# Overview of Billing

Contents

[1.1 About the Revenue Operations Manual
1-2](#about-the-revenue-operations-manual)

[1.1.1 Revenue Operations Manual Objectives
1-2](#revenue-operations-manual-objectives)

[1.1.2 Revenue Operations Manual Contents
1-2](#revenue-operations-manual-contents)

[1.1.3 Accessing the Revenue Operations Manual
1-3](#accessing-the-revenue-operations-manual)

[1.2 About the Billing Process 1-3](#about-the-billing-process)

[1.3 General Billing Policy Statement
1-4](#general-billing-policy-statement)

[1.4 General Billing Guidelines 1-4](#general-billing-guidelines)

[1.4.1 Guidelines to Improve Reimbursement
1-6](#guidelines-to-improve-reimbursement)

[1.5 Capturing all Reportable and Billable Services
1-7](#capturing-all-reportable-and-billable-services)

[1.6 About the CMS-1450 / UB-92 Form
1-8](#about-the-cms-1450-ub-92-form)

[1.7 Modifiers and their Role in Billing
1-8](#modifiers-and-their-role-in-billing)

[1.8 Place of Service 1-9](#place-of-service)

[1.9 "Incident To" Services 1-10](#incident-to-services)

[1.10 Billing Form Review 1-11](#billing-form-review)

[1.11 Utilization Review 1-11](#utilization-review)

[1.11.1 Splitting Claims Process 1-11](#splitting-claims-process)

[1.12 Roll-Over/Cross-Over for Secondary and Tertiary Billing
1-12](#roll-overcross-over-for-secondary-and-tertiary-billing)

## About the Revenue Operations Manual

The Indian Health Service *Revenue Operations Manual* provides a
system-wide reference resource for all Indian, Tribal, and Urban (I/T/U)
facilities across the United States, to assist any and all staff with
any function related to business operation procedures and processes.

### Revenue Operations Manual Objectives

-   Provide standardized policies, procedures, and guidelines for the
    Business Office related functions of IHS facilities.

-   Capture accurate coding for all procedures and services to maximize
    reimbursement for each facility.

-   Provide on-line, via the IHS Intranet, reference material subdivided
    by department and function that is accessible to all facilities.

-   Share innovative concepts and creative approaches to Business Office
    functions across all the Area offices and facilities.

-   Promote a more collaborative internal working environment throughout
    all of IHS.

-   Foster and promote continuous quality improvement standards, which
    when implemented and monitored on a day-to-day basis, will ensure
    the highest quality of service at each level of the Business Office
    operation.

### Revenue Operations Manual Contents

The *Revenue Operations Manual* is divided into the following five (5)
parts:

-   **Part 1 Administrative Roles and Responsibilities** contains

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-   Overview of revenue operations

-   Laws, acts, and regulations affecting health care

-   IHS laws, regulations, and policies

-   Health Insurance Portability and Accountability Act Privacy Rule

-   Business Office management and staff

-   Business Office Quality Process Improvement and Compliance

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-   **Part 2 Patient Registration** contains:

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-   Overview of patient registration

-   Patient eligibility, rights, and grievances

-   Direct care and contract health services

-   Third-party coverage

-   Registration, discharge, and transfer

-   Scheduling appointments

-   Benefit coordinator

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-   **Part 3Coding** contains:

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-   Overview of coding

-   Medical record documentation

-   Coding guidelines

-   Data entry

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-   **Part 4 Billing** contains:

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-   Overview of billing

-   Hard copy vs. electronic claims processing

-   Billing Medicare, Medicaid, and private insurance

-   Third party liability billing

-   Billing private dental insurance and Pharmacy

-   Secondary billing process

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-   **Part 5 Accounts Management** contains:

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-   Overview of accounts management

-   Electronic deposits and Remittance Advices

-   Processing zero pays, payments, and adjustments

-   Creating payment batches

-   Reconciliation of credit/negative balances

-   Collections and collection strategies

-   Rejections and appeals

Each part and chapter of the manual is designed to address a specific
area, department, or function. A part may also contain one or more
appendices of topic-related reference materials.

This manual also includes:

-   Acronym dictionary

-   Glossary

### Accessing the Revenue Operations Manual

The *Revenue Operations Manual* is available for downloading, viewing,
and printing at this website:

<http://www.ihs.gov/NonMedicalPrograms/BusinessOffice/index.cfm?module=rom>

## About the Billing Process

Indian Health Care Improvement Act, P.1.94-437,authorizes the Business
Office to bill and collect reimbursement from a patient's health
insurance and other third party resources. Title IV of the Indian Health
Care Improvement Act, as amended, authorizes Indian Health Services
facilities to bill and receive payment from Medicaid and Medicare
patients. Public Law 100-713 of the Indian Health Care Improvement Act
Amendments of 1998 allows IHS to bill and seek payments from private
insurance companies and has ruled IHS has the statutory right of
recovery.

For an overview of how IHS and Tribes are paid for services rendered to
patients in IHS facilities, see Part 4, Appendix A. "IHS Reimbursement
Methods."

## General Billing Policy Statement

The third party billing policy for the Business Office is to optimize
collections efficiently and effectively from Medicaid, Medicare, private
insurance, and other alternate resources in compliance with the rules
and regulations of the Centers for Medicare/Medicaid (CMS) and IHS and
Third Party Accounts Management and Internal Controls policy.

To have a successful claims management process, everyone in the
third-party billing process must perform their specific duties
accurately, cooperatively and timely. All necessary steps will be taken
to ensure that follow-up on every third party account is adequately and
appropriately performed in a timely manner. All IHS facilities will be
made aware that collecting third party revenue is a cooperative
organizational effort.

## General Billing Guidelines

-   All fee schedules need to be reviewed and updated yearly. The Custom
    Fee Analyzer can be purchased and used as a guide for reviewing the
    outpatient fee schedule for the facility.

The Analyzer begins with a detailed process on how to review the
facility's fees. It is recommended that once a fee schedule is
established by the facility that it is used for all payers. To review
codes other than outpatient, use either the HCPCS or Dental Analyzer.

-   All diagnoses affecting the current treatment of the patient must be
    included on the claim forms.

Diagnosis codes (ICD-9) need to be selected with care. All coding must
be accurate, precise, and meaningful to guarantee prompt and accurate
payment.

-   The health care providers will be responsible for providing either
    the narrative for the diagnosis or in selecting an accurate code
    that matches his/her written description.

-   The coders will code the applicable code and enter all codes into
    the RPMS system.

-   The provider will provide written documentation of the diagnosis and
    ICD9 code either on the PCC form or in the Electronic Health Record.

-   Depending on the facility, the coder or biller will validate the
    provider's coding.

-   A coder or biller should never modify documentation by a provider.
    If a provider fills out a charge ticket and signs it or completes an
    EHR with an electronic digital signature, then that document is a
    legal record and should not be altered.

-   If the diagnosis code listed by the provider differs from the
    coder/biller, the coder or biller must review the discrepancy with
    the provider. If the provider agrees with the coder/biller, the
    provider must change the code and initial the claim (either the PCC
    or as an amended claim in the Electronic Health Record).

-   All Medicare, Medicaid, and private insurer claims require a linkage
    or a relationship between the CPT and ICD-9-CM codes.

-   Current Physician Terminology (CPT) is required by most insurers.
    Procedure codes need to be routinely checked or validated against
    the diagnostic codes to assure reimbursement is made only for those
    procedures that are "medically necessary" for the treatment of the
    stated diagnosis. Either the coder or biller, depending on the
    facility, should validate the CPT codes for accuracy.

-   Claims are processed to the insurer according to the terms set forth
    in the benefit plan. After receiving the claim, the plan may:

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-   Verify the patient's coverage type

-   Verify the services provided are covered

-   Verify services meet Plan requirements

-   Verify pre-certification was required and/or obtained.

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-   Billing must be familiar with the requirements, benefits, and
    exclusions for each insurer. AR must also follow-up on all rejected,
    unpaid, or denied claims within the stipulated timeframe for each
    insurer

### Guidelines to Improve Reimbursement

The organizational flow of information and accurate documentation and
coding is crucial to processing third party claims.

![](media/image1.png){width="5.124409448818898in"
height="3.1188976377952757in"}

To prevent claims from being rejected, the business process needs to
review such areas as:

-   inaccurate or lack of coding

-   incomplete claims

-   lack of supporting documentation

-   poor communication with the payer

-   not billing for services rendered

The overall reimbursement process is a series of sequential or
interconnected but independent steps, starting with the patient's visit
to the facility. The steps involve:

-   Assuring that all patients are registered for scheduled or walk-in
    appointments.

-   Obtaining accurate and detailed insurance and demographic
    information during the registration process.

-   Accurately documenting the service, examination, and patient care by
    all providers (physician, mid-level practitioner, nurse, or others).

-   Capturing and coding correctly all reportable and billable services.

-   Billing all billable services that are not only reimbursable by the
    insurance company but also supported by documentation.

-   Reconciling claim payments to assure correct payment.

-   Appealing all rejections that should have been paid.

## Capturing all Reportable and Billable Services

It is important to assure that providers document all services and
procedures in the clinical record and enter the applicable codes into
the EHR or the RPMS PCC application. To accomplish this, the Business
Office should:

-   Devote time each week to learn more about billing and coding for
    services, to acquire enough knowledge to identify all reportable
    services, procedures, and even supplies.

-   Keep current with all the updates from the insurers, for example,
    MedLearn Matters, CMS newsletter, Medicaid Newsletters, and others.

-   Conduct peer review and track the reasons of all rejections or
    denials. This would include registration, coding, data entry,
    provider, billing, and accounts receivable. This would determine if
    errors are identifiable and can be reduced or corrected in the
    future.

-   Make sure the providers document all the services and procedures.
    This information should be entered into the EHR by the provider or
    thoroughly documented on the superbill, PCC or PCC+. Documentation
    should include the E&M level of service, diagnosis, date of
    services, procedure, patient name, location, and any other pertinent
    demographic information.

-   Educate providers with current billing changes.

-   Understand billing requirements for bundling and unbundling of
    services.

-   Examine coding options such as whether to use CPT or HCPCS level II
    or Level III codes for procedures and services. Carriers or insurer
    payer policies may dictate what procedure codes or combination of
    codes to submit.

-   For a date of service when multiple surgical procedures are
    involved, sequence each procedure. The first procedure should be the
    primary reason for the surgery, and other surgical procedures become
    secondary. After sequencing, then add the appropriate modifier.

-   Link all diagnosis codes or symptoms to the relevant procedures or
    services. Linking addresses the medical necessity question, supports
    the services provided, and relates the reason for each service.

-   Understand or analyze reports associated with the billing process
    such as EOB, ERA, RPMS reports, CMS top-ten error reports, and RTP
    reports.

-   Report all software issues promptly to the supervisor.

## About the CMS-1450 / UB-92 Form

The CMS-1450 form, more commonly known as UB-92, serves the needs of
many payers. Not all of the data elements need to be completed for every
payer.

Data elements in the CMS uniform electronic billing specifications are
consistent with the CMS-1450 form data set to the extent that one
processing system can handle both. Definitions are also identical.
However, due to the space constraints on the form, the electronic record
contains more characters for some items than the corresponding items on
the form

The revenue coding system for both Form CMS-1450 and the electronic
specifications are identical.

Effective June 5, 2000, CMS extended the claim size to 450 lines. For
the hard copy UB-92 or Form CMS-1450, CMS will accept claims of up to 9
pages. In addition, effective October 16, 2003, all state fields will be
discontinued and reclassified as reserved for national assignment.

For descriptions of the locator fields, see Part 4, Appendix B," CMS
1450/UB-92 Form."

## Modifiers and their Role in Billing

Modifiers are used to modify payment of a procedure code, assist in
determining appropriate coverage, or otherwise identify the detail on
the claim. The use of modifiers ensures the appropriate reimbursement by
the insurer.

Modifiers are entered in box 24 D on the HCFA-1500 (CMS-1500) claim form
or UB 92 (CMS 1450).

For the most current list of modifiers, refer to the current CPT or
HCPCS Code book.

1.  The modifiers are updated on a yearly basis, and the tables are
    supplied to each RPMS site by the IHS Office of Information
    Technology (OIT). It is the responsibility of each Area IT to
    install the updated tables.

## Place of Service

Place of Service is a two-digit indicator assigned by CMS to the various
places where a medical service or procedure can be provided.

+-----------------------------------------------------------------------+
| 03 -- School                                                          |
|                                                                       |
| 04 -- Homeless Shelter                                                |
|                                                                       |
| 05 -- Indian Health Service Free-standing Facility                    |
|                                                                       |
| 06 -- Indian Health Service provider-based Facility                   |
|                                                                       |
| 07 -- Tribal 638 Free-standing Facility                               |
|                                                                       |
| 08 -- Tribal 638 Provider-based Facility                              |
+-----------------------------------------------------------------------+
| 11 -- Office                                                          |
|                                                                       |
| 12 -- Home                                                            |
|                                                                       |
| 13 -- Assisted Living Facility                                        |
|                                                                       |
| 14 -- Group Home                                                      |
|                                                                       |
| 15 -- Mobile Unit                                                     |
+-----------------------------------------------------------------------+
| 20 -- Urgent Care Facility                                            |
|                                                                       |
| 21 -- Inpatient Hospital                                              |
|                                                                       |
| 22 -- Outpatient Hospital                                             |
|                                                                       |
| 23 -- Emergency Room -- Hospital                                      |
|                                                                       |
| 24 -- Ambulatory Surgical Center                                      |
|                                                                       |
| 25 -- Birthing Center                                                 |
|                                                                       |
| 26 -- Military Treatment                                              |
+-----------------------------------------------------------------------+
| 31 -- Skilled Nursing Facility                                        |
|                                                                       |
| 32 -- Nursing Facility                                                |
|                                                                       |
| 33 -- Custodial Care Facility                                         |
|                                                                       |
| 34 -- Hospice                                                         |
+-----------------------------------------------------------------------+
| 41 -- Ambulance -- Land                                               |
|                                                                       |
| 42 -- Ambulance -- Air or Water                                       |
|                                                                       |
| 49 -- Independent Clinic                                              |
+-----------------------------------------------------------------------+
| 50 -- Federally Qualified Health Facility                             |
|                                                                       |
| 51 -- Inpatient Psychiatric Facility                                  |
|                                                                       |
| 52 -- Psychiatric Facility Partial Hospitalization                    |
|                                                                       |
| 53 -- Community Mental Health Center                                  |
|                                                                       |
| 54 -- Intermediate Care Facility/Mentally Retarded                    |
|                                                                       |
| 55 -- Residential Substance Abuse Treatment Facility                  |
|                                                                       |
| 56 -- Psychiatric Residential Treatment Center                        |
|                                                                       |
| 57 -- Non-residential Substance Abuse Treatment Facility              |
+-----------------------------------------------------------------------+
| 60 -- Mass Immunization Center                                        |
|                                                                       |
| 61 -- Comprehensive Inpatient Rehabilitation Facility                 |
|                                                                       |
| 62 -- Comprehensive Outpatient Rehabilitation Facility                |
|                                                                       |
| 65 -- End-Stage Renal Disease Treatment Facility                      |
+-----------------------------------------------------------------------+
| 71 -- State or Local Public Health Clinic                             |
|                                                                       |
| 72 -- Rural Health Clinic                                             |
+-----------------------------------------------------------------------+
| 81 -- Independent Laboratory                                          |
|                                                                       |
| 99 -- Other Unlisted Facility                                         |
+-----------------------------------------------------------------------+

The place where a service is rendered can determine the reimbursement
and coding conventions applied to the service codes.

If services are rendered in two locations in a given day, such as the
clinic and the emergency room, the reimbursement is reduced for the
services provided or split into technical and professional components.
For the latter, usually two separate bills are provided by the facility.

## "Incident To" Services

"Incident To" services are defined as services commonly furnished in a
physician's office, which are

-   incident to the professional services of a physician or a
    non-physician provider's employee

-   limited to situations in which there is direct
    physician/non-physician personal supervision.

This applies to auxiliary personnel employed by the
physician/non-physician, which includes but is not limited to, nurses,
technicians, therapists, non-physician practitioners, and others.

"Incident To" rules apply to all insurers.

To have the same service covered as "incident to" the services of a
physician, it must be performed under the direct personal supervision of
the physician as an integral part of the physician's personal in-clinic
service. This does not mean that for each visit the patient must also
see the physician. It does mean there must have been a direct, personal,
professional service furnished by the physician/non-physician to
initiate the course of treatment. There must also be subsequent services
by the physician/non-physician of a frequency that reflects his/her
continuing active participation in, and management of, the course of
treatment.

There are four things that are required to qualify for "incident to":

1\) The physician Assistant, Nurse Practitioner, or Clinical Nurse
Specialist must be an employee of the physician or of the entity which
also employs the physician.

2\) The physician has to have initially seen the patient.

3\) The physician has to have direct supervision; the physician has to
be within the facility, but not necessarily in the same room and must be
available to render assistance and direction if necessary.

4\) The physician must have an active participation in the on-going care
of the patient.

## Billing Form Review

The forms you use to bill depend on payer requirements. Prior to
submission, review your paper claim forms (e.g., CMS 1450, CMS 1500,
ADA, NCPDP, etc.) to ensure that the form locators are completed, based
on specific payer requirements.

For information on the CMS 1500 form, go to this website:

[http://www.nucc.org](http://www.nucc.org/)

For information on the CMS 1450 (UB-92) form, go to this website:

[http://www.nubc.org](http://www.nubc.org/)

## Utilization Review

Authorization numbers from insurers need to be obtained and are required
on the bills when they are generated for billing. Utilization review
needs to assure that all billable services have been captured to bill
for acute care days and ambulatory care services. The purpose of the
process is to assure each facility meets hospitalization and length of
stay criteria.

Utilization staff, in this process, needs to work closely with
Admitting, Billing, providers, and Coders.

### Splitting Claims Process

Hospital billing is split with professional services on the HCFA-1500
form, and the hospital charges, (e.g., lab, pharmacy, radiology,
anesthesia, emergency room provider, nurse) and supplies on the UB-92.

Splitting claims is payer specific. For example:

-   Split lab for technical and professional

-   DME and medical

For more information, see the *RPMS IHS Third Party Billing (ABM) User's
Manual*, which is available at this website:

<http://www.ihs.gov/cio/rpms/index.cfm?module=home&option=documents>

## Roll-Over/Cross-Over for Secondary and Tertiary Billing

Medicare currently has contractual arrangements with supplemental
insurers to automatically crossover claims payment information for their
policyholders. An eligibility file furnished by the supplemental insurer
is used to drive the process rather than information found on the claim.
These eligibility files are matched, based on the Health Insurance Claim
(HIC) number, against Medicare's internal eligibility file. If a match
occurs, the beneficiary's record is flagged indicating to which company
we will cross claim payment information.

The name of the crossover insurance company will appear on both the
beneficiary Explanation of Medicare Benefits and the provider's
Remittance Notice.

Users need to ensure the crossover payment was forwarded to the correct
secondary payer by reviewing the remittance advice.

Each supplemental insurer is given the opportunity to specify criteria
related to the claims the insurer wants Medicare to crossover. Examples
of claims most often excluded from the crossover process:

-   Totally denied claims

-   Claims denied as a duplicate or for missing information

-   Adjustment claims

-   Claims reimbursed at 100%

-   Claims for dates of service outside of the supplemental policy's
    effective and end dates.

As part of the CMS process, it is required for each service furnished by
the provider that the provider reports each service as a separate line
item on the claim form.

As claims are processed, the beneficiary's eligibility record is checked
by the system to determine whether the claim should be considered for
crossover. If the beneficiary's eligibility record is flagged for
crossover, the claim is then checked by the system to determine whether
the claim meets the crossover criteria required by the insurer. If the
claim is not excluded, at this point it is marked for crossover to the
appropriate company. An electronic claims payment record is then created
and forwarded to the requesting insurer. This eliminates the need for
the billing office to file claims for the patient's supplemental
benefits.

Upon receipt of the transmittal crossover file, the system will
initially edit the file and return a flat file to the contractor
indicating the number of claims received and accepted. The entire file
that contains any transmission error will be returned with a request for
retransmission.

In regard to crossovers, Medicare cannot add, change, or delete any
eligibility information furnished by an insurer. In addition, the
crossover process is totally automatic, and does not require or permit
any clerical intervention.

The crossover insurance companies send an eligibility tape at least once
a month to the primary insurer. The crossover company's eligibility tape
reads the internal eligibility record and looks for the HIC matches.

The Medicaid update process is the same as the automatic crossover
process except the eligibility tape is sent to the primary insurer by
each state