthly statement until the claim is paid.

There are also stickers or notes you can use on your patient statements to help them understand why they are receiving a bill.  Using these will help cut down on the number of phone calls that sending statements can generate.

If your “clean” claims remain unpaid after 45 days consider filing a complaint against the insurance company with the Texas Department of Insurance.  This link is located on our website under Resource Links.  This can be done on link and the TDI will investigate the matter for you at no charge and send you a copy of all correspondence.  This is a great tool.

Visit with your physician about setting limits for the number of statements sent.  I recommend sending the first statement out as is, the second statement with a notice of some sort such as past due and the third statement out with a notice that the balance may be considered for collections.  

After the third statement has been sent with no results, consider either writing off the amount to “bad debt” or sending the patient to collections if the amount is more than a pre-determined limit such as greater than $50.00.  You can then notate this information in the patient’s file for future reference.

While sending a patient to collections may seem harsh, doing this will ensure the best clientele for your practice and promote fairness to those who are financially responsible.  Many agencies will just take a percentage of what they collect with no up front fees.  You can also choose who to send or not to send, no one would fault you for not sending a Medicare patient to collections!

By setting a limit on the number of statements sent out, you will keep your accounts current cutting down on wasted postage, time and effort.  There will also be less data to cull through each time you work your outstanding accounts.

I also recommend writing off anything that is more than one year old unless it is tied to a patient payment plan or you are hopeful of getting the insurance company to pay the claim.  Consider doing this each January for the previous year.  If it will never get paid-get rid of it.  This also makes your financial reports cleaner, more accurate and focus’s attention on those claims that can still be paid.

© 2006 Copyright TXACOFP