August 03, 2020



After the appointment, the doctor sends a bill to an insurance claims processing center. It's a primary locale for health insurance problems to arise. They gather all relevant information - the patient appointment sheet, intake forms and the proper services documentation. These are compared to the patient's policy to see if it covers the services. If it does, the insurance carrier submits payment for the remaining balance. If not, the insured is responsible for whatever balance is left after the co-pay. 

That sounds easy enough. Most claims processes are smooth, but there may be some bumps in the road -- the dreaded denied claims. We'll find out what to do about those in the sections to come, but, for now, the the provider's involvement with the claim looks like this. My apologies in advance that this is tedious, but there isn't really any way to make it exciting.

Determine billing policy  The practice staff is responsible for implementing the physician practice’s billing policy and methodology with these options:

  • Send the claim electronically and save the acknowledgement of the health insurer’s receipt
If allowed:
  • Send the claim by U.S. certified mail, return receipt requested, or
  • Personally deliver it to the health insurer’s claim processing office as a final measure to alleviate health insurance problems later on

The billing policy serves to notify a patient of the provider's billing procedures and the methods of payment the practice accepts. The policy includes specific billing information for each type of health insurer because billing and payment requirements differ from one health insurer to another. In addition, the billing policy addresss the patient’s financial responsibility if the practice does not receive payment from the health insurer.

The practice staff requests a signed acknowledgements from the patient prior to the delivery of care to help secure appropriate payment for procedures and services. This acknowledgement includes the physician practice’s policies on primary and secondary health insurer processing and patient billing and payment. If the physician practice arranges payment plans for patients, the collection policy includes the procedures associated with patient financial agreements.

Submit claim Today, claims are mainly sent electronically. The insurer is billed for medical care provided using the physician’s retail charge for those services. Once the claim is received for processing, the payer’s claim adjudication system determines whether the patient is a subscriber “match” in the payer’s system and is eligible to receive benefits for the date(s) of service identified on the claim. If the patient “matches” and is eligible, the payer’s system then typically determines whether the services are “covered services” according to the patient’s benefit plan. The submission process itself presents unique challenges whether done electronically or manually, in an office/clinic or facility/ hospital. This is because of the standardized claim forms used industry wide. the CMS-1500 (formerly known as a HCFA-1500), and the UB-04, 
Form CMS-1500  In the mid-1970s, the Health Care Financing Administration (HCFA, pronounced “hick-fa”) created a new form for Medicare claims, called the HCFA-1500. The form was approved by the American Medical Association and was subsequently adopte by all government healthcare programs. Although the HCFA-1500 originally was developed for submitting Medicare claims, it eventually was accepted by all commercial/ private insurance carriers to facilitate the standardization of the claims process. Because HCFA is now called the Center for Medicare and Medicaid Services (CMS), the name of the form has been changed to CMS-1500; however, it is basically the same document with this protocol
• Use only an original red-ink-on-white-paper Form CMS-1500 claim form 
• Use dark ink.
• Do not print, hand-write, or stamp any extraneous data on the form.
• Do not staple, clip, or tape anything to the Form CMS-1500 claim form

• Remove pin-fed edges at side perforations.
• Use only lift-off correction tape to make corrections.
• Place all necessary documentation in the envelope with the Form CMS-1500 claim form.
• Do not use italics or script.
• Do not use dollar signs, decimals, or punctuation.
• Use only upper-case letters.
• Use 10- or 12-pitch (pica) characters and standard dot matrix fonts.
• Do not include titles (e.g., Dr., Mr., Mrs., Rev., M.D.) as part of the beneficiary’s name.
• Enter all information on the same horizontal plane within the designated field.
• Follow the correct Health Insurance Claim Number (HICN) format. No hyphens or dashes should be used. The alpha prefix or suffix is part of the HICN and should not be omitted. Be especially careful with spouses who have a similar HICN with a different alpha prefix or suffix.
• Ensure data is in the appropriate field and does not overlap into other fields.
• Use an individual’s name in the provider signature field, not a facility or practice name.
• Put the beneficiary’s name and Medicare number on each piece of documentation submitted. Always use the beneficiary’s name exactly as it appears on the beneficiary’s Medicare card.
• Include all applicable NPIs on the claim, including the NPI for the referring provider.
• Indicate the correct address, including a valid ZIP code, where the service was rendered to the beneficiary. Any missing, incomplete, or invalid information in the Service Facility Location Information field will cause the claim to be unprocessable. Any claims received with the word “SAME” in fields indicating that the information is the same as in another field are unacceptable. A post office box address is unacceptable in the field for the location where the service was rendered.
• Include special certification numbers for services such as mammography (FDA number) and clinical laboratory (CLIA number).
• Ensure that the number of units/days and the date of service range are not contradictory.
• Ensure that the number of units/days and the quantity indicated in the procedure code’s description are not contradictory.
• Use current valid diagnosis codes and code them to the highest level of specificity (maximum number of digits) available. Also make sure that the diagnosis codes used are appropriate for the gender of the beneficiary.
• Use current valid procedure codes as described in the Current Procedural Terminology (CPT) or Healthcare Common Procedure Coding System (HCPCS) manuals.
• Use only Level II HCPCS codes, not local codes.
• Use current valid modifiers when necessary.
Form UB-04  A close cousin of the CMS-1500, the UB-04 is the current version of the paper uniform bill used by institutional providers and contains data elements identified as necessary for claims processing in the paper environment. The form has numbered spaces, referred to as "form locators (FLs)," and general fields for data elements that are occasionally needed. It contains a number of improvements from its predecessor, the UB-92, and enhancements that resulted from nearly four years of research, including better alignment with the electronic institutional transaction standard. Although the billing form is standardized, not all payers require the same data elements, so payers should be contacted for their exact billing requirements. Some of the main features of the protocol are: 
• A provider filing a UB-04 should retain the copy designated “Institution Copy” and submit the remaining copies to its Fiscal Intermediary (FI), Medicare Administrative Contractor (MAC), Regional Home Health and Hospice Intermediary (RHHI), managed care plan, or other insurer.
• Instructions for completing inpatient and outpatient claims are the same unless otherwise noted.
• If a provider omits any required data, the FI/MAC will either ask for the missing data or obtain the data from other sources. The FI/MAC will maintain the data on its history record.
• Data elements in the CMS uniform electronic billing specifications are consistent with the UB-04 data set to the extent that one processing system can handle both. The definitions are identical, although in some situations, the electronic record contains more characters than the corresponding item on the form because constraints on the form size are not applicable to the electronic record. Further, the revenue coding system is the same for both the UB-04 and the electronic specifications.
• If the field is labeled as “Leave Blank”, do not complete the field. In some cases, completing a “leave blank” Form Locator could delay in the processing of the claim.
• The amount entered in Form Locator 39-41 under Value Code 23 is the gross patient pay which is the amount from the PA 162. Also, under Value Code 6-the amount entered should be the amount minus the medical expenses (if applicable.) Note: if there are no medical expenses, Value Codes 23 & 66 will be the same amount
• When completing Form Locator 54a, Enter the total amount Medicare approved for the coinsurance days.
• When completing Form Locator 76, the Attending Physician ID number is located in the field after the QUAL box.
If a long-term insurance policy is paying for services during the billing month, list the insurance name in Form Locator 50 on Line B, and enter the payment received in information into Form Locators 54 on Line B. Also, complete all other applicable fields 55-60 on Line B. 
The Full Medicare days should be entered on the first line of the Form Locator 30.  
• Facility phone numbers in Form Locator 1 is optional.
When billing on the UB-04, the admission date is required on all claims
When determining calculation you must add days listed in Form Locator 30 to any day listed in Form Locators 39-41 under Value Codes 80, 81 & 82.
If a resident has Medicare Part A coverage, the Medicare information should be entered in Form Locator 50a and all applicable fields 51-60a. Please refer to the UB-04 Desk Reference for the appropriate Condition Code.
The specific insurance MUST be identified. All commercial insurance information should be listed on Line B of all applicable Form Locators 50-60


Sometimes, when you go to the doctor or other medical provider, you may be told that you have to submit your own insurance claim form. This means that the doctor or facility does not ask the health insurance company to pay for your bill and you must do so. They may also require the patient to pay for the services out of pocket, and leave the claims filing to the patient. Whatever the case, this is where health insurance online is part of the acceleration of delivery of payment. Almost gone are the days when weeks go by with conventional mail. A lot of health insurance providers allow claims to be submitted online, and payment can be processed electronically. If you have to file electronically or manually:

Follow Health Insurance Plan Rules  Determine what form(s) need to be filled out, and get copies from the insurer. Taking the extra time to locate the required forms will expedite the claims review process and boost the chances of prompt reimbursement. Reputable health insurance providers will also have a standard set of claim forms available for prospective customers to review and access, which can be a helpful tool when attempting to compare health insurance benefits.  It is filled out completely and double-checked for even simple errors: names spelled correctly, correct addresses especially ZIP codes and that the coverage dates on the form are the right ones in order to save health insurance problems later on.

Get Supporting Documentation  The insurance company may require a summary of action taken by the doctor. The patient may also be required to provide billing codes, which should be on the summary you get from your doctor. If filing for health care that had to be pre-authorized, a copy of the original authorization form is included. Attached also is an itemized receipt for services received. This itemized bill is obtained by the policyholder from the medical provider as a part of the visit. 

Attaching a summary credit card bill or statement is not sufficient for most health insurance providers - they require an itemized bill in order to accurately assess which costs are the insurance carrier's responsibility. Failure to attach an itemized bill most often results in outright denial of the claim.

Make Copies of Everything  Photocopies are made of not only the receipts but also the claim form itself. Open a file showing not only what will be sent but also when and where it was sent.   

Send Claim Form and Supporting Documents  Once the above is accomplished, the claim form and supporting documentation are sent to the insurance company. Certified mail, signature required is the preferred method if this is allowed by the company. If, not, proof of mailing from your post office an inexpensive option that shows the date mailed the and the address sent.

Follow Up  Call customer service If the claim isn’t resolved within 30 days. Tell them you're checking "claim status" which is a call they get hundreds of times a day and probably have a special line for. Some companies ask for 90 days, but you don't have to wait that long. In fact, it's not a good idea because the chances increase that they say they haven't received it yet, and then you have a whole bunch of timely filing and other health insurance problems on your hands..

Related Resources:
1. "What is Medical Billing & How To Do It!"  , (2012).

A fun little video on how to fill out Blocks 1 - 13 of a CMS-1500 claim form. That's the one submitted by the doctor's office. Don't despair, however, because the UB-04, the hospital/facility form is worse!