Institute:Office of National Coordinator (ONC) Workforce Training Curriculum
Component:Introduction to Health Care and Public Health in the U.S.
Unit:Financing Health Care - Part 1
Lecture:Payors in the U.S. Health Care System
Slide content:How Insurers Pay Providers - 1 Provider submits claim Uses two kinds of codes Diagnosis code = ICD-10-CM Procedure code = CPT code or DRG code Medical claims examiner or adjuster processes claim Determines usual and customary charge Deducts portion patient is responsible for Deducts contractual provider discount Reimburses remainder 7
Slide notes:It is important to understand how providers receive payment from payors or insurance companies. Whenever a patient sees a doctor, has a medical test, or goes to the hospital, the provider prepares one or more claims to receive insurance reimbursement. Information about the patient and the services received is described in two kinds of code a diagnosis code and a procedure code. A diagnosis code is called an ICD-10-CM code. ICD stands for International Classification of Disease. CM stands for Clinical Modification, and ICD-10-CM codes are used only in clinical and outpatient settings. A procedure code is called a CPT code, which stands for Current Procedural Terminology, in the case of physicians, or a DRG, diagnosis related group, in the case of hospitals billing Medicare. The procedure code describes the services provided by the provider. Most claims are sent electronically to the insurance company, where the medical claims examiner or adjuster processes it according to the insurance plans guidelines. The examiner subtracts from the bill any amount considered in excess of the plans so-called usual and customary charge. The examiner also subtracts any patient co-payment, co-insurance, or deductible, as well as the providers pre-negotiated discount for services. The balance is then remitted to the provider in an explanation of benefits or remittance advice. 7