PV

Me d i c a l Bi l l i n g a n d
Co d i n g : Ba s i c
Instructors Edition
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NOT FOR PRINTING OR INSTRUCTIONAL USE

Medical Billing and Coding: Basic

Series Product Managers: Charles G. Blum and Adam A. Wilcox
Developmental Editor: Don Tremblay
Copyeditor: Robb Tillett
Series Designer: Adam A. Wilcox

COPYRIGHT 2009 Axzo Press
ALL RIGHTS RESERVED. No part of this work may be reproduced, transcribed, or used in any form or by any
meansgraphic, electronic, or mechanical, including photocopying, recording, taping, Web distribution, or
information storage and retrieval systemswithout the prior written permission of the publisher.
For more information, go to www.axzopress.com.

Trademarks
ILT Series is a trademark of Axzo Press.
Some of the product names and company names used in this book have been used for identification purposes only and
may be trademarks or registered trademarks of their respective manufacturers and sellers.
Disclaimer
We reserve the right to revise this publication and make changes from time to time in its content
without notice.
ISBN 10: 1-4188-1488-1
ISBN 13: 978-1-4188-1488-5
Printed in the United States of America
1 2 3 4 5 GL 06 05 04 03
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Co n t e n t s

Introduction iii
Topic A: About the manual............................................................................... iv
Topic B: Setting student expectations .............................................................. ix
Topic C: Classroom setup................................................................................ xiii
Topic D: Support.............................................................................................. xiv
Introduction to medical billing and coding 1-1
Topic A: Roles and responsibilities ................................................................. 1-2
Topic B: Applying for a position.................................................................... 1-22
Topic C: Self-employment in the field ........................................................... 1-44
Topic D: The basics of health insurance......................................................... 1-57
Topic E: Medical billing today and tomorrow ............................................... 1-66
Unit summary: Introduction to medical billing and coding ............................ 1-73
Federal and state insurance plans 2-1
Topic A: Medicare ........................................................................................... 2-2
Topic B: Medicaid .......................................................................................... 2-16
Topic C: Workers Compensation ................................................................... 2-19
Topic D: TRICARE and CHAMPVA ............................................................ 2-23
Topic E: Managed Care Organizations .......................................................... 2-27
Topic F: Other Insurance plans ...................................................................... 2-31
Unit summary: Federal and state insurance plans ........................................... 2-34
Health insurance claims 3-1
Topic A: Types of forms.................................................................................. 3-2
Topic B: Electronic data interchange.............................................................. 3-14
Topic C: More on the claims process ............................................................. 3-21
Topic D: Reports............................................................................................. 3-26
Unit summary: Health insurance claims ......................................................... 3-34
Payments and collections 4-1
Topic A: The Medicare payment process ........................................................ 4-2
Topic B: Managed Care Organizations .......................................................... 4-20
Topic C: Other carriers ................................................................................... 4-29
Topic D: The collection process ..................................................................... 4-33
Unit summary: Payments and collections ....................................................... 4-46
Applications and audit trails 5-1
Topic A: The billing cycle ............................................................................... 5-2
Topic B: Completing the process.................................................................... 5-15
Topic C: Audit trails ....................................................................................... 5-24
Topic D: Practice makes perfect ..................................................................... 5-29
Unit summary: Applications and audit trails................................................... 5-32
Course summary S-1
Topic A: Course summary............................................................................... S-2
Topic B: Continued learning after class .......................................................... S-4
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ii Medical Billing and Coding: Basic

Index I-1

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iii

Me d i c a l Bi l l i n g a n d
Co d i n g : Ba s i c
Introduction
After reading this introduction, you will know
how to:
A Use ILT Series training manuals in
general.
B Use prerequisites, a target student
description, course objectives, and a skills
inventory to properly set students
expectations for the course.
C Set up a classroom to teach this course.
D Get support for setting up and teaching this
course.
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iv Medical Billing and Coding: Basic

Topic A: About the manual
ILT Series philosophy
Our goal is to make you, the instructor, as successful as possible. To that end, our
training manuals facilitate students learning by providing structured interaction
with the subject itself. While we provide text to help you explain difficult concepts, the
activities are the focus of our courses. Leading the students through these activities will
teach the concepts effectively.
We believe strongly in the instructor-led classroom. For many students, having a
thinking, feeling instructor in front of them will always be the most comfortable way to
learn. Because the students focus should be on you, our manuals are designed and
written to facilitate your interaction with the students, and not to call attention to
manuals themselves.
We believe in the basic approach of setting expectations, then teaching, and providing
summary and review afterwards. For this reason, lessons begin with objectives and end
with summaries. We also provide overall course objectives and a course summary to
provide both an introduction to and closure on the entire course.
Our goal is your success. We encourage your feedback in helping us to continually
improve our manuals to meet your needs.
Manual components
The manuals contain these major components:
Table of contents
Introduction
Units
Course summary
Index
Each element is described below.
Table of contents
The table of contents acts as a learning roadmap for you and the students.
Introduction
The introduction contains information about our training philosophy and our manual
components, features, and conventions. It contains target student, prerequisite,
objective, and setup information for the specific course. Finally, the introduction
contains support information.
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Introduction v

Units
Units are the largest structural component of the actual course content. A unit begins
with a title page that lists objectives for each major subdivision, or topic, within the unit.
Within each topic, conceptual and explanatory information alternates with activities.
Units conclude with a summary comprising one paragraph for each topic, and review
questions that give students an opportunity to practice the skills theyve learned.
The conceptual information takes the form of text paragraphs, exhibits, lists, and tables.
The activities contain various types of questions, answers, activities, graphics, and other
information. Throughout a unit, instructor notes are found in the left margin.
Course summary
This section provides a text summary of the entire course. It is useful for providing
closure at the end of the course. The course summary also indicates the next course in
this series, if there is one, and lists additional resources students might find useful as
they continue to learn about the subject.
Index
The index enables you and the students to quickly find information about a particular
topic or concept in the course.
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vi Medical Billing and Coding: Basic

Manual conventions
Weve tried to keep the number of elements and the types of formatting to a minimum
in the manuals. We think this aids in clarity and makes the manuals more elegant. But
there are some conventions and icons you should know about.

Instructor note/icon Convention Description

Italic text
In conceptual text, indicates a new term or feature.

Bold text
In unit summaries, indicates a key term or concept. In an
independent practice activity, indicates an explicit item
that you select, choose, or type.
Code font Indicates code or syntax.
Instructor notes. In the left margin, provide tips, hints, and warnings for
the instructor. Instructor notes are not visible in student
books.

Select bold item In the left column of hands-on activities, bold sans-serif
text indicates an explicit item that you select, choose, or
type.
Warning icon.
Warnings prepare instructors for potential classroom
management problems.
Tip icon.
Tips give extra information the instructor can share with
students.
Setup icon.
Setup notes provide a realistic business context for
instructors to share with students, or indicate additional
setup steps required for the current activity.
Projector icon.
Projector notes indicate that there is a PowerPoint slide
for the adjacent content.

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Introduction vii

Activities
The activities are the most important parts of our manuals. Many activities in this book
allow for as much discussion as the instructor allows, so you have a lot of control over
how long each units takes. Activities are usually divided into two columns, with
questions or concepts on the left and answers and explanations on the right. To the left,
instructor notes provide tips, warnings, setups, and other information for the instructor
only. Heres a sample:
Do it! A-1: Steps for brainstorming
Exercises

1 Sequence the steps for brainstorming.

Begin generating ideas
Select the purpose
Organize for the session
Ask questions and clarify ideas
Review the rules
Select the purpose
Organize for the session
Review the rules
Begin generating ideas
Ask questions and clarify ideas

PowerPoint presentations
Each unit in this course has an accompanying PowerPoint presentation. These slide
shows are designed to support your classroom instruction while providing students with
a visual focus. Each one begins with a list of unit objectives and ends with a unit
summary slide. We strongly recommend that you run these presentations from the
instructors station as you teach this course. A copy of PowerPoint Viewer is included,
so it is not necessary to have PowerPoint installed on your computer.
The ILT Series PowerPoint add-in
The CD also contains a PowerPoint add-in that enables you to do two things:
Create slide notes for the class
Display a control panel for the Flash movies embedded in the presentations
To load the PowerPoint add-in:
1 Copy the Course_ILT.ppa file to a convenient location on your hard drive.
2 Start PowerPoint.
3 Choose Tools, Macro, Security to open the Security dialog box. On the Security
Level tab, select Medium (if necessary), and then click OK.
4 Choose Tools, Add-Ins to open the Add-Ins dialog box. Then, click Add New.
5 Browse to and select the Course_ILT.ppa file, and then click OK. A message
box will appear, warning you that macros can contain viruses.
6 Click Enable Macros. The Course_ILT add-in should now appear in the
Available Add-Ins list (in the Add-Ins dialog box). The x in front of
Course_ILT indicates that the add-in is loaded.
7 Click Close to close the Add-Ins dialog box.
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viii Medical Billing and Coding: Basic

After you complete this procedure, a new toolbar will be available at the top of the
PowerPoint window. This toolbar contains a single button labeled Create SlideNotes.
Click this button to generate slide notes files in both text (.txt) and Excel (.xls) format.
By default, these files will be saved to the folder that contains the presentation. If the
PowerPoint file is on a CD-ROM or in some other location to which the SlideNotes files
cannot be saved, you will be prompted to save the presentation to your hard drive and
try again.
When you run a presentation and come to a slide that contains a Flash movie, you will
see a small control panel in the lower-left corner of the screen. You can use this panel to
start, stop, and rewind the movie, or to play it again.
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Introduction ix

Topic B: Setting student expectations
Properly setting students expectations is essential to your success. This topic will help
you do that by providing:
Prerequisites for this course
A description of the target student at whom the course is aimed
A list of the objectives for the course
A skills assessment for the course
Course prerequisites
Students taking this course should be familiar with personal computers and the use of a
keyboard and a mouse. Specifically, students should be comfortable using Microsoft
Windows and Internet Explorer (or some other browser). Furthermore, this course
assumes that students have completed the following courses or have equivalent
experience:
Medical Terminology
Target student
The typical students of this course will be interested in a career in medical billing and
coding, and may be interested in certification in the field.
Course objectives
You should share these overall course objectives with your students at the beginning of
the day. This will give the students an idea about what to expect, and will also help you
identify students who might be misplaced. Students are considered misplaced when they
lack the prerequisite knowledge or when they already know most of the subject matter
to be covered.
After completing this course, students will know how to:
Understand the roles, responsibilities and options of those in the medical billing
field; identify different rsum types, keywords, and application avenues;
describe the pros and cons of self-employment in the field; gain a base
knowledge of US health insurance history and terminology; understand current
events in the field and expected growth and change to come.
Know the basics and history of Medicare as a driving force for the industry;
understand the Medicaid and the Medicare-Medicaid relationship; know
applications of Workers Compensation for medical billers; identify the general
concepts of Tricare and ChampVa; know the specific types and applications of a
managed care organization; know what additional health insurance options and
resources are available.
Complete basic claim forms and understand the differences in claim types;
understand the connection of the Health Insurance Portability and
Accountability Act to electronic claims; apply unique requirements to other
insurance carriers such as Medicaid and Workers Compensation; combine
necessary reporting mechanisms to the overall claim process.
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x Medical Billing and Coding: Basic

Calculate the Medicare and Medicare-related fee-schedules to a payment,
adjustment, and collection process for PAR and Non-PAR providers; combine
your knowledge of managed care to the complete payment and collections
process; use and understand the different payment methods and calculations;
apply collection methods and types to complete the claims process, along with
learning about different options for collections.
Follow the medical claims steps from predetermination to the end of a claims
life; understand and apply different types of patient statements and follow the
steps in the management of the billing process; know the administrative tasks for
the medical billing cycle, such as audit trails, practice analysis, and problem
identification; apply the whole billing process by completing claims, following
up, and using patient ledgers in sample cases.
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Introduction xi

Skills inventory
Use the following form to gauge students skill level entering the class (students have
copies in the introductions of their student manuals). For each skill listed, have students
rate their familiarity from 1 to 5, with five being the most familiar. Emphasize that this
is not a test. Rather, it is intended to provide students with an idea of where theyre
starting from at the beginning of class. If a student is wholly unfamiliar with all the
skills, he or she might not be ready for the class. A student who seems to understand all
of the skills, on the other hand, might need to move on to the next course in the series.

Skill 1 2 3 4 5
Listing job titles and describing different positions in the
medical billing and coding field

Listing skills and proficiencies needed for success in the
medical billing and coding field

Describing the standards of ethical coding
Describing medical etiquette and HIPAA
Listing and describing certifications in the field
Creating a rsum that matches your goals and experience
Describing the pros and cons of self-employment
Relating the history and future of health insurance in the
United States

Describing the basics of Medicaid, PAR, and non-PAR
providers, and fraud awareness

Describing different types of Medicare and eligibility
Describing the history and coverage of Workers
Compensation.

Describing TRICARE and CHAMPVA
Comparing managed care organizations and other health
insurance plans

Completing basic health insurance claim forms
Understanding the overall claims and billing process
Using various billing reports
Calculating the Medicare and Medicare-related fee-
schedules to a payment

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xii Medical Billing and Coding: Basic

Skill 1 2 3 4 5
Completing patient ledgers
Using different payment methods and calculations
Tracking, managing, and improving collections
Following up on pending claims
Completing the claims process
Documenting and managing accounts
Maintaining an audit trail
Finding and identifying problems in the billing process

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Introduction xiii

Topic C: Classroom setup
This course assumes that each student has a personal computer with Internet access to
use during the class. In addition to a manual, each student should also be provided with
a pad and pens or pencils for filling out forms jotting down notes questions. Students
should have a comfortable place to sit and ample table space to spread out their
materials.
First-time setup instructions
The first time you teach this course, you will need to perform the following steps:
1 Ensure each student should have a computer with Internet access and a Web
browser. Newer versions of Windows and Mac OS come with a browser
installed.
2 Some documents that students open during Web activities are in PDF format (as
are the student data files), so youll need to install the free Adobe reader: Open a
Web browser and go to www.adobe.com. Click the link for Get Adobe Reader
and follow the instructions for installation.
3 If you dont already have the student handout files on CD, download the
Student Data files for the course.
a Connect to www.axzopress.com.
b Under Downloads, click Instructor-Led Training.
c Browse the subject categories to locate your course.
4 Print out a copy of each data/case document for each student. These include files
in the unit folders and in the case subfolders. Print two copies of each form
(these are found in the Forms subfolder in the unit folders, where applicable).
Some forms appear in more than one unit, so students will have four or six
copies of some blank forms.
Setup instructions for every class
Before the start of every class, print out fresh data sheets, case studies, and forms for
each student.
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xiv Medical Billing and Coding: Basic
Topic D: Support
Your success is our primary concern. If you need help setting up this class or teaching a
particular unit, topic, or activity, please dont hesitate to get in touch with us.
Contacting us
Please contact us through our Web site, www.axzopress.com. You will need to provide
the name of the course, and be as specific as possible about the kind of help you need.
Instructors tools
Our Web site provides several instructors tools for each course, including course
outlines and answers to frequently asked questions. To download these files, go to
www.axzopress.com. Then, under Downloads, click Instructor-Led Training and
browse our subject categories.

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11

Un i t 1
Introduction to medical billing and coding
Unit time: 360 minutes
Complete this unit, and youll be able to:
A Discuss the roles, responsibilities, and
options of those in the medical billing field.
B Identify different rsum types, keywords,
and application avenues.
C Describe the pros and cons of self
employment in the field.
D Discuss U.S. health insurance history and
terminology.
E Understand current events in the field and
expected growth and change to come.
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12 Medical Billing and Coding: Basic

Topic A: Roles and responsibilities
Explanation The healthcare industry today provides many job opportunities. According to the U.S.
Department of Labor, Bureau of Labor and Statistics, About 16 percent of all new
wage and salary jobs created between 2002 and 2012 will be in health services3.5
million jobs, which is more than in any other industry.
1
The workforce in healthcare is
largely divided into two main categories: clinical and non-clinical. The clinical side
includes those medical careers that are highly visible such as doctors, nurses, medical
assistants, and other direct patient contact careers. While these are all considered great
career options, a demand for staff that support such positions in healthcare are becoming
even more recognized and valued such as medical billing insurance specialists and other
administrative-related positions.
Positions, titles, and places of employment in the field
Health insurance policies and contracts barrage our healthcare industry and can be quite
complicated in nature. Reimbursement for services rendered in the field has become a
much more difficult task than in the past as a result of changing policies and guidelines
and therefore requires additional knowledge to ensure proper handling of claims,
payments, and reviews. Due to this need, achievable avenues have developed to aid
professionals who are forced to keep up with the constant changes in guidelines and
conventions.
Managers and administrators are no longer able to spend the enormous amount of time
required to efficiently complete the insurance billing cycle. An array of positions such
as health insurance specialists, medical documentation coders, and health information
technicians has arisen due to the ever-changing complexity of the required billing
guidelines and coding conventions. Although the rising need for such specialization has
served to raise the recognition of professionals in the field, unfortunately there are still
some employers out there who have not yet realized the true value of having such
specialists as professionals among their staff. With continued focus on this need,
however, and the assistance of national organizations that are willing to continue the
fight, it is expected that this trend for more educated professionals in medical health
insurance billing and coding will continue to grow. Therefore, the timing for those
going into medical billing and coding is perfect.
Note: It is important to understand that the positions listed below under specific facility
options are in general terms and that some positions may cross the location/facility
barrier, depending on the specific needs and responsibilities of that employer. For
example, a billing company may need to hire all types of certain facility-based billers
such as those companies who bill for hospitals, medical offices, and a combination of
facilities. It is also worth noting that some employers require different skills and
responsibilities. For example, employers who might want to include coding
responsibilities along with required billing responsibilities. Note that this list is non-
inclusive of positions in the field as new ones are created and specified constantly as
new responsibilities and specializations come about.
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Introduction to medical billing and coding 13

Hospital and inpatient facilities

Medical Records Specialist
Hospital Patient Accounts Representative
Health Information Technicians and Managers (HITs and HIMs)
Responsibilities: Working with medical records in an inpatient facility such as a skilled
nursing facility, medically-based nursing home, or hospital. Data entry is usually
considered to be a big part of this list of positions with the exception of the Health
Information Managers whose duties are more administrative in nature. The Health
Information Technician differs from the Medical Records Specialist in that these
information technicians are usually involved in the coordination of information (e.g.,
computer information with electronic and paper documentation) and usually also
involve a level of medical coding as well.
Clinical facilities
Generally, the clinical facilities category includes medical offices, healthcare clinics,
and outpatient services facilities.
Medical Office Billing Specialist
Electronic Claims Professional (ECP or CECP for Certified)
Medical Billing Specialist (MBS)
Responsibilities: Completion of CMS/HCFA 1500; customer service related to
completion of claims and insurance assistance; working closely with back-office
personnel to ensure proper coding, documentation, and billing; determining proper
coding and billing conventions; possessing a basic knowledge of insurance types and
familiarity with general policies and procedures for each.
Patient Billing Advocate
Claims Assistance Professional (CAP)
Patient Claims Specialist (PCS)
Medical Savings Plan Representative
Responsibilities: These individuals may or may not work for a medical facility or billing
company. They represent and are considered advocates for patients in their quest for
proper payment of services or procedures rendered to them or a family member. Many
medical facilities are recognizing the need for such positions in the ever-complicated
world of claims and are contracting with companies that provide these types of services.
They assist patients with such issues as their patient rights, including financial matters
when claims are not getting properly paid or a patient is financially unable to pay
required bills. CAPs may also be self-employed and are considered to be a great up-and-
coming profession. There is a word of caution in this position: the insurance industry
does not allow CAPs or patient advocates to recommend or suggest certain insurances
or types as it is considered selling and will fall under their insurance sales
representative state laws per the national insurance commissioner.
2

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Non-clinical facilities
These employers generally include such entities as insurance companies, health
maintenance organizations, or other third party administrators (TPAs).
Health Insurance Specialist (HIS)
Health Insurance Claims Reviewer
Electronic Insurance Specialist (EIS)
Responsibilities: Receiving and reviewing insurance claims submitted in a timely
manner; understanding codes and conventions; determining errors, omissions or
inconsistencies with claims under review according to standards and policy.
Positions that can be filled at more than any one location
These positions are based on duties and specialties and are therefore able to be filled at
any or all facility types such as hospitals, clinics, medical offices, laboratories, billing
companies, and other medically-related businesses.
Collection Specialist
Reimbursement Specialist
A/R Collections Representative (Accounts Receivable)
Patient Account Specialist
Responsibilities: Reviewing outstanding claims to determine payment requirements or
reimbursement necessities; following up with insurance carriers, network plan
providers, or Third Party Administrators to determine reason(s) for any unpaid claims;
following up with patients for payment of claims unrecoverable from insurance carriers;
referring those with financial hardships to the proper channels (Medicaid, payment plan
options, State, County or Federal Health Assistance programs).
Coding positions

Certified Professional or Procedural Coder (CPC)
Certified Hospital Coder (CHC or CCS-H)
Certified Coding Specialist (CCS)
Certified Coding Associate (CCA)
Responsibilities: Translating medical documentation services and procedures into valid
CPT (Current Procedural Terminology), ICD9CM (International Classification of
Diseases, 9th Revision, Clinical Modification), or HCPCS/CPT, level 2 (Health Care
Procedural Coding System). Many coders specialize in specific types of coding such
as, but not limited to: hospital coding, outpatient coding, procedural coding, diagnostic
coding, physician coding, DME (Durable medical equipment) coding, and specialty
coding. Each type of position focuses on transcribing the medical documentation or
services or procedures codes rendered along with conditions, symptoms or diagnoses
into these nationally (above) and internationally (ICD10) recognized codes.
Other positions
Medical Secretary
Medical Facility Unit Clerks
Administrative Assistants
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Responsibilities: Generally responsible for a variety of administrative and clerical duties
necessary to run an organization efficiently. They need skills for a variety of tasks and
machines such as computers, facsimile machines, photocopiers, complex telephone
systems, and other office equipment. In addition, these individuals increasingly use
personal computers to create spreadsheets, compose correspondence, manage databases,
and create reports and documents via desktop publishing and digital graphicsall tasks
previously handled by managers and other professionals.
Chiropractic, acupuncture, and alternative medicine facilities
Modern healers are continuing to embrace ancient medicine. Many health insurance
companies are also beginning to recognize that these methods might have a hand in
preventative and overall good health, and a few have even begun including them in
patients benefits and on a case-by-case basis. It is expected that this trend in medicine
will continue to grow, thus increasing the need for medical billers and coders.
Medical software applications specialists
Computers, Internet access, electronic billing, and HIPAA have all sparked the need for
computer software companies to offer solutions to the healthcare community. Even
President George W. Bush in his 2004 presidential debate with Senator John Kerry
recognized the need for the medical community to become better equipped and more
up-to-date with the twenty-first century in assisting patients, doctors, and insurance
companies.
3
This makes it essential for software development companies to work hand-
in-hand with the medical professionals, which has already begun creating the need for
professionals who understand and are educated in regulations, billing guidelines, and
conventions. Software and programs that are able to complete these tasks often require
the assistance of full-time medical billers and coders.
These other possible careers for professionals can sometimes be a part of, derived from,
or even grow out of a medical billing and coding position.
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Do it! A-1: Reviewing positions and titles
Exercises

1 Match each title or title acronym on the left with its corresponding description on
the right.

a. CPC
b. CBCS
c. Reimbursement
Specialist
d. CAP
e. CCA
f. ECP
g. HIT
h. A/R Representative
1. Claims Professional that often works for individuals
rather than companies.
2. Concerned with collections.
3. Certified Procedural or Professional Coder.
4. Claims Specialist that uses electronic means for claims
submissions.
5. Considered and recommended by most as the first step
on the National Certification ladder.
6. Considered by AHIMA to be the first step in National
Coding for those who do not yet qualify as a full-
fledged coder.
7. Generally works with medical documentation at an
inpatient facility.
8. Reviews outstanding claims and accounts to track the
percentages of monies still due to the facility.

Answers: a=3; b=5 (certified billing and coding specialist); c=2; d=1 (claims assistance
professional); e=6 (certified coding assistant); f=4 (electronic claims professional); g=7
(health information technician); h=8 (accounts receivable representative)

2 After you have completed the matching above, list general responsibilities for
each.

3 Discuss possible places of employment for each.

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Skills and proficiencies
Explanation There are many characteristics that an individual should possess in order to function
well in the medical billing and coding profession. It is also important to realize that
although the skills and proficiencies listed are considered for most positions mentioned,
additional skills and proficiencies may be required by an employer.
Generally, a minimum of a high school diploma or equivalent is considered a must as
reading, logic, and critical problem solving are required skills to begin with. Good
organizational skills are also invaluable in this field. Moreover, proactive tactics are
often necessary to complete accurate claims and reviews since many times in the field
reimbursement hinges on the careful approach of someone who has an eye for details
that can be easily overlooked.
Minimal skills

Critical thinking skills It is important to possess the ability to think logically
and solve problems.
Comprehensive and precise reading skills Applicants must not only be able to
read carefully but also be able to understand that detailed issues in
documentation can be extremely crucial. For example, noticing the difference in
simply a few letters of a medical procedure can prevent a huge clerical mistake,
such as the difference between words like colotomy, which is a surgical incision
in the colon, versus colectomy, the surgical removal of all or part of the colon.
Basic mathematics Calculating fees, percentages, and reimbursements are a
necessary part of any billing position. Verification of an understanding of basic
multiplication, division, addition, and subtraction by testing is considered to be
part of the application process for some billing positions.
Computer skills An overall comprehension of inputting, typing, and general
computer knowledge is required for almost all positions in the field. The ability
to use programs such as MS Word, Word Perfect, and Excel are minimal
requirements in most facilities.
Additional skills
Medical Terminology A basic understanding of general medical terms,
including the ability to break down words and comprehend which body
system(s) is being referred to is considered a must in this field.
Anatomy & Physiology A working knowledge of gross anatomy and
physiology (e.g., knowledge of disease processes) is also required by most
employers.
Proficiencies
Typing Skills A minimum of 35 WPM is usually required. Some employers
require more, depending on what the job entails.
Mathematical Problem Solving Not only are basic mathematical skills
important, but also the ability to understand math solutions and their
implications.
10-Key and Calculator Usage A general understanding of how to use a 10-
key calculator is assumed by most employers. Some companies even test
applicants in this skill.
Data Entry Data entry goes hand-in-hand with computer skills and is
considered an important responsibility of most positions.
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Do it! A-2: Practicing required math skills
Exercises
Students may also use a
separate calculator.
1 Choose Start, All Programs,
Accessories, Calculator

What is $1002.66 and $1265.22
debited from $2367.88?
On your calculator key in: 2367.88 minus
1002.66 minus 1265.22, which will show
$100.00 as the correct answer.

What is $1045.00 with credits of
$100.00 and $235.00, and a debit
of $80.00?
On your calculator key in: 1045.00 plus 100.00,
plus 235.00 minus 80.00, which will show

2 Case Scenarios Use a calculator and consider the following.

A claim was sent in for
$14,799.25 (amount due) and
XYZ Insurance company paid
$9025.25. An adjustment of
$112.00 was also made (deducted)
for non-contracted monies.
What is the amount still owed on
the claim?
On your calculator, key in: 14799.25 minus
9025.25 minus 112.00, which will show

A reimbursement check came into
the office for $4,156.99 from
ABC Carrier. The check consisted
of payment on several patients
claims for services rendered. Here
is a breakdown of payments
(deducted) listed on the
Explanation of Benefits.
J. Brimley: 2119.20
S. Simpson: 59.00
T. Wright: 267.00
A. Smith: 1022.79
L. Luerrel: 809.00
This remittance advice also
reflects a REFUND (addition
overage) for an H. Truly. How
much of a refund should be
reflected for Mr. Truly on this
EOB?
On your calculator, key in: 4156.99 minus
2119.20 minus 59.00 minus 267.00 minus
1022.79 minus 809.00, which shows you a
negative number of $120.00. This would
normally indicate that the check amount sent
would not cover all of the payments that need to
be applied to each patients account and
subtracted from the check total; however, we are
told in the scenario that there is also a refund
which reflects a credit or added amount.
Therefore, the correct answer or refund amount
would be $120.00

3 What is 87% of $3500.00? On your calculator, key in: 3500.00 times .87 to
show the correct answer of $3045.00.
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4 Percentages and Multiplication
What would the consumers total
be when offered a reduction for
paying in full of 15% off regular
fees of $349.00?
Hint: The answer must reflect
what the consumer would pay in
total, not the reduction amount
There are two ways you can complete this
equation. You can either multiply 349.00 by .15,
which gives you a subtotal of $52.35, and then
subtract this subtotal from the original fee of
$349.00; or you can multiply 359.00 by .85,
which is the difference of 100% minus the 15%
discount/reduction. Either equation will give
you a correct answer of $296.65.

5 Putting it all together
A patient seen in the office today
by Dr. Cardiac has an evaluation
and a procedure done whose fees
are $65.00 and $142.00. The
patients insurance pays 80%.
A. What is the total insurance
amount that would be paid?
B. How much does the patient
owe for his evaluation?
C .How much does the patient
owe for his procedure?
A. On your calculator, key in 65.00 and multiply
by .80 to show a subtotal of $52.00. Then, key
in 142.00 and multiply by .80 to show a second
subtotal of $113.60. Add these two subtotal
amounts together (52.00 plus 113.60) to show
the correct answer of $165.60.
B. On your calculator, key in 65.00 and multiply
by .20. The answer of $13.00 shows that this is
the amount owed by the patient.
C. Key in 142.00 and multiply by .20 to show
that $28.40 is the correct amount due for the
procedure.

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Ethics, etiquette, and HIPAA
Explanation As in any business arena, it is important for those entering the medical billing and
coding field to project a professional image. This not only includes presenting a
business appearance via ones attire, but also exhibiting professionalism through such
behavioral manifestations as effective communication, displaying a team player
attitude, and speaking intelligently. An understanding of the essentials of common
medical etiquette and ethics should include having at least a basic knowledge of the
most current issue affecting the field. The Health Insurance Portability and
Accountability Act (HIPAA) has affected everyone in the medical field recently, and
those entering the medical billing and coding world should be aware of the name, at
minimum. HIPAA will be discussed in more detail later.
Medical ethics
Medical ethics are the standards of conduct that are generally accepted within the
medical community as guidelines for behavior from a moral perspective.
Acting ethically means behaving in a way toward others that includes such conduct as
honesty, integrity, decency, consideration, mutual respect, fairness, and self control.
Hippocrates, along with the medical community of the time, established the most
famous written ethical principles in about the fifth-century BCE, known as the Oath of
Hippocrates. An updated version of these ethical boundaries were issued in 2002 by the
American Medical Association called the Charter on Medical Professionalism
4
and are
based also in part on the Principles of Medical Ethics that were developed by the AMA
in 1980.
Some educational facilities are even including Medical Ethics in their courses as
required material for students entering this field. The American Health Information
Management Association has devised the Standards of Ethical Coding for coding
professionals.
5

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Exhibit 1-1: AHIMAs Standards of Ethical Coding
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Other national associations that have gained authority in the field of medical billing and
coding are the National Healthcareer Association (NHA), and the Healthcare Billing
and Management Association (HBMA). They continue to require members to maintain
such ethical standards as professionalism, competency, integrity, objectivity,
confidentiality, honesty, diligence, and complying with all relevant local, state, and
federal laws as applicable.
6

Professional etiquette
In any business setting, interactions between professionals should include such
standards as courtesy, manners, and consideration for others. Some detailed examples of
recommended practices in professional etiquette are:

Always rise when introducing or being introduced to others.
Maintain a firm handshake and eye contact with others during introductions.
Always use proper titles, names, and company information.
Unless requested or given permission to do otherwise, always use title and last
name for introductions.
Always arrive on time for appointments: It is recommended to arrive ten minutes
early to be considered on time in most corporate situations.
Specifically, medical etiquette is an essential part of the medical billing and coding field
and should include the etiquette practices above as well as these suggested by most
medical professionals:

With respect to physicians and providers, never keep them on hold for more than
a few seconds on the telephone and keep other waiting times to a minimum.
Offer to assist providers in any way necessary, such as by pulling a patients
chart or medical records.
Regarding all medical professionals and clients, treat them with a respect and
courtesy that demonstrates an awareness of health concerns and stress factors.
Always maintain patient confidentiality.
Respect patients privacy. Be aware of the federal mandate HIPAA, or Health
Insurance Portability and Accountability Act, discussed later.
Netiquette
With todays convenience of the Internet at our disposal, it is important to discuss this
recent addition to the professional community at large. For the medical community in
particular, the Internet can be a great delivery system for expeditious exchanges of
information and data. Although still in its beginning stages in the medical realm, the
Web can provide consumer access to health records and medicines for emergency
situations, offer quicker approval of health benefits or specific services needed, and
assist in research efforts for better patient care. In response to this new instant access for
medical professionals, there derives the need to communicate and correspond in the vast
Internet world.
Netiquette (from Internet etiquette) guidelines that are widely accepted align with the
professional etiquette that is recommended for any communication or correspondence
with another professional in any setting.
Here are some of the applicable netiquette guidelines for consideration.
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Do not type in all caps in communications, as this is considered a form of yelling
or screaming online.
Whether e-mailing, chatting, or submitting information online, always give a
subject or heading to your correspondence.
Keep formatting simple: do not add color, graphics, or fancy font/characters.
Although it might look great from your end, it is always questionable for
viewing at the receiving end.
Do not send anything to a blind receiver (one who is not authorized to receive
your correspondence or information).
Always use proper language and professional tones in writing because the only
tone an Internet receiver will perceive is the one contained within your written
words.
Never give out phone numbers or personal information online. Patient
information and data exchanged over the Internet is considered subject to
HIPAA
7
, and any correspondence sent in unsolicited bulk can be considered
spam.
8

Due to the need for more Internet e-Health ethical guidelines, the Journal of Medical
Internet Research (JMIR) is one international entity that has taken on the enormous task.
They began their goal with the e-Health Ethics Summit, which convened in
Washington, DC, on January 31, 2000 along with and hosted by the World Health
Organization (WHO) and the Pan-American Health Organization (PAHO). They began
their questalong with many other international guests from all over the worldto
discuss this vital issue. The e-Health Code of Ethics guidelines and information is still
being discussed
9
and can be viewed at: http://www.jmir.org/2000/2/e9.
HIPAA awareness and compliance
Not only is it imperative from an ethical and etiquette standpoint, but now also from a
legal standpoint that medical professionals maintain confidentiality for patients.
The Health Insurance Portability and Accountability Act of 1996 was implemented by
the Centers for Medicare and Medicaid (CMS) and incorporates two main parts that
have digressed into more detailed portions of the law. Title I of HIPAA is intended to
protect health insurance coverage for workers when they change or lose their jobs. This
part is known as HIPAA Insurance Reform.
Title II of HIPAA requires the Department of Health and Human Services to establish
national standards for electronic healthcare transactions along with providing national
identifiers for providers, health plans, and employers. It incorporates the privacy and
security of confidential medical data and information and is commonly referred to as
PHI (Protected Health Information). It also contains standardized code sets for claims
and unique NPIs (National Provider Identifier numbers) that providers will need to
request beginning May, 2005.
The main point of discussion with respect to those just beginning to learn HIPAA is to
understand the responsibilities of those in the medical field that may be privy to detailed
medical and financial issues that pertain to individuals. There has been a need for many
years to standardize our industry, and HIPAA allows for and assists with this. With
respect to privacy specifically, Privileged information is basically everything you see,
hear, or read about a particular patient that needs to remain confidential and should not
be discussed without the patients permission. Some employers now even require some
sort of confidentiality agreement signed by new employees and business associates,
such as contracted billing companies.
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Privileged versus Non-privileged information
Privileged information includes details related to the treatment, condition, and financial
status of any patient. This requires a patient to sign an authorization to release any
information, along with disclosing the details as to where and to whom the information
is being given.
Non-privileged information includes public information about the patient such as his
name, city of residence, dates of hospital admission and discharge, and facts accessible
through public entities within that county, city, or district. Non-privileged information
does not generally require a signature authorization but may still fall under the HIPAA
privacy sensitivity of information section and must therefore only be disclosed to those
who have a legitimate need-to-know, meaning that the information being revealed
must only be given to those with respect to the patients treatment or insurance company
claim data.
Do it! A-3: Discussing ethics, etiquette, and HIPAA
Exercises

1 Perform these sample cases in small groups. Read the medical etiquette scenario.
Discuss the proper etiquette technique, and offer additional suggestions. Be
specific.
You are doing medical billing at a medical facility satellite office, helping out for
someone who is sick. The provider you are working for owns the satellite facility.
You answer the telephone, and there is another provider on the phone requesting
you to put them through to the provider in charge. The medical provider is
presently on a personal errand picking up his dry cleaning and will not be coming
into the office at all today.
How should you handle the call?
Some possibilities:
Inform the requesting provider on the phone that the provider in charge is out on a
personal errand picking up his dry cleaning and will not be coming to this office at all
today.
Inform the requesting provider to call back at the other office where the provider in
charge should be later on.
Inform the requesting provider that the provider in charge is not presently available but
should be back tomorrow.
Inform the requesting provider that the provider in charge is not presently available but
you would gladly take a message.
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2 Read the netiquette scenario.
You receive an e-mail back regarding some medical billing concerns you had sent
to an insurance companys contractor representative. In the response you received,
you noticed several acronyms that were unfamiliar to you, as well as a cc
(carbon copy) to the patient account representative supervisor. Here is the sample
e-mail you received:

To: Responder Date:8-22-2004
From: ABC Insurance Company
Re:
cc: Suzy Supervisor
Hi Betty Biller,
In response to your question about a contract with your provider, Dr. XXXXXX and
subscriber Penny Patient; I would like you to know that because we have no specific
information about this patient on file from you, and apparently she is NDA, IMHO I
CANNOT ASSIST YOU AT THIS TIME. BTW, you might want to review your
contract for the doctor and contact us for further answers as per the contract. Dont
contact us this way again.
Thank you,
Miserable Marcia Company Representative

After researching further, you define the acronyms:
NDA = Not Diagnosed with Anything
IMHO = In My Humble/Honest Opinion
BTW = By The Way
What are the ethical issues (if any) and the proper medical netiquette techniques
that Miserable Marcia (Company Representative) did not follow?
There is no Subject/Reference in the Heading.
The phrase I CANNOT ASSIST YOU AT THIS TIME is all in caps. This is considered
inappropriate.
The use of abbreviations and Internet acronyms might be cute; however, they are not to
be used in business netiquette.
The letter contains a patients name and the heading has a cc (carbon copy) to Suzy
Supervisor, which is unauthorized.
The entire tone of the letter is unprofessional.
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3 Read the ethics in managed care scenario.
You are the medical biller for a provider. Mrs. Smith, a client of that provider, has
been calling and coming into the office excessively and refuses to follow the
medical advice given. You have contacted the managed care organization who
states that they will not cover any further office visits, based on the medical plan
of treatment required for this patient per the provider. The provider feels that the
prescribed treatment is medically necessary; however, the patient is still refusing
to comply.
What is the ethical issue of concern? Note: You are not required to solve the
dilemma, only to discuss the ethical responsibilities.
Here are some possible reactions to discuss:
Because the patient is insisting, you would not even discuss this with the
provider, but just let her come back in.
You would need to go to your supervisor because even though this problem is
ethical in nature, you would need to follow the office policies.
You would politely inform the patient that the provider cannot see her
anymore.
None of these describes your reaction; you would

4 Review the ethical dilemma after reading the HIPAA scenario.
After completing a privacy meeting earlier in the day, you overhear another
employee discussing a patients poor prognosis with a non-relative. She displays
sincere concern for the patient; however, you remember that in the meeting it was
stressed that HIPAA privacy laws prohibit discussing medical information without
proper authorization.
What are the ethical concerns you should consider?
Confidentiality is the biggest ethical concern in this scenario. PHI can fall under HIPAA.
Objectivity is also an ethical consideration that was not observed.
Integrity with respect to the patient and the other employee must also be addressed.

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Certifications and educational requirements
Explanation

Although currently there are no requirements on a national level for those in the medical
billing and coding field, it is recommended that professionals in the field consider a
more specialized form of recognition in their career development. Because the
healthcare industry continues to be one of the fastest growing fields in our nation, it
reflects an increase in career-oriented professionals entering this promising field. It is
also becoming a competency standard for larger employers that are starting to request
some credentialing. It is also important be able to network with others, which is another
benefit of becoming recognized and belonging to a national organization. Certification
and registration are two ways of pursuing recognition.
Certifications
Due to the ever-increasing complexity of the specific skills and the type of education
that continues to evolve in the field of medical billing and coding, it has become
desirable to certify ones skills and knowledge. The field continues to mature, and a
higher level of professionalism has lead to the creation of a number of organizations that
now offer specialized training and testing. Being able to show proficiency to a potential
or current employer when looking for advancement is a great benefit for professionals
who are serious about their careers. Specific requirements and guidelines help identify
those individuals who might or might not be eligible for these certifications.
Registrations
Registration is generally a verification of educational and professional requirements. It
offers the benefit of belonging to an official registry. There are also requirements and
guidelines for determining whether or not an individual can become registered. Usually
a fee is paid for the verification and for the addition of your name to an official registry.
Education
There have been and continue to be many changes in medical billing and coding from
year to year. It therefore becomes necessary to be proactive in maintaining ones
education in order to remain sharp and skilled. Most all of the national organizations
that offer specialized recognition want members to maintain their status by completing
continuing education courses every year or two. Many also stipulate the accepted forms
of continuing education, so it is wise to become informed about the required guidelines.
Moreover, it is helpful in knowing exactly what type of specialized training you might
wish to attain and it allows for professionals to even change direction but still stay
active and in the field.
For those just entering the world of medical billing and coding, it is important to review
those subjects that are generally considered to be required in this field. Here is a list of
topics that are important:
Medical Basics Medical Terminology, Anatomy and Physiology, Diseases
and their processes.
Medical Billing Billing Basics, Claim Forms, The Billing Cycle, Claims
Submission and Remittance, Electronic Billing, Collections and Reimbursement.
Medical Coding CPT (Current Procedural Terminology); ICD9CM
(International Classification of Diseases, 9th Revision, Clinical Modification);
HCPCS/CPT, level 2 (Health Care Procedural Coding System); and the
upcoming ICD10 (International Classification of Diseases, 10th Revision by the
World Health Organization).
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Keep in mind that it is not only beneficial but critical to keep current in medical billing
and coding. With the upcoming changes such as the ICD10, specialized recognition
might become a future requirement and would assist the professional in a smoother
transition if this does happen.
View the following chart for more information about the different certifications and
registrations.
Note: This list is non-inclusive and might not reflect all national organizations due to
additional certifications, registrations and changes that occur nationally. There might
also be additional certifications or registrations within each listed organization. (It is
recommended that you review the information listed for each organization to make sure
you have the most current information to make an informed decision.)

Title Organization Description
Certified Billing and
Coding Specialist (CBCS)
NHA National Headquarters
134 Evergreen Place,
9th Floor
East Orange, NJ 07018
Phone: 973-678-9100
Toll free: 800-499-9092
Fax: 973-678-7305
Web address: www.nhanow.com
Considered one of the first steps in
the medical billing and coding arena.
Focuses on both medical billing and
coding as well as medical
terminology.
Certified Coding Associate
(CCA)
Certified Coding Specialist
(CCS)
Certified Coding Specialist
Physician based (CCS-P)
Registered Health
Information Administrator
or Technician (RHIA or
RHIT)
Certified in Healthcare
Privacy (CHP)
American Health Information
Management Association
233 N. Michigan Avenue,
Suite 2150
Chicago, IL 60601-5800
Phone: (312) 233-1100
Fax: (312) 233-1090
Web address: www.ahima.org
Coding Professionals Certifications
focus specifically on medical coding,
documentation, national coding
standards, along with medical
terminology, anatomy and
physiology.
Registered Health Information
specialists focus on medical records
by verifying their completeness,
accuracy, and proper entry into
computer systems, along with
analyzing patient data for the purpose
of assisting in the improvement of
patient care or controlling costs.
The newest Privacy Certification
focuses on designing, implementing,
and administering comprehensive
privacy protection programs in all
types of healthcare organizations.
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Title Organization Description
Certified Professional
Coder (CPC)
Coder Hospital
(CPC-H)
Coder Apprentice
(CPC-A)
American Academy of
Professional Coders (AAPC)
309 West 700 South
Salt Lake City, Utah 84101
Phone: 800-626-CODE (2633)
Fax: 801-236-2258
Web address: www.aapc.com
Coding Professionals focus on coding
and coding compliance, standards and
conventions. They also include
medical terminology, anatomy and
physiology. They offer training in
Professional Medical Coding
Curriculum (PMCC).
Certified RN
Coder/Clinical Coder
Certified RN
Auditor/Clinical Auditor
Certified Medical Coder
(CMC) Technical Coder
(Non-clinical)
Certified Outpatient Coder
(COC) Technical Coders
(Non-clinical)
American Association of
Certified Coders and Auditors
(AACCA)
3233 Grand Avenue #N291
Chino Hills, CA 91709
Phone: 909 590-5307
Fax: 909-752-5315
Website: www.aacca.net
Predominantly a certification
specifically designed for Registered
Nurses (RNs) and also includes
physical therapists, physicians,
speech language pathologists;
however, now open to non-clinical
professionals beginning 2005.
Certified Medical Biller
(CMB) and Certified
Medical Billing Specialist
(CMBS)
American Association of Medical
Billers (AAMB)
1840 E. 17th St., Suite 140
Santa Ana, Ca. 92701
Phone: 1-888-BILLERS
Website: www.billers.com
This organization is becoming more
recognized for medical billers.
Certified Claims Assistance
Professional (CCAP) or
Certified Electronic Claims
Professional (CECP)
National Association of Claims
Assistance Professionals, Inc.
(NACAP)
5329 S. Main St., Suite 102
Downers Grove, IL 60515
Phone: 708-963-3500
A great organization for those
considering becoming CAPs.

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Do it! A-4: Certifications and education game
Heres how Heres why
You will need Internet
access for this activity.
1 Choose Start, All Programs,
Internet Explorer
To start the Web browser. You will play an
online activity game.

2 Go to http://www.quia.com/cm/66259.html

Follow the instructions on the site This will bring you to the Quia Medical Billing
and Coding Certification game.

3 You may play more than once You will become familiar with the acronyms
and titles in the field.

4 You will also need to view each
associations website for current
information:
Changes in the field make it necessary to change
requirements and qualifications; therefore it is
important to make sure you review the most up-
to-date information available.

http://www.aapc.com
http://www.ahima.org
http://www.nha2000.com
http://www.aacca.net
Look up certifications for each organizations
website.

5 Write down any sites or
certifications that you are
interested in pursuing

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Exhibit 1-2: Medical billing and coding crossword puzzle
Do it! A-5: Medical billing and coding crossword
Heres how

1 Pair up and complete the crossword puzzle in Exhibit 1-2

2 Compare your answers

3 Review and discuss any questions you have

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Topic B: Applying for a position
Explanation Healthcare has undergone significant changes in the past 20 years. A much higher level
of education and skills are necessary in the field of medical billing and coding today;
therefore, a more professional appearance, attitude, and rsum should be considered.
You are required to show evidence of your knowledge, skills, experience, or education,
and posses the ability to demonstrate your qualifications in sometimes quick and
impersonal ways.
Often your rsum and rsum-package is the first impressionone that can either help
or hinder your pursuit of employment or promotion in the field. There are different
ways to reflect your own key selling points or professional attributes.
Types and formats of rsums
Rsum: A rsum is preferred for healthcare professionals seeking positions in medical
billing and coding or back-office operations. When seeking a management position,
reverse-chronological rsums or combination rsums are preferred. Hospitals,
physicians offices, medical facilities, billing companies, and health insurance agencies
need qualified people in accounting, billing and coding, claims, collections, and the
management of these areas.
Curriculum Vitae (Course of Ones Life): CVs are used primarily by people in
medical, academic, and scientific professions, like physicians and those with a high
degreed level. CVs should have a tone of understated modesty. The professional should
list all credentials, but not necessarily boast (as in a rsum) about the achievements.
Typical headings include education/degrees, internships, professional experience,
awards and honors, publications (books, articles, reports, and journals), speaking
engagements, conferences, and professional affiliations. The length depends on the level
of experience a CV for a new grad might be one page, whereas one for a long-time
professional might be several pages.
Reverse chronological order rsum

This is the traditional style rsum that lists your professional experience
chronologically, starting with your most recent position. The majority of rsums are
written in this format, and this is also the format most employers are accustomed to
seeing. This style is particularly effective in these circumstances:
If you have professional experience in the field of interest
If you can demonstrate measurable results or skill level such as with achieving a
Medical Billing and Coding Certification
If you have held impressive job titles such as a Medical Billing Supervisor,
Practice Reviewer, or Claims Auditor
If your experience outweighs your education in the field of interest
Here is an example of this type of rsum:
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Exhibit 1-3: Reverse chronological format rsum
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Functional rsum

This style became popular in the 1970s and 80s when the need arose for a more creative
way to market ones skills and qualifications
The functional format uses a summary introduction section followed by a detailed
description of the job-seekers skills and expertise in specific functional areas. This
functional section serves as the main area of content.
It is helpful when there are gaps in the chronological order of jobs.
Work History is generally listed in a simple listing and does not usually include
descriptions or dates.
Education and other sections are listed below.
Most commonly used for career changers who lack specific work history in the
job field they are attempting to enter but have transferable skills in this area.
Also can be effective if the job-seeker has past experience in a certain functional
area, but recent experience does not reflect the specific function.
Some employers do not favor this type of rsum because of the possible gap and
sometimes misleading details that are left out. It is also more difficult to format this type
of rsum into the newest electronic media availability.
Here is an example of a functional rsum.
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Exhibit 1-4: Functional rsum
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Combination rsum

The combination rsum utilizes the best components of the reverse chronological and
functional styles. More recently, the combination rsum has included accomplishments
under each position or function, rather than simply outlining duties and responsibilities.
This style allows for flexibility in designing a rsum. Again, since employers are used
to a reverse chronological format, this includes the quick-glance response from
employers while emphasizing specific areas of strength.
You might consider this type of rsum:
If each position you held involved a different job description
If you have completed a medical billing and coding program or course and lack
experience in the field
If you have had volunteer, internships, or externships related to the field and
want to focus attention on this
If you are changing fields and want to market yourself as a qualified and
professional applicant who is serious about your career
This is the most popular type of rsum in medical billing and coding today. Here is an
example of a combination rsum.
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Exhibit 1-5: Combination rsum
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Do it! B-1: Determining the type of rsum you need
Questions and answers
Students can use
separate sheets of paper
for this activity.
Students do not have to
choose a provided
answer. They can make
up their own.
1 Why do you want to write a rsum?
I am looking for a new job in a different field from my previous experience.
I am looking for a new job in the same field.
I would like a promotion at my current employers company in a different
department.
I have a need for a rsum due to (fill in the rest).
It is possible to have a unique need for a rsum, such as to apply for a specific
national certification exam or registration.

2 What are your strengths and weaknesses?
I have a little education and a lot of experience.
I have little to no experience in the field, but have completed a great program
in medical billing and coding.
I have a lot of previous experience in management but am new to this field.
I have a Bachelors or Associates degree and have completed a program in
medical billing and coding.
I have specific strengths in (fill in the rest). An example would be someone
who possesses an accounting background and wants to focus on this.

3 You need to assemble the following information.
Dates, names of direct supervisors, addresses, phone numbers, and other
pertinent information from each past and present employer.
Job descriptions and responsibilities as they relate to desired position.
Educational information or transcripts for degrees, programs, seminars, and
courses completed such as dates, type of degree/certification received,
addresses, names, and phone numbers of instructors or school officials for
verification.
Letters of recommendation, appreciation, or awards received.
Information about the prospective employer or department.
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4 Review the above to see if the amount of information you gathered matches your
area(s) of strength determined in Step 2. Do you need to adjust your targeted areas
of strength on your rsum to draw more attention to these areas?
If you have more than one area that you would like to focus on then you will want
to reflect any and all applicable strengths in the beginning or top portion of your
rsum.
I have strengths in the following areas(list):
Some examples are employment: previous management, previous medical
experience, accounting background, customer service; and education:
completion of a medical billing and coding program/seminar/course, college
degree, continued education.

5 Based on your answers to the above questions, you can then decide which type of
rsum would suit your needs.
Reverse Chronological format
Functional Rsum format
Combination Rsum format
Note: Most professionals in medical billing and coding will want to use the
Combination Rsum format due to the nature of the information included.

6 What type of position are you looking for and where are you going to market
yourself?
I am specifically looking for a position in or at: (fill in the blank).
Notes: Medical billing and coding positions are considered to be technically-
skilled positions that can be marketed in many ways, such as in direct or local
employment guides, via medical organizations, newsletters, or electronic media.
Rsums are generally preferred in this field over Curriculum Vitaes unless a
medical background exists in an administrative or clinical capacity.
E-rsums are widely accepted in the industry and will become a more required
form for employers seeking qualified applicants in the future.

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E-rsums and scannable rsums
Explanation Whether or not you will be using the Internet to market your rsum, many larger
companies have begun using scanners and optical character recognition software (OCR)
that convert text into a format for storage and review. E-rsums and scannable rsums
help weed out those potential applicants who might not be qualified or meet certain
requirements established by the company.
E-Rsum is short for Electronic Rsum. The world of the Internet has brought us the
capability to market ourselves in a much broader fashion than ever before. As the
medical community becomes more accustomed to using the web, there will be more
companies who will be using this avenue to locate qualified applicants. It is therefore
important to be familiar with the different formats and acceptable options available to
those who want to find employment.
E-mail is also fast becoming another viable option for sending your rsum. It is
expected to replace faxing capabilities in the near future.
With the new electronic medical trend it is now easy to almost instantaneously submit
rsums online through rsum agencies whose sole purpose is to advertise for potential
employers and employees.
These agencies offer employers the service of electronically screening possible
candidates for jobs the employer wants to fill. They forward a selection of candidates
that meet the employers criteria to the employer, who then selects candidates for
interviews. This approach saves employers the cost both of advertising and of screening
hundreds of applicants themselves.
Each online databank agency has a different way of doing business. However, most
services sort the information on your rsum into categories such as position sought,
industry, work history, occupational skills, education, salary expectation, years of
experience, geographical preferences, ethnicity, and willingness to relocate. These are
then abstracted into mini-profiles comprised of keywords in a standardized format. It is
these mini-profiles that the computers use to identify candidates for positions posted by
employers. This means that you need to be able to anticipate at least somewhat the
keywords an industry might choose and be sure those words are on your rsum. Most
services do not allow employers to browse the databank. The employers tell the service
what they are looking for and a service employee does the looking.
A word of caution
With all the possible rsum posting sites online (many of them are free for prospective
rsum-posters), it is also important to understand that any time you post anything on
the Internet, it is viewable to all.
Cyber-safety must always be considered when you are researching just where and with
whom to post online. It is also noteworthy to mention that employers are becoming
more aware of prospective employees that post their rsum excessively online, which
is now considered to be rsum spamming. Remember, the farther your rsum
spreads, the less control you have over it and just who it seeing it. What can you do?
Per Susan Joyce, author of Job-Hunt.org at http://www.job-hunt.org, you will
find some tips to help you stay safe.
Heres how it works:
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The employers request and specifications are entered into a system. The computer
searches for keyword matches to the requisition. Suppose the employer is seeking a
research engineer with an advanced degree in electronics. The company operates a plant
in Mexico, so the candidate should speak Spanish. The company also does not want to
spend much money relocating an employee, so they are particularly interested in
candidates in the local San Diego area. The service would enter into the computer the
keywords such as: certified coding specialist or Medicare knowledgeable for
example. The computer would then forward the people who match those specifications
and certain keywords.
Keywords: categories and considerations

Keywords are special words or phrases used in a specific industry or field. Sometimes
these are called buzzwords.
Many of the keywords for medical billing and coding consist primarily of:
Job titles
Certifications, registrations, and degrees
Specialties in medicine, such as radiology, pulmonology, cardiology)
Coding acronyms such as CPC, CPT, ICD, and CCS
Billing acronyms such as CMS, EMC, and ERS
Phrases in both medical coding and medical billing such as accounts
receivable
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Do it! B-2: Rsum keyword activity
Heres how Heres why

1 Re-write the strengths you came
up with in the previous activity
Some abilities you might emphasize:
Ability to organize and plan.
Ability to lead and supervise.
Ability to communicate effectively and to be a
team player.
Ability to accurately and effectively bill and
code.

2 Now think of verbs and nouns that
can be included in your area(s) of
strength
Examples of keywords:
In the group: Ability to communicate and be a
good team player:
Sample nouns and phrases: communicator,
coordinator, negotiator, promoter. Implement,
institute, apply, and test. Practice analysis,
monthly reports, accounts receivable, collection
practices, positive player.
In the group: Ability to accurately and
effectively bill and code:
Sample nouns: billing, Medicare, claims,
collections, documentation, reimbursement.
Coding conventions, claims review, electronic
submittal, managed care knowledge, privacy
rights.
Small sample of acronyms used in medical
billing and coding used as keywords:
EMC (Electronic Medical Claims), HIPAA
(Health Insurance Portability and Accountability
Act), A/R (Accounts Receivable), A/P
(Accounts Payable), EDI (Electronic Data
Interchange), CPT (Current Procedural
Terminology), ICD (International Classification
of Diseases), HCPCS (Health Care Procedural
Coding System), P&L (Profit and Loss), HMO
(Health Care Organization), PPO (Preferred
Provider Organization), MCO (Managed Care
Organization).
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3 Identify other keyword issues in
electronic media
A rsum that is correctly formatted for
keyword scanning software also avoids fancy
fonts, graphics, and other effects that are not
conducive to scanning rsum text into
computers.
You will want to use basic fonts in your
electronic rsum that can be widely read with a
font size between 9 and 12, such as:
Times New Roman
Arial
Helvetica
Verdana
Tahoma
Courier.
It is generally recommended to also format your
E-rsum left aligned, rather than a centered or
fully justified.

4 Review the following websites (links included with permission) for more E-
rsum tips, information, and safety precautions:
http://www.susanireland.com/eresumework.htm
http://www.rileyguide.com/eresume.html#safe#safe

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Rsum errors
Explanation If your rsum is not in a simple, general format using specific and common keywords,
the software wont be able to read it accurately and convert it to a filtered batch for
the prospective employer to view. This will greatly limit your ability to land an actual
interview.
Do it! B-3: Discussing rsum errors
Question Answer

1 Does your rsum contain the five
basic elements of a rsum?
Contact informationAt the top of your
rsum, clearly state your name, current address,
telephone number, and e-mail address.
SummaryA good summary statement displays
your major strengths and encourages the reader
to continue reading your rsum. Highlight your
strengths, skills, knowledge, and achievements
related to your job objective.
ExperienceIn this section, document your
skills and specific experience.
AccomplishmentsState what you did, briefly
and clearly, by using action verbs or applicable
nouns. Show the results or the impact of your
achievements. Use numbers when possible.
Write statements that show how you have solved
problems. You can even choose to include the
valuable skills you acquired while raising a
family, volunteering, or managing a community
project.
Education and TrainingList your relevant
education and training in reverse chronological
order (if you choose the Reverse Chronological
Order or Combination rsum), starting with
your highest degree. Be sure to list special
courses, seminars, workshops, or training that
relate to your job objective. List these before
your degree or formal education if they are more
relevant or are an area of strength you want to
focus on. Include other kinds of information, if
it is relevant to your job objective. You can
include information such as professional
memberships, publications, community
activities, military service, and foreign
languages.
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2 It is pleasing to the eye? Remember, this might be the first impression
that a prospective employer or department has of
you. The points:
Layout and general appearance: You should
always print your rsum and just eye-ball it.
It should be simple, yet understandable in
format, regardless of the type of rsum you
choose.
Length should be short and contents precise:
Most employers are busy and will not even
consider a rsum that is not easily scanned.
Organization of your rsum should make sense
and be logical.
Misspellings, typographical errors, and poor
grammar are sure to cause your rsum to end
up in the garbage can.

3 What should be contained in your
Career Objective or Summary of
Qualifications?
Experts recommend a clear, concise objective or
summary. It is also advised that you be specific
in your statements and avoid such general
phrases as, to obtain employment in a company
that offers high potential and advancement.

Review these possible questions
you might be asking yourself

4 What if I have no experience in
the field or position?
Many job-seekers have successfully overcome
the lack of experience hurdle by utilizing their
strengths in a Combination rsum that focuses
on such issues as a completion of a field-specific
program or course, previous experience that can
be applied such as management or customer
service skills, or offering an option of allowing
some time to prove yourself in the position.

5 What if I am older and concerned
about the age factor?
You will want to emphasize such keywords and
phrases as experience, maturity, good
judgment, team-player, consistent success, and
stable.

6 How long will the typical recruiter
or manager spend on reviewing a
rsum?
Some resources quote 30 to 60 seconds;
however, many believe that they will review
your rsum until they have a reason to put it
down. The reason might be because your rsum
does not appeal to their eyes or that it contains
errors, so be watchful of your rsum appeal.
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7 What if I dont have much to put
on my rsum or it lacks
something like length of time at a
job?
You want to include all your relevant skills and
qualifications and present them in the most
positive light. But that doesnt mean lying or
stretching the truth. You also dont want to
include irrelevant information just to make your
rsum longer.
Remember that employers check employment
history, references, and dates so it is never wise
to provide anything but the absolute truth. You
can, however, stress your willingness to comply
or stay with a company long-term.

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Rsum Packages
Explanation After you have completed your rsum, you will be ready to submit it to a prospective
employer or department. Remember, a rsum is a concise outline of what you have to
offer. Because the space and content can be limited, you will want to also create an
entire rsum package. A rsum package consists of your cover letter, the rsum, a
separate list of references, and a thank you note.
Cover letters

The cover letter should be a sales letter that will encourage and lead the reader to
review your rsum. Its design should entice the reader to learn more about youto
show a personal aspect of the accomplishments that are reflected in the rsum.
Cover letters should also be unique and company-specific. It is a great place to also
show your knowledge about the company (make sure you do your research and include
only factual information). You can use a general format to start with; however, it is
recommended that you change parts of it to include unique details.
Get the readers attention by including something that will convince him or her that you
are the perfect match for their needs and yours. Use a simple business letter format and
the same font style and size as in your rsum. You can be more creative in the cover
letter because of its nature, but again, do not be too fancy or you risk losing their
interest.
References
A reference is someone who can provide a prospective employer with information
regarding your professional strengths and weaknesses. Obviously, you want to give
them names of people who will concentrate more on your strengths and less on your
weaknesses. The most difficult part of a reference is deciding just who to use and for
which positions it will be necessary to use them.
There are generally three main types of references:
Professional reference This is generally considered to be someone who was a
supervisor or a higher-level co-worker who has some sort of authority and
managerial responsibility. The more recent and the more time known are two
factors that can help, depending on your relationship with that person.
Academic or educational reference This reference source can be used by
those who are possibly new to the field but have completed a program, course,
or seminar related to the field in which you are applying. Do not use someone
with whom youve only taken one class or day seminar. However, you can
certainly obtain a reference from him or her if there were extraordinary
circumstances (i.e., you made an abnormally high grade on a project or test for
that day or seminar or your Instructor mentioned that you stand out for some
reason in a positive way).
Personal reference This should be considered a character reference
someone who can vouch for your desirable personal traits, ones that will reflect
how much of an asset you would be to the prospective company or department.
Regardless of the type of reference, be sure to ask their permission prior to adding them
on your list. This is not only courteous, but it might just help you filter out those who
could end up hurting your chances for an interview if they found out you wrote their
name and phone number down without discussing it with them.
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It is also wise to know the type of questions that are often asked of references. This
might also help you decide whom to include. Some common questions asked are:

1 How long did (your name) work for you?
2 What was the quality of work (your name) performed?
3 How much responsibility did (your name) have?
5 Does (your name) get along well with others?
6 Is (your name) an independent worker, requiring little supervision?
7 Was (your name) prompt and dependable?
8 Why did (your name) leave the company?
9 Can you think of anything that I have not asked that would help me in my
decision of whether to hire (your name)?
Another recommendation is to include your references in a typed letter, similar to your
cover letter and rsum. Many supervisors prefer a typed list rather than having to ask
or seeing them listed on an application.
On the other hand, it is always a good idea to ask for a letter of reference from any
professional who has valid reason to supply you with one. For example, you might want
to request a written letter of reference when you have done an exceptional job or project
for someone or have done well in a medical billing and coding program. Written letters
of reference are always a great benefit in marketing yourself. The best way to proceed is
to draft a statement for your reference person to sign or revise. Giving them the raw
material simplifies their task. Remember, few busy managers, teachers, or professionals
like to write these letters. It is time consuming, and they often have more urgent matters
to handle. If you dont provide them with a written draft, your request for a reference
letter may be delayed for weeks. Always emphasize results and achievements, and be as
specific as you can.
Thank you notes
Searching for a job or requesting a promotion is a marketing opportunity to really sell
yourself. Most of us, including those deciding whom to hire in a company, are busy,
conscientious professionals who value our time. Showing appreciation by sending a
thank you to someone for their time can be a powerful way to show recognition. A
thank you note will reflect to that potential boss that you were not too busy to
acknowledge them, and that personal touch is something we all crave.
Hand written thank you notes add a personal touch (make sure your handwriting is
legible), but typed notes also work just fine. Be sure to state your appreciation for their
time and consideration, regardless of their decision. After all, they took the time to
either see you or at least review your cover letter and rsum.
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Do it! B-4: Reviewing rsum packages

1 Write down some ideas with respect to what you might want to include in your
cover letter that cannot be reflected on your rsum.
The cover letter should contain positive information only. You would not want
to include any negatives not reflected on your rsum, such as personality
conflicts with past employers, pending litigation, unacceptable pay, or
anything that emphasizes the bad points in your reasons to seek employment
or advancement.
In one example, if you had no previous experience in a profession, but had
recently completed a program focusing on that field, a cover letter might
include a statement such as Recently successfully completed a medical
billing program with exceptional grades and equivalent knowledge to fulfill
the duties of this position.

2 Organize your cover letter ideas in a rough-draft.
A basic cover letter is usually composed of three paragraphs: an opening, the
middle or meat, and then a closing paragraph.
The opening paragraph should spark the interest of the reader and include such
important facts such as Successfully completed a medical billing and coding
training program. It should also contain the reason for sending your rsum,
like I am sending this in reference to fulfilling your need for a full-time
Medical Billing Specialist.
The second paragraph should demonstrate and highlight how your
qualifications match those needed for the job. You can use this portion to
really sell your strengths in a more personal and specific way than your
rsum.
The final paragraph should contain your call to action. You will include your
reference to the enclosed rsum and express thanks to the reader for his or her
time and consideration. Also be specific on your availability and just how and
when the reader can contact you to set up an interview.

3 After reviewing the possible reference questions listed in the References section
above, begin writing a list of possible references and include why you chose them.
Remember to categorize them according to the type of reference, being sure
to consider the questions that might be asked of a reference.
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4 Write down personal achievements or professional highlights that you might want
included in a letter of reference.
Job title and applicable dates
Relationship to the writer
Key promotions or awards
Duties or responsibilities
Areas of strength or exceptional work
Specific results and achievements

5 Consider points in rough-draft form that you would like to include in your thank
you letters.
Remember that you can use one main sample as your general format. It will
contain pertinent points for every thank you letter. You can then use the main
sample to change applicable details for each different thank you letter that you
need.
You might want to also include an action statement in your letter, such as I
am available from 9am until 4pm Monday through Friday for an interview;
please contact me anytime at (your telephone number).

6 What if you have done everything right and you do not receive a phone call for
an interview? Discuss what you would do.
In this day of rush and hurry and impoliteness, good people skills and the
ability to communicate well with others is highly valued in the workplace.
Many times no news does not necessarily mean that you are still not
someone to be considered for the position.
Be sure to follow up with a phone call, e-mail, or fax. The personal touch of a
phone call is generally more effective; however, be sure to give the
prospective employer or department manager some time (average one week)
and then follow up, (with a positive attitude) expressing your interest in the
position. It is acceptable to request a phone call or contact of some sort in
return. Do not, however, be pushy or demanding but acknowledge your
understanding that professionals are busy. Offer to make their response easier
by leaving your contact information if necessary and by letting them know you
can contact them again in a week if that is acceptable.

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The Interview
Explanation Nothing is as important as the ever-so-dreaded interview; however, there are some tips
that can help ease your tension about this critical step in the hiring process. Per the
Connecticut Department of Labor, there are only a few crucial issues that can make or
break an interview.
Key issues at the interview

Along with your knowledge, skill level, and ability to perform a particular job, there are
some key issues or concerns that most employers share that can actually help or hinder
your chances of being hired.
Have a good attitude and be positive in your comments. Nothing pleases an
employer more than knowing she will be hiring someone who will contribute in
a positive way to the staff and general atmosphere in the office. An employer
will find great comfort in knowing that you are able to comply and can do so
with respect and a team-player attitude.
Maintain your professionalism at all times. Keeping your cool during difficult
interviews, treating others with courtesy and respect, and always addressing
others by their last names and titles will get you far on the career ladder in life.
Even if you decide, due to the circumstances surrounding the interview that you
are not interested in taking the position, you never know just who networks with
whom and that regardless of how they act or treat you that you maintain your
professionalism.
Express your ability to learn anything new quickly and to work efficiently;
discuss your positive qualities and desire to be flexible. Employers want to know
that the company will benefit by hiring you and that you will make things easier
in the workplace.
Present yourself as a true professional. Appearance matters greatly. First-time
impressions only come around once; therefore, it is critical to dress the part
and be appropriate in fashion, hair-style, and consideration of time.
Review the Interview Cheat Sheet to help you prepare for your interview.
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Exhibit 1-6: Interview Cheat Sheet
Do it! B-5: Discussing the job interview
Multiple-choice questions

1 You should arrive at an interview:
A On time
B 5-10 minutes early
C At least 20 minutes early
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2 With respect to the company and the position you are interviewing for, you
should:
A Do your homework about the company and the position.
B Ask the interviewer about the company and the position.
C Dont mention anything about this because it would be considered rude.

3 Other employees or staff members that you meet while waiting for your interview:
A Are insignificant and therefore not a consideration.
B Are significant and therefore you need to be extra courteous.
C Are certainly worth consideration: treat them professionally and courteously;
however, address this in your interview.

4 Asking questions of the interviewer:
A Is inappropriate because they are interviewing you.
B Is perfectly appropriate because you are both interviewing each other.
C Is acceptable but only to clarify items that you do not understand.

5 If you have had a bad experience with a previous employer, it is important to
discuss this with your interviewer when?
A Never, because you do not want to leave an impression with the interviewer
that you are difficult to work with and not a team-player.
B You discover that this interviewer is possibly another problem for you.
C You are asked about any negatives that you need to mention.

6 With respect to the subject of salary, you should:
A Be the first to bring it up because it is critical.
B Not discuss it at all in the first interview.
C Allow the interviewer to bring it up and then discuss it because it is
important.

7 When finishing an interview, it is appropriate to:
A Ask the interviewer if you have the job.
B Ask the interviewer if you can contact her in a week to follow up on this
position because you realize you are interested.
C Let the interviewer know that the salary you expect is $XXXXX.

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Topic C: Self-employment in the field
Explanation Running your own medical billing company can be a great goal to work toward, but it is
highly recommended that you take time to work in the field first as an employee or
subcontractor in order to gain hands-on experience and confidence in the necessary
skills before venturing out on your own.
Advantages

Many professionals consider at some point the possibility of having a small business. It
can be a great goal to attain; however, it can be a difficult venture and therefore it is
highly recommended that you spend time in research and planning to gather as much
information as possible to aid in making your business successful.
Flexibility
The satisfaction of being your own boss and being in control of your own financial and
personal goals can be extremely self-motivating. Because of this, more and more
professionals want the flexibility and freedom associated with owning a small business.
Even if they must put in more hours than their corporate counterparts, home-based
business owners gain the flexibility to structure their own time and control their own
lives.
A home-based business allows you to eliminate the cost of an officea major expense
for most small businesses. Also, most home-based business owners are eligible for a
partial write-off of their house payment, utilities, and maintenance costs. (The laws are,
however, becoming stricter in this area. Be sure to check the current tax laws in your
state.)
Commuting
For many Americans, the trip to work is the dominant focus of travel each day.
According to the U.S. Census Bureaus American Community Survey, approximately
123 million people in the United States commuted to work outside the home in 2000.
The average American spends 1 hour and 13 minutes behind the wheel each day. And
according to the Nationwide Personal Transportation Survey using the 2001 AAA
statistics; the average household spends about $6,400 per year just to keep a new
vehicle operable. It is also amazing to consider that the Westchesters Smart Commute
Programs from New York stated in its report that A typical household spends nearly 20
percent of its income in driving costsmore than it spends on food.
9

All of this adds up to another great advantage to owning and running your own
business.
Other Advantages
Some professionals experience less stress and better health than those working outside
of the home. Although it is not true for all, most do agree; however, not having a boss to
answer to is definitely a plus for overall stress level.
Disadvantages
While there are apparent pros to working for oneself, there are also some cons that need
to be addressed and considered if you are going to work for yourself.
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Lack of personal interaction
The need for networking and communication with others is even more essential and
noteworthy when you are working in an isolated situation that running your own
business can cause. Making an effort to include yourself in networking opportunities
such as belonging to a local medical billing and coding association, taking seminars in
the field, and setting up appointments with those in the community that can provide a
mutually beneficial relationship is suggested to help with this.
Lack of boundaries and limitations
For many home-based business owners, one of the biggest challenges is the lack of
boundaries, such as knowing when to set hours of working versus down or off time.
By following a carefully considered schedule, setting up special boundaries and treating
your time at work the same as you would by wearing appropriate business attire,
resisting the urge to do personal chores during work hours, and just using overall
common sense will help you in setting up and complying with your necessary
limitations.
Scams
According to the Federal Trade Commission, medical billing scammers generally
charge a fee of $300 to $500. In exchange, they claim to provide everything you
supposedly need to launch your medical billing business: the software program to
process the claims and a list of potential clients. But in reality, few consumers who pay
for medical billing opportunities find clients or make any money, let alone earn the
promised substantial income. Competition in the medical billing market is quite fierce,
especially for those who are new in the field. Many doctors offices process their own
medical claims. Doctors who contract out their medical billing often use established
firms, not individuals working from home. In short, if it sounds too good to be true, it
probably is.
For further information or reporting contact the Federal Trade Commission. Call 1-877-
FTC-HELP (1-877-382-4357) or log on to http://www.ftc.gov
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Do it! C-1: Discussing self-employment in medical billing
Exercises

1 List your reasons for considering a medical billing business of your own. Consider
your own goals such as home circumstances, financial reasons, or health issues.

2 Review your reasons for considering a medical billing business of your own from
Step 1. Based on your reasons, write down some advantages to having your own
business. When you are done writing individually, share some of your advantages
with the group.
No commuting to work.
The satisfaction of being your own boss.
Lower overhead and expenses because you are working from your home. (This also can
provide some tax breaks; check with your tax advisor or accountant.)
Flexible hours in your work schedule. You can determine your own hours.

3 List some disadvantages of having your own home-based billing company.
There are no guarantees: unlike the benefit of knowing you will be getting a paycheck
every week or so, working for yourself provides no guarantees of being able to provide a
specific amount of income until you reach a stable level, which on average takes a
minimum of 5 years.
Requires self-discipline and setting boundaries: you will need to treat this just like you
are going to work. Setting times for work by not answering the personal telephone calls
and requiring family to respect your work time versus taking time off (clocking out) and
not working too late.
Projecting professionalism at all times and in a home office can be difficult.
It can be difficult to accept the challenge of accomplishing all tasks and goals yourself.
Requires a high level of knowledge and skills in medical billing and coding as well as
overall good business sense.
It can be costly if you do not do your research and continue to manage and adjust when
necessary.
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4 Discuss the reality of scams and what you can do to protect yourself.
Per the Federal Trade Commission, here are some tips:
Ask and check references from companies.
Consult with organizations and medical facilities in your area.
Check with the State Attorney Generals office, consumer protection agency, and the
Better Business Bureau in the area where the company is located.
If the company sells specific software, check with the software company to see if there
have been any negative reports.
You also might want to consult an attorney or accountant in certain circumstances.
It is also highly recommended that you not only do the research on possible avenues
that you are considering, but also to actually spend time out in the field first as an
employee or subcontractor to get hands-on experience and to make a good name for
yourself out in the medical community.

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Strategies and beginning your business
Explanation As a potential medical billing business in your area, it is wise to research those
companies locally who will be your competition. As you check out the competition, you
will want to ask what type of services they offer to see where the needs might be.
Starting off
Your own state might want you to purchase or qualify for a license or state permit to do
business in your home.
You might also want to discuss with an attorney or accountant what type of business
you want, such as a corporation or a limited liability company. Obtaining your
Employer Identification Number will also be a necessity.
Managing
According to the Womens Business Center of the Small Business Administration, if
you are diligent about monitoring and researching your bottom line, initial
expenditures, and business ratios, you will be able to develop your own insight into
what is working versus what is not working.
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Do it! C-2: Strategies and steps for new businesses
Heres how Heres why

1 In your browser, go to the Small Business Administration to review the basics of
starting a business: http://sba.gov/starting_business/index.html.
Review the Small Business Administrations main home business page for those
starting a business.

Move into small groups or find a
partner. Make a list of items that
you might need to research before
beginning your business
Remember that failing to plan means planning
to fail. There are some key areas to consider in
your research before deciding on specifics in
your business.

2 Consider the following:
What are your areas of strength and weakness in medical billing and coding?
What type of software or computer needs do you have?
Do you have previous experience and therefore contacts in the field?
How will you provide services and how can you plan your home to
accommodate those services?

3 Go to http://app1.sba.gov/survey/checklist
Review the steps in starting a business per the Small Business Administration.

Continue through the survey using the results
you concluded from Activity C-1.

4 Review the Business Plan Basics at:
http://sba.gov/starting_business/planning/writingplan.html

You need to research and
understand the business you want
to provide. More than likely, you
will need to design a business plan
and therefore need to know the
basic business plan parts. Discuss
each part with your partner or
group
It is recommended that you work on your
business plan and do your research. Although
business plans vary, here are the main parts:
Cover sheet with contents.
Business summary or statement of purpose.
Description and context of business.
Marketing analysis and competition.
Financial: Initial expenditures, profit and loss
statement, projections and expected cash flow
for a minimum of three years.
Supporting documents such as articles, charts,
contracts, detailed financial information, patents,
product information, price lists, brochures,
newsletters and technical drawings.
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5 Go to http://www.onlinewbc.gov/docs/finance/fs_ratio1.html
Consider some of the important ratios and percentages you will need in your
business plan and in managing your company.

There is software that can assist you in
managing and keeping track of vital ratios. It is
worth the effort to research this out as well, as
some medical accounting software does come
with these capabilities.

6 Go to the Financial Loan information to find out about Applying for financial
loans and assistance at
http://sba.gov/starting_business/financing/applyloan.html
There are many different resources for loans and grants. You need to check with
your local institutions and occupational license office for more information.

7 What are some of the reasons for failure that you need to consider? Go to
http://www.onlinewbc.gov/docs/starting/failure.html
Review and discuss the most common reasons with your group or partner.

8 What other places should you
check into prior to starting up
your own business?
You need to contact your local county and state
offices to review the policies and procedures for
licenses and permits that might be required in
your area. Check out the Better Business Bureau
at http://www.bbb.org

9 List business options for setting
up a corporation, limited liability
company, or partnership.
Be sure to review the Internal Revenue Service
requirements. Go to either their home page at:
http://www.irs.gov or the Frequently Asked
Question section for those beginning a small
business at http://www.irs.gov/faqs/faq12-1.html.

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Starting a medical billing and coding business
Explanation Medical billing and coding has its own unique challenges and requirements that need to
be addressed when considering the ultimate goal of setting up your own medical billing
business. An understanding must accompany the tactics needed in marketing a medical
billing service that recognizes the history of the outsourcing of billing and weighs the
benefits that it can offer as opposed to the use of an in-house employee by a medical
facility. In-house refers to someone who is working as an employee of that facility or
company. Outsourcing refers to contracting with an outside entity or company for
medical billing services. As an outsourcer (medical billing company), you also need to
be on the alert for get-rich-quick programs and schemes in this field, unfortunately
they are out there as you discovered in the last exercise. The good news is that with
knowledge, education, and experience comes ability. Ability is reflected in those who
learn how to combine skills with diligence and professionalism.
There are more than 500,000 healthcare professionals in the United States alone who
need to bill for their services. Many employ a medical biller in an in-house capacity.
Several years ago providers began using billing companies who claimed high returns
but many hired only data entry clerks who lacked the training and skills necessary to do
the job correctly and therefore did not come through on their promise of higher
receivables. The trick is to provide a service that encompasses real knowledge and
current skills to fully accomplish the job and one that offers more than what the
provider could get utilizing an in-house employee. Having a track-record is a
tremendous advantage to show potential clients.
Remember that the medical billing arena is like any other professional arenathe more
professional and thorough you are, the better your chances for success.
Goal setting
There are generally two types of medical billing companies: those that provide billing or
submission of claims only and those that provide management of accounts as well.

A Medical Billing Service may or may not encompass a wide range of services in
todays billing arena. The types of services may include some of the following (Note:
this list is non-inclusive):
*Electronic claims submissions, remittances, and reviews.
*Reporting services for various accounting, financial, and overall collection
ratio.
*Managing of accounts, including proper follow up, review, and appeals
assistance.
Contract reviewing of various PAR (participating) insurance carriers.
Documentation review for proper coding assistance.
Reimbursement assessment, ratio comparisons, and office P&Ls (Profit and
Losses).
Accounting Services for overall practice analysis.
The starred (*) items are generally basic services offered by almost all medical billing
companies. With experience, education, and knowledge of additional areas, your
business can market itself with the added benefits that may make your company unique
and sought after.
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Personal and professional assessment in medical billing and coding
Assessing your own strengths may prove to be extremely valuable. For example, one
particular biller had an accounting background and was therefore able to sell her
accounting services as part of the companys services which made a very appealing
package for prospective accounts. Her marketing strategies focused heavily on this
unique additional benefit. Another strength might be medical coding documentation
review, which would encompass a coding background. Finding a niche in the billing
business will add to your companys value and overall professional appeal.
As with the last activity, expand on specific medical billing and coding strengths. Begin
with jotting down these items. Writing things down is vital and a great habit to develop.
Start with ideas, lists, and areas of expertise; you may be surprised at the avenues you
will develop by performing this simple exercise. It may also clue you in as to needed
areas of education. Make a separate list of these weaknesses as well. It is important to
mention here that a certain weakness is not indicative of a certain area of failure, this is
merely an assessment tool to assist in obtaining possible training if needed.
Medical software and clearinghouses
What is a clearinghouse for electronic claims? It is just like a bank clearinghouse: it
takes the data from one computer, edits it, and then sends it to the destination
computer/data system. It not only offers the convenience of reporting mechanisms but
also assists you by offering edits. Edits are screens that can drop off those claims that do
not meet certain standards and correct formats. For example, Medicare might have one
format required in a particular claim block, and Aetna might have another. It is worth
the added cost to make sure your electronic claims are being handled by a large,
reputable clearinghouse that can save you thousands in rejected claims.
If a company tells you they are their own clearinghouse, beware! That means you are
tied into them, and cant use any other clearinghouse. What happens to you if they go
out of business? Youll have to buy new software so you can make your own
connection with a different clearinghouse.
HIPAA and business associates
Per the Centers for Medicare and Medicaid, a business associate is a person or
organization that performs a function or activity on behalf of a covered entity.
Companies such as billing and software vendors are not considered covered entities
under HIPAA. However, many of these companies have a business relationship with
covered entities and may be considered their business associates. For example, vendors
may provide claims processing functions, practice management, or billing software
services for a covered entity. Because they also have access to Protected Health
Information (PHI), business associates must agree to the privacy and security
requirements of HIPAA. The business associate agreement is used to describe the
business associates responsibilities for protecting the privacy and security of PHI. Even
though covered entities are already required to comply with all HIPAA privacy and
security requirements, if they are business associates they still must have a business
associate agreement between them.
For billing services that still send paper claims, they are not governed by HIPAA. The
fact that the health plan or Health Care Clearinghouse converts paper claims into data in
a standard transaction does not make the health care provider a covered entity and
thereby not subject to HIPAA transactions requirements, according to the Centers for
Medicare and Medicaid.
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To find out whether you are a covered entity or a business associate as a billing
company, go to http://www.cms.hhs.gov and search on vendor billing service.
The direct link to this document is as follows: http://www.cms.hhs.gov/hipaa/
hipaa2/education/infoserie/5-VendorBillingservice.PDF
Obtaining new medical billing accounts
Although there are many advertisements out there claiming to assist you in starting your
own medical billing company and obtaining new accounts, remember that caution is
necessary. Per the Federal Trade Commission, be leery of medical billing scams
offering unsubstantiated claims for income potential.
10
Be sure to check out ways of
protecting yourself. Go to: http://www.ftc.gov.
Another consideration is the calculation of fees. Depending on the areas you choose to
specialize in and service, fees can vary widely. Many medical billing companies offer
fees based on one of three methods:
1 A flat fee usually based on the average number of patients over a given time.
2 Per claim/per statement basis.
3 A combination method
Additional information
Offering percentage-based billing arrangements is not recommended due to the Office
of Inspector Generals (OIG) concern that it might violate the anti-kickback statute that
assesses risk factors.
11
With some plans, such as with Florida Medicaid, it is considered
unacceptable practice.
12
This might vary from state to state.
It is suggested for any medical billing company to review and comply with the OIGs
Compliance Program Guide. The guidelines can be viewed at:
http://oig.hhs.gov/fraud/docs/complianceguidance/thirdparty.pdf
View the checklist for items needed from new accounts/facilities to help you.
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Exhibit 1-7: Checklist for new medical billing company
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Do it! C-3: New business checklist and marketing strategies
Heres how Heres why

1 List your Medical Billing and
Coding areas of strength
You can gain a perspective of just what services
to provide in a billing business. Some examples
of areas that you might possess strengths in and
can include in your services are:
Accounting background Offer accounting
services such as collection services, A/P, and
extra reporting mechanisms along with the
billing/submission of claims.
Coding Offer coding convention edits of your
own by verification of submitted codes with the
claims.
Management Offer overall management
services that include all aspects of follow up,
reporting, A/R, collections for all categories, and
statement completion. This added service is a
growing market and therefore contains high
potential.

2 List areas of weakness in medical
billing and coding
You might want to enroll in extra learning
avenues to offer a higher level of service or you
might just want to negate those areas in your
services (at least in the beginning).
Determining your areas of weakness is meant to
help you in your overall assessment and can
keep you from getting into areas that could cost
you financial losses.

3 Choose a medical/accounting
software
You will want to research different types of
software that can correspond with your strengths
and possibly also assist you in the weak areas by
containing extras.
Some of the different medical software
companies to consider are:
Medical Manager at:
http://www.medicalmanager.com
Medisoft at: http://www.medisoft.com
MedMaster at: http://www.medmaster.com
Lytec Practice Management at:
http://www.microwize.com/Lytec/
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4 Consider clearinghouses in your
research of medical software
Clearinghouses are a major part of a billing
services ability to conduct business.
What exactly does a clearinghouse do? Well, for
one thing, they check claims for accuracy. But,
the biggest thing they do is reformat the data
you send to them to a format that a given carrier
can read. Most medical software companies
align themselves with a clearinghouse, so be
sure to ask about this for Electronic Data
Interchange along with applicable HIPAA
requirements.

5 Discuss how HIPAA will affect you as a billing company.
For more information and a flow chart to help you with HIPAA go to:
www.cms.hhs.gov/hipaa/hipaa2/support/tools/decisionsupport/
CoveredEntityFlowcharts.pdf

6 Review the Medical Billing New
Business Checklist
You can use this as your template to obtain
specific required information with respect to
new accounts for your medical billing business.
You will want to add to this list any extra
services you might want to include.

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Topic D: The basics of health insurance
Explanation Health insurance refers to a contract between a policyholder or beneficiary and an
insurance company or healthcare program. The main job of a health insurance contract
is to offer reimbursement to the policyholder or member for costs of medical treatment
deemed medically necessary or approved preventative healthcare received. It was
designed to assist patients in times of health-hardship.
The history of health insurance
Health Insurance in its rawest form became a necessary extension of life insurance
which was offered as early as the 1800s. The Franklin Health Assurance Company from
Massachusetts began offering insurance for nonfatal injuries in 1850. The next largest
recorded company that began offering health insurance more in line with todays health
insurance format was the Travelers Insurance Company of Hartford.
13

The American Medical Association became a newly reorganized and focused
organization in the early 1900s that drove many physicians to begin considering
contracts with medical facilities such as hospitals to obtain payment for services
rendered.
In 1929, prepaid health plans were introduced by Blue Cross. A prepaid health plan is a
contract between a specific group of individuals and local hospitals and physicians.
Each member of the group paid a premium, or set monthly amount paid, to be included
in the group which outlined specific medical services for recipients along with the fees
paid to the facilities and physicians in return.
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Health insurance policy terms
Like other fields, the health insurance industry has its own unique vocabulary.
Considered a legal document, the health insurance policy contract contains terminology
that applies solely to that contract but can be understood in the context of accepted
health insurance jargon.
Review the chart below to familiarize yourself with some of the main terms used in
health insurance contracts.

Term Description
Benefits The money that is paid to the policyholder for medical services that
are specified in a healthcare contract.

Deductible The cumulative amount that you must pay annually before benefits
will be paid by the insurance company.

Coinsurance The amount that a policyholder or a secondary insurance portion
pays. One common payment percentage for coinsurance is 80/20,
which indicates that 20% is the coinsurance or secondary portion
due.

Co-payment The set or fixed-dollar amount you are required to pay each time a
particular medical service is used.

The three Pres:
Predetermination
Pre-certification
Preauthorization
Predetermination is another term for discovery of a patients
benefits and the dollar limits, including their annual deductible.
This is often the first step of the insurance verification process and
is completed prior to their first visit.
Pre-certification refers to the process of verification of coverage for
a specific treatment such as surgery, hospitalization, laboratory
tests, etc.
Preauthorization relates to pre-certification, however, it also
indicates that a specific procedure or service is deemed medically
necessary.

Policyholder Also known as the Insured, member, subscriber, or recipient. This
indicates the person or organization responsible for and the
purchaser of a health insurance policy. This person buys protection
from financial loss due to an illness, injury, or medical condition.

Dependents A person for whom the insured has some legal obligation. For most
plans, it is the insureds spouse and/or children. Some plans also
allow non-traditional spousal relationships (significant other, life-
partner, etc.) to be considered a dependent with some additional
certifying paperwork.

Third Party
Administrators
(TPAs)
Generally an administrator for an employers self-funded insurance
plan, they handle the claims and paperwork for them.
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Term Description

Assignment The transfer of benefits or an individuals legal right to collect an
amount payable under an insurance contract. With Medicare, it
indicates an agreement in which a patient assigns to the provider the
reimbursement from the fiscal intermediary or administrator of
claims, for medical services rendered.

Exclusions and
Limitations
Conditions, situations, and services not covered by the insurance
carrier.

Usual and
Customary
Charge
Also called Reasonable and Customary charges. The routine charge
for a medical service by similar professional medical providers in
the same geographical area. You may pay an amount above the
Usual and Customary charge if a provider charges more than other
providers for the same service.

Capitation Specified amount paid periodically to health provider for a group of
specified health services, regardless of quantity rendered.

Health insurance policy types
Until the 1980s most medical insurance policies in the United States were the traditional
indemnity plan.

Under indemnity plans, policyholders were paid back for medical expenses incurred
from an accident or illness. A schedule of benefits was included in the plan which
reflected the services that were paid for and the amount that was forwarded to the
policyholder for that service. Most indemnity plans were 80/20 plans, meaning that they
paid 80% and the member or policyholder was responsible for 20% of the schedule of
benefits amount.
During the mid-eighties, a new concept arose called managed care. Managed care was
developed as a way to control costs. In a Managed Care Organization, or commonly
referred to as an MCO; health care providers and facilities sign up and agree to
provide services on a fixed fee. The fixed fees are set by the company or government
healthcare program agency that contracts with these participants. They were designed to
also gain supervision over the care of the patient to ensure that only those services truly
needed were rendered.

The MCOs are further divided into smaller subtypes and are all variations of the main
MCO standard. Some of these subtypes are Health Maintenance Organizations (HMO),
Preferred Provider Organizations (PPO), Point of Service Organizations (POS),
Individual Practice Associations (IPA), and an Exclusive Provider Organization (EPO).
There are also other types such as the original Fee-for-service plan that represents the
method of paying the provider regular fees charged.
The primary care physician, or PCP, often acts as the primary gatekeeper in health
plans. That is, often the PCP must approve referrals to specialists. Other entities may
also act as gatekeepers, such as a local agency or managed care entity responsible for
determining when and what services a patient can access.
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Group health insurance plans versus individual policy plans
An individual plan or contract contains an individual or family that has contracted with
an insurance carrier or MCO. These plans do not fall under the same as group
insurance state and federal law mandates. They often have a higher premium.
A group plan or contract is any plan in which a group of employees and their eligible
dependents are insured under a single policy issued to their employer. They offer
individual certificates of insurance that are given to each contracted member. Group
policies often offer lower premiums and better benefits because they have the advantage
of using a larger group to help with contract negotiations.
The main difference between a group and an individual insurance plan has nothing to do
with the number of participants but instead is based on the qualifications of that
participant or group (i.e., whether or not an employer identification number exists and a
regular group as defined by that insurance carrier).
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Do it! D-1: Discussing types and terms of health insurance

1 What type of managed care is a healthcare financing and delivery system that
provides comprehensive health care for subscribing members in a particular
geographic area using managed care techniques and is generally considered a
closed-panel program?
An HMO Health Maintenance Organization

2 Which type of MCO describes a plan in which you can choose to go to a network
provider for lower out-of-pocket costs, or go to an out-of-network provider for
higher out-of-pocket costs, thus indicating an open-panel program?
A PPO Preferred Provider Organization

3 Which managed care plan is similar to a PPO but incorporates an indemnity plan
option?
A POS Place of Service plan

4 What describes an MCO plan that has an open-panel HMO contract with an
association of physicians who agree to provide services for its HMO members
thus enabling physicians more negotiating power in contract negotiations?
An IPA Individual Practice Association

5 Which type of MCO operates similar to an HMO but is usually offered as a self-
insured product?
An EPO - An Exclusive Provider Organization

6 What term within MCOs denotes the provider that will usually direct the course of
a patients treatment, including referrals to specialists? (Hint: usually a GP or
family practitioner who services as the insureds personal physician and first
contact within the managed care system.)
A PCP Primary Care Physician

7 Which term describes a system of payment used by managed care organizations,
usually for specialty providers, in which physicians or facilities are paid on a
fixed, per capita amount for each patient enrolled over a specified period of time?
Capitation

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Healthcare insurance timeline
Explanation It is an important step in understanding health insurance to familiarize yourself with the
timeline and pertinent history facts associated with the healthcare programs in our
country.
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Do it! D-2: Sequencing the healthcare insurance timeline
Exercises

1 Put the following events in the proper timeline order.
Have students form small
groups, if possible.
Expansion of managed care helps to
moderate increases in health care costs.
By the end of the decade there are 44
million Americans, 16 % of the nation,
with no health insurance at all
Prepaid group healthcare began during
the second World War
Health Insurance Portability Act
(HIPAA) was created in 1996 to assist
in efforts to thwart fraud and abuse and
help establish more standardization in
the industry
At the turn of the century was the
beginning of organized medicine
The 1980s brought an overall shift
toward privatization of healthcare to
help control the health cost of medical
care
Social Security Act is passed in 1935,
providing funding for unemployment
compensation, assistances, and benefits
for the elderly population and aid to
dependant children
The year is 1929. Direct pay had been
in effect and Prepaid health plans were
introduced by Blue Cross.
1952 marked the establishment of the
Joint Commission on Accreditation of
Healthcare Organizations (JCAHO)
Richard Nixon renames prepaid group
health care plans as health maintenance
organizations (HMOs), with legislation
that provides federal endorsement,
certification, and assistance at a time
when American astronauts were
making their first moon landing
At the turn of the century was the beginning of
organized medicine.
The year is 1929. Direct pay had been in effect and
Prepaid health plans were introduced by Blue
Cross.
Social Security Act is passed in 1935, providing
funding for unemployment compensation,
assistances, and benefits for the elderly population
and aid to dependant children.
Prepaid group healthcare began during the second
World War.
1952 marked the establishment of the Joint
Commission on Accreditation of Healthcare
Organizations (JCAHO).
The Social Security Act Amendments was signed
into law by President Lyndon Johnson which began
the government sponsored health care programs
now known as Medicare and Medicaid.
Richard Nixon renames prepaid group health care
plans as health maintenance organizations (HMOs),
with legislation that provides federal endorsement,
certification, and assistance at a time when
American astronauts were making their first moon
landing.
The 1980s brought an overall shift toward
privatization of healthcare to help control the health
cost of medical care.
Expansion of managed care helps to moderate
increases in health care costs. By the end of the
decade there are 44 million Americans, 16 % of the
nation, with no health insurance at all.
Health Insurance Portability Act (HIPAA) was
created in 1996 to assist in efforts to thwart fraud
and abuse and help establish more standardization
in the industry.

2 To review a more detailed timeline, go to the Public Broadcasting Services
Healthcare Insurance Timeline website at
http://www.pbs.org/healthcarecrisis/history.htm

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Additional healthcare insurance types
Explanation Another insurance type is the hospital indemnity plan. This type of insurance offers
limited coverage. It pays a fixed amount for each day, up to a maximum number of
days. You may use it for medical or other expenses. Usually, the amount you receive
will be less than the cost of a hospital stay.

Long term insurance plans are another type. Long-term care insurance is designed to
cover the costs of nursing home care, which can be several thousand dollars each month.
Long-term care is usually not covered by health insurance except in a very limited way.
Medicare covers very few long-term care expenses. There are many plans, and they vary
in costs and services covered, each with its own limits.
Disability insurance is also an option. It replaces income you lose if you have a long-
term illness or injury and cannot work. This is an important type of coverage for
working-age people to consider. Disability insurance does not cover the cost of
rehabilitation if you are injured.
There are also government sponsored programs such as Medicare and Medicaid.
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Do it! D-3: Matching terms and definitions
Exercises

1 Match each title or title acronym on the left with its corresponding description on
the right.

a. Preauthorization
b. A Disability Plan
c. Indemnity Plan
d. Hospital Indemnity
Plan
e. Managed Care Plan
f. Long Term
Insurance Plan
g. The deductible
h. Co-payment
i. Assignment
j. The year 1996
1. Until the 1980s this indicated a typical plan where
policyholders were paid back for medical expenses
incurred from an accident or illness.
2. HIPAA was developed and established.
3. This plan pays a fixed amount for each day, up to a
maximum number of days for hospitalization.
4. The set or fixed-dollar amount you are required to pay
each time a particular medical service is used.
5. This plan covers the costs of nursing home care.
6. With Medicare, it indicates an agreement in which a
patient assigns to the provider the reimbursement from
the fiscal intermediary or administrator of claims for
medical services rendered.
7. On this type of plan, health care providers and facilities
sign up and agree to provide services on a fixed fee and
specified consecutive time frame.
8. Replaces income you lose if you have a long-term illness
or injury and cannot work.
9. The cumulative amount that you must pay annually
before benefits will be paid by the insurance company.
10. This indicates that a specific procedure or service is
deemed medically necessary by the insurance carrier.

Answers: A-3, B-10, C-4, D-8, E-6, F-9, G-5, H-2, I-7, J-1

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Topic E: Medical billing today and tomorrow
Explanation Medical billing, as it relates to healthcare insurance, is one of the fastest-changing
industries in the United States. Keeping current with new plans and programs is
essential to maintain accuracy and efficiency. Certification, education, networking, and
proactive vigilance in the field will greatly benefit the medical biller today and in the
future.
Current issues and events

More and more varied types of insurance plans and creative healthcare assistance
options for patients and policyholders are being developed. A few more unique types are
mentioned here.
Medical savings accounts (MSAs)
They combine high-deductible health insurance with a savings plan similar to an IRA.
Insurance policies for individuals have generally carried a minimum deductible of
$1,600 to $2,400 ($3,200 to $4,800 for families). When you open an account for
yourself, you can contribute to the MSA up to 65% of the deductible, 100% of your net
self-employment income, or 100% of your wages, whichever is least. The contribution
limit rises to 75% of the deductible for family policies. You deduct contributions on
your federal income-tax return. Withdrawals you make to cover out-of-pocket medical
expenses are tax-free, and your investments grow on a tax-deferred basis.
Health savings accounts (HSAs)
This more recent 2004 option has replaced the MSAs of 2003 and earlier for new
enrollees. They allow anyone who has qualifying high deductible insurance to fund a
Health Savings Account that is 100% tax-deductible. The money can be used tax-free
for medical expenses, and if its not used, it rolls over year to year. At age 65, the
money can be used like a retirement plan, or still saved for future medical expenses.
These accounts can reduce health insurance premiums for families by thousands of
dollars annually as compared to the MSAs that were previously used. Per President
Bushs new plan, the minimum individual deductible is $1,000 and the family
deductible is now $2,000. Insurance companies in 2005 are now required to offer these
HSAs with no limits. Go to the website for more information at:
http://www.hsainsider.com
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Healthcare and medical savings programs
Although it may not sound like it, the MSA or HAS, the Healthcare or Medical Savings
programs are different.
Healthcare Savings Programs are not an insurance plan, and they do not contain an
insurance component at all. They are medical savings programs that access networks of
healthcare providers and bring you the same negotiated rates that the large insurance
companies use.
These allow the patient to go to any provider or facility within that particular group,
generally a PPO group. The patient will need to pay at the time of service, like a cash
account; however, the patient will be required to pay only the allowable rate per that
PPO group for that particular service or procedure. For example, if a patient comes into
an office that is contracted with XYZ PPO and receives services for a new patient, low
evaluation, whose regular price is $85.00 but the PPOs allowable feeor amount to be
paid to the provider for that serviceis only $60.00, then the patient belonging to that
Health Savings Program would pay only $60.00.
Complete the following quiz to see if your personality matches that of a medical biller
and coder. This quiz is meant as an exercise in personal reflection. It should not be the
sole indicator in your decision of whether or not to pursue a career in medical billing
and coding.
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Do it! E-1: Current events personality quiz
Question Answer

1 For each of the following
questions, choose the answer
which best describes you, and
tally the score for each letter to
the left
B
C
E
S

2 Do you enjoy working alone and
can you work independently?
Completely and at all times, being alone doesnt
bother me, and I love challenges. If you choose
this answer, write down 1 point for each for E
and S.
Occasionally its okay but I am really a social
person who likes challenges but loves company.
If you choose this answer, write down 1 point
for C.
I Would rather be responsible for just my own
work and not the companys, I also am not big
on solving puzzles and problems because I get
stressed. If you choose this answer, write down
1 point for B.

3 Have you worked in a medical
facility or the medical field?
I am currently working in the medical field and
in a medical facility: E, S.
I have worked in some capacity in the medical
field or a medical facility in the past: B, C.
I am completely new to the medical field: B.

4 Do you like working with
numbers and have some sort of
knowledge in business math or
accounting?
I have an accounting background or possess a
high skill level in business math: E, S.
I have moderate skill level in accounting
practices or business math: B.
I do not enjoy, nor would I be interested in a
position using these skills but am interested in or
know that I already like the medical field: C.

5 Do you have an investigative
personality?
Yes, I am inquisitive and love solving puzzles
and problems: E, S.
Occasionally I like a good mystery but am
more have more of a desire to know what to
expect in my job: B.
I enjoy solving puzzles but like to have the
option of using hints and cheat sheets
because I get frustrated: C.
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6 Do you have a persistent
personality, even when faced with
disappointments or rejection?
I am definitely persistent and do not give up
once I start something: E.
Occasionally it is all right but really dont want
to have to deal with this on a too much of a
consistent manner; however, I am diligent in
resolving difficult issues head-on: S.
Not at all, I would much rather let someone else
handle this: B, C.

7 Are you confident in your medical
billing and coding skill level and
abilities?
Yes, I have worked in the field for awhile and
am confident in my abilities: E, S.
I am confident because I have some experience
or education: B, C.
I am confident with medical billing but feel I
need more education in medical coding: B.

8 Do you feel comfortable in
dealing with physicians,
administrators and supervisors?
Yes, I already have experience with this: E, S.
I feel comfortable that I can do this despite my
lacking of exposure in this area. I feel that I have
the knowledge necessary to even teach them
when needed: C.
I am not sure how I will do, but am willing to
learn: B.

9 Do you have the financial
resources or are you confident you
can obtain them in order to sustain
you for a minimum of six months
(per the SBA)?
Yes, I have the startup or am able to attain the
financial resources such as a business because I
have a business plan or will complete one: E.
I have some funds but really not too sure about
this: S.
I am not interested in obtaining this status: B, C.

10 Do you have any marketing or
business development skills?
Yes, I have information about this and feel
confident in my decision: E.
I am not sure about this. I have not checked on
this and I am not sure that Im comfortable with
it but I do have business development skills: S.
I am truly not interested in doing any marketing
or business development: B, C.
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11 Do you possess computer skills
and understand how to use
resources on the Internet?
Yes, I have this skill and feel confident with my
abilities: E, S, B, C.
I have some knowledge and experience with
computers but feel that I can learn it more on my
own: C.
I am new to the computer and the Internet,
I realize that I need some education or
assistance: B.

12 Are you a member of a national
medical billing and/or coding
organization?
Yes, I am already a student or professional
member and am do not use active with
them: E, S.
I am not a member, although not active, I
receive their newsletter or e-letters: C.
I am not currently a member but plan on
becoming one somewhere: B.

13 Do you have professional goals in
mind?
Yes, I have professional goals and have already
written them down: E, S, C, B.
Yes, I have professional goals but have not
written them down yet: E, S, C, B.
No, I am really not sure about my professional
goals at this time: B.
Count the totals for each letter. You might have more than one letter with a total
of 10 or more.
Add up the number of
each letter: Es, Ss, Cs
and Bs.
10 or more for B You are a Medical Biller. Your mathematical
mindset will help you in your goal of becoming
a medical billing specialist.

10 or more for C You are a Medical Coder, possessing an
inquisitive nature while using your experience
or education in coding in the field.

10 or more for S You have the personality of a Supervisor. You
can use your experience or education in your
advancement in the field.

10 or more for E You are an entrepreneur. You have personality,
experience or education that will help you in
your pursuit of having your own medical billing
company if you choose.

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The future of medical billing
Explanation According to the statistics from 2002/2003 and the 2004/2005 Occupational Outlook
Handbook, medical billing is among the ten fastest growing occupations in the United
States. And according to the U.S. Department of Labor, employment of medical records
and health information technicians is expected to increase 36% or more through the year
2012.
14

This growth is due to the fact that every healthcare provider must submit proper
documentation to insurance companies for reimbursement, which in turn creates
numerous opportunities for trained individuals in medical offices, clinics, ancillaries and
hospitals, as well as home-based employment.
Outsourcing medical billing internationally
The formality of healthcare in other developed countries in some ways is comparable
with that in the United States: patients have access to similar drugs, diagnostic tests, and
other technology for preventing, diagnosing, and treating disease when the technology
and treatment is available. Patients in Canada, the United Kingdom, Western Europe,
and Japan use primary care physicians for most health problems. Patients are sent to
specialists for more serious conditions, and may receive care in hospitals and nursing
homes.
The major difference with respect to medical billing is in the way other developed
countries pay for healthcare. Private health insurance pays for most care in the United
States. Slightly over 84 percent of Americans have health insurance coverage.
Employers usually pay a portion of the premium, or cost, as part of the benefits
provided to employees besides their salaries.
Most European countries have a national health insurance plan that provides free care in
a more controlled atmosphere. Taxes paid by citizens pay most of the cost. In Canada,
the central government and the provinces share costs for medical care. Individuals
usually contribute a certain amount through payroll deductions. The central government
does not own most healthcare facilities in these countries.
China and many other countries have a completely socialized health care system. The
government owns all healthcare facilities. Physicians and other health care personnel are
government employees. The former Soviet Union established the worlds first
socialized medical system in the 1920s. But Russia and other independent republics that
formed when the Soviet Union broke up in 1990 are experimenting with private health
insurance and other financing methods.
Billions of people in developing countries suffer greatly because medical care is not
readily available and is poor in quality. Governments in many poor countries such as in
sub-Saharan Africa and Asia spend only a few dollars per person on healthcare each
year. Trained people, equipment, and medicines needed to provide the most basic
medical care are in grave shortage. Families in these countries typically earn only a few
hundred dollars each year. They must rely on the government, international aid
organizations, missions, or charities for healthcare. According to Thomas Reardon, a
medical doctor and past president from the American Medical Association, The U.S.
healthcare system is the envy of the world (in an excerpt from an article entitled, The
Worlds Healthcare, How do we rank? on August 28, 2000).
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The ICD-10-CM
The World Health Organization has published an international healthcare coding format
that can be used world-wide for mortality purposes.
Currently, the ICD-10 (International Classification of Diseases, Tenth Revision) is
being used internationally for comparing data collected around the globe. It is mostly
concerned with mortality statistics and causes of death and is generally reported by
larger institutions such as hospitals and cancer registries. These international mortality
coding standards can be viewed at:
http://www.cdc.gov/nchs/about/major/dvs/icd10des.htm
With the inclusion of experts from the U.S., the WHO is currently working on
development of the ICD-10 CM (Clinical Modification) which is intended as an
eventual replacement for ICD-9-CM, Volumes 1 and 2 (diagnosis). There is also work
going on with respect to the ICD-10-CM and procedures as well.
In conclusion, it has not been proven at this point that medical billing can be prosperous
or efficient in other countries, using our current U.S. standards. The main issue
according to the WHO is that here in the United States we do not have one
comprehensive health system; we have multiple microsystems that provide great
avenues for competition and higher quality but are quite complex and difficult to
simplify and coordinate with other healthcare systems around the world.
This makes it essential to maintain education in the field to ensure that as a professional,
you are kept current in your knowledge, skills, and global awareness.
Do it! E-2: Discussing the future of medical billing
Heres how
Break the class into
groups of three or four.
1 Go to the Agency for Healthcare Research and Quality webpage at
http://www.ahcpr.gov
Pick any topic of choice, review and discuss.

2 Check out the ICD-10-CM used for morbidity purposesthe eventual
replacement for the ICD-9-CM from the CDCs National Center for Health
Statistics at
http://www.cdc.gov/nchs/about/otheract/icd9/abticd10.htm
Discuss when the National Center for Health Statistics will be implementing this
into the United States.

3 Discuss concerns or issues you might have, based on this lesson, regarding the
future of Medical Billing and Coding, and national versus international prospects.

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Unit summary: Introduction to medical billing
and coding
Topic A In this topic, you learned about the different roles, responsibilities, and certifications
in medical billing and coding. You also saw the different skills necessary to begin a
career in this field. The ethical issues were also addressed in order to give you some
insight into the complexity of the positions, along with the need for continued
education.
Topic B In this topic, you practiced rsum-package techniques and tips to help you in the
pursuit of gaining employment or attaining advancement in medical billing and coding.
You began formulating in rough-draft form some of the elements of your cover letter,
references, thank you notes, rsum parts, and interviewing techniques to assist you in
the successful acquisition of your professional goal.
Topic C In this topic, you saw the positive and negative issues surrounding self employment
in the field. You were exposed to the dangers and down-sides that were discussed to
help in your awareness of fraud and scams. You also examined the actual steps and tips
for those who decide they are qualified and possess the aptitude and fortitude to pursue
this entrepreneurial avenue.
Topic D In this topic, you used the history and terminology of health insurance to become
informed about the industry and its beginnings. You learned how to relate the terms to
different time frames in history in order to gain a more thorough understanding of
medical billing and applicable insurance issues overall. You then discussed and
reviewed different types of health insurance that relate to billing.
Topic E In this topic, you reviewed current and future issues of medical billing and coding.
The concept of Medical and Healthcare Savings Accounts was introduced along with
the possibilities and requirements for future use. You learned a more global perspective
of the international healthcare systems that might affect how we accomplish our jobs as
medical billers and coders in the future. You were also introduced to the World Health
Organizations ICD-10 and the ICD-10-CM, along with its future implementation and
the need to maintain up-to-date information at all levels.
Review Questions
1 What are some of the different certifications available to those seeking a career in
Medical Billing and Coding?
Some of the Certifications are Certified Coding Specialist, Certified Professional Coder,
Certified Hospital Coder, and Certified Coding Associate
Certified Billing and Coding Specialist
Certified Claims Assistance Professional, Certified Electronic Claims Professional
Health Insurance Technician and Manager
2 What are some of the key points in writing scannable rsums?
Key words and phrases in medical billing and coding
Security of your personal information
Simple format, proper spelling and grammar, general font type, and concise information
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3 Describe some things to be aware of when considering self employment in medical
billing and coding.
Beware of scams per the Federal Trade Commission when considering medical billing
software packages.
It takes a high-level of skills, experience, and education in medical billing and coding;
therefore, it is recommended that one gains some hands-on time out in the field first.
Financial obligation and requirements might be a problem.
It can be lonely and provide a type of isolation that some do not desire.
It can be difficult to get started and to obtain accounts unless a proven history exists.
4 Name some solutions to the disadvantages of self employment in medical billing
and coding.
Research thoroughly the company that you are considering and check out all avenues. The
Better Business Bureau is a great resource.
Complete your own homework in knowing what steps must be taken prior to beginning your
own business. Be sure to review the Small Business Administrations website and
information.
Be prepared financially with a business plan and have the capability to sustain yourself for a
minimum of six months or more with a loan or other means.
Be sure to maintain your education and network with others in the field.
Have a proven history either personally with your own hands-on experience or professionally
with a proven business track that has been checked out.
5 What is the main difference between group and individual health insurance?
The main difference is not the number of participants. The main difference is the category or
qualifications of the participants, such as whether or not those included are a documented
business and have a valid tax identification number.
6 Which of the following are considered types of Managed Care Organizations
(MCOs)?
A Independent Practice Associations (IPAs)
B Health Maintenance Organizations (HMOs)
C Preferred Provider Plans (PPOs).
D All are correct.
7 What is HIPAA?
Health Insurance Portability and Accountability Act of 1996.
Title I protects health insurance coverage for workers and their families during change.
Title II is the Administrative Simplification that medical billers and coders are mostly
concerned with. It establishes national standards for electronic transactions in healthcare and
national identifiers. It also establishes privacy issues for medical and financial documentation
and information of patients or the Protected Health Information (PHI).
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8 Which of the following describes Healthcare Savings Accounts (formerly Medical
Savings Accounts)?
A They are health insurance plans with high premiums.
B They are regular bank savings accounts that can be used for medical and non-
medical use.
C They combine high-deductible health insurance with a savings plan similar to an
IRA.
D It is a program that accesses networks of healthcare providers and brings you the
same negotiated rates that the large insurance companies use.
9 What are some of the future issues that medical billers and coders should be aware
of and continue education in?
Global and international issues such as the ICD-10-CM changes to come. The WHO has not,
however, determined an implementation date for the United States at this point.
Maintaining education in applicable areas to keep current and be aware of possible new issues.
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Endnotes

# Reference
1 Occupational Report. Bureau of Labor Statistics, Occupational Employment Survey, 2003/2002:
http://www.bls.gov.oes
2 See Review of Insurance Transactions Directly Affecting Consumers which Involve Use of Third
Party Vendors. National Association of Insurance of Insurance Commissioners, June 2004:
http://www.naic.org/legal/ and American Association of Independent Claims Professionals
http://www.aaicp.net/.
3 Excerpt from, The Final Showdown President George W. Bush, the Presidential Debate with
Senator John Kerry. ABC news. October 13, 2004.
4 See Hippocrates updated: New pledge for professionalism by Andis Robeznieks, March 2002.
http://www.ama-assn.org/amednews/2002/03/11/prsc0311.htm
5 Standards of Ethical Coding as developed by the American Health Information Management
Association. AHIMA, December 1999, http://www.ahima.org/infocenter/guidelines/standards.cfm
6 See HBMA Code of Ethics Healthcare Billing and Management Association. 1993.
http://www.hbma.com/ethics.html and National Healthcareer Association (NHA)
http://nha2000.com/index.htm
7 Internet Policy 1998. Centers for Medicare and Medicaid.
http://www.cms.hhs.gov/it/security/References/ps.asp
8 See Privacy Policy: What is Spam? 1998. Spamcop.net
9 e-Health Ethics Initiative by Helga Rippen, MD, PhD., Ahmad Risk, MD. E-Health Code of
Ethics. Journal of Medical Internet Research 2000:2(2):e9. http://www.jmir.org/2000/2/e9/
10 Medical Billing Opportunities, Worth a Second Opinion Federal Trade Commission. FTC Facts.
Bureau of Consumer Protection, April 2002. http://www.ftc.gov/bcp/conline/pubs/invest/medbill.pdf
11 Publication of the OIG Compliance Program Guidance for Third-Party Medical Billing
Companies. Office of Inspector General. Federal Registry/Vol 63 No.243/Dec 18,1998,p70143.
http://oig.hhs.gov/fraud/docs/complianceguidance/thirdparty.pdf
12 See Billing Agents, Introduction. Of the Florida Medicaid Provider General Handbook, October
2003 p2-48,
13 Insurance Handbook for the Medical Office by Marilyn Fordney. Saunders Company. Elsevier
Science USA 2004.
14 See Occupational Outlook Handbook, 2004-05 Edition. Bureau of Labor Statistics, U.S.
Department of Labor. Medical Records and Health Information Technicians, on the Internet at
http://www.bls.gov/oco/ocos103.htm

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