About Billing Fundamentals

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Medicaid

When a client has multiple funding sources including Medicaid, Medicaid is the payor of last resort. For example, an adolescent client from a low-income family may be covered by their parents’ high deductible commercial insurance, have SSI with Medicare benefits, and qualify for Medicaid. In this example, the order of billing would be commercial insurance, then Medicare, then Medicaid.

Medicaid Section 1115 waivers provide states with more flexibility on how they provide mental health and substance abuse treatment. Waivers can change how states manage Medicaid expenses and claims. As of 2017 there were 33 states with at least one waiver. So, your agency may need to report additional client data (often referred to as state reporting). Missing or incomplete state reporting data can affect the adjudication of claims. Depending on your state, you may need to bill through a managed care organization, and you may need to request authorization for all treatment. The authorization through your managed care organization is in addition to authorizations requested of the client’s other funding sources, such as health insurance plans.

CMS

The Centers for Medicare and Medicaid Services (CMS) is an excellent source of information for Medicare and Medicaid billing. They also provide information on private insurance and standardized billing formats. CMS also provides guidance to meet regulations which include electronic health records, documentation standards, and much more.

SAMHSA

The Substance Abuse and Mental Health Services Administration provides grants for funding of behavioral health treatment and manages outcome measures. Treatment Episode Data Set (TEDS) is one tool used. National Outcome Measures System (NOMS) is another tool. Looking at the TEDS and NOMS tools, you will notice that these tools provide much of the information your state requires to be included in state reporting criteria for the adjudication of claims.

State Departments for Health and Human Services

Your state offices will have valuable information on Medicaid billing regulations. The department name may vary by state, and you may need to complete a web search to find your state’s office. "[State name] department of health and human services" is an effective search when looking for your state’s website.

Group Health and Health Insurance Companies

If you have insurance through your employer, you are likely familiar with benefit summaries. Deductibles, co-pays, and percentage of coverage may vary if the provider is considered in-network or out-of-network. Your agency may contract with major insurance companies to be an in-network provider. Your agency may have individual practitioners who are on insurance panels. The Mental Health Parity and Addiction Equity Act requires group and health insurance companies to provide the same minimum annual and lifetime benefits for behavioral health as medical and surgical limits. However, insurance companies may use different underwriters for the behavioral health coverage.

Electronic Billing Formats

The American National Standards Institute (ANSI) through the Accredited Standards Committee (ASC) develops and maintains standardized transaction sets for transmitting electronic data. There are many sets; the X12 format used for health care is the ASC X12N. Although the standards are set by ACS, each payor has some leeway for
gathering specific data. Therefore, it is important to use a payor-specific companion guide.

270/271 Health Care Eligibility Benefit Inquiry and Response - The 270 transaction set is used to request benefit coverage and the 271 transaction set is used to receive the coverage information.
276/277/278 Health Care Claim Status Request - The 276 transaction set is used to verify the status of a previously-submitted claim. The 277 transaction set is sent in response. The 278 transaction set is a request for authorization.
820 Premium Payment - The 820 Premium Payment transaction set provides information related to payments. It is typically used in conjunction with an electronic transfer of funds for payment of goods, insurance premiums or other transactions.
834 Benefit Enrollment - The 834 Benefit Enrollment transaction set is represents a Benefit Enrollment and Maintenance document. It is used by employers, as well as unions, government agencies or insurance agencies, to enroll members in a healthcare benefit plan.
835 Health Care Claim Payment and Remittance advice - The 835 transaction file is primarily used by healthcare insurance plans to make payments to healthcare providers. An 835 is also known as a ERA (Electronic Remittance Advice).
837 Institutional Health Care Claim - Often referred to as the 837I, this standardized transaction set is used to bill inpatient claims.
837 Professional Health Care Claim - Often referred to as the 837P, this standardized transaction set is used to bill outpatient claims.
999/997 Functional Acknowledgement - The 999 Functional Acknowledgement transaction set is an Implementation Acknowledgement document, developed specifically to replace the 997 Functional Acknowledgement document for use in healthcare. Both the 997 and 999 are used to confirm that a file was received.

Paper Billing Formats

The Centers for Medicare and Medicaid Services (CMS) was formerly the Health Care Financing Administration (HCFA). You may hear people call the 1500 standardized form, which is white paper with red ink, the CMS 1500 or the HCFA (pronounced Hic Fah) 1500. Paper claims are typically sent in a Batch of more than one claim at a time, usually either daily or weekly.

UB-04 – This standardized form is used to bill inpatient claims.
CMS 1500 – Also called the HCFA 1500, This standardized form is used to bill outpatient claims.

Note: Before billing on paper, you need to reach out to the payor to ensure they accept paper claims.

Coding Terms

Current Procedural Terminology (CPT) – CPT is a set of codes to describe a service or procedure performed for the patient.
International Classification of Diseases (ICD) – is a set of codes to describe the diagnosis and symptoms related to the CPT code. The current set of codes is on version 10, so you will hear this referred to as ICD-10.
Modifiers – Modifiers are often two characters in length and are added to the end of the CPT code. For example, adding the modifier GT to a CPT code indicates the service was provided using audio and video telecommunication.
Remittance Advice Remark Codes (RARCs) – RARcs are a set of codes to explain the payments, adjustments, and denials related to a claim.
Diagnostic and Statistical Manual (DSM) – DSM is the set of codes used to describe mental disorders. The current set of codes is on version 5, so you will hear this referred to as DSM-5. Most insurance companies want the ICD-10 code, but some states want the DSM-5 code included in the state reporting.
Systematized Nomenclature of Medicine – Clinical Terms (SNOMED CT) – is a set of codes used to describe symptoms, problems, and diagnoses affecting the patient. Although not used for billing specifically, the SNOMED CT is used in treatment planning which must support the services provided to the patient.