Hospital coding and billing professionals will be required to have an understanding of the ICD-9-CM coding system and will need to transition to ICD-10. For this reason, this chapter will provide examples of claim form completion using the ICD-10 coding systems. The chapter illustrates how various elements relate to claim forms. Although hospitals may use both claim forms to submit charges, the CMS-1450 (UB-04) is the primary claim form used for submission of charges for most services, procedures, and items. Therefore, this chapter will provide a brief overview of the CMS-1500, followed by an in-depth discussion on claim form completion requirements for the CMS-1450 (UB-04).

Purpose of Claim Forms

An insurance claim form is a form that is completed by providers for the purpose of submitting charges for medical services and supplies to various third-party payers. Claim forms contain fields for recording data about the provider, insured, date of service, and charges. A provider is an individual or entity that provides medical services and/or supplies to patients. Examples of providers are physician, physician assistant, nurse practitioner, clinic, laboratory, radiology center, hospital, and Ambulatory Surgery Center. Charges are submitted to third-party payers for reimbursement using claim forms. Reimbursement is a term used to describe the payment received from a third-party payer for services rendered by the provider to a patient. Third-party reimbursement for medical services or supplies is determined based on the information reported on the claim form. Claim form information is also used by various organizations and agencies for research, education, and administrative purposes, as discussed in previous chapters.

Claim Form Submission

Claim forms can be submitted to third-party payers manually on paper or by electronic transmission. A manual claim is a paper claim that is typed or computer generated on paper and sent by mail. This is referred to as manual claim submission. An electronic media claim (EMC) is a claim that is transmitted through electronic data interchange (EDI). Electronic data interchange (EDI) is the process of sending data from one computer to another by telephone line or cable. EDI requires data to be in a specific format, and both computers must be set up to send and receive data in the required format.

Today, most claim forms are computer generated and submitted electronically in accordance with payer requirements and Health Insurance Portability and Accountability Act (HIPAA) Title II provisions. Two universal claim forms are used to submit charges to all payers, the CMS-1500 and CMS-1450 (UB-04). Although these claim forms are universal, the guidelines for completion vary by payer. These variations are addressed by setting up a computer template that includes required information by payer type. A template defines all the information required on the claim for the payer, and specific payer edits can also be programmed. The payer-specific knowledge is beyond the scope of this text; however, an overview of general claim form completion requirements is provided. Hospital billing and coding professionals should have knowledge of payer specifications available when submitting claims to various payers. The following review of electronic versus manual claim submission is illustrated in Figure 10-1.

The electronic claim submission process for a hospital is illustrated in Figure 10-2. Functions required to complete the process are performed by the hospital’s Patient Financial Services (PFS) Department. Data required for claim submission is recorded on the patient’s computerized account during the patient visit. The hospital’s computer system performs edits to identify issues with the claim data. Any issues identified during the edit process can be resolved before transmission. Claims are then prepared and transmitted to the payer directly or through a clearinghouse. The clearinghouse may also conduct edits. After the claim has satisfied the payer’s edit, payment determination is made. A remittance advice (RA) is forwarded to the hospital that explains payment determination. Remittance advices can also be transmitted electronically by various payers.

FIGURE 10-2 Electronic claim functions performed by the Patient Financial Services (PFS) Department. (Modified from Fordney MT: *Insurance handbook for the medical office*, ed 12th, St Louis, 2012, Elsevier.)

The major disadvantage to electronic claim submission is the need for various versions of software or a clearinghouse. Another disadvantage is that claims requiring attachments cannot be submitted electronically. Despite these disadvantages, many providers elect to transmit claims electronically because the advantages are greater than the disadvantages.

Advantages of Electronic Claim Submission

Electronic transmission of claims improves the payer’s processing time and therefore helps to improve cash flow. The advantages of electronic claims involve tracking, proof of receipt, processing time, reimbursement, and compliance.

Tracking

Electronic claim submission eliminates the potential for claims to be lost in the mail or within the organization. Claims transmitted electronically are tracked by the hospital’s health information system. The system records the batch number, patient identification, date of service, and claim amount for all transmitted claims. This tracking provides the hospital with confirmation of claims transmitted.

Proof of Receipt

The clearinghouse and the payer will provide a confirmation report that acknowledges receipt of the batch. This report is referred to as a transmission report and it outlines the claims received in the batch. The transmission report is used as proof of receipt of the claims, which is critical to prove claims were filed within the timely filing period as required by the payer.

Processing Time

Electronic claim submission reduces the amount of time required to process the claim. Data from the claim is directly transmitted into the payer’s computer system. This eliminates any manual handling and data entry of claim information, which delays payment determination. Electronic claim submission also eliminates the potential for errors during manual data entry.

Reimbursement

The reduction in the time required to process claim data improves the amount of time it takes for the payer to make a payment determination and to send a remittance advice (RA). Reimbursement on claims transmitted electronically is generally 7 to 14 days, as opposed to 4 to 8 weeks for a paper claim.

Compliance

While there may be a circumstance when a paper claim is required, most payers require electronic submission of claims. Providers who are equipped to submit electronic claims will be in compliance with these payer guidelines. Additionally, providers who submit electronically will be in compliance with the electronic transaction provisions outlined under HIPAA.

BOX 10-2 CONCEPT REVIEW

Electronic Claim Process

• Direct transmission

• Transmission through a clearinghouse

Advantages of Electronic Claim Submission

• Ability to track claims

• Proof of receipt is provided

• Shorter processing time

• Faster reimbursement

• Compliance

Claim Form Variations

Two claim forms are universally accepted by payers today: the CMS-1500 and the CMS-1450 (UB-04). The CMS-1500 is used by non-institutional providers to submit professional charges for physician and outpatient services to payers for reimbursement. The CMS-1450 (UB-04) is used by institutional providers to submit hospital facility charges for services, procedures, and items to payers for reimbursement. It is necessary to complete these claim forms in accordance with payer guidelines and specifications. Claim form completion specifications vary by payer. Hospital billing professionals are required to gain knowledge regarding various payer specifications for claim form completion. The category of service generally dictates which claim form is used. Claim form variations for outpatient, inpatient, and non-patient services are outlined in Figure 10-3.

FIGURE 10-3 Comparison of the CMS-1500 versus CMS-1450 (UB-04) claim forms.

BOX 10-3 CONCEPT REVIEW

Claim Form Submission Methods

• Manual paper claim

• Electronic media claim (EMC)

Universally Accepted Claim Forms

• CMS-1500

• CMS-1450 (UB-04)

BOX 10-1 Test Your Knowledge
PURPOSE OF CLAIM FORMS; CLAIM FORM SUBMISSION; CLAIM FORM VARIATIONS

True/False

1. The purpose of claim forms is to submit charges for medical services and supplies to various third-party payers for reimbursement.	T	F
2. Third-party reimbursement for medical services and/or supplies is determined based on the information reported on the claim form.	T	F
3. A computer template defines all the information required on the claim for the payer, and specific payer edits can also be programmed.	T	F
4. Manual submission of claims results in reduced processing time. Reimbursement for manual claims may be generally received within 7 to 14 days.	T	F
5. The CMS-1450 (UB-04) is used by non-institutional providers to submit professional charges for physician and outpatient services to payers for reimbursement.	T	F