Healthcare Reimbursement Exam 2
Questions and Answers
Contract "Pitfalls" - ANSWER-drawbacks of the contract - examples: incorporation of
manuals, evergreen clause, missing definitions, etc
Coordination of benefits (COB) - ANSWER-determines which payor is responsible for
paying the claim if patient is covered by two insurances--determines primary and
secondary insurance; prevents conflicts or disputes about which insurance plan pays
claim
Medicare is always the secondary payor by law
if patient has two private plans, the plan in effect the longest is the payor or the "birthday
rule" (parent with calendar birthday earlier in year decides primary)
Explanation of benefits (EOB): - ANSWER-statement sent by a health insurance
company to covered individuals explaining what medical treatments and/or services
were paid for on their behalf. The EOB is commonly attached to a check or statement of
electronic payment; produced by claims administration
Terms and Conditions element - ANSWER-governing language of the contract, defines
parties of the agreement, contains definitions, credentialing initiatives, claims
submission, payment provisions
Evergreen clause - ANSWER-contract pitfall - contract will automatically renew for
annual periods unless the two parties notify each other
No balance billing clauses - ANSWER-the physician agrees to a contractual allowance
with the insurer which is written off - when agreeing with this, the physician agrees not
to balance bill the patient
Advance beneficiary notice (ABN) - ANSWER-notice that a provider should give you
before you receive a service if the provider has reason to believe Medicare will not pay
for the requested service (denial). allows you to decide whether to get the care and
accept financial responsibility if Medicare denies the payment; cannot deliver a blanket
ABN. only delivered when physician suspects or has reason to believe insurance will
not cover services (can be delivered with informed consent)
, Capitation methodology - ANSWER-a fixed, pre-arranged monthly payment received by
a physician, clinic or hospital per patient enrolled in a health plan with a capitated
contract. —Prepaid services on a per member per month (PMPM) basis, regardless of
whether the member receives any services during that month.
Fee schedule - ANSWER-a complete listing of fees used by Medicare to pay doctors or
other providers/suppliers. This comprehensive listing of fee maximums is used to
reimburse a physician and/or other providers on a fee-for-service basis. A listing of
every service a healthcare provider could render, together with the contracted payment
for each service (NOT IN HMOs). included in the attachments and exhibits section of
contract. use CPT codes, E&M
Which payors pay the best DRG rates? The worst? - ANSWER-Best: Private Pay
Worst: the government (Medicare and Medicaid)
Per diem rates (calculate) - ANSWER-daily allowance for is a specific amount of money
an organization gives an individual, often an employee, student athlete (usually for away
matches), per day to cover living expenses when traveling for work. To calculate: =
Days Stay * Per Diem Rate
Benchmarking accounts receivable - ANSWER-your organization's performance
measure is "Days Revenue in Accounts Receivable"-- how long it takes to get money
back from reimbursements. benchmark performance is 50 days in A/R
A/R calculation - ANSWER-current AR / average daily AR
Purpose and calculation of "Reimbursement-to-Charges" ratio - ANSWER-Allows the
provider to see how much reimbursement they are receiving for each charge to the
patient.
reimbursement/charges
Direct Graduate Medical Education (DGME) - ANSWER-Residents have graduated
from medical school and then go on to complete several years of supervised, hands-on
training in a particular area of expertise, Medicare pays the direct costs of a hospital's
residency program. hospital is paid a fixed amount per resident FTE, multiplied by
Medicare % of patient days, paid as an annual lump sum directly to hospital
Indirect Medical Education (IME) - ANSWER-Medicare pays an additional amount to
teaching hospitals to account for the higher complexity and increased costs of caring for
patients at those teaching hospitals
why- teaching hospitals attract and treat the most complex patients, need to have the
latest and most expensive technology
Questions and Answers
Contract "Pitfalls" - ANSWER-drawbacks of the contract - examples: incorporation of
manuals, evergreen clause, missing definitions, etc
Coordination of benefits (COB) - ANSWER-determines which payor is responsible for
paying the claim if patient is covered by two insurances--determines primary and
secondary insurance; prevents conflicts or disputes about which insurance plan pays
claim
Medicare is always the secondary payor by law
if patient has two private plans, the plan in effect the longest is the payor or the "birthday
rule" (parent with calendar birthday earlier in year decides primary)
Explanation of benefits (EOB): - ANSWER-statement sent by a health insurance
company to covered individuals explaining what medical treatments and/or services
were paid for on their behalf. The EOB is commonly attached to a check or statement of
electronic payment; produced by claims administration
Terms and Conditions element - ANSWER-governing language of the contract, defines
parties of the agreement, contains definitions, credentialing initiatives, claims
submission, payment provisions
Evergreen clause - ANSWER-contract pitfall - contract will automatically renew for
annual periods unless the two parties notify each other
No balance billing clauses - ANSWER-the physician agrees to a contractual allowance
with the insurer which is written off - when agreeing with this, the physician agrees not
to balance bill the patient
Advance beneficiary notice (ABN) - ANSWER-notice that a provider should give you
before you receive a service if the provider has reason to believe Medicare will not pay
for the requested service (denial). allows you to decide whether to get the care and
accept financial responsibility if Medicare denies the payment; cannot deliver a blanket
ABN. only delivered when physician suspects or has reason to believe insurance will
not cover services (can be delivered with informed consent)
, Capitation methodology - ANSWER-a fixed, pre-arranged monthly payment received by
a physician, clinic or hospital per patient enrolled in a health plan with a capitated
contract. —Prepaid services on a per member per month (PMPM) basis, regardless of
whether the member receives any services during that month.
Fee schedule - ANSWER-a complete listing of fees used by Medicare to pay doctors or
other providers/suppliers. This comprehensive listing of fee maximums is used to
reimburse a physician and/or other providers on a fee-for-service basis. A listing of
every service a healthcare provider could render, together with the contracted payment
for each service (NOT IN HMOs). included in the attachments and exhibits section of
contract. use CPT codes, E&M
Which payors pay the best DRG rates? The worst? - ANSWER-Best: Private Pay
Worst: the government (Medicare and Medicaid)
Per diem rates (calculate) - ANSWER-daily allowance for is a specific amount of money
an organization gives an individual, often an employee, student athlete (usually for away
matches), per day to cover living expenses when traveling for work. To calculate: =
Days Stay * Per Diem Rate
Benchmarking accounts receivable - ANSWER-your organization's performance
measure is "Days Revenue in Accounts Receivable"-- how long it takes to get money
back from reimbursements. benchmark performance is 50 days in A/R
A/R calculation - ANSWER-current AR / average daily AR
Purpose and calculation of "Reimbursement-to-Charges" ratio - ANSWER-Allows the
provider to see how much reimbursement they are receiving for each charge to the
patient.
reimbursement/charges
Direct Graduate Medical Education (DGME) - ANSWER-Residents have graduated
from medical school and then go on to complete several years of supervised, hands-on
training in a particular area of expertise, Medicare pays the direct costs of a hospital's
residency program. hospital is paid a fixed amount per resident FTE, multiplied by
Medicare % of patient days, paid as an annual lump sum directly to hospital
Indirect Medical Education (IME) - ANSWER-Medicare pays an additional amount to
teaching hospitals to account for the higher complexity and increased costs of caring for
patients at those teaching hospitals
why- teaching hospitals attract and treat the most complex patients, need to have the
latest and most expensive technology
