I. To prepare the learner with basic knowledge of medical insurance
A. Spell and define the key terms.
B. Discuss the function of the multipurpose billing form (super bill).
i. Combination bill, insurance form and routing document which may be given to the patient at the time of the office visit
ii. Super bills (fee tickets, charge tickets, encounter form, patient service slip, routing form, transaction slip) are preprinted patient statements that can be used in a manual (peg-board charge-slip system) or computerized office bookkeeping system
iii. Contains the patients name, date, services rendered, procedure codes (list codes for basic office charges), diagnostic codes, the physician’s identifying data and a section to indicate the patient’s next appointment.
iv. Super bill form may have two or three copies
v. Clipped to the front of the patient’s charts on their arrival at the office
1. Physician checks off procedures that are performed
2. Applicable diagnoses
3. Return appointment time frame if needed
4. May be used as a receipt for the patient
5. May be submitted to the billing department
6. Should be updated to include new or revised procedures and diagnostic codes at the beginning of each year
C. Discuss determination of primary coverage.
i. If the individual has only one policy, it is primary
ii. If the person has coverage under two plans:
1. Insurance for the longest period of time is primary person
2. If active employee has a plan with a present employer and is still covered by a former employer’s plan as a retiree or a laid-off employee. The current employer’s plan is primary.
iii. If the individual is also covered as a dependent under another insurance policy, the patient’s plan is primary.
iv. If an employed person has coverage under the employer’s plan and additional coverage under a governmental sponsored plan, the employer’s plan is primary. Example – person is enrolled in a PPO through employment who is also on Medicare.
v. If a retired individual is covered by the plan of the spouse’s employer and the spouse is still employed, the spouse’s plan is primary, even if he is retired person has Medicare.
vi. The birthday rule: If the person is a dependent child covered by both parents’ plans and the parents are neither separated nor divorced (or have joint custody of the child), the primary plan is determined by which parent has the first birth date in the calendar year.
vii. If two or more plans cover the dependent children of separated or divorced parents who do not have joint custody of their children, the children’s primary plan is determined in this order:
1. The plan of the custodial parent
2. The plan of the spouse of the custodial parent (if the parent has remarried).
3. The plan of the parent without custody.
D. Describe group, individual, and government sponsored health programs.
i. Group insurance
a. Group health benefits are sponsored by an organization such as an employer, a union or an association.
b. A person covered by group health benefits is either an employee or a group member, who by virtue of employment or membership in an organization may participate in and receive benefits from a health plan.
c. If an individual under group coverage leaves the employer or organization the insured may continue the same or lesser coverage under an individual policy
ii. Individual health benefits
a. Individual health benefits policies are purchased by an individual from an insurance company.
b. Premiums are submitted by the individual directly to the insurance company.
c. Company then reimburses the covered individual eligible medical expenses.
d. Medi-Gap plans
iii. Government sponsored health benefits
a. Government sponsored benefits programs are funded and regulated by the federal or state government.
b. Government programs have been developed over the years to assist persons who might otherwise have health benefits such as the elderly, the indigent, and others unable to obtain benefits.
c. Government programs include Medicare, Medicaid (MediCal is the Medicaid program in California), CHAMPVA/TRICARE, and Worker’s Compensation (State program).
1. Medicare was designed to provide medical care and benefits for the elderly population.
2. Medicare has since been expanded to provide benefits for blind individuals, disabled individuals who are eligible for social security benefits and meet certain criteria, children and adults with end-stage renal disease, and kidney donors.
3. Medicare advantage plans
4. Part A hospital insurance
a. Provides inpatient up to 90 days for each benefit period. (begins the day a patient goes into the hospital and ends the day patient has not been hospitalized for 60 days).
b. Patient who has been an inpatient in a skilled nursing facility (SNF) for no more then100 days in each benefit period (one calendar year).
c. A patient who is receiving medical care at home.
d. A patient who has been diagnosed as terminally ill and needs hospice care (6 months to live).
e. Patient who requires psychiatric treatment, covering 190 days of psychiatric hospitalization in a patient’s lifetimes.
f. Patient who requires respite care (short break for caregivers), those who care for the terminally ill.
5. Part B – pays for procedures physician’s services) and supplies.
6. Part D – prescription coverage
a. Covers 99% of top 100 drugs (covers 5000 drugs)
b. $7.00 co-payment for generic drugs
c. Total payment for the year - $2510.00)
7. Donut hole coverage – insurance that covers missing coverage.
ii. Medicaid or MediCal
1. Government sponsored programs provide health benefits to low income or indigent persons.
2. Eligibility for Medicaid is based on a patient’s eligibility for other state programs such as welfare assistance.
3. Medicaid eligibility and benefits vary from state to state.
4. Federal government contributes partial funding to each state for Medicaid costs.
5. Medicaid provides coverage for the following:
a. Inpatient hospital care
b. Outpatient treatment and services
c. Diagnostic services
d. Family planning services
e. Skilled nursing facilities
f. Diagnostic screening for children.
1. CHAPVA: The civilian health and medical program of veterans’ administration covers dependents of veterans who have total and permanent service connected disabilities. The CHAMPVA program is administered by the area veterans’ administration program.
2. TRICARE Manager Care Programs are offered to control escalating medical costs and to standardize benefits for active-duty families, military retirees, and their dependents. Eligible individuals have three options from which to choose:
a. TRICARE Prime (HMO)
b. TRICARE Extra (PPO)
c. TRICARE Standard
d. Tricare for Life supplementary payer to Medicare
iv. Workers’ Compensation
a. Employers in every state are covered by a Workers’ Compensation program administered by the state or private insurers.
b. Worker’s Compensation benefits were developed to cover the expenses resulting from a work related illness or injury.
E. Explain the differences between health maintenance organizations (HMO) and preferred provider organizations (PPO).
1. Unlike the traditional insurance system, HMO promises to provide covered services rather than pay for them.
2. HMO acts both as an insurer and a provider of service medical services are rendered by participating providers.
3. HMO policy lists the medical services the member is entitled to receive and the physicians and hospitals that provide these services.
4. HMO has a contract with both the patient and the provider.
5. HMO, rather than the patient, is responsible for the cost of medical services. Providers bill the HMO rather than the patient if a reimbursable service has been rendered to an HMO member.
6. Physician typically paid by capitation
7. Patient’s pay a co-payment for services rendered
8. Three types of HMO plans
a. Group practice model (independent physicians)
b. Staff model (Kaiser)
c. Network model (group practices)
9. Patient selects a primary care physician whose name and phone number appear on the insurance card
1. While an HMO promises to provide services and have a financial risk in their relationships with subscribers, a PPO is an organization whose purpose is simply to contract with providers, then lease this network of contracted providers to health care plans.
a. Participating Physicians accept assignment
b. Nonparticipating physicians does not accept assignment
2. PPO network is not risk bearing and does not have any financial involvement in the health plan.
3. A PPO is typically developed by hospitals and physicians as vehicle to attract patients. Some are developed and managed by insurance companies.
4. A PPO contracts with participating providers including hospital and physicians. These contracts allow the PPO to contract with insurers and other purchasers of health care services on behalf of the participating providers who accept less than normal charges and agree to follow the utilization management and other administrative protocols.
5. Subscriber has more freedom of choice than does an HMO patient
iii. Point of Service (POS) plan
1. A managed care organization that combines elements of an HMO and a PPO
iv. Basically an HMO with the flexibility to go out of network but receive benefits at a greater level of flexibility
II. To prepare the learner with basic knowledge and skills to use methods of establishing professional fees, customer credit, and identify the laws and regulations that affect follow-up and collection procedures.
A. Spell and define key terms.
B. Identify methods of establishing professional fees.
i. Fee-for-service is the most traditional method.
ii. Physicians use their sense of values and judgments.
iii. Identify fees appropriate for similar specialist in the community.
iv. Determine the actual cost plus the physician time involved.
v. Obtain usual and customary fee schedules for the local medical society from medical insurance corporations.
vi. Must consider the complexity of the diagnosis and treatment.
vii. For private patients, there are no limitations to fees charged.
C. Explain a physician’s fee schedule.
i. A physician may have multiple fee schedules.
1. Fee schedule set by government sponsored insurance programs such as:
b. Medicaid or medical in California
c. Champus, Champva, Tricare
2. One fee is set by the physician for their private paying patients or cash patients.
3. Fees schedule set by companies that physicians have contracted with:
a. Health Maintenance Organizations (HMO)
b. Preferred provider organizations (PPO), and related organizations
c. State regulated agencies such as:
i. County programs which may or may not be affiliated with medical
ii. Workers’ compensation
ii. The fee schedule should be discussed with the patient (depending on their status) prior to their visit. This avoids misunderstanding between the patient and the physician office.
iii. Insurance companies set a physician’s fee profile based on the billing history established by the physician and the usual customary fess of similar physicians with the same specialty in the same zip code.
D. Distinguish different fee policies and contracts.
i. A fee policy is an understanding of what a basic fee will be and how it will be paid or collected.
ii. A contract is established with a third-party payer and without prior knowledge of the patient. In the contract the physician agrees to accept a set fee per patient with the addition of the patient’s co-payment or deductible. The fees to be paid vary with the contract.
E. Identify areas on the patient registration form necessary for collection.
i. The patient registration form serves many purposes.
ii. Patients are required to give this information. A patient does not have a right to refuse.
iii. Registration form should be updated on a yearly basis or if information has changed.
iv. The registration form gives the patient’s demographic information.
1. Patients full name, correctly spelled
2. Date of birth
3. Marital status
4. Current address and length at that address
5. Telephone numbers at home and at work or cell phone
6. Name of person legally responsible for charges
7. Patient occupation and phone number of work
8. Name of person referring patient to facility
v. If the patient has insurance
1. The insurance card and sometimes a second form of identification (driver’s license) are photocopied.
2. An insurance ID card will have valuable information which must be copied.
3. Information should be verified immediately.
4. A copy is kept in the patient chart and updated on a regular basis.
vi. If a third party is involved, such as in an auto accident or workers’ compensation claim, the office personnel must establish who is responsible, where can they be reached, and verify financial responsibility.
vii. Updates should be required of each patient every 6-12 months.
F. Identify the need for payment arrangements.
i. Establish immediately what the expectations for payment will be in your facility.
1. This can be done in the form of a letter to a new patient.
2. Each new patient may be asked to sign an agreement stating this payment information which often is included on the registration form.
ii. Lessen the patient’s anxiety regarding insurance billing or personal responsibility.
1. Your patient is aware of where the initial responsibility rests.
2. Encourage your patient to be involved if insurance companies require additional information or request patient input.
iii. Ideally the office will run smoothly on a budget, based on past cash receipts.
1. Without an established policy, patient may not feel any responsibility to become involved in the collection of funds owing on their account.
2. It has become necessary to involve patients in all areas of their care.
3. Better, more efficient care can be given if small details do not hamper the relationship you have established with your patients.
iv. Discuss fees, arrange payments, and be sure they have been established and agreed upon in writing.
v. By law, the facility must have the established fee schedule available.
G. List various methods of payment.
1. Keep change on hand.
2. Always give a written receipt for cash received.
1. This is the most common method of payment.
2. Patients have an automatic receipt with a cancelled check.
3. Checks should be verified based upon office or facility policies.
4. Checks help safeguard the office from accumulating a large amount of cash.
a. Be sure the message line does not contain false information (paid in full).
b. Be sure to endorse the check immediately with the facility's bank stamp.
5. Some patients will still expect a receipt.
iii. Credit card payments
1. Credit cards are fast becoming a common method of payment.
2. Allow your customers to keep the account paid in full.
3. Credit cards acceptance must be set up with your bank or financial service company.
a. A percentage fee will be charged.
b. Credit card receipts are deposited in a similar manner to cash and checks.
c. Credit cards may be taken over the phone.
d. Be sure to get an imprint if the card is presented at the time of the visit. A stolen credit card may not be accepted by the financial institution if an imprint was not made.
iv. Debit card acceptance must be set up with your bank or financial service company, patients may expect a receipt.
v. All co-pays are to be paid prior to the examination per the contract physician’s sign with the HMO insurance company.
H. Apply current credit laws and regulations to compose collection letters.
i. A patient should be advised of the office payment or collection policy at the onset of the contract or the first visit.
ii. Confidentiality is extremely important.
iii. Office personnel should compose a letter with all the necessary information the patient will need so it will be clearly understood by the patient. Be firm and concise.
iv. Avoid words such as, neglected, ignored and failure that might offend the patient. Instead use words like missed, overlooked and forgotten.
v. Contact should be made with the patient at their home.
vi. Check the current collection laws and regulations to avoid accusations of harassment.
I. Recognize legal limitations in methods of collection.
i. Federal laws dictate limits in methods of collection.
1. Phone calls should be made during regular office ours. Do not call after 9pm or before 8am.
2. No more than one phone call per week allowed if contact has been made, failure to reach the party does not allow for daily callbacks.
3. If an employer requests that calls not be made to the place of employment, calling must be stopped.
4. Make no threats that you do not intend to carry out.
5. It may be difficult to locate a patient who has moved from the area, and almost impossible to collect from one who has left the state.
6. An attorney or reputable collection agency should be contacted for difficult cases or large sums of money.
a. Collection agency will keep its share per an arranged percentage (50-60%) and will forward the remaining amount to the physician's office on a contracted basis.
b. If a debtor contacts the office they must be instructed to contact the collection agency.
ii. Remember all information is confidential. Contact of any type should only be made with the patient or responsible party.
iii. Check for current state laws regarding limitations and changes in the law.
III. To prepare the learner with basic knowledge and skills necessary to perform bookkeeping, accounting, and payroll
A. Spell and define key terms.
B. Describe the various accounting systems and supplies available for use in the medical office.
i. Bookkeeping systems
a. Organized and accurate record-keeping system of financial transactions for a business
b. Accounts receivable is money owed to the practice.
c. Accounts payable is money owed by the practice.
2. Single-entry bookkeeping, books are not balanced
a. Uses a day-sheet or general ledger to record fees and payments for the services rendered.
b. An accounts receivable ledger card shows the amounts owed by each patient for services performed.
c. A check register records the checks written and details the expense category where office expenditures were made.
d. A payroll register may be kept separately or on the check register, recording the checks written to employees for wages earned and deductions from gross earnings.
3. Double entry bookkeeping, books are balanced
a. This system uses assets, capital (or owner’s equity) and liabilities. The assets minus the liabilities are equal to the capital.
i. Assets are all items owned by the business.
ii. Capital (or owner’s equity), is the original investment and property that is owned.
iii. Liabilities are the monies that are owed by the business.
b. This system is more complicated, requires more training and is commonly used by corporations.
4. Pegboard bookkeeping
a. The most commonly used bookkeeping method in a small physician’s office. It is a very accurate system.
b. Requires some training and is easy to learn.
c. This system uses multiple layers atop one another so that all pieces of information are recorded at one time.
i. All are preprinted and arranged to be held in place by pegs at one side of the board.
ii. Forms are NCR paper, where no carbon paper is required and the pressure of a pen will write through multiple layers.
d. Forms used
i. The day-sheet records all charges to accounts, such as payments/adjustments, directly to the patient receipt and ledger card. This prevents multiple entries and the possibility of errors.
ii. The patient ledger card keeps record of all charges and payments per individual or family, as required.
iii. Super bills, encounter forms or transaction slips to record details of the charges and credits on a given day for each patient.
1. These serve as a patient receipt.
2. It is also an insurance billing request, and a reminder of a claim.
3. Copies of these are kept in the patient chart for record of transactions and charges.
iv. Deposit slips are recorded simultaneously, checked and balanced at the end of the day, and taken or sent to the bank.
v. Negotiable funds
1. Personal check is considered a negotiable instrument.
a. Written and signed by a maker; contains a promise or order to pay a sum of money.
b. Payable on demand
c. Payable to order or bearer
2. Bank draft
3. Cashier's check
4. Certified check
5. Money order
6. Travelers check
vi. Bank Codes
1. American Bankers Association (ABA)number
2. Magnetic Ink Character recognition
a. Found at the bottom of check
b. Represents a common machine language readable by machine and humans
vii. Accounts payable journals have check registers available to record information from the payables in the same manner as receivables.
ii. Computerized bookkeeping or accounting
1. This system seems easier but much training is needed to use the system to the fullest benefit or extent.
2. Data entry is the primary area for concern. This must be absolutely correct.
3. Many computerized systems are available.
4. Passwords or key operators are used to insure the integrity of the operators and equipment.
5. Many computer software programs are available with multiple capabilities.
a. Appointment scheduling
b. Tracking daily charges and credits.
c. Identifying at risk patients.
i. Preparing monthly billing
ii. Insurance billing
iii. Patient billing
d. Computer programs work as expanded calculators and perform the arithmetic functions.
e. May write checks.
f. Manage electronic banking between the facility and the bank (e-banking).
g. Generate office reports, daily, monthly, and yearly.
h. Essential that data be backed up in a reliable way.
iii. Monthly statements for accounting are available.
1. Aging analysis notes the delinquency of each account in terms of days.
2. Practice income analysis indicates where income is being generated.
C. Illustrate the use of an accounts receivable aging analysis sheet.
i. Construct an aging analysis sheet.
1. Outline categories for 30, 60, 90, and 120 day accounts.
2. Identify necessary information to contact patients.
3. Set priorities of who to contact first.
4. Discuss methods of contact.
D. Discuss payroll forms.
i. Payroll is a very important part of the accounting process.
ii. Taxes must be taken out of the earnings, recorded, paid to the appropriate agencies every quarter by the 15th of the month April, June, September, and December or weekly depending on office policy and reconciled.
iii. Annual reports are required and W-2 forms distributed to employees at the beginning of the following year, in order to report earnings for tax purposes, must be prepared for each employee by January 31 of each year.
iv. Have employees update W-4 forms each year in case they want to adjust their deductions or make other changes.
E. Explain the multiple taxes and deductions withheld from a paycheck.
i. California has state income tax deductions.
ii. Federal income tax deductions use Circular E tables provided by the IRS.
iii. Social Security tax deductions.
iv. State Disability Insurance deductions and others
1. Any personal insurance is also deducted.
2. Other deductions approved by the employer and employee are also withheld.
v. Each employee must have a record of their earnings and deductions from each pay period.
vi. At the end of each year, taxes are paid according to wages earned and taxes withheld.
F. Demonstrate the use of machinery and equipment necessary to function as a bookkeeper in a medical facility.
i. A ten key adding machine
ii. A calculator with appropriate functions
iii. A computer with appropriate software
G. Cite the law relating to length of time records must be kept.
i. Accounting and bookkeeping records must be kept for a minimum of seven years. Some facilities keep records of the financial activity indefinitely.
ii. Liability and malpractice records must be kept permanently.
IV. To prepare the learner with basic knowledge and skills necessary to perform banking procedures
A. Spell and define key terms.
B. Identify common types of banking accounts.
i. Selection of a bank in a medical practice has usually been completed.
ii. Many banks compete for business by offering a variety of services.
iii. Banking transactions involve privileged information and the medical assistant must be aware of confidentiality.
iv. Features that may differ from bank to bank
1. Fees for checks
2. Cashier checks
3. Travelers checks
4. Per check fees
6. Monthly fees
8. Safe deposit box
v. Checking accounts
1. Regular checking accounts
a. Money readily accessible
b. Checks provide legal documentation of practice expenses
c. Monthly service charge may be assessed and money does not increase in value.
2. Interest bearing checking or money market accounts
a. Guidelines need to be followed or account will not earn interest.
b. This type of account may be used to pay insurance premiums or quarterly taxes.
3. Savings account
a. Used for money that is not needed for current expenses
b. Earns interest at a prevailing rate
C. Describe various types of checks encountered.
i. Certified check
1. Has been authorized by a bank official and funds have been set aside to cover the check and verified by a stamped certification.
2. This type of check is not used very often.
ii. Cashier’s check
1. Is purchased from a bank and is guaranteed.
2. It is written on the bank’s own checking account.
iii. Money order:
1. Is a check purchased for a fee and used when personal checks are not accepted or available.
2. Patients may use this form of payment.
iv. Travelers check
1. Is used for traveling or when personal checks are not accepted.
2. Printed in denominations of $10, $20, $50, or $100, checks are signed at the financial institution by the payer.
3. Upon presentation, the check is signed again by payer. Thus, two signatures of the payer are required.
1. Shows that a debit is due because services have been rendered.
2. Issued by government and civic agencies.
vi. Voucher check:
1. Used to itemize or specify purpose for which check is drawn.
2. Convenience for payer
3. Voucher portion is removed before presenting check.
D. Identify common types of credit cards used for payment of services.
i. The use of credit cards has become common for payments.
ii. Patients appreciate the convenience
iii. The voucher is deposited to a bank credit card account.
iv. Credit card companies charge a monthly fee for the collection service (1% to 5 %).
1. Verification by phone
2. Credit card verification device
1. Verification by phone
2. Credit card verification device
vii. Discover Card:
1. Verification by phone
2. Credit card verification device
viii. ATM/Debit cards use direct withdrawals from accounts and may use the same machine as credit cards.
ix. Other credit and debit cards have their own regulations.
E. State the purpose of petty cash.
i. Established by a check written payable to “cash” or “petty cash”
ii. Provides cash for small purchases such as toilet paper, light bulbs and cleaning supplies
iii. Revolving fund for continuous use
iv. Petty cash voucher form used as a receipt of petty cash issued
v. Replenished when balance reaches a designated amount for practical needs
vi. It should not be used to make change for patients.
F. Discuss precautions in writing and accepting checks.
i. Written legibly and in ink
ii. May be computer generated
iii. Facility may use a check writer for printing the amount
1. Endorses the paper
2. Prevents forgery
3. Uses colored inks
iv. The first step is to fill in information on voucher:
2. Payee name
4. Check number
v. Write the name of payee at area designated “Pay to the order of”
1. Do not use title of persons
2. If it is an officer of an organization, add title at end such as John Smith, President.
3. Start at the extreme left of the line
vi. Write amount of check in words on line below or above payee’s name, depending on print of check.
1. Draw line to extreme right to the word dollars, so no additional words can be inserted to increase the amount of the check.
2. Separate dollars and cents by using the word “and”, then write the cents portion as a fraction.
vii. If space permits on the check write the purpose of the check payment at the area noted as “memo”.
viii. Get authorized payer signature
G. Explain types of check endorsements.
i. Endorser transfers all rights of the check to another party.
ii. Endorsement is made in ink with a rubber stamp at the medical facility.
iii. Endorse no more than 1 ½” from the trailing edge of the check.
iv. Blank endorsement
1. Payee signs only his or her name
2. Common for personal checks
v. Restrictive endorsement:
1. Besides signing the company’s name or endorser’s signature, words such as “for deposit only” are added so checks can’t be used for any purpose other than stated.
2. The account number is also noted
vi. Limited and full endorsements
1. Includes words specifying the person to whom the endorser makes the check payable
2. Are used to sign over insurance checks to the medical practice
vii. Be sure to inspect checks thoroughly before acceptance.
1. Date on check is not over 6 months old
2. For a “limited” check, there is a time limit during which the check is negotiable; cannot be postdated.
3. Make sure payee line is correctly made out to the medical practice.
4. Numerical amount of check and written amount of check must agree.
5. Affixed signature (payer) has signed the check, person signed who signed the check is listed on the check
6. If check states “paid in full”, verify this comment.
7. Current address and phone number
H. Explain the purpose of a safe deposit box and an office safe
i. Provides protection for valuable papers and personal property
ii. Safe deposit box is a metal container inside a locked compartment in the bank and requires two keys to open.
1. One key is issued to customer and the other the bank retains for their use.
2. Usually has a monthly or annual service fee
iii. Requires authorization signature to open each time
iv. Office safe is also used for protection of paper and personal property within the office.