BILLING/ACCOUNTS RECEIVABLE

REIMBURSEMENT MANAGEMENT WORKSHOP


What is Reimbursement Management?

Reimbursement Management is the next generation of the Proration Dictionary. Reimbursement Management is introduced in the 5.5 release of both Magic and Client/Server. The purpose of this enhancement or rewrite was to remove the reliance upon knowledge of Magic Code. It is important to note that the majority of contracts will be able to be written without Magic Code. However, Magic Code remains for those scenarios which cannot be handled solely through Rates. Reimbursement Management is the process of assigning balances to insurances and self pay. It can also be used to:

  1. Determine if the account has the necessary information to proceed through proration (does the inpatient have a DRG, does the outpatient have a diagnosis).
  2. Determine the correct number of expected receipts for the Insurances.
  3. Determine the expected reimbursement amount per insurance.
  4. Take adjustments (discounts/allowances) at the time of proration. If you do not take the adjustment at the time of proration, the expected reimbursement should be calculated.

Reimbursement Management can be simple or complex, depending on the goals of the rule. Reimbursement Management is impacted by other applications, dictionaries and parameters, and these must be considered when writing rules. When evaluating the results of reimbursement management rules it may be necessary to return to these dictionaries to verify that they are set up correctly and that the account has the required information necessary to make a particular rule work.

This document will demonstrate how to prorate dollars. It will also demonstrate how expected reimbursement is calculated. The expected reimbursement is used in the Contract Management Reports to help determine if an intermediary is meeting their contractual obligations. It is very important to calculate the expected reimbursement if what you are prorating to the insurances is not what you are expecting. It is very important to note that every facility uses the Reimbursement Management Dictionary. If there is no one at your facility that has created or updated rules, most likely the 100% rules are in use.

Important Definitions:

  1. The balance of the insurance is the prorated amount less any adjustment.
  2. The total charges must equal the total balance of all of the insurances and self pay.
  3. Anything not prorated to insurance is automatically prorated to self pay.

Reminder: The amount prorated is not what will print on a claim. The total dollar amount of charges will print not the prorated amount.


Reimbursement Management (Proration) and the Billing Process

There must be an understanding of the billing process prior to effectively building rules in Reimbursement Management. Every account goes through the billing process (while Client Accounts do go through a Billing Process, they do not utilize Reimbursement Management (Proration) and do not behave the same as accounts billed to patients or insurances. Charges are posted to a patients account from either an ancillary application (LAB, PHA, OR, ADM, ITS/RAD, SCH) or are posted through Process Batches in the BAR application. These charges remain unbilled (UR) on the patient account until such time that a bill is cut or demanded.

The system will run a routine to cut the bill (Cutoff). This routine will determine if an account can begin the billing process. An account can begin the billing process if there are charges present and the criteria (delay/suspense days) defined in the Billing Group Dictionary has been met. The Billing Process is outlined on the following page.

The Billing Process

Unbilled Charges
------Cutoff/Demand------
snap shot of the account at that moment/Cutoff = global, Demand = individual account
Account Status / Receivable Status
UB / Preliminary
·  proration rule assigned
·  proration holds assigned
·  any new charges will be late charges
·  cancel bill to prevent late bills or to correct the bill / UR
UB / Prorated
·  proration holds (dx, final abs status)
·  expected receipts calculated
·  expected reimbursement calculated
·  up front adjustments can be taken
·  money assigned to insurance buckets
·  Determines account to be sent to ABS for APC calculation
·  any new charges will be late charges
·  cancel bill to prevent late bills or to correct the bill / UR
IB/FB / Posted
·  bills queued
·  claims queued
·  collection evaluation begins (statements, reminders, letters)
·  any new charges will be late charges
·  reverse bill and demand a new one to prevent late bills or to correct the bill / AR
IB/FB / Printed
·  prints itemized bill
·  any new charges will be late charges
·  reverse bill and demand a new one to prevent late bills or correct the bill / AR

Considerations

B/AR Dictionaries that relate to or impact the Reimbursement Management Dictionary:

  1. Account Type Dictionary
  2. Billing Group Dictionary
  3. Rate Schedule Dictionary (includes reimbursement schedules)
  4. Procedure Dictionary (Charge and Non-Charge)
  5. Claim Dictionary
  6. Proration Flag Dictionary (utilized in Contract Management Reports)

B/AR Parameters and Customer Parameters that relate to the Reimbursement Management Dictionary:

  1. Primary Parameter for Proration Rule (Primary/Secondary)
  2. Transfer Pos Ins Balances
  3. Transfer Neg Ins Balances
  4. Reimbursement Management Criteria in Customer Parameters

Other Application Dictionaries that relate to the Reimbursement Management Dictionary:

  1. MIS RUGS Codes Dictionary
  2. MIS CODES Dictionary (IRF)
  3. MIS HHRG Codes Dictionary and MIS HHRG Rates Dictionary
  4. ABS DRG Data Dictionary
  5. ABS CPT Code Dictionary

Final Considerations:

  1. The Claim Dictionary set up should be considered when creating reimbursement management rules, since certain prompts in the Reimbursement Management Dictionary should mirror those in the Claim Dictionary.
  2. The Charge Procedure Dictionary set up should be considered since there are prompts in that dictionary that will affect how certain reimbursement management rules work.

3.  Some information flows to BAR from Abstracting or gets pulled directly from Abstracting Dictionaries. This information must be present for certain reimbursement management rules to calculate correctly.


Reimbursement Management Dictionary – Main Page

The fields on this page are utilized to establish eligibility for the Reimbursement Management Rule. Access to other pages will occur when data has been entered or filed.

Insurance Contract: This field provides an informational link to the MIS Contract Dictionary. Users may use this as a reference tool while building the rule to view the “written description” of the contract. This field could be used in the Contract Performance Contract Management report to bring in all associated rules at once.

Account Type: This field allows the restriction of this rule to a particular account type. There is not a need to separate rules for different account types, adding efficiency to the dictionary. The lookup is to the B/AR Account Type Dictionary.

PPS: This field provides a one to one correlation to an account type and allows sites to designate specific account types to be reimbursed under various CMS Prospective Payment Systems or PPS. The choices available include DRG, APC, IRF, RUG, HHRG and NO. If a PPS is selected, the MEDICARE/PPS rates data will be used (more information is available on this later in the document). If there is no PPS selected for a given account type, the other rate screens will be used. Note: A PPS can be assigned to multiple account types, but each account type can only be assigned to one PPS per rule.

Bill Type: This field allows the rule to be restricted to particular bill types. The choices are Interim, Final and Late. If this field is empty all bill types will be assumed. Although there are generally not contractual stipulations regarding this, occasionally there will be separate late rules so that write-offs can be taken using a specific adjustment code.

Effective Date Event: This field determines which effective date (version) of a particular rule should be used. The choices are ADM/SVC, DIS/SVC, BILL, or CUTOFF. When a reimbursement management rule is invoked in proration, the system looks at this prompt. If it is set to ADM/SVC date then it will pick a rule with an effective date on or before that the Admit/ Service date on the account.

Eff Date: This field stores the date on which a particular version of a rule becomes effective. Multiple dates can be entered.

Method: This is multiple field and is linked to Eff Date. Each effective date can only have one Method associated to it. However, each effective date can have a different Method. There are three Methods to choose from:

  1. Rates: This method takes advantage of the major portion of this enhancement and allows access to the rates buttons/pages (Inpatient, Inpatient Extras, Outpatient, Maternity, Amb/Surg, ER/Obsv, Medicare/PPS and Non- Primary). Approximately 90% of all contracts can be handled by this method. More detail will follow about each rate button/page.
  2. Rates + Hook: In stances where a contract cannot be entirely written using the Rates method, the Rates + Hook method allows for a combination of rate tables and traditional Magic Code. Use of this method provides access to both the rates buttons/pages and the Step Magic button/page. When prorating using this method, the system will evaluate any applicable rates first and then the Magic Code.
  3. Step Magic: This button/page will be primarily used by sites that receive updates to the 5.5 Release. All existing rules will be converted as is in Step Magic.

Applies to Any Insurance: This field will determine whether this rule will be applicable to all insurances (prompt answered to N) or those listed below in the Insurances prompt (prompt answered to Y).

Insurances: This is a scrolling field which allows a rule to be restricted to a list of Primary Insurances or Primary/Secondary Insurance combinations.

Space for Notes:

Reimbursement Management Dictionary – Rcpt/Adj Data Page

The fields on this page establish how expected receipts will be calculated and address specific adjustment scenarios.

Compute Prof. Receipts: This field has an option of Y/N. If Y is chosen then the users will access to the One Svc Date Per Line, One Doctor Per Page fields as well as the Rcpt Chg Cat field. Will professional receipts be calculated?

One Svc Date Per Line: This field should be answered as it is on the applicable professional fee claim (1500 Claim Form Page 2) if expected receipts for professional fee claims should be calculated.

One Doctor Per Page: This field should be answered as it is on the applicable professional fee claim (1500 Claim Form Page 2) if expected receipts for professional fee claims should be calculated.

Rcpt Chg Cat: This field will allow charge categories to be entered to increase the expected number of receipts. By doing so, the expected receipts will be increase by 1. Example if 981 and 985 is in the list, it will increase the expected receipts by two. If it is listed as 98* , which represents all charge categories from 980-989, then the expected number of receipts would only be increased by 1.

Alt Code Priority: This is a look up to the Alt Codes defined in Customer Parameters in B/AR. Alt code types entered at this field are available for use with the Alt Code method in the Outpatient Rates table. Use of this field allows the Reimbursement Rule to make calculations based on the presence of a particular alternate code.

Override Adjustment Procs: This field is a lookup to the Non Charge Procedure Dictionary in B/AR. The Non Charge Procedure Dictionary allows the creation of specific adjustment procedures to be used. The non charge procedure adjustment code entered here will allow for an override (is used in place of) of the Primary Adjustment Code for this insurance. An example of why this field would be utilized is if there is a specific rule for Late Bills and there is a specific non charge procedure utilized to track those adjustments.

Note: During proration, only adjustments associated with the Primary Adjustment Code will be evaluated unless there is a value in the Override Adjustment Procs field or the Special Write-offs field.

Note: The Non Charge Procedure Dictionary now has a Reimbursement Type field in which a specific adjustment procedure code can be used for Primary (ADJ1), Primary2 (SECADJ) and Non Primary.

Special Write-offs: This section will allow for specific Charge Categories or Charge Procedure Codes to be written off using a designated Non Charge Procedure. Allowances can be tracked for experimental procedures to a specific GL Override in a Non Charge Procedure. This can only be used in conjunction with adjustment codes for the primary insurance on an account.

Self Pay Writeoff Proc: This must contain an Adjustment Code (Non Charge Procedure) for Self Pay. It would be reference when either Rates & Hook or Step Magic is used and the Proration Variable ADJP is used.

Reimbursement Schedule: Applicable Reimbursement Schedule can be entered here for use when either Rates & Hook or Step Magic Methods are chosen.

Timeout String: Timeout strings allow the system to automatically move money to subsequent buckets after a predetermined time. This is applied to an account as it goes through the Billing Process. This would apply to all insurances for this rule. Insurances that are grouped together under a contract would also likely be collected upon in the same fashion.

Expected # of Rcpts (Primary/Secondary): Define the default expected number of receipts for all insurances associated with this rule. Generally set to 1. When an insurance reimburses under the same contract, the payment terms are not likely to differ either.

Space for Notes:

Reimbursement Management Dictionary – Checks/Non Primary Exceptions

This page is used to prorate specific procedures or charge categories to Self-Pay or the Secondary Insurance, as well as to assign Proration Checks to this rule.

Proration Checks: List those Claim Checks that accounts eligible for this rule should be validated against. These checks would be used as both Reimbursement Management holds and potentially as UR Management holds. Reimbursement Rules can include both inpatients and outpatients. However, Proration Checks are not specific to patient type. The ability to restrict Proration Checks to specific Account Types now exists. This will prevent Outpatients for holding for a DRG Status.