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Here are the details on the Medicare rules for healthcare practitioners who can’t opt-out of Medicare. This applies to Chiropractors as well as Physical Therapists and Occupational Therapists in private practice.

I was asked by a Chiropractor, so this answer is framed for a DC, but this applies to any provider who can’t opt-out. These practitioners can be Participating or Non-Participating.

This is a look into the what the options are, what the rules are and how to go about them. Participating Provider: 2:24 Non-Participating Provider: 5:59

What are the first steps to take in order to improve your rate of patient collections?

For those using Jane App for billing, here’s a hack that will let you print claims from Jane directly onto your red CMS-1500 forms.

This list of terms is posted here as a supplement to the Medical Billing Basics, Part 2 video:

Common Abbreviations in Billing:

AOB – ​Assignment of benefits
CMS – Centers for Medicare and Medicaid Services
CPT– Current Procedural Terminology. (Procedure codes)
DME – Durable Medical Equipment
DOS – Date of Service
Dx – Abbreviation for Diagnosis code

EHR – Electronic Health Records
EOB – Explanation of Benefits
ERA – Electronic Remittance Advice
E/M – Evaluation and Management section of the CPT codes

HIPAA – Health Insurance Portability and Accountability Act
ICD – International Classification of Diseases (Diagnosis codes)
NOS – Not Otherwise Specified
NPI – National Provider Identifier
PHI – Protected Health Information
POS – Place of Service
SOF – Signature on File

Common Medical Billing Terms:

Accept Assignment – When a healthcare provider accepts the amount paid on a claim by the insurance company, in lieu of receiving payment from the patient. Patients may also owe amounts such as coinsurance or copay to the provider.

Adjudication – The decision or settlement of claim by the insurance payer per their payment rules and guidelines.

Adjusted Claim – A claim that has been corrected and results in a credit or payment to the provider.

Allowed Amount – The reimbursement amount an insurance company will pay or “allow” for a healthcare procedure, normally less than the amount that is billed for the procedure. This amount varies depending on the patient’s insurance plan.

Aging – Refers to the unpaid insurance claims or patient balances that are more than 30 days past due. Most medical billing software has the ability to generate a separate report for insurance aging and patient aging. These reports typically list balances by 30, 60, 90, and 120 day increments.

Ancillary Services – These are typically services a patient requires in a hospital setting that are in addition to room and board accommodations – such as surgery, lab tests, therapy, etc.

Appeal – When an insurance plan denies a treatment, an appeal (either by the provider or patient) is the process of objecting to this decision. The insurer may require documentation when processing an appeal and typically has a formal policy or process established for submitting an appeal. Often the process and associated forms can be found on the insurance provider’s web site.

Applied to Deductible (ATD) – This is the amount of the charges, determined by the patients insurance plan, the patient owes the provider. You may see this term on the patient statement. Many plans have a maximum annual deductible that once met is then covered by the insurance provider.

Assignment of Benefits (AOB) – Insurance payments that are paid directly to the doctor or hospital for a patient’s treatment. This is designated in Box 27 of the CMS-1500 claim form.

Authorization – When a patient requires permission or authorization from the insurance company before receiving certain services. “Pre-authorization” is the acquiring of this permission prior to treatment.

Beneficiary – Person or persons covered by the health insurance plan and eligible to receive benefits.

Bundled – This generally refers to services provided in a single encounter or episode of care that are combined and paid as a single unit, rather than each of multiple codes that may have been billed being paid individually.  

Capitation – A fixed payment paid per patient enrolled over a defined period of time, paid to a health plan or provider. This covers the costs associated with the patient’s health care services. This payment is not affected by the type or number of services provided.

Carrier – Simply the insurance company or “carrier” the patient has a contract with to provide health insurance.

Clean Claim – A complete insurance claim that has all the necessary information that allows it to be processed and paid promptly, without any omissions or mistakes.

Clearinghouse – This is an intermediary service that transmits claims from providers to insurance carriers. Prior to submitting claims, the clearinghouse “scrubs” and checks for errors. Clearinghouses electronically transmit claim information that is compliant with the HIPPA electronic format standards.

CMS – Centers for Medicaid and Medicare Services. Federal agency which administers Medicare, Medicaid, HIPPA, and other health programs. Formerly known as the HCFA (Health Care Financing Administration). You’ll notice that CMS is the source of many medical billing terms.

CMS 1500 – Medical claim form established by CMS to submit paper claims to insurers. Most commercial insurance carriers also require paper claims be submitted on CMS-1500’s. The form is distinguished by its red ink.

Coding – Medical Billing Coding involves taking the doctors’ notes from a patient encounter and translating them into the proper diagnosis (ICD) and treatment (CPT) medical billing codes. This is for the purpose of reimbursing the provider and classifying diseases and treatments.

Co-Insurance – Percentage or amount defined in the insurance plan for which the patient is responsible. Most plans have a ratio of 90/10 or 80/20, 70/30, etc. An insurance carrier may pay 80% and the patient pays 20% of the allowed amount.

Coordination of Benefits (COB) – When a patient is covered by more than one insurance plan. One insurance carrier is designated as the primary carrier and the other as secondary. The insurance plans must have COB in place so that they pay appropriately.

Co-Pay – An amount paid by a patient at each visit, as defined by their specific insured plan.

CPT Code – Current Procedural Terminology. This is a 5-digit code assigned for reporting a procedure performed by the physician. The CPT has corresponding diagnosis codes assigned to it on a claim.

Credentialing – This is an application process for a provider to participate with an insurance carrier. Many carriers now request credentialing through CAQH (The Council for Affordable Quality Healthcare). The CAQH credentialing process is a universal system now accepted by insurance company networks.

Credit Balance – The amount of patient credit that is shown in the “Balance” or “Amount Due” column of an account statement.

Crossover claim – When claim information is automatically sent from Medicare the secondary insurance.

Date of Service (DOS) – Date that health care services were provided.

Day Sheet – Daily summary of daily patient treatments, charges, and payments received.

Deductible – Amount a patient must pay before insurance payment begins. For example, a patient could have a $1000 deductible per year before their health insurance begins paying for services. The patient will owe these amounts to the provider directly. This could take several doctor’s visits or prescriptions to reach the deductible.

Demographics – Physical characteristics of a patient such as age, sex, address, etc. necessary for filing a claim.

DME – Durable Medical Equipment – Medical supplies such as wheelchairs, oxygen, catheter, glucose monitors, crutches, walkers, etc.

Down-coding – When the insurance company reduces the code (and payment amount) of a claim when there is not documentation to support the level of service represented by the billed code. The insurer’s computer system converts the code submitted down to the closest code which usually reduces the payment.

Duplicate Coverage Inquiry (DCI) – Request by an insurance company or group medical plan by another insurance company or medical plan to determine if other coverage exists.

Dx – Abbreviation for diagnosis code (ICD-9 or ICD-10 code).

Electronic Claim – Claim information is sent electronically from the billing software to the clearinghouse or directly to the insurance carrier. The claim file must be in a standard electronic format as defined by the receiver.

Electronic Funds Transfer (EFT) – An electronic means of transferring payment. This allows funds to be transferred, credited, or debited to a bank account and eliminates the need for paper checks.

E/M – Evaluation and Management CPT codes. These are the CPT codes 99202 through 99499. They represent services in which a provider is either evaluating or managing a patient’s health.  

EMR – Electronic Medical Records. Also referred to as EHR (Electronic Health Records). This is a medical record in digital format of a patient’s treatment. An EMR is the patient’s medical record managed at the provider’s location. The EHR is a comprehensive collection of the patient’s medical records created and stored at several locations.

Enrollee – Individual enrolled in and covered by health insurance.

EOB – Explanation of Benefits. This is a term for the statement that comes with the insurance company payment to explaining payment details, covered charges, write offs, and patient responsibilities and deductibles.

ERA – Electronic Remittance Advice. This is an electronic version of an insurance EOB that provides details of insurance claim payments.

Fee For Service – Insurance where the provider is paid for each service or procedure provided. Typically allows patient to choose provider and hospital. Some policies require the patient to pay a provider directly for services and submit a claim to the carrier for reimbursement.

Fee Schedule – Cost associated with each CPT treatment billing code for a provider’s treatment or services.

Financial Responsibility – The portion of the charges that are the responsibility of the patient or insured..

Fraud – When a provider receives payment or a patient obtains services by deliberate, dishonest, or misleading means.

GHP – Group Health Plan. Health insurance offered by an employer, union or association to its members or employees.

Group Name – Name of the group or insurance plan that insures the patient.

Group Number – Number assigned by insurance company to identify the group under which a patient is insured.

Guarantor – A responsible party and/or insured party who is not a patient.

HCPCS – Health Care Common Procedure Coding System. (pronounced “hick-picks”). A standardized medical coding system used to describe specific items or services provided when delivering health services.

Health Savings Account (HSA) – Also called Flexible Spending Account. A tax-exempt account provided by an employer from which an employee can pay health care related expenses.

Healthcare Provider – Typically a physician, hospital, nursing facility, or laboratory that provides medical care services.

HIPAA – Health Insurance Portability and Accountability Act. Federal law that requires national standards to protect sensitive patient health information from being disclosed without the patient’s consent or knowledge.

HMO – Health Maintenance Organization. A type of health care plan that places restrictions on treatments.

ICD 10 Code – 10th revision of the International Classification of Diseases. These are diagnosis codes.

In-Network (or Participating) – An insurance plan in which a provider signs a contract to participate in. The provider agrees to accept a discounted rate for procedures.

Insured – This is the person who has medical benefits coverage through their health insurance policy. This may also refer to the Primary insured person on the policy who may have dependents on the policy. If the insured spouse for example, has a policy through their employer, they may add their spouse as a dependent.

Managed Care Plan – Insurance plan requiring a patient to see doctors and hospitals that are contracted with the managed care insurance company. Medical emergencies or urgent care are exceptions when out of the managed care plan service area.

Maximum Out of Pocket – The maximum amount the insured is responsible for paying for eligible health plan expenses. When this maximum limit is reached, the insurance typically then pays 100% of eligible expenses/allowed amounts.

Medical Necessity – A term used by health insurance companies to describe the coverage that not considered by that company to be investigational, cosmetic, or experimental.

Medical Record Number (MRN) – A unique number assigned to a patient in an EHR or practice management system.

Medical Necessity – Services or procedures performed for treatment of an illness or injury that is determined by the insurer to be medically necessary.

Medicare – A federal health insurance for people over 65 or people under 65 with certain disabilities.

• Medicare Part A – Hospital coverage
• Medicare Part B – Physicians visits and outpatient procedures.
• Medicare Part C – refers to Medicare Advantage plans, Medicare-approved plans from private companies that offer an alternative to original Medicare.
• Medicare Part D – Medicare insurance for prescription drug costs for anyone enrolled in Medicare Part A or B.

Medicaid – Insurance coverage for low-income patients. Funded by Federal and state government and administered by states.

Medigap – Medicare supplemental health insurance for Medicare beneficiaries which may include payment of Medicare deductibles, co-insurance and balance bills, or other services not covered by Medicare.

Modifier – A code that may be attached to a CPT code, which indicates that it has been altered by some specific circumstances. Correct usage of Modifiers are important in obtaining reimbursements.

N/C – Non-Covered Charge. A procedure not covered by the patient’s health insurance plan.

Network Provider – Health care provider who is contracted with an insurance provider to provide care at a negotiated cost.

Non-participation – When a healthcare provider chooses not to accept Medicare-approved payment amounts as payment in full.

NPI Number – National Provider Identifier. A unique 10-digit identification number assigned to covered health care providers.

Out-of-Network (or Non-Participating) – A provider that does not have a contract with the patient’s insurance carrier. Patient’s may be responsible for a greater portion of the charges or may have to pay all the charges for using an out-of-network provider.

Out-Of-Pocket Maximum – The maximum amount the patient has to pay under their insurance policy. Anything above this limit is the insurer’s obligation. These Out-of-pocket maximums can apply to all coverage or to a specific benefit category such as prescriptions.

Outpatient – Typically treatment in a physician’s office, clinic, or day surgery facility lasting less than one day.

Patient Responsibility – The amount a patient must pay that is not covered by the insurance plan.

Payer – Health insurance payer.

PCP – Primary Care Physician – Usually the physician who provides initial care and coordinates additional care if necessary.

POS – Point-of-Service plan. This is a flexible type of HMO (Health Maintenance Organization) plan where patients have the freedom to use (or self-refer to) non-HMO network providers. When a non-HMO specialist is seen without referral from the Primary Care Physician, the patient pays a higher deductible and percentage of  co-insurance.

POS (Used on Claims) – Place of Service. A two-digit code which defines where the procedure was performed, which is used on medical insurance claims – such as the CMS 1500 form, block 24B. For example 11 is for the doctors office, 12 is for home, 21 is for inpatient hospital.

PPO – Preferred Provider Organization. Commercial insurance plan where the patient can use any doctor or hospital within the network. Similar to an HMO.

Practice Management Software – Software used for the daily operations of a provider’s office. Typically used for appointment scheduling and billing.

Preauthorization – A decision by a health insurer or plan that a service is medically necessary. Some policies require prior notification in order for some procedures to be considered a covered expense. Sometimes called prior authorization, prior approval or precertification. Does not guarantee benefits will be paid.

Predetermination – Maximum payment insurance will pay towards surgery, consultation, or other medical care – determined before treatment.

Pre-existing Condition (PEC) – A medical condition that has been diagnosed or treated within a certain specified period of time just before the patient’s effective date of coverage. A Pre-existing condition may not be covered for a determined amount of time as defined in the insurance terms of coverage (typically 6 to 12 months).

Premium – The amount the insured or their employer pays (usually monthly) to the health insurance company for coverage. This is an entirely separate from and not related to the patient’s out of pocket medical expenses.

Protected Health Information (PHI) – An individual’s identifying information such as name, address, birth date, Social Security Number, telephone numbers, insurance ID numbers, or information pertaining to healthcare diagnosis or treatment.

Provider – Physician, practitioner or medical care facility who provides health care services.

Referral – When one provider (such as a family doctor) refers a patient to another provider (typically a specialist).

Remittance Advice (R/A) – A document supplied by the insurance payer with information on claims submitted for payment. Contains explanations for rejected or denied claims. Also referred to as an EOB (Explanation of Benefits).

Responsible Party – The person responsible for paying a patient’s medical bill. Also referred to as the guarantor.

Scrubbing – Process of checking an insurance claim for errors in the billing software prior to submitting to the payer. Some may also refer to a biller’s manual examination of claims as “scrubbing”.

Self-Pay – Payment made at the time of service by the patient.

Secondary Insurance Claim – Medical claim for insurance coverage paid after the primary insurance makes payment. Secondary insurance is typically used to cover gaps in insurance coverage.

Secondary Procedure – When a second CPT procedure is performed during the same physician visit as the primary procedure.

Skilled Nursing Facility – A nursing home or facility for convalescence. Provides a high level of specialized care for long-term or acutely ill patients. A Skilled Nursing Facility is an alternative to an extended hospital stay or home nursing care.

SOAP notes – Subjective, Objective, Assessment and Plan. This is a format for documentation that many healthcare professionals use to record a patient interaction.

Specialist – Physician who specializes in a specific area of medicine, such as urology, cardiology, orthopedics, oncology, etc. Some healthcare plans require beneficiaries to obtain a referral from their primary care doctor before making an appointment to see a Specialist.

Subscriber – Describes the employee for group policies. For individual policies the subscriber describes the policyholder.

Superbill – One of the terms for the form the provider uses to document the treatment and diagnosis for a patient visit. Typically includes several commonly used ICD and CPT procedural codes.

Supplemental Insurance – Additional insurance policy that covers claims for deductibles and coinsurance. Frequently used to cover these expenses not covered by Medicare.

Taxonomy Code – Specialty standard codes used to indicate a provider’s specialty, sometimes required to process a claim.

Term Date – Date the insurance contract expired or the date a subscriber or dependent ceases to be eligible.

Tertiary Insurance Claim – Claim for insurance coverage paid in addition to primary and secondary insurance. Tertiary insurance covers gaps in coverage the primary and secondary insurance may not cover.

Third Party Administrator (TPA) – An independent corporate entity or person (third party) who administers group benefits, claims and administration for a self-insured company or group.

Timely Filing – Refers to the timeframe within which a claim must be submitted to the payer. Different payers have different timely filing limits or deadlines.  

TRICARE – This is federal health insurance for active-duty military, National Guard and Reserve, retirees, their families, and survivors. Formerly known as CHAMPUS.

UB-04 – Claim form for hospitals, or long-term care facilities to bill for services provided to residents.

Upcoding – An illegal practice of assigning an ICD code that does not agree with the patient records for the purpose of increasing the reimbursement from the insurance payor.

Utilization Limit – The limits that Medicare sets on how many times certain services can be provided within a year. The patient’s claim can be denied if the services exceed this limit.

Workers’ Compensation (Worker’s Comp) – Insurance that provides medical benefits to people who are injured or become ill in the course and scope of their job.

Write-off – Refers to the difference between what the practitioner charges and what the insurance plan contractually allows, and the patient is not responsible for.

I spent some time on LinkedIn the other day and got this message from a Chiropractor. He said:

“Hi Kat,

What I really need is to understand the Medicare billing process. I have some patients getting older and I have never done Medicare. I know they have a lot of rules and restrictions.”

So I thought I would share what my response was to him, for anybody who needs it.

The first thing I’ll enter here is a disclaimer. The Centers for Medicare & Medicaid Services are very specific about “Chiropractic Services”, but they are referring to spinal adjustments only. As we know, Chiropractors can perform Physical Therapy, and may have other services performed in their offices like massage therapy, acupuncture and so on. These things may potentially be covered by a secondary insurance, but Medicare isn’t going to tell you how to bill them to the secondary. So what I give you here is information from my own experience, and I’ll include links below so you can research the codes and modifiers for yourself with CMS rather than just taking my (or anyone else’s) word for it.

Check out my video on this topic:

Here’s my personal Medicare for Chiro billing cheat sheet that I put together for a Chiro client: 

• Bill adjustments: 98940-98942 only. Use AT modifier for active treatment.
• Primary dx code must be subluxation (M99.00 through M99.05)
• Claims must include initial treatment date in box 15.
• Exams are not covered by Medicare but secondary might cover, so use mod 25 as appropriate.
• PT codes are not covered by Medicare but secondary might cover, so use mod 59 as appropriate.
• Use GY for all PT codes.
• Use GP for all PT codes. 

Medicare Modifiers Defined:

• AT = Active Treatment. Use this modifier on CMT only and only for active treatment, when Medicare is expected to cover. Applies only to medically necessary spinal manipulation to correct subluxation. Must have primary dx of subluxation.
• GA = Use on adjustments done under maintenance care (not active treatment) when we do not expect Medicare to cover. Use indicates ABN (Advanced Beneficiary Notice) is on file and allows the provider to bill the patient if not covered by Medicare. Ensures that upon denial Medicare will assign financial liability to patient.
• GY = Item does not meet the definition of a Medicare benefit. Indicates that Medicare is expected to deny.
• GP = Outpatient physical therapy.

And here are some informative links for you:

https://www.cms.gov/medicare/medicare-general-information/bni/abn

https://www.cms.gov/medicare-coverage-database/view/article.aspx?articleId=56273

https://www.medicare.gov/coverage/chiropractic-services

https://www.cms.gov/regulations-and-guidance/guidance/transmittals/downloads/r2148cp.pdf

https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2019downloads/R4440cp.pdf

Kat Jordan is the Owner of Orion Billing Services. With extensive experience in healthcare billing, Orion is well prepared to help with expert billing and collections. Call (727) 492-4801 for more information. 

www.OrionBilling.com