CHAPTER

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7Healthcare Claim Preparation and Transmission

Learning Outcomes

When you finish this chapter, you will be able to:7.1 Distinguish between the electronic claim

transaction and the paper claim form.

7.2 Discuss the content of the patient information section of the CMS-1500 claim.

7.3 Compare billing provider, pay-to provider, rendering provider, and referring provider.

7.4 Discuss the content of the physician or supplier information section of the CMS-1500 claim.

7.5 Explain the hierarchy of data elements on the HIPAA 837P claim.

7-2

Learning Outcomes (continued)

When you finish this chapter, you will be able to:7.6 Categorize data elements into the five sections of

the HIPAA 837P claim.

7.7 Evaluate the importance of checking claims prior to submission, even when using software.

7.8 Compare the three major methods of electronic claim transmission.

7-3

Key Terms

• 5010 version• administrative code set• billing provider• carrier block• claim attachment• claim control number• claim filing indicator code• claim frequency code

(claim submission reason code)

• claim scrubber• clean claim

7-4

• CMS-1500

• CMS-1500 (08/05)

• condition code

• data element

• destination payer

• HIPAA X12 837 Health Care Claim: Professional (837P)

• HIPAA X12 276/277 Health Care Status Inquiry/Response

Key Terms (continued)

• individual relationship code

• line item control number• National Uniform Claim

Committee (NUCC)• other ID number• outside laboratory• pay-to provider• place of service (POS)

code• qualifier

7-5

• rendering provider

• required data element

• responsible party

• service line information

• situational data element

• taxonomy code

7.1 Introduction to Healthcare Claims 7-6

• The HIPAA-mandated electronic transaction for claims is the HIPAA X12 837 Health Care Claim or Equivalent Encounter Information—used to send a claim to primary and secondary payers– The electronic HIPAA claim is based on the CMS-

1500, which is a paper claim form

7.1 Introduction to Healthcare Claims (continued)

7-7

• National Uniform Claim Committee (NUCC)– organization responsible for claim content– CMS-1500 (08/05)—current paper claim approved by

the NUCC

5010 version – new format for the EDI transactions

7.2 Completing the CMS-1500 Claim: Patient Information Section

7-8

• The CMS-1500 claim has a carrier block and thirty-three Item Numbers (INs)

• Carrier block—data entry area in the upper right of the CMS-1500

• Condition code—two-digit numeric or alphanumeric codes used to report a special condition or unique circumstance

7.2 Completing the CMS-1500 Claim: Patient Information Section (continued)

7-9

• The upper portion of the CMS-1500 claim form (Item Numbers 1-13):– Lists demographic information about the patient and

specific information about the patient’s insurance coverage

– Information is entered based on the patient information form, insurance card, and payer verification data

7.3 Types of Providers 7-10

• It may be necessary to identify four different types of providers:1. Pay-to provider—person or organization that will be

paid for services on a HIPAA claim

2. Rendering provider—term used to identify an alternative physician or professional who provides the procedure on a claim

3. Billing provider—person or organization sending a HIPAA claim

4. Referring provider

7.4 Completing the CMS-1500 Claim: Physician/Supplier Information Section

7-11

• This part identifies the healthcare provider, describes the services performed, and gives the payer additional information to process the claim

• Other ID number—additional provider identification number

• Qualifier—two-digit code for a type of provider identification number other than the NPI

• Outside laboratory—purchased laboratory services

7.4 Completing the CMS-1500 Claim: Physician/Supplier Information Section (continued)

7-12

• Service line information—information about services being reported

• Place of service (POS) code—administrative code indicating where medical services were provided

• Taxonomy code—administrative code set used to report a physician’s specialty

• Administrative code set—required codes for various data elements

7.4 Completing the CMS-1500 Claim: Physician/Supplier Information Section (continued)

7-13

• The lower portion of the CMS-1500 claim form (Item Numbers 14-33):– Contains information about the provider or supplier

and the patient’s condition, including the diagnoses, procedures, and charges

– Information is entered based on the encounter form

7.5 The HIPAA 837 Claim 7-14

• Data element—smallest unit of information in a HIPAA transaction– Example: a patient’s name– Required data element—information that must be

supplied on an electronic claim– Situational data element—information that must be

on a claim in conjunction with certain other data elements

7.6 Completing the HIPAA 837 Claim 7-15

• The five sections of the HIPAA 837 claim transaction include:– Provider information– Subscriber information– Payer information– Claim information– Service line information

7.6 Completing the HIPAA 837 Claim (continued)

7-16

• Responsible party—other person or entity who will pay a patient’s charges

• Claim filing indicator code—administrative code that identifies the type of health plan

• Individual relationship code—administrative code specifying the patient’s relationship to the subscriber

• Destination payer—health plan receiving a HIPAA claim

7.6 Completing the HIPAA 837 Claim (continued)

7-17

• Claim control number—unique number assigned to a claim by the sender

• Claim frequency code (or claim submission reason code)—administrative code that identifies the claim as original, replacement, or void/cancel action

• Line item control number—unique number assigned to each service line item reported

• Claim attachment—additional data in printed or electronic format sent to support a claim– Examples include lab results, specialty consultation notes, and discharge notes

7.7 Checking Claims Before Transmission 7-18

• Claims are carefully reviewed before transmission

• Clean claim—claim accepted by a health plan for adjudication– Properly completed and contains all the necessary

information

• HIPAA X12 276/277 Health Care Claim Status Inquiry/Response—electronic format used to ask payers about claims

7.8 Clearinghouses and Claim Transmission

7-19

• Practices handle transmission of electronic claims through three major methods:1. In the direct transmission approach, providers and

payers exchange transactions directly

2. The majority of providers use clearinghouses to send and receive data in correct EDI format

3. Some payers offer online direct data entry (DDE) to providers, which involves using an Internet-based service into which employees key the standard data elements

• Claim scrubber—software that checks claims to permit error correction

Summary

Summary

Summary