Healthcare IT EMR PMS

Practice Management software (Medical Billing system)

Practice Management software (Medical Billing system) As a developer, i have written PMS software on different computer Languages for more than 5 times. In the year 2003, started writing coding for Practice management System in Microsoft Visual Basic 6, and then Microsoft access for small providers, and then move to VB.Net and now in 2015, written a complete Practice Management system, purely using Java and other Open source technologies to achieve the same result in WEB. In 2012, again I was involved in developing an independent system for PMS using VB6 with SQL server 2005. I really enjoyed myself and love to work/complete that project. One of my best period in my life. But unfortunately, we could not able to market the product because of VB6 no longer used widely in the industry.

Here are some video demos and screen shots of the PMS software

Video Demo

1. Master Screens

2. Patient Demographics

3. Charge Entry

4. Submit Electronic Claims

5. Reports

Screen shots
1. Practice Management System (PMS) Sample screens Part 1
2. Practice Management System(PMS) Sample Screens Part 2
3. Patient demographics and Patient case screens
4. Charge Entry screen design

Difference Between 837 Institutional and 837 Professional

837 Professional

Revenue codes are 3-digit numbers that are used on hospital bills to tell the insurance companies either where the patient was when they received treatment, or what type of item a patient might have received as a patient. A medical claim will not be paid if this is missing from a bill.

Revenue codes go along with procedure codes. When putting them in a charge master, you would add the correct revenue code to the CPT code you were going to use for a particular department. It's the use of revenue codes which allows hospitals to use the same CPT code in multiple departments because it will show which department the services were provided in.

An easy example to use here would be to match up CPT code 99282, which is for an emergency room visit of low to moderate severity, and revenue code 450, which stands for emergency room. In this case, revenue code 450 is the only code that could be used for this CPT code, thus making this one easy to code.

In short, Revenue Codes are descriptions and dollar amounts charged for hospital services provided to a patient. The revenue code tells an insurance company whether the procedure was performed in the emergency room, operating room or another department.For example, stitches may be given to a patient in the emergency room, or in a completely different area of the hospital like the maternity ward.

837 Specification

Both sets of 837 specifications are same. The only differences would be claim specific data that pertains to a single transaction. All three transactions contain ISA, GS and ST segments but some data and qualifying codes are specific to the type of 837. Another way to quickly identify which type of 837 is being encountered is by the codes sent in the GS-08 or in the ST-03. Professionals use a 005010X222, Institutional uses a 005010X223 and Dental uses a 005010X224.

837 Institutional Transaction Sample

Data Element	Value
Subscriber:	Clark Kent
Subscriber Address:	123 Fake St. Pittsburgh, PA 15123
Sex:	M
DOB:	May 3, 2006
Insurance ID#:	000000001-03
Payer ID #:	987654321
Patient:	Clark Kent
Primary Payer:	UPMC Health Plan
Submitter:	Line Medical Center
EDI #:	111111111
Receiver:	UPMC Health Plan
EDI #:	222222222
Billing Provider:	Line Medical Center
Provider #	111111111
Address:	123 Line Blvd. Pittsburgh, PA 15123
Contact Person and Number	Dr. J, 412-454-1000
Attending Physician:	William J. Line, MD
Attending Physician NPI:	2222222222
UPIN #	P97777
Patient Account Number:	333333
Date of Admission:	04/17/2011
Place of Service:	Hospital
Occurrence Codes and Dates:	41 on 5/1/2010 27 on 7/15/2010 33 on 4/15/2010 C2 on 4/10/2010
Value Code	30
Value Amount	$20.
Condition Codes:	01
ICD-9 Procedure Code and Date:	449.1, 7/30/2010
Principal Diagnosis Code:	250.00
Secondary Diagnosis Codes:	789.01
Revenue Codes	0300 0320 0270
Services:	HC
Institutional Services Rendered:	81000 76092 J1120
Line Item Charge Amounts	$120. $50. $30.
Total Charges:	$200.

Example 837 Data String
The following transmission sample illustrates the file format used for an EDI transaction, which includes delimiters and data segment symbols. The sample includes the ISA (Interchange Control) and GS (Functional Group) portions of a transmission, and only one ST/SE segment. This sample contains a line break after each tilde to provide an easy illustration of where a new data segment begins.

ISA*00* *00* *ZZ*111111111 *33*7306849549*110418*1336*^*00501*000000312*1*P*:~
GS*HC*111111111*7306849549*20110418*1336*312005010X223~
ST*837*0034*005010X223A1~
BHT*0019*00*3920394930203*20100816*1615*CH~
NM1*41*2* LINE MEDICAL CENTER*****46*111111111~
PER*IC*DR. J*TE*4124541000~
NM1*40*2*UPMCHP*****46*222222222~
HL*1**20*1~
NM1*85*2* LINE MEDICAL CENTER*****XX*1111111111~
N3*123 LINE BLVD~
N4*PITTSBURGH*PA*15123~
REF*EI*111111111~
PER*IC*CLARK KENT*TE*00000000101*FX*6145551212~
HL*2*1*22*0~
SBR*P*18*XYZ1234567******BL~
NM1*IL*1*KENT*CLARK*S**MI*00000000101~
N3*123 FAKE ST~
N4*PITTSBURGH*PA*15123~
DMG*D8*19820503*M~
NM1*PR*2*UPMCHP*****PI*222222222~
CLM*333333 *200***13:A:1***A**Y*Y~
DTP*434*RD8*20110417-20110417~
CL1*1*9*01~
REF*F8*ASD0000123~
HI*BK:25000~
HI*BF:78901~
HI*BR:4491:D8:20100730~
HI*BH:41:D8:20100501*BH:27:D8:20100715*BH:33:D8:20100415*BH:C2:D8:20100410~
HI*BE:30:::20~
HI*BG:01~
NM1*71*1*LINE*WILLIAM*AL***34*2222222222~
REF*1G*P97777~
LX*1~
SV2*0300*HC:81000*120*UN*1~
DTP*472*D8*20100730~
LX*2~
SV2*0320*HC:76092*50*UN*1~
DTP*472*D8*20100730~
LX*3~
SV2*0270*HC:J1120*30*UN*1~
DTP*472*D8*20100730~
SE*41*0001~
GE*1*312~
IEA*1*000000312~

Are you looking for a solution to generate 837P or 837I in your medical billing product? Then you are in the right place.

I am Senthil Muthiah, A technology-driven professional with over 20 years of experience including nearly 9 years in Software Development and Business Analysis. Well versed with US Healthcare Domain – Electronic Medical Record (EMR) & Medical Billing. In particular, 15 years of experience in the Healthcare domain specifically in Claim processing, Claims adjudication, clearing house-related processes.

Consultation Option

1. if your product is in java, then we are very close. You can buy my java Spring Boot API Service source code which converts JSON to EDI and vice versa.

Here is the demo link
https://demo.nagatabilling.com/NagataEDITool/login.zhtml

2. if your product in different technology, then I will help your developer to create an EDI file using Pseudo. Here is a sample Pseudocode

For more detailed resume and skills, please refer to the following link

· Online Resume

· Linked Profile

My Email ID : vbsenthilinnet@gmail.com

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Understanding EDI 835 Electronic Remittance Advice

First Let us understand the Workflow

Patient Calls / Walks to the Physician(or Doctor or Provider) office to fix an Appointment.
On the Appointment day, patient checked In to the office and give all the demographics information(last name, first name, DOB, address,etc.) and insurance information;
Doctor check the Patient Previous medical record and does the treatment to the patient for the current problem(or Disease);
Each Disease represents by a Code. That code is called ICD. It is also called Dx Codes or Problems or ICD Codes or Diagnosis Codes; So for each patient visit, doctor choose the correct ICD Code;
Each treatment represent a code and that code is called CPT. It is also called Procedure Codes; So for each patient visit, doctor choose the correct CPT Code;
Once all the process are over, now patient leaves the doctor room. Now the doctor office to get paid for the service provided to the the patient;
Since the patient has health insurance, so patient leaves(checked out) the clinic and ask the clinic to get money from the insurance company;
Now the Billing department of the Clinic prepare the Bill(Claim) by entering all the necessary information. This process is called Charge entry or Charge Posting;
Once the Claim is prepared and send to the Insurance company for payment;
Billing Department using the Practice Management System (PMS), send the claim via EDI File. The EDI Transaction used to create the claim in the Electronic format is EDI 837
Refer the Following Link to understand more on EDI 837
What is an EDI ?
EDI 837 Health Care Claim
Once the 837 EDI File is created, then it will be send to the Clearing House.
Clearing House will validate the EDI File and send to the particular insurance company.
Insurance Company Process the Claim and prepare the Check (Cheque) and Statement(This statement is called Explanation of Benefits OR Remittance Advisory (EOB)
Refer the following Link for EOB
EOB - An explanation of benefits
Insurance company also generates the EDI 835 File using their System. EDI 835 is electronic version of EOB.
The Electronic Remittance Advice (ERA), or 835, is the electronic transaction which provides claim payment information in the HIPAA mandated ACSX12 005010X221A1 Format. These files are used by practices, facilities, and billing companies to Auto Posting payments into their systems.
Refer the following link for Sample
EDI 835 Health Care Claim Payment/Advice:
Once the Check, Statement (EOB) and ERA File are ready, then insurance company first send the ERA File and EOB to the clearing house.Second , insurance company will send the Check and copy of the EOB to the billing provider address . Third for each patient in the statement, the copy of the EOB will be emailed.
Now the Billing Team download the EOB and ERA from the clearing house. If the PMS system has Auto Posting Using ERA File, then they will download the EDI File and do auto posting. If there is no auto posting Module, then they will download the EOB PDF and apply posting manually.Remember, some time, ERA/EOB file will be reach the clearing house, even before the insurance company send the payment check to the doctor.

Are you looking for EDI Integration with the clearing house for EDI 835, then please contact me for more information.
And also, you can check our Tool which converts EDI 835 to PDF or Push EDI 835 information into database via JSON.

Parse EDI 835 into PDF
Schedule Payment ERA File (EDI 835) Parsing Job

      Here is the demo link
      https://demo.nagatabilling.com/NagataEDITool/login.zhtml
      User Name: demo, password: demo

For more detailed resume and skills, please refer to the following link

· Online Resume

· Linked Profile

My Email ID : vbsenthilinnet@gmail.com

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Well, You have learned the basics of ZK Framework and now you are ready to go to develop a Complete commercial Application or Sample Application. But how to start ? You might be end with lot of questions such as “Is there any template available ?”, “any support available for the project template”?, etc.

Here it is. I have developed a small Project start up kit with the following features

1. Menus are Dynamic for N Level support. What does it mean ? Well, in the modern Web application, you might want to visible/invisible Menu by each users type (aka Dynamic Menu). This template has that option . All the Menu caption and levels are Stored in MySQL Database and after login , it will retrieve the menus assigned only for the user.

2. Apart from Menu, You might be interested in giving permission to add/delete/edit for CRUD Based screens. Using this template, you can also control by each user.

3. For all the CRUD Based screens, Export to Excel option template is provided.

4. Sample CRUD Screen are Provided to ready to start.

5. Integrated with Spring Security

6. Integrated with Spring Hibernate Security.

7. Base DAO and DAO implementation classes are provided.

8. Utilising ZK's MVVM databinding.

9. Project comes with 5 different themes . So you can set theme by each user and after login, the selected theme will be applied.

Apart from the above, the Most important option is “ Support!!!!!!!”. Users who buying this kit, unlimited support will be provided to help them to understand the structure. If you are interested in buying this start up kit, please email to me at vbsenthilinnet@gmail.com

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EDI 835 Health Care Claim Payment/Advice

Looking for best Practice Management software ? Please email at vbsenthilinnet@gmail.com

If you are new to Medical Billing, then please read this article first.
If you are new to EDI, then read the following articles

1. What is an EDI ?
2. EDI Transactions
3. Understanding EDI Structure
4. EDI Instruction

EDI 835 Health Care Claim Payment/Advice

The 835 is used primarily by Healthcare insurance plans to make payments to healthcare providers, to provide Explanations of Benefits (EOBs), or both. When a healthcare service provider submits an 837 Health Care Claim, the insurance plan uses the 835 to detail the payment to that claim, including:

What charges were paid, reduced or denied
Whether there was a deductible, co-insurance, co-pay, etc.
Any bundling or splitting of claims or line items
How the payment was made, such as through a clearinghouse

A particular 835 document may not necessarily match up one-for-one with a specific 837. In fact, it is not uncommon for multiple 835 transactions to be used in response to a single 837, or for one 835 to address multiple 837 submissions. As a result, the 835 is important to healthcare providers, to track what payments were received for services they provided and billed. And also one EDI 835 File, may contain multiple Checks i.e Multiple EOBs

Before going into detail, Let us understand how insurance Payer make the Payment. Please understand and have good understanding on the following topics.

1. What is Copay, Co Insurance and Deductible in Insurance Payment Posting ?
2. EOB – Explanation of Benefits

The following EDI Parser for 835 Developed by me using java Spring Boot . Please contact me for source code .

The following video demo explain how to make restful web service api for the service.

Enter video caption here

To Demonstrate the various use cases of EDI 835, I've developed an internal Web application tool to test my own API. Here are some use cases.
Example 1: One Claim with Co-pay Amount

Enter video caption here

Example 2: Coinsurance and Deductible Example

Enter video caption here

I have developed a small Parsing tool in VB.NET/VB.6/Java . This tool will take the EDI File and convert into PDF File as shown here.

Looking for best Practice Management software ? Please email at vbsenthilinnet@gmail.com

Questions or feedback are always welcome. You can email me at vbsenthilinnet@gmail.com

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271–5010 Health Care Eligibility Benefit Response - Subscriber Demographic Information and Subscriber Date –Loop 2100C

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How to process Co pay, Co Insurance and Deductible Amount in Insurance Payment Posting

Let us first see what is Co-pay, Co insurance and Deductible

Co-payment

A co-payment, or co-pay, is the flat amount you pay at the time of a medical service or to receive a medication. All insurance companies provide these costs to you up front. Insurance companies use these co-pays in part to share expenses with you.

Co-pay example: A doctor’s office visit might have a co-pay of $30. The co-pay for an emergency room visit will usually cost more, such as $150. However, there is a maximum amount you will pay for coinsurance and co-pays. This is called the coinsurance and co-pay maximum.

Coinsurance

Coinsurance and co-payments are not the same thing. A co-payment is a specific amount that you pay to the provider before you meet your deductible. Coinsurance is a percentage of a provider’s charge that you may be required to pay after you’ve met the deductible.

Example of coinsurance: Say you’ve already paid out (or met) your $147 Medicare deductible and your coinsurance is 20 percent. For a $100 health care bill, you would pay $20 and your insurance company would pay $80.

When you’ve met your deductible, you’ll have to pay coinsurance (Medicare is set to 20 % of the provider’s charge) until you reach your out-of-pocket maximum. After that, the insurance company will pay for all covered services to the policy maximum for the remainder of the year

Deductible

A deductible is the amount you pay for health care services before your health insurance begins to pay. For Medicare, this resets every year on January 1st.
Part B Deductible for 2014: $147 per year (for most people).

Difference Between Co-pay and Coinsurance

Coinsurance: Coinsurance is a term used for a percentage amount you are responsible for. For example if your insurance policy is 80/20, then the insurance is 80%. You are responsible for paying 20% of your bill. The 20% that you owe is called "coinsurance." This amount can vary as the cost of the services performed varies.

Co-pay: A co-pay is usually a flat fee. For example, every time you go to the doctor you pay a 25.00 co-pay for the office visit, regardless of the level of service you receive.

While doing insurance Posting in PMS Software, line item may contain Co pay, Co Insurance and Deductible. The following are guidelines to handle the same.

PR - 1 Deductible Amount

Description:

In insurance policy terms, a deductible is the amount of money which the insured party must pay before the insurance company's own coverage plan begins. In practical terms, insurance companies include a deductible in their policies to avoid paying out benefits on relatively small claims.

Action:

1. We need to bill the patient.

2. If the patient has another insurance coverage which covers deductible we can file to that insurance, if the policy not cover primary deductibles we have no other way rather than billing the patient.

Claim processed as PR - 2 Coinsurance Amount

PR - 2 Coinsurance Amount

Coinsurance amounts are generally 20% of the Medicare fee schedule. Physicians must collect the unmet coinsurance from the beneficiary. Consistently waiving the coinsurance may be interpreted as program abuse. If a beneficiary is unable to pay the coinsurance, the physician should ask him or to sign a waiver that explains the financial hardship. If no waiver is signed, the beneficiary’s medical record should reflect normal and reasonable attempts to collect, before the charge is written off.

Action :

1. We need to file the claim to secondary insurance

2. If there is no secondary insurance we can bill the patient

EOB - PR - 3 Co-payment Amount

PR - 3 Co-payment Amounts

Description:

Co-payment A specified dollar amount or percentage of the charge identified that is paid by a beneficiary at the time of service to a health care plan, physician, hospital, or other provider of care for covered service provided to the beneficiary.

Cost sharing the general set of financial arrangements whereby the consumer must pay out-of-pocket to receive care, either at the time of initiating care, or during the provision of health care services, or both. Cost sharing can also occur when an insured pays a portion of the monthly premium for heath care insurance.

Action:

1. We need to bill the patient.

2. If there is any other insurance coverage if the patient has, we can bill to that insurance also.

Co-pay Work Flow

Patient walks into doctor office .
People at the Reception desk ask the patient insurance card (it is like credit card) and see any amount mention in the card as co-pay. If not, they will do the eligibility check and see whether any co-pay is required. Insurance eligibility check will give the complete details where insurance is active , any co-pay amount to be paid, etc..
Once they determined, if co-pay amount need to be paid, then reception desk will do either of the following
   Option 1:    Will collect the amount and give the Patient receipt.
   Option 2:    Will Inform the patient that he/she need to pay copy after the Insurance payment is over. After insurance payment is over, we will send the patient statement to you and then you can pay your co-                      pay amount.
    Option 3:    Will inform the patient after the Insurance payment is over, we will send the claim to your secondary insurance and try to get the co-pay amount.

In most cases, doctor office will not collect the co-pay amount at the time of visit because either they may not known the exact amount or it   may be cover by the secondary insurance. Please remember, the exact co-pay amount is calculated after insurance processing the claim and will be informed in the EOB.
Billing company send the claim to Insurance company.
Insurance company process the claim and if any co-pay has to paid by patient, then they will mention that amount in the EOB.
Now the billing company transfer that amount from insurance side to patient side if patient does not have secondary insurance. (Move to Patient responsibility) if patient has secondary insurance, then they will send to secondary insurance and try to collect it from secondary insurance. Please remember, while sending the claim to secondary insurance, we must send the patient primary insurance information and what amount has been paid and what amount has been left over.
If secondary insurance does not cover that amount, then it will be transferred to patient responsibility.

Deductible Workflow

Simple example, once you taken the policy , insurance company says, first patient has to Pay $ 500 and then insurance will start paying for the medical services

1. Patient walks into doctor office A.
2. Doctor done some medical services to Patient.
3. Billing Department send the claim to Insurance. Let the bill amount is $ 200.
4. Insurance find that the patient has to pay $ 500 first and then they can start paying.
5. Now the insurance company send the EOB saying $200 is Deductible. Please note, here insurance company does not pay any amount. And also the insurance company system reduces this $ 200 from $ 500 and update the record balance as $300 deductible balance
6. Billing Department transfer this $ 200 to patient responsibility if the patient does not have secondary insurance. If the patient has secondary insurance, then claim send to secondary insurance for this amount.

**********************************
1. Same Patient walks into same doctor office A or doctor office B or lab.
2. Some medical Services done to Patient.
3. Billing Department send the claim to Insurance. Let the bill amount is $ 100
4. Insurance find that the patient has to pay $ 500 first and then they can start paying. And also records says $200 already met in the previous visit.
5. Now the insurance company send the EOB saying $100 is Deductible. Please note, here insurance company does not pay any amount.
And also the insurance company system reduces this $ 100 from $ 300 and update the record balance as $200 deductible balance.
6. Billing Department transfer this $ 100 to patient responsibility if the patient does not have secondary insurance. If the patient has secondary insurance, then claim send to secondary insurance for this amount.

**********************************

1. Same Patient walks into same doctor office A or doctor office B or lab.
2. Some medical Services done to Patient.
3. Billing Department send the claim to Insurance. Let the bill amount is $ 600
4. Insurance find that the patient has to pay $ 500 first and then they can start paying. And also records says $300 already met in the previous visit.
5. Now the insurance company send the EOB saying $200 is Deductible and Payment is $400
6. Billing Department transfer this $ 200 to patient responsibility if the patient does not have secondary insurance. If the patient has secondary insurance, then claim send to secondary insurance for this amount.

Questions or feedback are always welcome. You can email me at vbsenthilinnet@gmail.com

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EOB - An explanation of benefits

Here is the workflow on How does the EOB Statement comes to the Provider Office.

The patient visits the Clinic or Provider office.
The doctor sees the patient and render the Medical Service.
The Bill(Claim) is prepared to the Insurance Company via Clearing House.
Insurance Company Process the Claim and Send the Check Payment to the Provider.
Along with the Check, a statement (EOB) will also send to the Provider office. The Statement tells the details of the Payment.

An explanation of benefits (commonly referred to as an EOB form) is a statement sent by a health insurance company to covered individuals explaining what medical treatments and/or services were paid for on their behalf.

EOBs, or explanation of benefits, are the forms that are sent out by the insurance carriers in response to the claims that were filed. If the payment is being made, the EOB is either attached to or included in the check. If no payment is made the EOB should contain information explaining why no payment was made.

Electronic Remittance Advice – ERAs
Sometimes EOBs are received as an electronic file called an ERA or electronic remittance advice. The ERA would replace the paper EOB. Usually, a provider has to sign up to receive ERAs. In order to receive ERAs, the provider must be set up to receive their payments through EFT or electronic funds transfer. This is when the insurance carrier transfers any payments due to a provider directly into a specified bank account through electronic funds transfer.

The insurance companies like ERAs because it saves them in printing, paper, and postage. They no longer have to print out the checks and eobs and have them stuffed into envelopes and mailed to the provider. With ERAs, they just create the eob as an electronic file usually in a format called an 835. The provider downloads the ERA 835 file from h the clearinghouse.

The advantage of receiving ERAs for the provider is that it eliminates the mail time and can cut down on paper. If the provider stores the file on their computer they don’t have to file the paper copy of the eob. The other advantage is that most practice management systems will use the ERA to automatically post the payments. This saves a lot of time manually entering the payments.

What action needed at the Provider Office when they receive EOB?
Once the provider downloads the ERA the payments must be applied to the appropriate patients and any secondary claims should be submitted or patient balances should be billed. Sometimes ERAs contain rejections and those should be handled as well. This Process called Insurance Payment Posting

EOB includes following details which is necessary during payment posting process in order to post the payments to the respective patient account:

Payer Name: Name of the Insurance company
Payer Address: Address of the Insurance company
Patient Name: Name of the patient
Provider Name and address
Member ID#: It is also known as policy identification number
Claim received Date: It is the date the claim received by payer from provider (Billing office).
Payment or denial date: It is the date the claim processed or denied by payer.
DOS – Date of Service: It is the date service provided from healthcare provider to patient.
CPT Code – Procedure code
Billed Amount – It is also called as charge amount for each service performed by healthcare providers.
Claim Number – It is also called as Document control number or Transaction control Number, which will be assigned by the payer for each claim as soon as they receive in their system.

If claim paid then following details:

Allowed Amount: It is an amount, payer deems fair for a specific service or procedure. AA = PA+ PR.
Paid amount: Paid Amount = Allowed Amount – Patient responsibility.
Patient Responsibility: This is the balance percentage of reimbursement that the patient has to pay according to his policy with the insurance company. This is paid either by the patient or his secondary insurance if they have one.
Write off Amount: It is an amount that is waived off by the provider. Write off Amount = Billed Amount – Allowed Amount.
Check#
Check date
Electronic Fund Transfer# (EFT#)
EFT date

If claim denied, then it will have the following details.

Denial Code
Denial Reason

You can also download some Sample EOBs

1. Simple EOB 1
2. Simple EOB 2
3. Co-pay Example
4. EOB With Multiple Claims
5. EOB With Multiple Check (More than one Posting or Batch)
6. EOB With Multiple Check (More than one Posting or Batch)

How to Read and Understand an EDI File ?

EDI Instructions

Understanding EDI Structure

What is an EDI ?

Medical Billing Workflow

Note: In medical billing, people often use different terms to refer to the same thing. Here are some of the most commonly used variations:

A Doctor is also referred to as a Physician or Provider.
A Doctor’s Clinic is also called a Doctor’s Office, Physician’s Office, Provider’s Practice, or Provider’s Facility. The terms facility, practice, clinic, and office all refer to the place where a patient meets with a doctor.
Insurance is also referred to as a Payer or Carrier.

Use Case 1: In-House Billing

A patient calls or walks into the Physician’s (Doctor’s or Provider’s) office to schedule an appointment.

On the appointment day, the patient checks in, provides demographic details (name, DOB, address, etc.), and gives insurance information.

The doctor reviews previous medical records and prescribes treatment.

ICD Codes (Diagnosis Codes)

Each disease is represented by an ICD Code (also called Dx Codes, Problems, or Diagnosis Codes).
ICD codes help classify diseases, symptoms, and causes of death.

CPT Codes (Procedure Codes)

Each treatment is represented by a CPT Code (also called Procedure Codes).
CPT codes describe the procedures performed on the patient.

After the consultation, the patient leaves, and the doctor’s office submits a claim to the insurance company for payment.

Use Case 2: In-House Billing with Two Insurances

Some patients have multiple insurance policies:

The first insurance billed is the Primary Insurance.
The second insurance is the Secondary Insurance.
If applicable, the third is the Tertiary Insurance.

Once the primary insurance pays its portion, the balance is sent to the secondary insurance for further processing.

Use Case 3: Self-Pay

Patients without insurance are considered self-pay and must pay for services out-of-pocket.

The clinic generates a statement and sends it to the patient for payment.

Use Case 4: Patient Responsibility

Some insurance policies only cover a percentage (e.g., 80%). The remaining amount is the patient's responsibility.

The balance is billed to the patient after the insurance company processes the claim.

Use Case 5: Clearinghouse Workflow

After submitting a claim, the billing team sends an EDI 837 file to the clearinghouse.

The clearinghouse validates the claim and forwards it to the appropriate insurance company.

Once processed, the insurance company generates an EDI 835 file (electronic remittance advice) and sends it along with the Explanation of Benefits (EOB).

Use Case 6: Co-Pay Workflow

A co-pay is a fixed amount the patient must pay at the time of service.

Co-pay details are verified through the patient's insurance card or an eligibility check.

Use Case 7: Deductible Workflow

A deductible is the amount a patient must pay before insurance coverage begins.

For example, if a patient has a $500 deductible, they must pay that amount first before the insurance covers any costs.

Use Case 8: Lab Billing

If a doctor requests lab tests, the samples are sent to a laboratory.

Once results are ready, the lab's billing department submits a claim to the insurance company for payment.

Example Patient Conversation

Jake: Calls the MyFirstHealth clinic.

Linda: Hello, this is Linda from MyFirstHealth Clinic. How can I help you?

Jake: Hi, I’d like to book an appointment with Dr. John for today at 5:30 PM.

Linda: Sure! Have you visited our clinic before?

Jake: No, this is my first time.

Linda: Okay. May I have your last name, first name, and date of birth?

Jake: My last name is Jake, my first name is Mike, and my DOB is XX/XX/XXXX.

Linda: Got it! Please arrive 15 minutes early to complete the check-in process.

Jake: Will do. Thanks!

At 5:15 PM, Jake arrives at the clinic and checks in.

Jake: Hi, I have an appointment with Dr. John at 5:30 PM.

Linda: Welcome, Jake! Do you have insurance?

Jake: Yes, my employer provides insurance. Do you need that information?

Linda: Yes, please.

Jake: Apart from my employer’s insurance, I also have a family insurance plan.

Linda: Great! We’ll list your employer’s insurance as primary and your family plan as secondary.

Jake: That makes sense. Thanks!

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Maintaining Patient Insurance

Many patients only have one insurance plan but it is possible for a patient to have two or three medical insurance policies. The first insurance billed would be the primary insurance. The next one billed would be the secondary, and the last would be the tertiary.

After payment is received from the primary insurance, the secondary is then billed on a new claim with the information regarding payment from the primary insurance in the form of a photocopy of the explanation of benefits. If there is a tertiary insurance, it would be billed after payment from both the primary and secondary insurances is received. Copies of both
the primary and secondary eobs would be attached to a new claim with the tertiary insurance information on it.

Another example of a person having two insurances is when both the husband and the wife work and both are eligible for health benefits from their employers. Their own policy would be primary and the spouse’s would be secondary. If they have children there are rules that determine which policy is prime for the children.

How patient insurances are maintained in the EMR/PMS software's ?

Today, software's are maintaining the patient insurance in difference ways. Each method has its own cons and pros. I will list those methods which i found in my past experience.

Before getting into detail, let us see the terms "Primary", Secondary, Tertiary and 4th Insurance". In some software, instead of calling 4th Insurance, they will call as Quaternary Insurance.

Actually, there is no defined process or method to identify which is patient primary insurance , and which is patient secondary insurance, and so on. For more details, please download this article and you will know how it has been identified. Since there is no defined way, most of the time, reception people will enter the secondary insurance information into primary and vice versa. That's the reason, all the software's providing swapping option for the insurance

And also, we should know how secondary insurance billed and get paid. Please download this document to know more on that.

Now let us see how software's are maintaining the patient insurance.

Method 1 : Maintain 2 or 4 insurance at the Patient Level

Here you can always maintain 2 or 4 insurance at active state. Give important to the word "Active" here. But, HIPAA EDI 837 Transaction allow up to 11 insurance. So what happens, at one point of time, the existing insurance get expired and patient got new insurance ? Well, you cannot remove that insurance from the system it because it is tightly linked to Billing (Claims) Module. So only the option is to de activate the existing primary insurance and add new insurance in the active state as primary Insurance.

The advantages in this method is : Insurance are maintained only at one place i.e. at the patient level. So any changes done here, it will impact all the claims linked to that. This might be useful when there is error in the data entry and after the correction, they want to re submit all the claims linked to that insurance.

And also, at one point of time, there will be huge number in the inactive state, and no idea which claims are linked to that.

But what happen, if the patient is coming for two different visit types : For example, you may have a patient that is being treated for injuries sustained from an auto accident that is covered under one insurance policy; yet that same patient may receive treatment during the same visit for a condition unrelated to the auto accident where a different policy may be billed. So in this case, you need to maintain two primary insurance dependent on the visit type.In the above method, it is not possible, so that is one of the disadvantage.

Method : 2

Another way is to clone the patient demographics insurance while claim is created and therein after maintain the copy of all insurance at the claim level.

In this method, initially, the insurance are maintained at the patient level. But when the claim is created, software will take a copy of all insurance and will maintain along with part of the claim details. So here, after the claim is created, the insurance at the patient level is plugged off and will not have tightly linked with the claim. If any error in the policy details, of course, first we should correct at the claim level and then at the patient level for error free future claims.

if the patient is coming for two different visit types, then we can easily handle here because, we need to change only at the claim level.

Method : 3

And final method is patient case. This method not only to maintain the insurance, but it can also provide a template kind of stuff to create same kind of claim data for the same patient again and again to save the time.

In order understand, simply you can think patient case is nothing but to maintain group of insurances. Let us see detail now.

EDI Transactions

The HIPAA transactions1 and code set standards are rules that standardize the electronic exchange of health-related administrative information, such as claims forms. The rules are based on electronic data interchange (EDI) standards, which allow for the exchange of information from computer-to-computer without human involvement.

A "transaction" is an electronic business document. Under HIPAA, a handful of standardized transactions will replace hundreds of proprietary, non-standard transactions currently in use. For example, the HCFA 1500 claims form/file will be replaced by the X12 837 claim/encounter transaction. Each of the HIPAA standard transactions has a name, a number, and a business or administrative use. Those of importance in a medical practice are listed in the table below.

Transaction	Number	Business use
Claim/encounter	X12 837	For submitting claim to health plan, insurer, or other payer
Eligibility inquiry and response	X12 270 and 271	For inquiring of a health plan the status of a patient.s eligibility for benefits and details regarding the types of services covered, and for receiving information in response from the health plan or payer.
Claim status inquiry and response	X12 276 and 277	For inquiring about and monitoring outstanding claims (where is the claim? Why haven.t you paid us?) and for receiving information in response from the health plan or payer. Claims status codes are now standardized for all payers.
Referrals and prior authorizations	X12 278	For obtaining referrals and authorizations accurately and quickly, and for receiving prior authorization responses from the payer or utilization management organization (UMO) used by a payer.
Health care payment and remittance advice	X12 835	For replacing paper EOB/EOPs and explaining all adjustment data from payers. Also, permits auto-posting of payments to accounts receivable system.
Health claims attachments (proposed)	X12 275	For sending detailed clinical information in support of claims, in response to payment denials, and other similar uses.

How EDI Works

Doctor diagnosis the patient and provide the treatment for the identified disease. Billing Team prepare the bill(claim) and the claim is transmitted into an EDI Document format called as 837 Health care claim. Then the EDI 837 Document securely transmitted to the insurance company via clearing house.

Then the Insurance company processes the claim which comes in the electronic format and provide the necessary reimbursement for the provider for the treatment given to the patient.

Why You Need EDI – the Benefits

Lower costs
Higher efficiency
Improved accuracy
Enhanced security
Greater management information

Interest to see some sample EDI Documents. Please check here.

837 Professional

Professional billing is responsible for the billing of claims generated for work performed by physicians, suppliers and other non-institutional providers for both outpatient and inpatient services. Professional charges are billed on a CMS-1500 form. The electronic version of the CMS-1500 is called the 837-P, the P standing for the professional format.

837 Institutional
Institutional billing is responsible for the billing of claims generated for work performed by hospitals and skilled nursing facilities. Institutional charges are billed on a UB-04.

Both sets of 837 specifications are same. The only differences would be claim specific data that pertains to a single transaction. All three transactions contain ISA, GS and ST segments but some data and qualifying codes are specific to the type of 837. Another way to quickly identify which type of 837 is being encountered is by the codes sent in the GS-08 or in the ST-03. Professionals use a 005010X222, Institutional uses a 005010X223 and Dental uses a 005010X224.

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Questions or feedback are always welcome. You can email me at vbsenthilinnet@gmail.com.

X12 EDI Examples

Use Case 1: In-House Billing

ICD Codes (Diagnosis Codes)

CPT Codes (Procedure Codes)

Use Case 2: In-House Billing with Two Insurances

Use Case 3: Self-Pay

Use Case 4: Patient Responsibility

Use Case 5: Clearinghouse Workflow

Use Case 6: Co-Pay Workflow

Use Case 7: Deductible Workflow

Use Case 8: Lab Billing

Example Patient Conversation