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Indian Health Service The Federal Health Program for American Indians and Alaska Natives


     Indian Health Manual
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Part 5 - Management Services

Chapter 1 - Third-Party Revenue Accounts Management
And Internal Controls


Title Section
Introduction 5-1.1
    Purpose 5-1.1A
    Policy 5-1.1B
    Authorities 5-1.1C
    Background 5-1.1D
    Definitions 5-1.1E
Responsibilities and Organizational Framework 5-1.2
    Director, Office of Resource Access and Partnerships 5-1.2A
    Director, Office of Finance and Accounting 5-1.2B
    Director, Office of Information Technology 5-1.2C
    Director, Office of Urban Indian Health Programs 5-1.2D
    Area Directors 5-1.2E
    Area/Service Unit Financial Management Officers 5-1.2F
    Area Business Office Coordinators 5-1.2G
    Area Information Technology Specialists/Coordinators 5-1.2H
    Chief Executive Officers 5-1.2I
    Service Unit Health Information Management Directors 5-1.2J
    Service Unit Business Office Managers 5-1.2K
General Requirements 5-1.3
    Internal Control Review 5-1.3A
    Third-Party Budgetary Resources 5-1.3B
    Accounts Receivable Balance 5-1.3C
    Patient Accounts 5-1.3D
    Patient Registration 5-1.3E
    Patient Check-in 5-1.3F
    Health Information Management Coding /Data Entry 5-1.3G
    Claims and Billing 5-1.3H
    Posting 5-1.3I
    Account Review and Followup 5-1.3J
    Weekly Auto Sync Process 5-1.3K
    Cutoff Date/Time-Reports 5-1.3L
    Monthly Balances 5-1.3M
    Access and Maintenance 5-1.3N
    Information Technology/Automated Systems 5-1.3O
General Requirements - Finance Office 5-1.4
    Collections and Deposits 5-1.4A
    Cutoff Date - Deposits 5-1.4B
    Month End Processing and Reconciliation 5-1.4C
     Recording/Entry into CORE 5-1.4D
    Advice of Allowance 5-1.4E
    Agreements 5-1.4F
    Allowances for Doubtful Accounts 5-1.4G
    Debt Collection 5-1.4H
Reporting 5-1.5
Control Reports 5-1.5A
Records/Documentation 5-1.6
    Medical Record Files 5-1.6A
    Transaction Records 5-1.6B
    Records Maintenance and Disposition 5-1.6C

Exhibit Description
Manual Exhibit 5-1-A Accounts Receivable Posting and Reconciliation Instructions
Manual Exhibit 5-1-B Accounts Receivable Flowchart
Manual Exhibit 5-1-C Disposition of Receipts from Third-Party Payer
Manual Exhibit 5-1-D Sample Reports

5-1.1  INTRODUCTION.

  1. Purpose.  This chapter establishes the Indian Health Service (IHS) policy for recording, controlling, and otherwise accounting for patient-related resources; and for ensuring the accuracy and timeliness of receivable and revenue reporting in the financial statements of the IHS.  It also establishes specific internal controls to safeguard and properly account for revenue and related assets, and defines the authorities for collecting debts owed to the IHS by third-party sources and non-beneficiary patients.

  2. Policy.  It is the policy of the IHS to ensure that financial operations comply with applicable laws, regulations, and Government-wide financial management requirements and standards as they relate to third-party revenue.  All IHS managers will implement the systems and requirements set forth in this chapter necessary to account for and collect revenue from various sources that include, but are not limited to:  Medicare, Medicaid, private insurance, non-beneficiaries, and other third-party resources.

  3. Authorities.  This policy is established in accordance with the Department of Health and Human Services (HHS) Departmental Accounting Manual, the Department of the Treasury Fiscal Manual, the General Accounting Office Statement of Federal Financial Accounting Standards (SFFAS), and the following:

    1. The Federal Privacy Act of 1974, 5 United States Code (U.S.C.) §552a, 42 Code of Federal Regulations (CFR) Part 2,45 CFR Part 5b.

    2. The Indian Health Care Improvement Act of 1976, as amended, Public Law (P.L.) 94-437; P.L.100-713; P.L.102-573.

    3. The Federal Managers’ Financial Integrity Act of 1982, P.L. 97-255.

    4. The Federal Claims Collection Act of 1982, as amended, P.L. 97-258.

    5. The Chief Financial Officers Act of 1990, P.L.101-576.

    6. The Government Performance and Results Act of 1993, P.L.103-63.

    7. The Information Technology Management Reform Act of 1996, P.L. 104-106.

    8. The Debt Collection Improvement Act of 1996,P.L. 104-134.

    9. The Health Insurance Portability & Accountability Act of 1996, P.L. 104-191, and all implementing regulations at 45 CFR Parts 160and 164.

    10. The Federal Financial Management Improvement Act of 1996, P.L. 104-208.

    11. The Improper Payments Information Act of 2002, P.L.107-300.

    12. The Federal Information Security Management Act of 2002, P.L. 107-347.

  4. Background.  The Indian Health Care Improvement Act (IHCIA) includes provisions for third-party reimbursements.  This legislation authorizes the IHS and Tribes with self-determination contracts and compacts to bill and collect for services rendered at IHS and Tribal facilities.  Although American Indians and Alaska Natives (AI/AN) are provided Federal health care, many individuals are covered by private insurance and/or are eligible for Medicare and/or Medicaid benefits.  An amendment to the IHCIA established the IHS' right to recover the reasonable costs of services from the party(ies) with a legal obligation to pay.  As a result, third-party billing and collections have become critical activities for the IHS.  The revenue generated from third-party billing and collections plays a major role in the health care services that are provided to the AI/AN community.  Safeguarding this revenue stream and related assets is vital to IHS health care programs.

    The IHS took several necessary preliminary actions before implementing a comprehensive system that properly accounts for all revenue resources and ensures the accuracy of receivable and revenue reporting.  The first Interim Accounts Receivable (A/R)Policy established criteria for evaluating and verifying the Resource and Patient Management System (RPMS) A/R/.  A second interim A/R policy was developed and implemented for all IHS Areas to record an initial (First Time Entry) A/R balance into the CORE Accounting System (CORE) that was supported by the subsidiary ledger (RPMS).  The second interim policy also established operational procedures and processes for ongoing maintenance of the A/R balance, which included posting revenue/payments, making adjustments, and performing reconciliations (see A/R Flowchart, Manual Exhibit5-1-B).  An initial A/R balance has now been recorded by each Area Office and entered into CORE.  The A/R balance will become more precise as adjustments, corrections, and improvements are made in accordance with this IHS policy that is also intended to safeguard third-party revenue by establishing improved internal management controls.

  5. Definitions.

    1. Adjustment.  A financial transaction that makes an administrative change principal balance of a Claim/bill or an account.

    2. Advice of Allowance.  Budgetary allocations made by the IHS Office of and Accounting (OFA) to each Area Office based upon actual third-party collections and all supporting documentation.

    3. Beneficiary.  An eligible AI/AN who presents himself for services at an health facility for health care.

    4. Bill.  The name given to a claim after it is approved in RPMS third-party becomes an account receivable.

    5. Claim.  A request for payment that has not yet been approved in RPMS third-party for services provided.

    6. Common Accounting Number.  An alpha numeric code set up by the OFA identify the Agency, accounting point, cost center, location, and sub-activity for each organizational unit/activity in IHS.

    7. CORE.  The IHS accounting system to which all third-party revenue is recorded and reconciled.

    8. Credit.  A payment or adjustment that reduces the principal balance (debt) when posted to an account.

    9. Debit.  A charge or fee that increases the principal balance (debt) when posted to an account.

    10. Debt.  Any amount of funds that an authorized official has determined is owed to the Government and for which appropriate collection action can be taken.

    11. Initial A/R Balance.  A balance that has been obtained from the A/R system of RPMS and entered into CORE.

    12. Insurer Types.  Federal, State, and local or private entities from which the IHS is authorized to collect reimbursements.

    13. Non-Beneficiary.  A person who presents himself to an Indian health facility for services and is not AI/AN or who cannot provide proof of eligibility.

    14. Posting.  The process of recording financial entries (debit or credit transactions) to an account.

    15. Receivables.  Revenue due as a result of the delivery of goods and/or services.  This chapter refers to amounts that are due from third-party payers or non-beneficiaries for provided health care services.  The amount due becomes a receivable at the time the services are provided.

    16. Receipts.  Monetary payments, refunds, or other collections received.

    17. Revenue.  Funds due or received for services or goods provided.

    18. Reconciliation.  The performance of a manual and/or automated comparison of financial source documents with summary data to obtain a reportable and auditable balance that meets generally accepted accounting standards.

    19. Resource Patient Management System.  An integrated and automated system for managing both clinical and administrative information in health care facilities.

    20. Segregation of Duties.  An internal control method for ensuring that no one individual has complete control over a transaction (usually financial) from beginning to end, i.e., receiving, recording, approving, distributing, reviewing/reconciling, adjusting, etc.

    21. Sub-Sub-Activity.  A budget structure term used to identify specific program activities in IHS.

    22. Subsidiary Ledger.  A ledger detailing transactions that support the summary postings to the accounting system and referring to the A/R segment of the RPMS.

    23. Write Off.  An asset that has been determined to be uncollectible and is adjusted and recorded in the accounting records as a loss.

5-1.2  RESPONSIBILITIES AND ORGANIZATIONAL FRAMEWORK

  1. Director, Office of Resource Access and Partnerships.  The Director, Office of Resource Access and Partnerships (ORAP), formulates and provides general standards and policy guidance for all third-party revenue and related functions.  The Director, ORAP, is responsible for the acquisition and implementation of those systems necessary to provide automated support for patient accounts and data management required to track, calculate, document, record, and otherwise control the third-party revenue function.  The Director, ORAP, provides overall direction and guidance for all IHS Business Office operations including overseeing the financial systems support for all third-party billing and collection activities and coordinating with the Director, OFA, to meet all legislative and statutory/administrative reporting requirements.  The Director, ORAP, is also responsible for annual IHS-wide policy compliance reviews and internal audits (including confirmation sampling) for all categories of third-party revenue.

  2. Director, Office of Finance and Accounting.  The Director, OFA, is the IHS Chief Financial Officer (CFO), and as the CFO, the Director provides executive leadership and is responsible for maintaining financial systems that meet all Federal statutory requirements.  The CFO provides financial management policy guidance and advice to the IHS with regard to legislation and Government-wide policies on accounts receivable/revenue reporting.  This includes the responsibility for developing and establishing policy and procedural guidance IHS-wide for these functions and monitoring and ensuring compliance through a periodic analysis, assessment, and review.  The Director, OFA, coordinates with the Director, ORAP, to meet all legislative and statutory/administrative reporting requirements.

  3. Director, Office of Information Technology.  The Director, Office of Information Technology (OIT) is responsible for providing automated system services and support for nationwide applications that support third-party billing and collection activities.  This includes developing, implementing, and maintaining automated programs for these functions; providing for the acquisition of necessary hardware; ensuring the timely and adequate distribution of software and user manuals; and providing related training.

  4. Director, Office of Urban Indian Health Programs.  The Director, Urban Indian Health Programs (UIHP), reviews and evaluates all eligible programs on the feasibility and means for collecting third-party revenue at urban Indian health facilities.  (It should be noted that approximately 70 percent of all IHS urban Indian health facilities provide direct patient services and are legally authorized to collect third-party revenue.)

  5. Area Directors.  Area Directors are responsible for managing and directing all third-party revenue functions and activities for their respective organizations in compliance with this policy and applicable legislative, regulatory, and other policy guidelines.  The Area Directors are responsible for ensuring overall coordination and facilitation among the organizational units involved with implementation and ensuring that appropriate procedures, reporting mechanisms, and inter-office communications are established to meet management objectives.  This includes developing and documenting Area-specific procedures for establishing the processes and systems required by this policy.

    The Area Directors must also plan and budget for those activities necessary to implement, maintain, and support the functions required by this policy and comply with Part 5 Chapter 16, Indian Health Manual (IHM) Through delegated authority under the Federal Claims Collection Act, Area Directors are authorized to make and responsible for making final decisions to suspend, compromise, or terminate the collection of uncollectible claims.  This authority applies to individual claims of $20,000 or less, exclusive of interest, penalties, and other charges.

  6. Area/Service Unit Financial Management Officers.  Area (or Service Unit, if appropriate) Financial Management Officers (FMO) are responsible for providing overall direction of accounting for third-party revenue.  The FMOs shall develop, implement, and/or maintain processes and procedures for the timely recording and execution of all third-party accounting transactions into CORE A/R The FMOs are also responsible for receiving, reviewing, validating, consolidating, clearing, and reconciling all financial data/information.  This includes maintaining the proper documentation for audit/evaluation and the preparation of analyses, summaries, distributions, operating plans, and other reports as needed.  The FMOs in coordination with Business Office Coordinators (BOCs) and their field counterparts, provide expert advice and technical assistance, as required, on financial management policy and procedural matters.

  7. Area Business Office Coordinators.  Area Business Office Coordinators (BOC) are responsible for overseeing the patient account management function in general and for providing instructions and guidance to the service units.  The BOCs ensure that documented processes and procedures are in place for receiving and posting collections and make adjustments, refunds, unallocated cash, denials, and transfers between facilities.  The BOCs provides coordination among the service units, Business Offices, and the Area Finance Office to facilitate reconciliation with CORE and to ensure that information is submitted on a timely basis and/or by established cutoff dates.  The BOCs are responsible for providing procedures and best practices intended to safeguard revenue for health services that are provided and for advising management on all collection activities.  In addition, they coordinate with their service unit counterparts and Finance Office managers to provide expert advice, training, and technical assistance, as required, on all Business Office operations.

  8. Area Information Technology Specialist/Coordinators.  The Information Technology (IT) Specialists are responsible for near- and long-term planning for information resource requirements and establishing strategies for managing information resources; coordinating and implementing IHS-wide information resources management (IRM) goals and strategic plans, including the provision of technical support for nationwide initiatives related to third-party billing and collection activities; and participating in the budget development process with I/T/U managers, facility IRM managers, and end-users.  The IT Specialist/ Coordinators establish mechanisms to track Area IT progress against plans; monitor new initiatives to ensure that objectives and intended purposes are met; monitor and maintain facility RPMS databases, ensuring the installation of current updates/new releases, patches, routines, globals, and data element tables; coordinate/provide analyses of computer/IT operations; and make recommendations related to daily operating procedures, data collection, data quality, equipment environments, preventive maintenance, and automated IT security measures.  Security includes planning and execution of the IHS IT Security Program.

  9. Chief Executive Officers.  Chief Executive Officers (CEO) are responsible for overseeing the revenue cycle for the service unit and for implementing procedures and practices that will safeguard the collection of amounts owed to the IHS for health services provided.  This includes developing location-specific procedures consistent with the requirements of this policy for patient registration, coding/data entry, billing, processing/follow-up on claims, posting collections, denials, and adjustments and other processes pertinent to patient accounts.  The CEOs are responsible for the accuracy of all transactions, computations, and numerical data for their respective organization; for the proper and timely preparation of detailed subsidiary transactions and summary reports; and for accurate and proper account balances.  The CEOs must budget for and provide adequate staffing levels and ongoing training in all third-party revenue functions and related requirements of this policy including debt management.  The CEO, in coordination with the Area FMO, also recommends write-off of uncollectible accounts to the Area Director.

  10. Service Unit Health Information Management Directors.  The Service Unit Health Information Management (HIM) Directors are responsible for providing overall direction of all HIM activities at their respective service unit facilities, i.e., hospitals, clinics, health centers, etc.  This includes the developing and implementing policies and procedures to properly direct and administer the medical records program and assisting in the planning and development of comprehensive health information programs that meet IHS goals and objectives.  The HIM Directors advise the CEOs and staff on all policy and procedural matters related to health records and data quality; assist in the evaluation and analysis of statistical data for epidemiological or other studies, program planning, and budgeting; and perform quality review studies in conjunction with professional personnel from other disciplines to meet IHS and other organizational i.e., Joint Commission on Accreditation of Healthcare Organizations) certification/accreditation requirements.  They provide HIM orientation/training for new employees, health records personnel, and departmental managers.  This includes advising/informing Chief Medical Officers and/or Clinical Directors on their responsibilities for timely, accurate, and proper documentation of medical services.

  11. Service Unit Business Office Managers.  The Service Unit Business Office Managers (BOM) (in conjunction with the) (CEO) are primarily responsible for the timely, accurate, and proper billing and collection of amounts owed to the IHS for all services provided, ensuring optimal reimbursement from third-party payers and non-beneficiaries.  The BOMs must ensure the efficient and accurate collection of all data/information related to patient services i.e., patient registration, admissions, eligibility, third-party resources, cost allocations, etc.) and make changes/improvements to Business Office operations as deemed necessary.  The BOMs are responsible for implementing and maintaining processes and procedures that meet the specific needs of their facilities while ensuring compliance with all regulatory/policy requirements.  This includes establishing management controls and tracking tools to monitor assignments, tasks, and performance standards; directing the development/preparation of required financial, statistical and other summary management reports; researching variances within the financial information and providing documented explanations; identifying risks and suggesting solutions and/or making proper adjustments to subsidiary transactions as necessary; and maintaining reports/records for all third-party transactions.  The service unit BOM must also develop and maintain productive/effective working relationships with administrative/clinical staff, providing expert advice and technical assistance, as required.

5-1.3  GENERAL REQUIREMENTS

  1. Internal Control and Review.  All third-party revenue functions/transactions must meet the general and specific internal control standards established by legislation, regulation, and policy.  Third-party revenue functions/transactions include:

    1. Area Specific Process/Procedures.  In consultation with their respective service units and Finance Office, Area Office BOCs must establish and document Area-specific processes and procedures for posting charges, receiving and posting collections, making adjustments and refunds, unallocated cash, and transfers between facilities in accordance with Manual Exhibit 5-1-A, “AccountsReceivable Posting and Reconciliation Instructions.”

    2. Local Procedures.  Based on the Revenue Operations Manual (ROM) (December 2005), location-specific procedures must be developed and documented for patient registration, coding/data entry, billing, processing/ follow-up on claims, posting collections, denials, adjustments and other processes pertinent to patient accounts.

    3. Management Reviews/Evaluations.  The CEO or designee must perform periodic reviews/analyses/evaluations to ensure that the general and specific internal control standards are met.  As appropriate, these reviews will include a check for proper authority, justification, reason, timeliness, and individual responsibility.  The CEO or his/her designee must do the following:

      1. Perform regular credentialing and background checks in accordance with IHS Circular No. 95-16, “Credentials and Privileging Review Process for the Medical Staff,” to ensure proper certifications, credentials, and experience.

      2. Address the results of all internal/external reviews, evaluations, and audits within 30 days of issuance and implement corrective actions in accordance with the findings/recommendations.

      3. Perform a weekly review of registration, coding/data entry, billing, advice, denials, batch, and posting documentation to identify backlogs and reasons for them.  This includes a review of aging open denials/claims and a review of the following reports from check-in to billing:  Incomplete Claims Status Report, Days to Collection Report, Flagged as Billable Report, Batch Statistical Report, and Age Summary Report.  (See Manual Exhibit 5-1-D for examples).

      4. Perform a monthly review of the "Bill Negative Balance List" (A/R negative balances) to ensure appropriate action has been taken or is underway to correct discrepancies.  (See Manual Exhibit 5-1-D, example 26).

      5. Perform a monthly check/review of all deleted claims listed in the "Canceled Claims Report."  (See Manual Exhibit 5-1-D, example 1).

      6. Using random sampling methodology, perform an independent quarterly review of documents from check-in to reconciliation (check-in, registration, coding/data entry, billing, posting, adjustments/write-offs, and reconciliation) to verify accuracy, compliance, and timeliness of preparation and submission.

      7. Perform an independent quarterly review (random sampling) of accounts receivable that are older than 120days to verify accuracy, compliance, completeness, and proper submission and follow-up.

      8. Perform monthly trend analyses for collections, deposits, amounts hilled, write-offs, denials, and adjustments by allowance category/ age/payer.  All analyses should be based on past/current operations to allow managers to see potential/actual problems and where improvements can he made to increase revenues and decrease losses.

    4. Segregation of Duties.  All procedures developed at the local level must ensure the separation of duties for the following processes:  collections, hilling, posting, receipt of remittance advice/explanation of benefits documents, A/R followup, hatch creation, and approval of write-offs.

    5. Ethical Conduct.  All staff/employees are prohibited from performing any transactions for their immediate family and/or self in accordance with the IHS ethics policy.

    6. Reports.  The CEO must ensure that the reports identified in Section 5 of this chapter are monitored on a set monthly schedule by personnel independent of the function and also reviewed/evaluated for follow-up and/or corrective action as necessary.

  2. Third-party Budgetary Resources.  The following budget activities identify specific categories of insurer types from which the IHS receives reimbursements and for which separate accounting is required.  The RPMS A/R collection reports must be created for these categories in each RPMS database except for Budget Activity 02.01.12 (Reference IHS Circular No. 2005-08, "Reporting Third-party Tortfeasor Claims and Recovery of Funds under the Federal Medical Care Recovery Act," for instructions concerning this category.)  Each type of reimbursement/collection must be covered when developing procedures for recording and accounting for the revenue cycle.  The following budget activities must be accounted for:

    1. Budget Activity 02.01.12 - Federal Medical Care Recovery Act (FMCRA)

    2. Budget Activity 05.01.15 - Private Insurance (PI)

    3. Budget Activity 07.01.17 - Children's Health Insurance Program (CHIP)/Medicaid

    4. Budget Activity 07.01.18 - CHIP-PI

    5. Budget Activity 01.01.21 - Medicare

    6. Budget Activity 02.01.22 - Medicaid

    7. Budget Activity 01.01.09 - Other Reimbursements (Beneficiary Medical Program (BMP), Non-Beneficiaries, Breast and Cervical Cancer Program (BCCP), Workmen's Compensation, etc.)

  3. Accounts Receivable Balance.  Each Area Business Office is required to provide the Finance Office all reports, data, and information necessary to establish, record, reconcile, and maintain the A/R balance for each type of third-party reimbursement.  (See Manual Exhibit 5-1-A, "Accounts Receivable Posting and Reconciliation Instructions," Section 3).

  4. Patient Accounts.  A patient account is to be established at the time of service for all patients regardless of their status, i.e., beneficiary, non-beneficiary, insured, non-insured, insurance type, etc. Beneficiary patient accounts without third-party coverage will be automatically adjusted by RPMS.  Patient accounts must be maintained in accordance with established schedules (set forth in paragraph J of this section) to ensure accurate and proper balances.  Patient accounts include:

    1. Clinical Services.  All clinical services must be entered into RPMS and identified by the financial class/insurer type that defines the payment sources, i.e., BMP, BCCP, Workers' Compensation, guarantor, etc.

    2. Payments/Co-pays/Deductibles.  Payments/co-pays/deductibles for all non-beneficiary patients must be collected at the time of registration, check-in, or patient service.

    3. Fees.  All third-party fee schedules must be reviewed annually and updated as appropriate in accordance with local procedures.

    4. Account Transactions.  Third-party revenue transactions will be interfaced to the IHS financial system at a cost center level utilizing a standard revenue recognition table.

    5. Third-Party Liability.  All FMCRA activities/functions are to be performed in accordance with IHS Circular No. 2005-08, "Reporting Third-party Tortfeasor Claims and Recovery of Funds under the Federal Medical Care Recovery Act."

  5. Patient Registration.  Third-party eligibility and patient demographic data is to be determined and/or verified at each and every patient encounter.  This includes collecting and/or updating patient information/demographic data and third-party eligibility in RPMS at the time of registration/check-in.

  6. Patient Check-in.  The RPMS Patient Information Management System module must be completed at the time of registration/check-in prior to any services being performed, except in emergency situations.

  7. Health Information Management Coding/Data Entry.

    1. Classification System.  The International Classification of Diseases - 9th Edition (ICD-9), American Dental Association, and Current Procedural Terminology - Version 4 (CPT-4) codes must be entered into RPMS/Patient Care Component (PCC) for all clinical services whether or not third-party coverage is applicable to the patient.  All applicable codes must be entered within 4 business days of the date of service.

    2. Patient Care Component Encounter Form.  Services provided at ancillary departments (radiology, laboratory, etc.) without a provider visit on the same day, must have a PCC encounter form generated and entered into RPMS.  (The PCC data entry for electronic health records (EHR) and non-EHR sites plays a critical role in the timely billing and recoupment of third-party resources.)

    3. Healthcare Common Procedure Coding System.  Current Healthcare Common Procedure Coding System (HCPCS) codes for supplies must be identified on charge tickets and entered into the PCC to ensure the capture of service related data and proper billing.

    4. Certified Coders.  Each facility must have at least one coder (performing coding functions) who has been certified by the American Academy of Professional Coders or the American Health Information Management Association   Current personnel (coders with at least 5 years of experience) should take the appropriate training necessary to obtain their certification within 2 years of the issuance date of this policy.

    5. Coding/Data Entry Review.  Each facility must have an independent certified coder perform a quarterly review (by random sampling) of all coding/data entries.  The sampling must be conducted by someone who did not do the original coding/data entry, i.e., someone from another facility, a contractor, etc.

    6. Patient Care Component Error Reports.  Each facility must perform a weekly review of PCC error reports and make adjustments/corrections.

    7. Coding/Data Entry Training.  Training must be completed for all coding and classification systems including ICD-9, CPT-4, HCPCS, and related software applications before an employee is allowed to independently perform this function.  The employee must work under a certified coder until his/her training is completed.  Training for new coding employees must be completed and documented by the compliance officer or designee as soon as possible after the employee comes on board.

    8. Coding/Data Entry Reference Manuals.  All coding and related reference books must be the current version with annual updates provided to all individuals involved in the coding/billing functions of the service unit.

  8. Claims and Billing.  A claim is established once services are rendered (See A/R Flowchart, Manual Exhibit 5-1-B) and must be recorded in the RPMS A/R when services are provided, within the following parameters:

    1. Billable Services.  All RPMS insurer coverage type parameters identified in the RPMS table maintenance must reflect billable services based on insurers.  Primary, secondary, and tertiary claims for billable services are to be automatically generated on an established schedule.

    2. Billing for Services.  All outpatient claims are to be billed within 6 business days of date of service; secondary and tertiary claims must be billed within 72 hours of the posting of the primary payment.  Inpatient claims are to be billed within 10business days.  The service unit must review the "Incomplete Coding Report" (inpatient and outpatient) and the "Flagged as Billable Report" on a daily basis to ensure that all goods and services provided are billed within the 6 business days.  Once approved, all claims are to be submitted to the responsible payer by the close of the next business day.

    3. The RPMS Edit for Bill Creation.  An RPMS system edit will be used to prevent the creation of a bill if the "Assignment of Medical Benefits Form" is not on file.  The form must be completed by patient registration based on the guidelines in the new ROM release (December 2005).

    4. Manual Entry of Bills.  The manual entry of bills based on the receipt of a check(s) is prohibited.  The account should be established when the service is provided.

    5. Electronic Transmits.  Reconciliation of electronic transmits to payer confirmation reports must be documented, and the files must be maintained by each location.  All transmits must be compliant with the Health Insurance Portability and Accountability Act (HIPAA), i.e., meet all requirements related to privacy transactions, security, and code sets.

  9. Posting.  All posting transactions should be in compliance with "Electronic Remittance Advice" (ERA) 835 requirements (when available by the payer) and recorded in accordance with the instructions for each transaction category/type identified in Manual Exhibit 5-1-A, Section 1.  All ERA electronic transmits must be HIPAA-complaint.

    1. Detailed Subsidiary Ledger.  The service unit should post all payments received to the RPMS detailed subsidiary ledger in the same month as received but no later than 72 hours after the receipt of support documentation.

    2. Health Insurance Portability and Accountability Act Codes.  Only HIPAA "Standard Adjustment and Reason Codes" are to be used when posting payments and adjustments into RPMS.

  10. Account Review and Followup.  All accounts must be reviewed at least once a month by payer, age, and dollar amount.  Review, research, and follow-up action must be performed on all bills aging > 45 days and properly documented in the RPMS A/R message field.  Open accounts > 120 days old should be reviewed in accordance with IHS management control review standards.

    1. Error Files.  Transmission error files are to be reviewed and corrected on a daily basis.

    2. Timely Filing Limits.  All claims/bills that have not been either approved or submitted within timely filing limits must be adjusted in RPMS and identified as a loss.  Timely filing limits are:

      1. Medicare Part A and Part B.  The IHS can bill for any date of service (DOS) in the current calendar year and any DOS in the previous calendar year plus 3 months (e,g., any service in 2005 and 2004 plus the last 3 months of 2003).

      2. Medicaid (Including CHIP).  The IHS can bill in accordance with individual State timely filing limits for up to 1 year from the DOS.  Any bill submitted past this time limit will be denied by Medicaid.

      3. Private Insurance (PI) and Workman's Compensation.  The timely filing limit for PI companies and Workmen's Compensation varies from 30 days to 1 year or more.

      4. Beneficiary Medical Program.  The IHS can bill for up to 1 year from the DOS.

      5. Non-Beneficiary.  The IHS can bill for up to 7 years from the DOS.

  11. Weekly Auto Sync Process.  Service Units must maintain the data integrity of RPMS by managing the auto sync process on a weekly basis, which will also facilitate month-end processing.

    1. Auto Sync Report.  Service unit business offices must print the Auto Sync Report in RPMS A/R at the end of each week and identify any discrepancies between the RPMS third-party bill file and the RPMS A/R bill file.  Each item must be researched, documented, and corrected.

    2. Random Sampling.  A random sampling of the Auto Sync Report must be performed once each quarter by the BOM as part of the internal control process to ensure the data integrity of RPMS.

  12. Cutoff Date/Time-Reports.  The close ofbusiness (11:59p.m. for facilities operating 24 hours) on the last calendar date of the month is established as the cutoff date for generating the Bills Listing Report (BLS), Transactions Report (TAR), Batch Statistical Report (BSL), Age Summary Report (ASM), Period Summary Report (PSR), and the Summary AR Bill and Transaction Synchronization (ASYNC) Report.  (See Manual Exhibit 5-1-D for Examples.)

    These reports must be run manually or queued to run automatically on the last working day of the month at the same time with no end users on the system (including Pharmacy Point of Sale users).  Running these reports takes a considerable amount of time, and allowances should be made for delays and/or downtime.

    1. Submission to Finance Office.  All BOMs must submit the ASM, PSR, BSL, and ASYNC reports to their respective Finance Office by the first business day after the established cutoff date.

    2. Supporting Detail Reports.  When the ASM and PSR are run, they must include the generation of all supporting detail reports.

    3. Exporting and Storage.  Summary and detail reports must be exported or maintained in accordance with the IHS Records Disposition Schedule or the National Archives and Records Administration's General Records Schedule.

  13. Monthly Balances.  All business offices must continue to post and maintain A/R balances in RPMS.  The RPMS A/R System serves as the subsidiary ledger to the general ledger in CORE and must be the primary source of data, documentation, and support for all balances.  (See A/R Flowchart, Manual Exhibit 5-1-B).  In order to facilitate the month-end reconciliation process, each facility may perform a daily transaction reconciliation as outlined in Manual Exhibit 5-1-A, Section 2A.

  14. Access and Maintenance.  Access to and maintenance of RPMS tables (and similar documents) are restricted to authorized personnel and must be monitored by the CEO or designee.  He/she will review for proper authority, reasons for updates/changes, timeliness, and individual responsibility.  Access and maintenance must be specifically controlled for the following:

    1. "Remit To" Address.  Access to RPMS table maintenance to change the "Remit To" address must be specifically controlled to safeguard third-party revenue.

    2. RPMS Directories.  Access to and saving files to RPMS directories, which contain personal health information, must be restricted in accordance with HIPAA and Privacy Act requirements.

    3. Deleting/Canceling Claims.  Access to the RPMS manager menu for deleting or canceling a claim must be limited to supervisors and managers, and each billing/collection clerk must enter reason/explanation codes as appropriate.

  15. Information Technology/Automated Systems.  Automated systems services and support by IHS Headquarters for nationwide applications must be provided on a continuing basis for third-party hilling and collection activities.  This includes developing, implementing, and maintaining automated programs for these functions; ensuring timely/adequate distribution of software, hardware, and user manuals; promptly responding to all inquiries; and providing training as required.

    1. Systems Development. Systems development must be based on defined requirements and input from program/end users.

    2. Subsidiary Systems Development.  All automated subsidiary systems developed for the revenue cycle must have the capacity to interface with RPMS A/R or meet all the requirements of this policy as an independent system subject to approval by the Area Director.  This includes commercial off-the-shelf software as well as contractor/independently developed automated systems.

    3. Information Technology Implementation/Maintenance.  Areas and service units must implement and maintain automated systems/programs for third-party revenue functions; ensure timely/adequate distribution of software, hardware, and user manuals; and provide budgetary resources and training.

5-1.4  GENERAL REQUIREMENTS- FINANCE OFFICE

  1. Collections and Deposits.  Only a collection clerk/officer designated by the FMO is authorized to collect funds, which include currency (cash), checks, money orders, credit cards, and lockbox receipts.  All collections received must be categorized by Budget Activity as identified in Section 5-1.3B of this policy.

    1. Receipts/Logs.  Pre-numbered field receipts are to be issued for all collection transactions (cash, check, money order, credit card) not directly received at the PNC lockbox.  All deposits are to be reconciled with collection receipts.  Prior to sending third-party collections to the lockbox, the collection clerk will establish daily manual logs that identify the date received, date sent, amount of payment, and disposition for all in-house payments.  Checks are to be submitted to the PNC lockbox on a daily basis.  Copies of receipts must be processed daily by an authorized collection clerk for submission to Finance.

    2. FMCRA Receipts.  Receipts are to be processed in accordance with IHS Circular No. 2005-08, "Reporting Third-party Tortfeasor Claims and Recovery of Funds under the Federal Medical Care Recovery Act."  Circular No. 2005-08 includes procedures for processing FMCRA payments sent in error by third-party payers to the IHS, i.e., payments that should have been sent to the Office of the General Council or its designee.

    3. Lockbox.  Implementation of the PNC lockbox process is mandatory for all IHS facilities for the receipt and deposit of all medical service payments (except FMCRA receipts).  Each location has the option of implementing a lockbox process at the Area Office or service unit level (see Manual Exhibit 5-1-C, "Disposition of Receipts - Third-party Revenue").  All payments, including ACH, must be sent directly to the PNC account (accomplished through RPMS Third-party Billing Table Maintenance)

  2. Cutoff Date - Deposits.  All third-party revenue collections must be deposited 3 days prior to the beginning of the following month in accordance with collection procedures identified in the Department Accounting Manual, HHS, Chapter 10-40,Transmittal 82.4 (6/15/82).

    1. Collection Entry Batch.  A collection entry batch for each category identified in Section 3B "Third-Party Budgetary Resources," must be created in RPMS A/R in the month of receipt regardless of the cutoff date.  Actual posting of the individual accounts may not be accomplished prior to the month-end closing, but collections will be included in the "Advice of Allowance" for the current month.

    2. "Difference"- Treasury/CORE.  Collections that are deposited, but not reported into CORE until the following month result in a "difference" between Treasury (which received the deposit) and CORE.  This "difference" must be documented as a reconciling item on the Treasury 224 Report and recorded in CORE the following month.

    3. Collection Report.  Collection totals must be entered into a collection report that is used in reconciling RPMS batches to CORE and to Treasury via the 224 cash process (see Manual Exhibit No. 5-1-A, Attachment 5).

  3. Month-End Processing and Reconciliation.  (See Manual Exhibit 5-1-A, Section 2B)

    1. Treasury Reconciliation.  Each FMO (or designee) must perform a monthly reconciliation of CORE to Treasury's 224 Report (month end).  Collections received after the cutoff date (3 days before the month end) will be entered into CORE in the current month.

    2. CORE Reconciliation.  Each FMO (or designee) must reconcile balances from the RPMS A/R system with the CORE general ledger using the reports received from the service unit (by allowance category).  The RPMS subsidiary ledger total (ASM) must reconcile with the Area CORE A/R total.  If the "Subsidiary Accounts" do not reconcile with the CORE accounts, Finance personnel must work with the facility's Business Office to find and correct/adjust the discrepancy.

    3. Transaction Documentation.  All records of daily and monthly transaction documents must be kept and maintained for subsequent reconciliation and/or audits in accordance with the "IHS Records Disposition Schedule," HIPAA requirements, and Privacy Act regulations.

  4. Recording/Entry into CORE.  All data/information received in the Finance Office must be reviewed, cleared, validated, and consolidated before entry into CORE.

    1. Receipt of PSR Report.  The PSR report must be received from each service unit.  Billed and adjusted amounts are to be summarized by location and budget activity prior to entry into CORE.

    2. CORE Entries.  Billed and adjusted amounts are to be entered into CORE by location and budget activity:

      1. JXX9991 - Medicare

      2. JXX9992 - Medicaid

      3. JXX9993 - Private Insurance

      4. JXX9754 - CHIP/Non-beneficiary

  5. Advice of Allowance.  Each Area FMO or designee must prepare a month-end request for an "Advice of Allowance" by budget activity and submit it by fax or e- mail to the Director, OFA.  The request must be based on summaries from the CORE ledger and not the amounts that are deposited to the Department of the Treasury.

  6. Agreements.  Only the FMO or designee is authorized to sign Automated Clearing House (ACH), Electronic Data Interchange, and Electronic Funds Transfer (EFT) agreements.

  7. Allowances for Doubtful Accounts.  The FMO or designee must perform a quarterly bad debt/doubtful accounts assessment by allowance category in accordance with SFFAS requirements.

  8. Debt Collection.  The delegated authority under the Federal Claims Collection Act authorizes the IHS to suspend, compromise, terminate/write-off, individual debts up to $20,000.  This authority has been delegated to the Area Director and must be employed when an official determination is made that a debt is uncollectible in accordance with the following criteria:

    1. The claim cannot be substantiated with current records/files.

    2. The costs of collection are anticipated to exceed the amount recoverable

    3. The claim has no legal merit, and/or enforcement of the claim is barred by limitation statutes.

    4. The claim against the debtor has been discharged in bankruptcy proceedings.

    5. The IHS is unable to locate the debtor.

5-1.5  REPORTING

  1. Control Reports.  Internal control reports must be created/generated to cover the most critical third-party revenue cycle functions, which include check-in, patient registration, coding/data entry, batch creation, posting, collections, reconciliation, and related administrative processes (see Manual Exhibit 5-1-D, Sample Reports).  Reporting on these functions is essential to prevent delays that may lead to lost revenue and for supervisors/managers to properly monitor and control the revenue cycle.  The following reports must be provided for in RPMS and automatically generated on a set monthly schedule for review and followup/ corrective action as necessary.  (The primary user is identified, including a brief description for each report.)

    1. Cancelled Claims Report.  The primary user is the CEO; the report is used to monitor cancelled or deleted claims from RPMS.  Claims are cancelled when a claim is determined as un-billable or all potential billing has been completed.  When a claim is cancelled, it is permanently removed, and no further editing or approval ofthe claim can occur.  The end user will have to populate a field noting why the claim is being cancelled for this report to be accurate.  The report will provide management with a tool to monitor accuracy, ensuring staff is consistent with following the appropriate standards, and there is a mechanism for sufficient justification and reasonableness when claims are cancelled.

    2. Adjustments Report.  The primary user is the CEO; the report is used to monitor all write-offs for proper justification, accuracy, reason codes, and compliance with Debt Collection legislation/regulations/policies.

    3. Days to Collection Summary Report.  The primary user is the CEO; the report is used to monitor the account process from patient check-in to PCC data entry to creating batches and posting of payments in order to identify delays, problems, and overall turn-around time for collection on third- party claims.

    4. CPT Code Level Report.  The primary user is the CEO; the report is used to identify over and under-coding for all CPT code levels by date range, provider, payer, and allowance category and to assist with trend analyses.

    5. Third-Party Table Maintenance Site Parameter Report.  The primary user is the CEO; the report is used to track specific Table Maintenance changes that were done to the Third-party Billing Site Parameter File.  This report will assist with monitoring edits to the Payment Site fields that identify (for the Payers) where to send the checks.  The site parameter changes affect all third-party claims.

    6. Incomplete Coding Report - Inpatient.  The primary user is the HIM, the report is used to monitor inpatient visits that are not coded or are missing important data to complete the coding process, which results in third-party claims not being submitted to payers.

    7. Incomplete Coding Report - Outpatient.  The primary user is the HIM, the report is used to monitor outpatient visits that are not coded or are missing important data to complete the coding process, which results in third-party claims not being submitted to payers.

    8. Incomplete PCC Visits by Provider Report - Inpatient.  The primary user is the HIM; the report is used to monitor incomplete visits by the Provider and delays in PCC data entry for inpatient visits (which in turn delays claim submission and the collection of third-party revenue).

    9. Incomplete PCC Visits by Provider Report - Outpatient.  The primary user is the HIM; the report is used to monitor incomplete visits by the Provider and delays in PCC data entry for outpatient visits (which in turn delays claim generation and the collection of third-party revenue).

    10. PCC Incomplete/Error Report.  The primary user is the HIM; the report is used to monitor incomplete visits in PCC, identify missing required data elements, and correct "orphan visits" (which in turn delays claim generation, missed charges, and the collection of third-party revenue).

    11. Incomplete PCC Visits by Ancillary Department Report.  The primary user is the HIM; the report is used to monitor incomplete visits by other departments such as radiology, laboratory, etc., resulting in PCC data entry delays (which in turn delays claim generation and the collection of third-party revenue).

    12. Patient Errors/Warning Audit Detailed Report.  The primary user is the Business Office/Patient Registration; the report is used to monitor patient registration entry errors (incorrect and missing data) that will delay and/or cause claim denials for third-party eligible patient services.

    13. Benefit Coordinator Productivity Report.  The primary user is the Business Office/Benefits Coordinator; the report is used to monitor the productivity of the benefits Coordinator to ensure third-party resource applications are properly completed and filed on a timely basis.

    14. Exception Report (Patients Under 18.  The primary user is the Business Office/Benefits Coordinator; the report is used to identify patients under 18 with no third-party coverage who may be eligible for the Medicaid CHIP program.  If eligible, applications must be processed to the appropriate local agency.

    15. Exception Report (Patients over 65).  The primary user is the Office/Benefits Coordinator; the report is used to identify patients over 65 with no third-party coverage who may be eligible for Medicare benefits.  If eligible, applications must be processed to the appropriate agency.

    16. Brief Claims Listing Report.  The primary user is the Business Office/Management; the report is used to monitor unbilled claims created in RPMS that have not bee approved.

    17. Bills Awaiting Export Report.  The primary user is the Business Office/Management; the report is used to monitor third-party claim forms that have not been printed or electronically submitted for payment.

    18. Incomplete Claims Status Report.  The primary user is the Business Office/Management; the report is used to monitor claims that are not approved because of missing or inaccurate data.  The information on the claim is returned to coding, the provider, PCC, HIM, or others for various reasons.

    19. Batch Statistical Report.  The primary user is the Business Office/Management; the report is used to monitor collection batches (including incomplete batches) within a facility database to ensure the posting is current and accurate.  Negative balances can also be identified and should be researched as to why there are negative balances to any one account.

    20. Transaction Report.  The primary user is the Business Office/Management; the report is used to allow the end user to list transactions by collection batch, batch item, transaction date range, A/R entry clerk, and provider.  This report can also be used to monitor the accuracy of data entry for adjustments.

    21. Zero Pay/Adjustment Correspondence Report.  The primary user is the Business Office/Management; the report is used to identify, monitor, and ensure the timeliness of batching and posting zero pay/adjustment correspondence.

    22. Period Summary Report.  The primary user is the Business Office/Management; the report is used to monitor and compare billed, adjusted, and posted amounts for services provided to actual reimbursement received for each type of service for a specific time period.

    23. Age Summary Report.  The primary user is the Business Office/Management; the report is used to provide summary information on all open-balance bills by insurer or clinic.  The report summarizes the outstanding bill totals by age category.

    24. ASYNC Report.  The primary user is the Business Office/Management; the report is used to allow the end user to see which bills are not in sync with the transaction history after a patch is installed.  The users are expected to work these accounts.  They will NOT automatically receive a transaction to make them balance.

    25. Bills Listing Report.  The Business Office/Management is the primary user; the report is used to provide detailed information on bills uploaded from the third-party billing package.  The report may be sorted by date range, clinic/visit type, billing entity, and provider.

    26. Bill Negative Balance List.  The primary user is the Business Office/Management; the report is used to monitor inaccurate posting amounts entered by the A/R posting staff or refunds processed to Finance.

5-1.6  RECORDS/DOCUMENTATION

  1. Medical Record Files.  The medical record files must be managed in compliance with IHS policy and all legislation/regulations related to medical data/information Access to medical records is limited to authorized personnel in accordance with IHS/HIM policy/procedures.  Patients are not allowed to transport their own medical record files unless a specific waiver has been granted.

  2. Transaction Records.  All Business and Finance Offices must maintain detailed documentation and accounting for all the various individual types of transactions that include but are not limited to the following:

    1. Centers for Medicaid and Medicare Form 1500

    2. Uniform Billing Form 92

    3. American Dental Association Forms

    4. Remittance Advises

    5. Notices of Claim Determination (Denials)

    6. Adjustment Explanations (Letters from Insurance Companies)

    7. Explanation of Benefits

    8. Medicaid Invoices

    9. Medicare Requests for Information

    10. Suspense Claims Awaiting Action

    11. Schedules of Collection

    12. Field Receipts

    13. Deposit Tickets

    14. Trading Partnership Agreements

    15. Electronic Data Information Agreements

    16. Business Association Agreements

  3. Records Maintenance and Disposition.  All records shall be maintained and disposed of in accordance with Part 5, Chapter 15 "Records Management Program," Indian Health Manual.  Current retention schedules can/should be obtained from the Area Records Management Officer or the Service Unit Records Management Liaison.

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