Medical Coding and Payment Rules
Medical insurance coverage plans, such as the Fee-for-Service Plans, Health Maintenance
Organizations (HMOs), Point-of-Service Plans (POS) and Preferred Provider Organizations (PPOs) come in many forms,
major and minor. They also have many different methods of billing patients and insurance companies.
More than ever, medicine and healthcare places greater demands on physicians to see more patients, provide more
complex medical services and adhere to stricter regulatory rules, leaving little time for coding and billing. Yet,
the need to adequately document medical records, appropriately apply billing codes and accurately charge health
insurance companies for medical services is essential to the medical practice's financial health and continued
existance. Making decisions to achieve optimal reimbursements should best be handled by experienced medical coders and billers.
Percentage of Health Insurance Coverage
Medicare, Medicaid and 3rd party insurance companies have strict compensation guidelines, which must be
followed. All types of encounters, services, tests, treatments, supplies and procedures provided to a patient have
a specific code which consists of a set of numbers and combinations of sets of numbers. The medical coder examines
encounter forms and analyzes medical records to assign a corresponding diagnosis and procedure code, the medical
biller then sees to it that the appropriate health insurance companies and the patients receive their bill.
The number of people with health insurance coverage in 2003, an increase of 1.0 million from 2002. The percentage of
the population with health insurance in 2003 was 84.4 percent, down from the 84.8 percent with coverage in
The percentage of people with health insurance coverage in 2003
among people living in households with incomes of $75,000 or more. The likelihood of being
covered by health insurance rises with income, as the corresponding rate for people with annual household
incomes of less than $25,000 was 75.8 percent.
The percentage of full-time workers age 18 to 64 covered by health insurance in 2003,
higher than the rate for part-time workers (76.2 percent) or nonworkers (74.0 percent).
60.4% and 174.0 million
The percentage and
number of people covered by employment-based health insurance in 2003, down from 61.3 percent
and 175.3 million in 2002. This decline essentially explains the fall in total private health insurance
coverage over the period, from 69.6 percent to 68.6 percent.
26.6% and 76.8 million
The percentage and number of
people covered by government health insurance programs in 2003, up from 25.7 percent
and 73.6 million in 2002.
Using Medical Billing Software
By Steven M. Verno, CMBS, CEMCS, CMSCS, CPM-MCS
Via our Medical Billing Community Forum
Published with permission
Steven Verno is a well known and respected certified medical biller who holds CMBS, CEMCS and CMSCS billing
certifications, and Certified Practice Manager-Medical Coding Specialist (CPM-MCS) through the
Physician office Managers Association of America (POMAA). He said:
Many people starting out in medical billing ask about medical billing software. There are many out there, like cereal boxes
where once all you had was Corn Flakes, now you have many choices.
I want an easy demographic sceen
I look for charge window where I can enter dates of service, cPt codes, and modifiers
I look for an insurance screen where I can enter the patent's primary, secondary or tertiary
I look for a cpt and ICD-9 and modifier database
I look for a provider database that is unlimited with ease of entry
I look for a payment entry screen where I can make easy changes if necessary
I want to be able to make easy changes to statements and claims forms
I want to be able to make notes
I want to be able to create reports using any internal data
I want to be able to export data in ascii format
I want to be able to bill a parent if the patient is a child
I want to be able to add separate practices without any extra cost
If upgrades are made due to Federal Law requirements, I want to know how much the fee for the
I also want to be able to import data in ascii mode
I want to be able to send multiple accounts to a debt collection agency rather than one account at a
It has to produce AR reports on demand
Individual insurance reports
Individual account report
Monthly payment report
Monthly overpayment report
Monthly adjustment report
Monthly time payment report
Debt collection report
I want to be able to use any databse to create a report, for example, if my provider wants to know how many kids
from 7-12 he treated, or how many Medicaid patients he treated, or how many 994 patients with Medicare he treated I
want to be able to create a report I can use. It's also important to ask about clearinghouses. -- Steve Verno, Certified
Author: Steven M. Verno is a Certified Master Medical Coder and Certified Master Medical
Biller and Medical Coding/Billing Instructor. He also is the co-owner of Lucrum Consulting, LLC, which provides
training in medical coding and billing issues and helps physician's practices in areas such as A/R recovery,
appeals and staff training.
Keeping an Eye on Health Care Law
To keep an eye on health care law check out the Health Care Law blog which regularly posts thoughts and comments on the health care
industry, privacy, security, technology and other odds and ends.
Health Insurance Language
Allowable: The amount that is paid to the provider by the
insurance is known as an allowable. For example, although a psychiatrist may charge $80.00 for a
medication management session, the insurance may only allow $50.00, so a $30 reduction would be
Copayment: The insurance payment is further reduced if the
patient has a copay, deductible, or a coinsurance. If the patient in the previous example had a $5.00
copay, the doctor would be paid $45 by the insurance. The doctor is then responsible for collecting the
out-of-pocket copay from the patient.
Deductible: If the patient had a $500.00 deductible, the
patient would have to pay the contracted rate of $50 ten times until the deductible was met, at which
point the insurance would begin to cover a portion of the charge.
Coinsurance: A coinsurance is a percentage of the allowed
amount that the patient must pay. It is most often applied to surgical and/or diagnostic procedures. Using
the above example, a coinsurance of 20% would have the patient owing $10 and the insurance company owing
(Examples in the above paragraph are provided under the terms of the GNU
Free Documentation License.)
An acronym is a term formed from the initial letter or letters of each of
the major parts of a compound term. This list explains acronyms found on the cms.hhs.gov web site and
other acronyms that are commonly used: Acronyms A-Z.
- Assignment of Benefits (AOB) Rules and Regulations