Assignment Prompt & Instructions
See Attached
– ## UnitVIIIEssayHTH.docx
– ## UnitVIIIHTHStudyGuide.pdf
**## UnitVIIIEssayHTH.docx**
Unit VIII Essay
This two-page essay paper measures your mastery of ULOs 2.4, 3.4, 4.5, and 5.3.
In this unit, you reviewed the process for accurate claim processing and the various stages for claim status. Throughout the claim submission and billing process there are many checks and balances to ensure that reimbursement is a smooth process. In this essay you will display your knowledge of various claim submission practices.
Use Chapter 17 and 18 readings, your Unit VIII study guide, and at least two sources from the CSU Online Library and/or textbook to respond to the prompts below:
· Identify the main reasons why insurance companies deny patient insurance claims.
· When filing insurance claims, how do HIPAA transaction code set standards apply?
· Your textbook outlines categories of fraud and abuse under the False Claims Act. Discuss two of these cases and provide an example of each.
· How does CMS manage Medicare payments through RACs and MACs?
· What are some similarities and differences between a remittance advice (RA) and an explanation of benefits (EOB)? How can each of these documents clarify errors for their respective recipient?
Your response must be at least two pages in length, not counting the title page or references page. You are required to use at least two sources in your response. One must be found from the CSU Online Library, and the other can be your textbook and/or study guide. Adhere to APA Style when constructing this assignment, including a title and reference page, and in-text citations and references for all sources that are used.
**## UnitVIIIHTHStudyGuide.pdf**
HTH 2305, Health Information Documentation Management 1
Course Learning Outcomes for Unit VIII
At the end of this unit, you should be able to:
2. Discuss how medical coding impacts the health care revenue cycle.
2.4 Examine medical claim rejections caused by coding errors.
3. Analyze medical records for accuracy and completeness.
3.4 Perform claim submission activities using patient medical records.
4. Apply compliance standards that govern how patient information is collected, stored, and transmitted.
4.5 Explain HIPAA’s transaction and code set rule.
5. Describe how accurate documentation improves health care delivery and patient outcomes.
5.3 Discuss mechanisms that maintain the integrity of the Medicare program.
Required Unit Resources
Chapter 17: Insurance Claims Processing (ULOs 2.4, 3.4, 4.5, and 5.3)
Chapter 18: The Revenue Cycle: Fees, Credit, and Collection (ULOs 2.4, 3.4, 4.5, and 5.3)
Unit Lesson
Lesson: Claims Submission Practices (ULOs 2.4, 3.4, 4.5, and 5.3)
Introduction
Throughout this course we have aimed to better understand the key components of revenue cycle
management and regulatory compliance as they are essential for professionals working in administrative and
billing roles. From the initial patient encounter to the claim submission process, each aspect of the healthcare
revenue cycle ensures the sustainability of healthcare providers.
This section will focus on six important claim submission topics: claim submission guidelines, physician fee
schedules to include participating vs. non-participating providers, Recovery Audit Contractors (RACs),
Medicare Administrative Contractors (MACs), the False Claims Act, and collection laws.
Claim Submission Guidelines
Claims must adhere to specific guidelines to ensure timely payment and compliance with insurance policies.
As outlined in the last unit, insurance coverage verification is an important first step before submitting a claim.
The claim verifies patient eligibility, benefits, and coverage limitations, minimizing the risk of claim denial due
to lack of coverage or expired policies. Effective use of standardized coding, including ICD-10-CM, CPT, and
HCPCS codes, is necessary to describe diagnoses and procedures accurately. Incorrect coding can lead to
denied or rejected claims.
Each payer has specific deadlines, often referred to as the "timely filing limit." Missing these deadlines can
also result in claim denial. Submitting clean claims, free of errors and omissions, results in faster processing
and reduces the likelihood of rejections. Claims must also be supported by medical records, such as chart
notes and test results, to justify the services billed. Many providers use clearinghouses to review and submit
UNIT VIII STUDY GUIDE
Claims Submission Practices
HTH 2305, Health Information Documentation Management 2
UNIT x STUDY GUIDE
Title
claims electronically. Failure to follow these guidelines can lead to claim rejections, delays in payment, or
even penalties for noncompliance.
When all the data has been collected, the insurance claim will go through four major stages, which include:
Four Stages of Insurance Claim
The CMS-1500 claim form is accepted by most insurance carriers for outpatient services. The preferred
method for submission is electronic; however, there may be some qualifying circumstances where a paper
claim may be filed to an insurance carrier. All sections of the CMS-1500 claim form need to be completed
according to HIPAA transaction and code set standards. This transaction and code set rule makes sure that a
patient’s electronic protected health information remains secure during the transmission process. All covered
entities such as providers, clearinghouses, vendors, and health insurance carriers are required to adhere to
HIPAA standards in this area.
Claim status can be described in several ways. The table below lists several insurance claim statuses:
Insurance Claim Statuses
Clean Claim
Dirty Claim
Incomplete Claim
Denied Claim
Pending Claim
Rejected Claim
Suspended Claim
• A clean claim means that the claim submitted contains all necessary elements to be processed and
paid correctly.
• A dirty claim means that the claim was submitted with errors.
• An incomplete claim is missing required information and needs to be resubmitted to the insurance
carrier.
• A denied claim has been rejected due to a technical error or a payment policy such as a non-covered
benefit.
HTH 2305, Health Information Documentation Management 3
UNIT x STUDY GUIDE
Title
• Pending claims are held in suspense and need to be reviewed further, resulting in either a payment or
denial.
• Rejected claims have been submitted to the insurance payer but have technical errors, require
correction, or require reprocessing.
• Suspended claims are held by the insurance company and are considered pending due to an error or
a request for additional information.
Claim adjudication is the decision-making process the insurance company follows that will ultimately result in
payment or denial of the claim. If the claim meets all requirement parameters, it will be approved for payment
by the insurance carrier and sent to the physician or healthcare facility.
Medicare Administrative Contractors (MACs) and Recovery Audit Contractors (RACs)
Medicare Administrative Contractors (MACs) are private organizations that process Medicare claims and
serve as intermediaries between healthcare providers and the Centers for Medicare and Medicaid services
(CMS). Each MAC is responsible for a specific geographic jurisdiction. They manage claims processing,
enroll providers, and conduct audits to ensure compliance with Medicare regulations. MACs also provide
information on Medicare updates and serve as a resource for providers seeking clarification on billing
practices.
Recovery Audit Contractors (RACs) are organizations contracted by the Centers for Medicare and Medicaid
Services (CMS) to identify improper Medicare payments. RACs aim to ensure the accuracy of Medicare
claims and protect taxpayer funds by using automated and manual reviews to identify discrepancies in claims.
Examples include claims with incorrect coding or instances where medical necessity was not adequately
documented. Providers can appeal RACs determinations through a five-level appeal process, but it is key to
avoid errors upfront to minimize audit risks. Together, RACs and MACs work to maintain the integrity of the
Medicare program by reducing fraud, waste, and abuse.
False Claims Act
The False Claims Act (FCA) is a federal law designed to combat fraud in government programs, including
Medicare and Medicaid. Under the FCA, it is illegal to knowingly submit false claims for payment or approval.
This includes billing for services not rendered, using improper coding, or providing medically unnecessary
services. False claims are submitted with the intent to defraud Medicare and Medicaid.
Key provisions of the FCA include qui tam lawsuits, which allow individuals (known as whistleblowers) to file
lawsuits on behalf of the government if they have evidence of fraudulent activities. Whistleblowers may
receive a portion of any recovered funds. Violators of the FCA may face fines ranging from $12,000 to
$25,000 per false claim, in addition to treble damages (three times the government's losses). To avoid
violations, providers must implement compliance programs, conduct internal audits, and provide staff training
on ethical billing practices. Transparency and accountability are essential to prevent fraudulent claims.
Physician Fee Schedules
Physician fee schedules are essential tools that determine how healthcare providers are reimbursed for
services. They list procedures and their corresponding reimbursement rates, ensuring consistency and
fairness in payments. Both private and public insurers use fee schedules to standardize billing and simplify
claims. These schedules consider factors including service complexity, resource use, and geographic
location, helping streamline the revenue cycle for providers and insurers.
The Medicare Physician Fee Schedule (MPFS) specifically governs reimbursement for Medicare Part B
services, which are related to outpatient care. Administered by the Centers for Medicare & Medicaid Services
(CMS), it uses the Resource-Based Relative Value Scale (RBRVS) to assign relative value units (RVUs)
based on physician work, practice expenses, and malpractice costs. Geographic adjustments (GPCI) and an
annually updated conversion factor are applied to determine final reimbursement rates.
The MPFS affects providers differently depending on their participation status. Participating (PAR) providers
agree to accept the payer's allowed amount as full payment for services. In Medicare, PAR providers receive
HTH 2305, Health Information Documentation Management 4
UNIT x STUDY GUIDE
Title
100% of the allowed amount directly from Medicare and may only bill patients for coinsurance, copayments,
and deductibles. Being a PAR provider often leads to higher patient volumes due to lower out-of-pocket costs.
Non-participating (NonPAR) providers, on the other hand, can choose whether to accept on a claim-by-claim
basis. If they do not accept assignment, they can charge up to 115% of the Medicare limiting charge. Patients
may pay more upfront and are reimbursed by Medicare.
For example, Dr. Smith is a PAR provider, while Dr. Jones is not. Both treat Medicare patients. Dr. Smith bills
Medicare directly and receives full payment minus the patient’s coinsurance. Dr. Jones bills the patient, who
is responsible for submitting the claim to Medicare for partial reimbursement. Patients often prefer PAR
providers due to the simplified billing process and lower costs. Understanding fee schedules and participation
status is necessary for effective revenue cycle management and compliance.
Collection Laws
There are times patients can default on their financial responsibility. If regular statements have been sent, two
or three months have elapsed since the service, and the patient cannot be reached by telephone or email or a
promised payment has not been received, then it is time to send a collection letter (French, 2024). Debt
collection in healthcare must comply with federal and state laws to protect patients from abusive practices.
The Fair Debt Collection Practices Act (FDCPA) regulates third-party debt collectors, prohibiting harassment,
misrepresentation, and unfair fees. Collectors must identify themselves and the purpose of the call, provide
written validation of the debt upon request, and refrain from contacting patients at inconvenient times or
locations.
The Health Insurance Portability and Accountability Act (HIPAA), while primarily focused on patient privacy,
also affects collections by restricting how patient information is shared. State collection laws often provide
additional protections, such as caps on interest rates for medical debt or extended grace periods for payment.
Offering flexible payment plans, communicating clearly with patients about financial responsibilities, and
training staff on compliant collection practices can minimize delinquent accounts. Providers who violate
collection laws risk legal penalties and damage to their reputation, while ethical and transparent billing
practices build trust and improve patient satisfaction.
Conclusion
The healthcare revenue cycle involves several processes, from accurate claim submission to compliance with
audits and collection laws. Understanding the roles of RACs and MACs, adhering to claim submission
guidelines, and maintaining compliance with the False Claims Act are necessary to reduce errors and prevent
fraud. A provider’s decision to participate in insurance networks affects billing and reimbursement, and
adherence to collection laws affects ethical financial practices. By mastering these practices, healthcare
professionals can effectively navigate billing and reimbursement while upholding the integrity of their
organizations.
Reference
French, L. L., & Turner, L. H. (2024). Administrative medical assisting (9th ed.). Cengage.
HTH 2305, Health Information Documentation Management 5
UNIT x STUDY GUIDE
Title
Learning Activities (Nongraded)
Nongraded learning activities are provided to aid you in your course of study. You do not have to submit
them. If you have questions, contact your instructor for further guidance and information.
These four MindTap assignments will introduce you to hands-on claim form processing measuring your
mastery of ULOs 3.4 and 5.3.
• Chapter 17 MOSS 4.0 Assessment 17.2A Batching and Billing Electronic Claims (Signal HMO)
• Chapter 17 MOSS 4.0 Assessment 17.3A Generating Paper (CMS-1500) Claims (FlexiHealth PPO)
• Chapter 17 MOSS 4.0 Assessment 17.4A Billing a Secondary Insurance
• Chapter 17 MOSS 4.0 Assessment 17.5A Billing Medicare as a Secondary Payer (MSP)
**## UnitVIIIHTHStudyGuide.pdf**
HTH 2305, Health Information Documentation Management 1
Course Learning Outcomes for Unit VIII
At the end of this unit, you should be able to:
2. Discuss how medical coding impacts the health care revenue cycle.
2.4 Examine medical claim rejections caused by coding errors.
3. Analyze medical records for accuracy and completeness.
3.4 Perform claim submission activities using patient medical records.
4. Apply compliance standards that govern how patient information is collected, stored, and transmitted.
4.5 Explain HIPAA’s transaction and code set rule.
5. Describe how accurate documentation improves health care delivery and patient outcomes.
5.3 Discuss mechanisms that maintain the integrity of the Medicare program.
Required Unit Resources
Chapter 17: Insurance Claims Processing (ULOs 2.4, 3.4, 4.5, and 5.3)
Chapter 18: The Revenue Cycle: Fees, Credit, and Collection (ULOs 2.4, 3.4, 4.5, and 5.3)
Unit Lesson
Lesson: Claims Submission Practices (ULOs 2.4, 3.4, 4.5, and 5.3)
Introduction
Throughout this course we have aimed to better understand the key components of revenue cycle
management and regulatory compliance as they are essential for professionals working in administrative and
billing roles. From the initial patient encounter to the claim submission process, each aspect of the healthcare
revenue cycle ensures the sustainability of healthcare providers.
This section will focus on six important claim submission topics: claim submission guidelines, physician fee
schedules to include participating vs. non-participating providers, Recovery Audit Contractors (RACs),
Medicare Administrative Contractors (MACs), the False Claims Act, and collection laws.
Claim Submission Guidelines
Claims must adhere to specific guidelines to ensure timely payment and compliance with insurance policies.
As outlined in the last unit, insurance coverage verification is an important first step before submitting a claim.
The claim verifies patient eligibility, benefits, and coverage limitations, minimizing the risk of claim denial due
to lack of coverage or expired policies. Effective use of standardized coding, including ICD-10-CM, CPT, and
HCPCS codes, is necessary to describe diagnoses and procedures accurately. Incorrect coding can lead to
denied or rejected claims.
Each payer has specific deadlines, often referred to as the "timely filing limit." Missing these deadlines can
also result in claim denial. Submitting clean claims, free of errors and omissions, results in faster processing
and reduces the likelihood of rejections. Claims must also be supported by medical records, such as chart
notes and test results, to justify the services billed. Many providers use clearinghouses to review and submit
UNIT VIII STUDY GUIDE
Claims Submission Practices
HTH 2305, Health Information Documentation Management 2
UNIT x STUDY GUIDE
Title
claims electronically. Failure to follow these guidelines can lead to claim rejections, delays in payment, or
even penalties for noncompliance.
When all the data has been collected, the insurance claim will go through four major stages, which include:
Four Stages of Insurance Claim
The CMS-1500 claim form is accepted by most insurance carriers for outpatient services. The preferred
method for submission is electronic; however, there may be some qualifying circumstances where a paper
claim may be filed to an insurance carrier. All sections of the CMS-1500 claim form need to be completed
according to HIPAA transaction and code set standards. This transaction and code set rule makes sure that a
patient’s electronic protected health information remains secure during the transmission process. All covered
entities such as providers, clearinghouses, vendors, and health insurance carriers are required to adhere to
HIPAA standards in this area.
Claim status can be described in several ways. The table below lists several insurance claim statuses:
Insurance Claim Statuses
Clean Claim
Dirty Claim
Incomplete Claim
Denied Claim
Pending Claim
Rejected Claim
Suspended Claim
• A clean claim means that the claim submitted contains all necessary elements to be processed and
paid correctly.
• A dirty claim means that the claim was submitted with errors.
• An incomplete claim is missing required information and needs to be resubmitted to the insurance
carrier.
• A denied claim has been rejected due to a technical error or a payment policy such as a non-covered
benefit.
HTH 2305, Health Information Documentation Management 3
UNIT x STUDY GUIDE
Title
• Pending claims are held in suspense and need to be reviewed further, resulting in either a payment or
denial.
• Rejected claims have been submitted to the insurance payer but have technical errors, require
correction, or require reprocessing.
• Suspended claims are held by the insurance company and are considered pending due to an error or
a request for additional information.
Claim adjudication is the decision-making process the insurance company follows that will ultimately result in
payment or denial of the claim. If the claim meets all requirement parameters, it will be approved for payment
by the insurance carrier and sent to the physician or healthcare facility.
Medicare Administrative Contractors (MACs) and Recovery Audit Contractors (RACs)
Medicare Administrative Contractors (MACs) are private organizations that process Medicare claims and
serve as intermediaries between healthcare providers and the Centers for Medicare and Medicaid services
(CMS). Each MAC is responsible for a specific geographic jurisdiction. They manage claims processing,
enroll providers, and conduct audits to ensure compliance with Medicare regulations. MACs also provide
information on Medicare updates and serve as a resource for providers seeking clarification on billing
practices.
Recovery Audit Contractors (RACs) are organizations contracted by the Centers for Medicare and Medicaid
Services (CMS) to identify improper Medicare payments. RACs aim to ensure the accuracy of Medicare
claims and protect taxpayer funds by using automated and manual reviews to identify discrepancies in claims.
Examples include claims with incorrect coding or instances where medical necessity was not adequately
documented. Providers can appeal RACs determinations through a five-level appeal process, but it is key to
avoid errors upfront to minimize audit risks. Together, RACs and MACs work to maintain the integrity of the
Medicare program by reducing fraud, waste, and abuse.
False Claims Act
The False Claims Act (FCA) is a federal law designed to combat fraud in government programs, including
Medicare and Medicaid. Under the FCA, it is illegal to knowingly submit false claims for payment or approval.
This includes billing for services not rendered, using improper coding, or providing medically unnecessary
services. False claims are submitted with the intent to defraud Medicare and Medicaid.
Key provisions of the FCA include qui tam lawsuits, which allow individuals (known as whistleblowers) to file
lawsuits on behalf of the government if they have evidence of fraudulent activities. Whistleblowers may
receive a portion of any recovered funds. Violators of the FCA may face fines ranging from $12,000 to
$25,000 per false claim, in addition to treble damages (three times the government's losses). To avoid
violations, providers must implement compliance programs, conduct internal audits, and provide staff training
on ethical billing practices. Transparency and accountability are essential to prevent fraudulent claims.
Physician Fee Schedules
Physician fee schedules are essential tools that determine how healthcare providers are reimbursed for
services. They list procedures and their corresponding reimbursement rates, ensuring consistency and
fairness in payments. Both private and public insurers use fee schedules to standardize billing and simplify
claims. These schedules consider factors including service complexity, resource use, and geographic
location, helping streamline the revenue cycle for providers and insurers.
The Medicare Physician Fee Schedule (MPFS) specifically governs reimbursement for Medicare Part B
services, which are related to outpatient care. Administered by the Centers for Medicare & Medicaid Services
(CMS), it uses the Resource-Based Relative Value Scale (RBRVS) to assign relative value units (RVUs)
based on physician work, practice expenses, and malpractice costs. Geographic adjustments (GPCI) and an
annually updated conversion factor are applied to determine final reimbursement rates.
The MPFS affects providers differently depending on their participation status. Participating (PAR) providers
agree to accept the payer's allowed amount as full payment for services. In Medicare, PAR providers receive
HTH 2305, Health Information Documentation Management 4
UNIT x STUDY GUIDE
Title
100% of the allowed amount directly from Medicare and may only bill patients for coinsurance, copayments,
and deductibles. Being a PAR provider often leads to higher patient volumes due to lower out-of-pocket costs.
Non-participating (NonPAR) providers, on the other hand, can choose whether to accept on a claim-by-claim
basis. If they do not accept assignment, they can charge up to 115% of the Medicare limiting charge. Patients
may pay more upfront and are reimbursed by Medicare.
For example, Dr. Smith is a PAR provider, while Dr. Jones is not. Both treat Medicare patients. Dr. Smith bills
Medicare directly and receives full payment minus the patient’s coinsurance. Dr. Jones bills the patient, who
is responsible for submitting the claim to Medicare for partial reimbursement. Patients often prefer PAR
providers due to the simplified billing process and lower costs. Understanding fee schedules and participation
status is necessary for effective revenue cycle management and compliance.
Collection Laws
There are times patients can default on their financial responsibility. If regular statements have been sent, two
or three months have elapsed since the service, and the patient cannot be reached by telephone or email or a
promised payment has not been received, then it is time to send a collection letter (French, 2024). Debt
collection in healthcare must comply with federal and state laws to protect patients from abusive practices.
The Fair Debt Collection Practices Act (FDCPA) regulates third-party debt collectors, prohibiting harassment,
misrepresentation, and unfair fees. Collectors must identify themselves and the purpose of the call, provide
written validation of the debt upon request, and refrain from contacting patients at inconvenient times or
locations.
The Health Insurance Portability and Accountability Act (HIPAA), while primarily focused on patient privacy,
also affects collections by restricting how patient information is shared. State collection laws often provide
additional protections, such as caps on interest rates for medical debt or extended grace periods for payment.
Offering flexible payment plans, communicating clearly with patients about financial responsibilities, and
training staff on compliant collection practices can minimize delinquent accounts. Providers who violate
collection laws risk legal penalties and damage to their reputation, while ethical and transparent billing
practices build trust and improve patient satisfaction.
Conclusion
The healthcare revenue cycle involves several processes, from accurate claim submission to compliance with
audits and collection laws. Understanding the roles of RACs and MACs, adhering to claim submission
guidelines, and maintaining compliance with the False Claims Act are necessary to reduce errors and prevent
fraud. A provider’s decision to participate in insurance networks affects billing and reimbursement, and
adherence to collection laws affects ethical financial practices. By mastering these practices, healthcare
professionals can effectively navigate billing and reimbursement while upholding the integrity of their
organizations.
Reference
French, L. L., & Turner, L. H. (2024). Administrative medical assisting (9th ed.). Cengage.
HTH 2305, Health Information Documentation Management 5
UNIT x STUDY GUIDE
Title
Learning Activities (Nongraded)
Nongraded learning activities are provided to aid you in your course of study. You do not have to submit
them. If you have questions, contact your instructor for further guidance and information.
These four MindTap assignments will introduce you to hands-on claim form processing measuring your
mastery of ULOs 3.4 and 5.3.
• Chapter 17 MOSS 4.0 Assessment 17.2A Batching and Billing Electronic Claims (Signal HMO)
• Chapter 17 MOSS 4.0 Assessment 17.3A Generating Paper (CMS-1500) Claims (FlexiHealth PPO)
• Chapter 17 MOSS 4.0 Assessment 17.4A Billing a Secondary Insurance
• Chapter 17 MOSS 4.0 Assessment 17.5A Billing Medicare as a Secondary Payer (MSP)
**## UnitVIIIEssayHTH.docx**
Unit VIII Essay
This two-page essay paper measures your mastery of ULOs 2.4, 3.4, 4.5, and 5.3.
In this unit, you reviewed the process for accurate claim processing and the various stages for claim status. Throughout the claim submission and billing process there are many checks and balances to ensure that reimbursement is a smooth process. In this essay you will display your knowledge of various claim submission practices.
Use Chapter 17 and 18 readings, your Unit VIII study guide, and at least two sources from the CSU Online Library and/or textbook to respond to the prompts below:
· Identify the main reasons why insurance companies deny patient insurance claims.
· When filing insurance claims, how do HIPAA transaction code set standards apply?
· Your textbook outlines categories of fraud and abuse under the False Claims Act. Discuss two of these cases and provide an example of each.
· How does CMS manage Medicare payments through RACs and MACs?
· What are some similarities and differences between a remittance advice (RA) and an explanation of benefits (EOB)? How can each of these documents clarify errors for their respective recipient?
Your response must be at least two pages in length, not counting the title page or references page. You are required to use at least two sources in your response. One must be found from the CSU Online Library, and the other can be your textbook and/or study guide. Adhere to APA Style when constructing this assignment, including a title and reference page, and in-text citations and references for all sources that are used.
**## UnitVIIIHTHStudyGuide.pdf**
HTH 2305, Health Information Documentation Management 1
Course Learning Outcomes for Unit VIII
At the end of this unit, you should be able to:
2. Discuss how medical coding impacts the health care revenue cycle.
2.4 Examine medical claim rejections caused by coding errors.
3. Analyze medical records for accuracy and completeness.
3.4 Perform claim submission activities using patient medical records.
4. Apply compliance standards that govern how patient information is collected, stored, and transmitted.
4.5 Explain HIPAA’s transaction and code set rule.
5. Describe how accurate documentation improves health care delivery and patient outcomes.
5.3 Discuss mechanisms that maintain the integrity of the Medicare program.
Required Unit Resources
Chapter 17: Insurance Claims Processing (ULOs 2.4, 3.4, 4.5, and 5.3)
Chapter 18: The Revenue Cycle: Fees, Credit, and Collection (ULOs 2.4, 3.4, 4.5, and 5.3)
Unit Lesson
Lesson: Claims Submission Practices (ULOs 2.4, 3.4, 4.5, and 5.3)
Introduction
Throughout this course we have aimed to better understand the key components of revenue cycle
management and regulatory compliance as they are essential for professionals working in administrative and
billing roles. From the initial patient encounter to the claim submission process, each aspect of the healthcare
revenue cycle ensures the sustainability of healthcare providers.
This section will focus on six important claim submission topics: claim submission guidelines, physician fee
schedules to include participating vs. non-participating providers, Recovery Audit Contractors (RACs),
Medicare Administrative Contractors (MACs), the False Claims Act, and collection laws.
Claim Submission Guidelines
Claims must adhere to specific guidelines to ensure timely payment and compliance with insurance policies.
As outlined in the last unit, insurance coverage verification is an important first step before submitting a claim.
The claim verifies patient eligibility, benefits, and coverage limitations, minimizing the risk of claim denial due
to lack of coverage or expired policies. Effective use of standardized coding, including ICD-10-CM, CPT, and
HCPCS codes, is necessary to describe diagnoses and procedures accurately. Incorrect coding can lead to
denied or rejected claims.
Each payer has specific deadlines, often referred to as the "timely filing limit." Missing these deadlines can
also result in claim denial. Submitting clean claims, free of errors and omissions, results in faster processing
and reduces the likelihood of rejections. Claims must also be supported by medical records, such as chart
notes and test results, to justify the services billed. Many providers use clearinghouses to review and submit
UNIT VIII STUDY GUIDE
Claims Submission Practices
HTH 2305, Health Information Documentation Management 2
UNIT x STUDY GUIDE
Title
claims electronically. Failure to follow these guidelines can lead to claim rejections, delays in payment, or
even penalties for noncompliance.
When all the data has been collected, the insurance claim will go through four major stages, which include:
Four Stages of Insurance Claim
The CMS-1500 claim form is accepted by most insurance carriers for outpatient services. The preferred
method for submission is electronic; however, there may be some qualifying circumstances where a paper
claim may be filed to an insurance carrier. All sections of the CMS-1500 claim form need to be completed
according to HIPAA transaction and code set standards. This transaction and code set rule makes sure that a
patient’s electronic protected health information remains secure during the transmission process. All covered
entities such as providers, clearinghouses, vendors, and health insurance carriers are required to adhere to
HIPAA standards in this area.
Claim status can be described in several ways. The table below lists several insurance claim statuses:
Insurance Claim Statuses
Clean Claim
Dirty Claim
Incomplete Claim
Denied Claim
Pending Claim
Rejected Claim
Suspended Claim
• A clean claim means that the claim submitted contains all necessary elements to be processed and
paid correctly.
• A dirty claim means that the claim was submitted with errors.
• An incomplete claim is missing required information and needs to be resubmitted to the insurance
carrier.
• A denied claim has been rejected due to a technical error or a payment policy such as a non-covered
benefit.
HTH 2305, Health Information Documentation Management 3
UNIT x STUDY GUIDE
Title
• Pending claims are held in suspense and need to be reviewed further, resulting in either a payment or
denial.
• Rejected claims have been submitted to the insurance payer but have technical errors, require
correction, or require reprocessing.
• Suspended claims are held by the insurance company and are considered pending due to an error or
a request for additional information.
Claim adjudication is the decision-making process the insurance company follows that will ultimately result in
payment or denial of the claim. If the claim meets all requirement parameters, it will be approved for payment
by the insurance carrier and sent to the physician or healthcare facility.
Medicare Administrative Contractors (MACs) and Recovery Audit Contractors (RACs)
Medicare Administrative Contractors (MACs) are private organizations that process Medicare claims and
serve as intermediaries between healthcare providers and the Centers for Medicare and Medicaid services
(CMS). Each MAC is responsible for a specific geographic jurisdiction. They manage claims processing,
enroll providers, and conduct audits to ensure compliance with Medicare regulations. MACs also provide
information on Medicare updates and serve as a resource for providers seeking clarification on billing
practices.
Recovery Audit Contractors (RACs) are organizations contracted by the Centers for Medicare and Medicaid
Services (CMS) to identify improper Medicare payments. RACs aim to ensure the accuracy of Medicare
claims and protect taxpayer funds by using automated and manual reviews to identify discrepancies in claims.
Examples include claims with incorrect coding or instances where medical necessity was not adequately
documented. Providers can appeal RACs determinations through a five-level appeal process, but it is key to
avoid errors upfront to minimize audit risks. Together, RACs and MACs work to maintain the integrity of the
Medicare program by reducing fraud, waste, and abuse.
False Claims Act
The False Claims Act (FCA) is a federal law designed to combat fraud in government programs, including
Medicare and Medicaid. Under the FCA, it is illegal to knowingly submit false claims for payment or approval.
This includes billing for services not rendered, using improper coding, or providing medically unnecessary
services. False claims are submitted with the intent to defraud Medicare and Medicaid.
Key provisions of the FCA include qui tam lawsuits, which allow individuals (known as whistleblowers) to file
lawsuits on behalf of the government if they have evidence of fraudulent activities. Whistleblowers may
receive a portion of any recovered funds. Violators of the FCA may face fines ranging from $12,000 to
$25,000 per false claim, in addition to treble damages (three times the government's losses). To avoid
violations, providers must implement compliance programs, conduct internal audits, and provide staff training
on ethical billing practices. Transparency and accountability are essential to prevent fraudulent claims.
Physician Fee Schedules
Physician fee schedules are essential tools that determine how healthcare providers are reimbursed for
services. They list procedures and their corresponding reimbursement rates, ensuring consistency and
fairness in payments. Both private and public insurers use fee schedules to standardize billing and simplify
claims. These schedules consider factors including service complexity, resource use, and geographic
location, helping streamline the revenue cycle for providers and insurers.
The Medicare Physician Fee Schedule (MPFS) specifically governs reimbursement for Medicare Part B
services, which are related to outpatient care. Administered by the Centers for Medicare & Medicaid Services
(CMS), it uses the Resource-Based Relative Value Scale (RBRVS) to assign relative value units (RVUs)
based on physician work, practice expenses, and malpractice costs. Geographic adjustments (GPCI) and an
annually updated conversion factor are applied to determine final reimbursement rates.
The MPFS affects providers differently depending on their participation status. Participating (PAR) providers
agree to accept the payer's allowed amount as full payment for services. In Medicare, PAR providers receive
HTH 2305, Health Information Documentation Management 4
UNIT x STUDY GUIDE
Title
100% of the allowed amount directly from Medicare and may only bill patients for coinsurance, copayments,
and deductibles. Being a PAR provider often leads to higher patient volumes due to lower out-of-pocket costs.
Non-participating (NonPAR) providers, on the other hand, can choose whether to accept on a claim-by-claim
basis. If they do not accept assignment, they can charge up to 115% of the Medicare limiting charge. Patients
may pay more upfront and are reimbursed by Medicare.
For example, Dr. Smith is a PAR provider, while Dr. Jones is not. Both treat Medicare patients. Dr. Smith bills
Medicare directly and receives full payment minus the patient’s coinsurance. Dr. Jones bills the patient, who
is responsible for submitting the claim to Medicare for partial reimbursement. Patients often prefer PAR
providers due to the simplified billing process and lower costs. Understanding fee schedules and participation
status is necessary for effective revenue cycle management and compliance.
Collection Laws
There are times patients can default on their financial responsibility. If regular statements have been sent, two
or three months have elapsed since the service, and the patient cannot be reached by telephone or email or a
promised payment has not been received, then it is time to send a collection letter (French, 2024). Debt
collection in healthcare must comply with federal and state laws to protect patients from abusive practices.
The Fair Debt Collection Practices Act (FDCPA) regulates third-party debt collectors, prohibiting harassment,
misrepresentation, and unfair fees. Collectors must identify themselves and the purpose of the call, provide
written validation of the debt upon request, and refrain from contacting patients at inconvenient times or
locations.
The Health Insurance Portability and Accountability Act (HIPAA), while primarily focused on patient privacy,
also affects collections by restricting how patient information is shared. State collection laws often provide
additional protections, such as caps on interest rates for medical debt or extended grace periods for payment.
Offering flexible payment plans, communicating clearly with patients about financial responsibilities, and
training staff on compliant collection practices can minimize delinquent accounts. Providers who violate
collection laws risk legal penalties and damage to their reputation, while ethical and transparent billing
practices build trust and improve patient satisfaction.
Conclusion
The healthcare revenue cycle involves several processes, from accurate claim submission to compliance with
audits and collection laws. Understanding the roles of RACs and MACs, adhering to claim submission
guidelines, and maintaining compliance with the False Claims Act are necessary to reduce errors and prevent
fraud. A provider’s decision to participate in insurance networks affects billing and reimbursement, and
adherence to collection laws affects ethical financial practices. By mastering these practices, healthcare
professionals can effectively navigate billing and reimbursement while upholding the integrity of their
organizations.
Reference
French, L. L., & Turner, L. H. (2024). Administrative medical assisting (9th ed.). Cengage.
HTH 2305, Health Information Documentation Management 5
UNIT x STUDY GUIDE
Title
Learning Activities (Nongraded)
Nongraded learning activities are provided to aid you in your course of study. You do not have to submit
them. If you have questions, contact your instructor for further guidance and information.
These four MindTap assignments will introduce you to hands-on claim form processing measuring your
mastery of ULOs 3.4 and 5.3.
• Chapter 17 MOSS 4.0 Assessment 17.2A Batching and Billing Electronic Claims (Signal HMO)
• Chapter 17 MOSS 4.0 Assessment 17.3A Generating Paper (CMS-1500) Claims (FlexiHealth PPO)
• Chapter 17 MOSS 4.0 Assessment 17.4A Billing a Secondary Insurance
• Chapter 17 MOSS 4.0 Assessment 17.5A Billing Medicare as a Secondary Payer (MSP)
**## UnitVIIIEssayHTH.docx**
Unit VIII Essay
This two-page essay paper measures your mastery of ULOs 2.4, 3.4, 4.5, and 5.3.
In this unit, you reviewed the process for accurate claim processing and the various stages for claim status. Throughout the claim submission and billing process there are many checks and balances to ensure that reimbursement is a smooth process. In this essay you will display your knowledge of various claim submission practices.
Use Chapter 17 and 18 readings, your Unit VIII study guide, and at least two sources from the CSU Online Library and/or textbook to respond to the prompts below:
· Identify the main reasons why insurance companies deny patient insurance claims.
· When filing insurance claims, how do HIPAA transaction code set standards apply?
· Your textbook outlines categories of fraud and abuse under the False Claims Act. Discuss two of these cases and provide an example of each.
· How does CMS manage Medicare payments through RACs and MACs?
· What are some similarities and differences between a remittance advice (RA) and an explanation of benefits (EOB)? How can each of these documents clarify errors for their respective recipient?
Your response must be at least two pages in length, not counting the title page or references page. You are required to use at least two sources in your response. One must be found from the CSU Online Library, and the other can be your textbook and/or study guide. Adhere to APA Style when constructing this assignment, including a title and reference page, and in-text citations and references for all sources that are used.
**## UnitVIIIHTHStudyGuide.pdf**
HTH 2305, Health Information Documentation Management 1
Course Learning Outcomes for Unit VIII
At the end of this unit, you should be able to:
2. Discuss how medical coding impacts the health care revenue cycle.
2.4 Examine medical claim rejections caused by coding errors.
3. Analyze medical records for accuracy and completeness.
3.4 Perform claim submission activities using patient medical records.
4. Apply compliance standards that govern how patient information is collected, stored, and transmitted.
4.5 Explain HIPAA’s transaction and code set rule.
5. Describe how accurate documentation improves health care delivery and patient outcomes.
5.3 Discuss mechanisms that maintain the integrity of the Medicare program.
Required Unit Resources
Chapter 17: Insurance Claims Processing (ULOs 2.4, 3.4, 4.5, and 5.3)
Chapter 18: The Revenue Cycle: Fees, Credit, and Collection (ULOs 2.4, 3.4, 4.5, and 5.3)
Unit Lesson
Lesson: Claims Submission Practices (ULOs 2.4, 3.4, 4.5, and 5.3)
Introduction
Throughout this course we have aimed to better understand the key components of revenue cycle
management and regulatory compliance as they are essential for professionals working in administrative and
billing roles. From the initial patient encounter to the claim submission process, each aspect of the healthcare
revenue cycle ensures the sustainability of healthcare providers.
This section will focus on six important claim submission topics: claim submission guidelines, physician fee
schedules to include participating vs. non-participating providers, Recovery Audit Contractors (RACs),
Medicare Administrative Contractors (MACs), the False Claims Act, and collection laws.
Claim Submission Guidelines
Claims must adhere to specific guidelines to ensure timely payment and compliance with insurance policies.
As outlined in the last unit, insurance coverage verification is an important first step before submitting a claim.
The claim verifies patient eligibility, benefits, and coverage limitations, minimizing the risk of claim denial due
to lack of coverage or expired policies. Effective use of standardized coding, including ICD-10-CM, CPT, and
HCPCS codes, is necessary to describe diagnoses and procedures accurately. Incorrect coding can lead to
denied or rejected claims.
Each payer has specific deadlines, often referred to as the "timely filing limit." Missing these deadlines can
also result in claim denial. Submitting clean claims, free of errors and omissions, results in faster processing
and reduces the likelihood of rejections. Claims must also be supported by medical records, such as chart
notes and test results, to justify the services billed. Many providers use clearinghouses to review and submit
UNIT VIII STUDY GUIDE
Claims Submission Practices
HTH 2305, Health Information Documentation Management 2
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claims electronically. Failure to follow these guidelines can lead to claim rejections, delays in payment, or
even penalties for noncompliance.
When all the data has been collected, the insurance claim will go through four major stages, which include:
Four Stages of Insurance Claim
The CMS-1500 claim form is accepted by most insurance carriers for outpatient services. The preferred
method for submission is electronic; however, there may be some qualifying circumstances where a paper
claim may be filed to an insurance carrier. All sections of the CMS-1500 claim form need to be completed
according to HIPAA transaction and code set standards. This transaction and code set rule makes sure that a
patient’s electronic protected health information remains secure during the transmission process. All covered
entities such as providers, clearinghouses, vendors, and health insurance carriers are required to adhere to
HIPAA standards in this area.
Claim status can be described in several ways. The table below lists several insurance claim statuses:
Insurance Claim Statuses
Clean Claim
Dirty Claim
Incomplete Claim
Denied Claim
Pending Claim
Rejected Claim
Suspended Claim
• A clean claim means that the claim submitted contains all necessary elements to be processed and
paid correctly.
• A dirty claim means that the claim was submitted with errors.
• An incomplete claim is missing required information and needs to be resubmitted to the insurance
carrier.
• A denied claim has been rejected due to a technical error or a payment policy such as a non-covered
benefit.
HTH 2305, Health Information Documentation Management 3
UNIT x STUDY GUIDE
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• Pending claims are held in suspense and need to be reviewed further, resulting in either a payment or
denial.
• Rejected claims have been submitted to the insurance payer but have technical errors, require
correction, or require reprocessing.
• Suspended claims are held by the insurance company and are considered pending due to an error or
a request for additional information.
Claim adjudication is the decision-making process the insurance company follows that will ultimately result in
payment or denial of the claim. If the claim meets all requirement parameters, it will be approved for payment
by the insurance carrier and sent to the physician or healthcare facility.
Medicare Administrative Contractors (MACs) and Recovery Audit Contractors (RACs)
Medicare Administrative Contractors (MACs) are private organizations that process Medicare claims and
serve as intermediaries between healthcare providers and the Centers for Medicare and Medicaid services
(CMS). Each MAC is responsible for a specific geographic jurisdiction. They manage claims processing,
enroll providers, and conduct audits to ensure compliance with Medicare regulations. MACs also provide
information on Medicare updates and serve as a resource for providers seeking clarification on billing
practices.
Recovery Audit Contractors (RACs) are organizations contracted by the Centers for Medicare and Medicaid
Services (CMS) to identify improper Medicare payments. RACs aim to ensure the accuracy of Medicare
claims and protect taxpayer funds by using automated and manual reviews to identify discrepancies in claims.
Examples include claims with incorrect coding or instances where medical necessity was not adequately
documented. Providers can appeal RACs determinations through a five-level appeal process, but it is key to
avoid errors upfront to minimize audit risks. Together, RACs and MACs work to maintain the integrity of the
Medicare program by reducing fraud, waste, and abuse.
False Claims Act
The False Claims Act (FCA) is a federal law designed to combat fraud in government programs, including
Medicare and Medicaid. Under the FCA, it is illegal to knowingly submit false claims for payment or approval.
This includes billing for services not rendered, using improper coding, or providing medically unnecessary
services. False claims are submitted with the intent to defraud Medicare and Medicaid.
Key provisions of the FCA include qui tam lawsuits, which allow individuals (known as whistleblowers) to file
lawsuits on behalf of the government if they have evidence of fraudulent activities. Whistleblowers may
receive a portion of any recovered funds. Violators of the FCA may face fines ranging from $12,000 to
$25,000 per false claim, in addition to treble damages (three times the government's losses). To avoid
violations, providers must implement compliance programs, conduct internal audits, and provide staff training
on ethical billing practices. Transparency and accountability are essential to prevent fraudulent claims.
Physician Fee Schedules
Physician fee schedules are essential tools that determine how healthcare providers are reimbursed for
services. They list procedures and their corresponding reimbursement rates, ensuring consistency and
fairness in payments. Both private and public insurers use fee schedules to standardize billing and simplify
claims. These schedules consider factors including service complexity, resource use, and geographic
location, helping streamline the revenue cycle for providers and insurers.
The Medicare Physician Fee Schedule (MPFS) specifically governs reimbursement for Medicare Part B
services, which are related to outpatient care. Administered by the Centers for Medicare & Medicaid Services
(CMS), it uses the Resource-Based Relative Value Scale (RBRVS) to assign relative value units (RVUs)
based on physician work, practice expenses, and malpractice costs. Geographic adjustments (GPCI) and an
annually updated conversion factor are applied to determine final reimbursement rates.
The MPFS affects providers differently depending on their participation status. Participating (PAR) providers
agree to accept the payer's allowed amount as full payment for services. In Medicare, PAR providers receive
HTH 2305, Health Information Documentation Management 4
UNIT x STUDY GUIDE
Title
100% of the allowed amount directly from Medicare and may only bill patients for coinsurance, copayments,
and deductibles. Being a PAR provider often leads to higher patient volumes due to lower out-of-pocket costs.
Non-participating (NonPAR) providers, on the other hand, can choose whether to accept on a claim-by-claim
basis. If they do not accept assignment, they can charge up to 115% of the Medicare limiting charge. Patients
may pay more upfront and are reimbursed by Medicare.
For example, Dr. Smith is a PAR provider, while Dr. Jones is not. Both treat Medicare patients. Dr. Smith bills
Medicare directly and receives full payment minus the patient’s coinsurance. Dr. Jones bills the patient, who
is responsible for submitting the claim to Medicare for partial reimbursement. Patients often prefer PAR
providers due to the simplified billing process and lower costs. Understanding fee schedules and participation
status is necessary for effective revenue cycle management and compliance.
Collection Laws
There are times patients can default on their financial responsibility. If regular statements have been sent, two
or three months have elapsed since the service, and the patient cannot be reached by telephone or email or a
promised payment has not been received, then it is time to send a collection letter (French, 2024). Debt
collection in healthcare must comply with federal and state laws to protect patients from abusive practices.
The Fair Debt Collection Practices Act (FDCPA) regulates third-party debt collectors, prohibiting harassment,
misrepresentation, and unfair fees. Collectors must identify themselves and the purpose of the call, provide
written validation of the debt upon request, and refrain from contacting patients at inconvenient times or
locations.
The Health Insurance Portability and Accountability Act (HIPAA), while primarily focused on patient privacy,
also affects collections by restricting how patient information is shared. State collection laws often provide
additional protections, such as caps on interest rates for medical debt or extended grace periods for payment.
Offering flexible payment plans, communicating clearly with patients about financial responsibilities, and
training staff on compliant collection practices can minimize delinquent accounts. Providers who violate
collection laws risk legal penalties and damage to their reputation, while ethical and transparent billing
practices build trust and improve patient satisfaction.
Conclusion
The healthcare revenue cycle involves several processes, from accurate claim submission to compliance with
audits and collection laws. Understanding the roles of RACs and MACs, adhering to claim submission
guidelines, and maintaining compliance with the False Claims Act are necessary to reduce errors and prevent
fraud. A provider’s decision to participate in insurance networks affects billing and reimbursement, and
adherence to collection laws affects ethical financial practices. By mastering these practices, healthcare
professionals can effectively navigate billing and reimbursement while upholding the integrity of their
organizations.
Reference
French, L. L., & Turner, L. H. (2024). Administrative medical assisting (9th ed.). Cengage.
HTH 2305, Health Information Documentation Management 5
UNIT x STUDY GUIDE
Title
Learning Activities (Nongraded)
Nongraded learning activities are provided to aid you in your course of study. You do not have to submit
them. If you have questions, contact your instructor for further guidance and information.
These four MindTap assignments will introduce you to hands-on claim form processing measuring your
mastery of ULOs 3.4 and 5.3.
• Chapter 17 MOSS 4.0 Assessment 17.2A Batching and Billing Electronic Claims (Signal HMO)
• Chapter 17 MOSS 4.0 Assessment 17.3A Generating Paper (CMS-1500) Claims (FlexiHealth PPO)
• Chapter 17 MOSS 4.0 Assessment 17.4A Billing a Secondary Insurance
• Chapter 17 MOSS 4.0 Assessment 17.5A Billing Medicare as a Secondary Payer (MSP)
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