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

Part 5 - Management Services

Title Section
Introduction 5-1.1
    Purpose 5-1.1A
    Background 5-1.1B
    Policy 5-1.1C
    Authorities 5-1.1D
    Definitions 5-1.1E
    Acronyms 5-1.1F
Responsibilities 5-1.2
    Director, IHS 5-1.2A
    Deputy Director for Field Operations 5-1.2B
    Chief Medical Officer 5-1.2C
    Director, Office of Resource Access and Partnerships 5-1.2D
    Director, Office of Finance and Accounting 5-1.2E
    Director, Office of Information Technology 5-1.2F
    Director, Office of Urban Indian Health Programs 5-1.2G
    Chief Health Information Management 5-1.2H
    Area Directors 5-1.2I
    Area or Service Unit Financial Management Officer 5-1.2J
    Area Business Office Coordinator 5-1.2K
    Area or Service Unit Information Technology Specialist or Coordinator 5-1.2L
    Area Health Information Management Consultant 5-1.2M
    Area Chief Medical Officer 5-1.2N
    Chief Executive Officer 5-1.2O
    Service Unit Health Information Management Director 5-1.2P
    Service Unit Clinical Director, Medical Director, and Chief of Staff 5-1.2Q
    Service Unit Business Officer Manager 5-1.2R
Procedures 5-1.3
    Area Specific Procedures 5-1.3A
    Local Procedures 5-1.3B
    Separation of Duties 5-1.3C
    Ethical Conduct 5-1.3D
    Patient Accounts 5-1.3E
    Health Information Management Coding/Data Entry 5-1.3F
    Claims and Billing 5-1.3G
    Third-Party Budgetary Resources 5-1.3H
    Accounts Receivables or Posting Transactions 5-1.3I
    Data Integrity 5-1.3J
    Information Technology or RPMS Technical Guidance 5-1.3K
    Exporting and Storage 5-1.3L
Functional Finacial Requirements 5-1.4
    Accounts Receivable Balance 5-1.4A
    Collections and Deposits 5-1.4B
    Receipts and Logs 5-1.4C
    Lockbox 5-1.4D
    Submission of Paper Checks 5-1.4E
    Federal Medical Care Recovery Act Receipts 5-1.4F
    Month End Processing and Reconciliation 5-1.4G
    Allotments 5-1.4H
    Financial Agreements 5-1.4I
    Allowances for Doubtful Accounts 5-1.4J
Compliance - Reporting and Monitoring 5-1.5
    Internal Control 5-1.5A
    Types of Management Reviews 5-1.5B
    Internal or External Reviews, Evaluations and Audit Results 5-1.5C
    Trend Analysis 5-1.5D
Debt Collection 5-1.6
    Director, IHS - Delegated Authority 5-1.6A
    Area Director - Delegated Authority 5-1.6B
    Records 5-1.6C
    Noncustodial Parents 5-1.6D
    Uncollectable Debt 5-1.6E
Third-Party Internal Controls - Online Tool Requirements 5-1.7
    Internal Control. 5-1.7A
    Data Collection Period 5-1.7B
    Red Flagged Items and Follow-up Process 5-1.7C
    Corrective Action Plans 5-1.7D
    Completion Status Details Report 5-1.7E
    Monitoring and Evaluation 5-1.7F
Records 5-1.8
    Medical Record Files 5-1.8A
    Transaction Records 5-1.8B
    Records Maintenance and Disposition 5-1.8C


  1. Purpose.  This chapter revises and updates the Indian Health Service (IHS) policy for recording, controlling, and accounting for patient-related resources; and for ensuring the accuracy and timeliness of receivables and revenue reporting in the IHS' financial statements.  It also updates specific internal controls to safeguard and properly account for third-party related revenue and related assets, and updates the authorities for collecting debts owed to the IHS by third-party sources and non-beneficiary patients.  The IHS Revenue Operations Manual (ROM) provides a system-wide reference resource and general implementation guide for all IHS, Tribal, and Urban (I/T/U) facilities across the United States (U.S.).  Area Offices (AO) and Service Units (SU) should develop more specific guidance for their location.
  2. Background.  The Indian Health Care Improvement Act (IHCIA) includes provisions for third-party reimbursements.  The IHCIA 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 (PI) and/or are eligible for Medicare and/or Medicaid benefits.  An amendment to the IHCIA, codified at 25 United States Code (U.S.C.) § 1621e, established the IHS' right to recover from third-party payers to the same extent that non-governmental providers of services would be eligible to receive reimbursement.  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 augmenting and enhancing 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.
  3. 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, PI, State Children's Health Insurance Program (SCHIP), Veterans Administration (VA), non-beneficiary, and other patient revenue resources.  Management at the Headquarters (HQ), AO, and SU will utilize the Third-Party Internal Controls Online Tool to report and monitor system wide compliance with this policy.
  4. Authorities
    1. The U.S. Department of Treasury, Department of the Treasury Financial Manual Disclaimer: You Are Leaving 
    2. The Government Accountability Office, Statement of Federal Financial Accounting Concepts and Standards Disclaimer: You Are Leaving 
    3. Privacy Act of 1974, 5 U.S.C. 552a Disclaimer: You Are Leaving 
    4. 31 U.S.C. Section § 3711, Collection and Compromise Disclaimer: You Are Leaving 
    5. 31 U.S.C. § 1341, Anti-Deficiency Act Disclaimer: You Are Leaving 
    6. Confidentiality of Alcohol and Drug Abuse Patient Records, 42 Code of Federal Regulations (CFR) Part 2 Exit Disclaimer: You Are Leaving 
    7. 42 CFR Part 136.12
    8. 45 CFR Part 5b Disclaimer: You Are Leaving 
    9. 45 CFR Parts160 and 164 Disclaimer: You Are Leaving Disclaimer: You Are Leaving 
    10. Chief Financial Officers Act of 1990, Public Law (P.L.) 101-576 Disclaimer: You Are Leaving 
    11. Debt Collection Improvement Act of 1996, P.L 104-134 Disclaimer: You Are Leaving 
    12. Federal Claims Collection Act of 1966, P.L. 89-508, as amended by the Debt Collection Act of 1982, P.L. 97-365, 5 U.S.C. § 5514. Disclaimer: You Are Leaving Disclaimer: You Are Leaving 
    13. Federal Emergency Medical Treatment and Labor Act, 42 U.S.C. § 1395 Disclaimer: You Are Leaving 
    14. Omnibus Consolidated Appropriations Act of 1997 (Federal Financial Management Improvement Act) of 1996,
      P.L. 104-208 Disclaimer: You Are Leaving 
    15. Federal Information Security Management Act of 2002, P.L. 107-347 Disclaimer: You Are Leaving 
    16. Federal Managers' Financial Integrity Act of 1982 (FMFIA), P.L. 97-255. Disclaimer: You Are Leaving 
    17. The Freedom of Information Act, 5 U.S.C. § 552, as amended. Disclaimer: You Are Leaving 
    18. Government Performance and Results Act of 1993, P.L.103-62 Disclaimer: You Are Leaving 
    19. Health Insurance Portability & Accountability Act of 1996, P.L.104-191, as amended Disclaimer: You Are Leaving 
    20. Indian Health Care Improvement Act of 1976, as amended, 25 U.S.C. §§ 1601 et seq. Exit Disclaimer: You Are Leaving Disclaimer: You Are Leaving 
    21. Information Technology Management Reform Act of 1996, P.L.104-106 Disclaimer: You Are Leaving 
    22. Improper Payments Information Act of 2002, P.L. 107-300 Disclaimer: You Are Leaving 
    23. Department of Health and Human Services Freedom of Information Act Regulations, 45 CFR Part 5 Disclaimer: You Are Leaving 
    24. Patient Protection and Affordable Care Act, P.L. No. 111-148, and the Health Care and Education Reconciliation
      Act of 2010, P.L. No. 111-152, amending certain provisions of P.L. No. 111-148, collectively known as the Affordable Care Act Disclaimer: You Are Leaving 
    25. Prompt Payment Act (31 U.S.C. § 3901, et seq.) Disclaimer: You Are Leaving 
    26. Title XVIII of the Social Security Act [42 U.S.C. §§ 1395 et seq.] or recognized under Section 1175 of such Act [42 U.S.C. § 1320d-4]. Disclaimer: You Are Leaving "
  5. Definitions
    1. Accounts Receivable Federal Lead.  A subject matter expert (SME) in Patient Accounts and Financial Accounts Receivable (A/R) functions designated by the Director, Office of Finance and Accounting (OFA).  This position can be filled by field personnel as a collateral duty if approved by the SME's supervisory chain of command.
    2. Adjustment.  A financial transaction to adjust the balance of a claim or bill or an account.
    3. Allowance Distribution.  The distribution of dollars that have been allotted to the Area and then further given to the SU in the form of an advice of allowance.
    4. Agency Location Code.  A code assigned by the Department of Treasury to each reporting unit requiring the preparation of a Financial Management Service (FMS) 224 form, titled, "Statement of Transactions."  The Agency Location Code (ALC) must be shown on all correspondence, forms, and other documentation that is forwarded to financial institutions, the Department of Treasury FMS, other Federal agencies, and to the Treasury Regional Financial Centers; and must be included on all Standard Form (SF)-215, Deposit Summary Forms, and SF 5515, Debit Vouchers.
    5. Allotment.
      1. The authority delegated by the head or other authorized employee of an agency to agency employees to incur obligations within a specified amount, pursuant to Office of Management and Budget (OMB) apportionment or reapportionment action or other statutory authority making funds available for obligation.  The amounts allotted cannot exceed the amount apportioned by OMB.
      2. Budgetary allocations made by the Director, OFA, to each AO based upon posted third-party collections from the Resource and Patient Management System (RPMS).
    6. Allowance.  A classification of obligational authority below the allotment level which is issued to centers/offices to make funds available for reasonable spending.
    7. Allowance Category.  Allowance categories are in RPMS as the major category in which an account is credited to and is determined by the category in which the claim is billed.  The allowance categories include the following:  Medicaid, Medicare, PI, VA, and other, and others as deemed necessary by the Agency for tracking monetary transactions.
    8. Batching.  Batching is the process of creating a collection batch in the automated A/R system. A Collection Batch is the receipt of all transactions that occurred in a given time period (usually a day), for a given collection point, by a specific user.  These batches are used to maintain an audit trail during the posting process as well as assisting management in workload and productivity statistics
    9. Beneficiary. An eligible AI/AN or other patient who can provide proof of eligibility in accordance with 42 CFR Part 136.12 or other Federal law and presents for services at a facility for health care.
    10. Bill or Invoice.  The charged amount for services provided by IHS after it is approved and determined to be a debt owed to IHS.
    11. Budget Accounting Classification Structure.  The Budget Accounting Classification Structure (BACS) is defined to store budget and accounting information for each transaction in a financial system.  Also known as "line of accounting."  In UFMS, this structure is handled using the Accounting Flex Field.
    12. Budget Activity Program.  The Budget Activity Program code is a component of the BACS in UFMS; the Core accounting system for IHS and the HHS.  The code is used to record allotments and allowances and monitor and report on funding by agency programs.
    13. Claim.  Pursuant to 25 U.S.C. § 1621e(h), the form in which a bill or invoice is submitted to a third-party payer for payment.  Unless otherwise indicated, the form for IHS claims will be consistent with the format required for submission of claims under Title XVIII of the Social Security Act [42 U.S.C. §§ 1395 et seq.] or recognized under Section 1175 of such Act [42 U.S.C. § 1320d-4].  A claim may also refer to a bill that has not yet been approved in the IHS approved billing system for healthcare services provided.
    14. Common Accounting Number.  An alpha numeric code used to identify the Agency, accounting point, cost center, location, and sub-activity for each IHS organizational unit or activity.
    15. Collections.  See definition of receipts.
    16. Credit.  A payment or adjustment that decreases the account balance (debt) when posted to an account.
    17. Debit.  A charge or adjustment that increases the account balance (debt) when posted to an account.
    18. Debt.  Any amount of funds that an authorized official has determined is owed to IHS and for which appropriate collection action can be taken.  Depending on specific circumstances, the debt owed to IHS may be different from the amount charged on a bill or invoice, e.g., Section 5-1.3G(3), "Establishing the Amount of the Bill or Invoice."
    19. Fund.  Identifies the Operating Division, the Internal Machine Number (IMN)-like fund identifier, the appropriation of the dollars, and the fiscal year (FY), the number of years and then either R or D.  (The R denotes "Reimbursable" and the D denotes "Direct.")  For example:  The IMN for Medicaid, Medicare and PI is 0J0700YEAR0RA0.  The fund for the "Other" Category is 0J2270YEAR1RA0.
    20. General Ledger.  The General Ledger is the Agency's financial records that constitute the financial transactions of the system.  It is the central repository of all transactions that flow into the Unified Financial Management System (UFMS) regardless of its origin (i.e., feeder system, the RPMS, or Oracle sub-ledgers).  These transactions remain as a permanent track of the history of all financial transactions of the IHS.
    21. Insurer Types.  Federal, State, and local or private entities from which the IHS is authorized to collect reimbursements.
    22. Invoice.  See definition of Bill.
    23. Intra-governmental Payment and Collection System.  The Intra-governmental Payment and Collection System (IPAC) application facilitates the intra-governmental transfer of funds, with descriptive data, from one Federal Agency to another.  The IPAC is one of the components of the Government's On-line Accounting Link System.  The On-line Accounting Link System provides a standardized inter agency fund transfer mechanism.
    24. Lockbox.  A service offered by banks to companies in which the company receives payments by mail or electronic funds transfer.  The bank records the payments several times a day, deposits them into the company account, and notifies the company of the deposit.
    25. Non-beneficiary.  A person who presents to an Indian health facility for health care services and is not AI/AN or an individual who cannot provide proof of eligibility.
    26. Payment Credit.  An adjustment used to represent a payment.  A payment credit is used for transferring money from one account to another.
    27. Posting.  The process of recording financial entries (debit or credit transactions) to an account.
    28. Point of Sale.  The physical location at which goods are sold to customers.  The point of sale is where something is sold, typically indicating the piece of technology which is used to finalize the transaction.
    29. Receipts.  Monetary payments or other collections received.
    30. Receivables.  Revenue that is due as a result of the delivery of goods and/or services.  (Receivables are amounts that are due from third-party payers or a non-beneficiary for health care services provided as receivables.)  The amount due becomes a receivable at the time the services are provided.
    31. Reconciliation.  The performance of a manual and/or automated comparison of financial source documents or subsidiary system with summary data to obtain a reportable and auditable balance that meets generally accepted accounting standards.
    32. Refund.  Receipts or revenue returned to a person or company due to an overpayment or due to an erroneous payment.
    33. Resource and Patient Management System.  The RPMS is an integrated solution for the management of clinical, business practice, and administrative information.
    34. Revenue.  Funds due or received for services or goods provided.
    35. Revenue Operations Manual.  The IHS ROM provides a system-wide reference resource and general implementation guide for all I/T/U facilities across the U.S.  The ROM is a tool which provides general guidance to staff with functions related to business office operations and procedures.  Area Offices and SU must develop more specific guidance for their location as needed.
    36. Separation of Duties.  An internal control method for ensuring that no one individual has complete or conflicting control over a transaction (usually financial) from beginning to end, i.e., billing; receiving payments; adjusting and reconciling accounts; and batching.
    37. Standard Form 215.  Standard Form-215, U.S. Treasury Deposit Ticket, Official name for the Treasury Deposit Number (TDN).
    38. Standard Form 5515.  Standard Form-5515, Debit Voucher, is a decrease recorded within the Department of Treasury reporting system.  This entry results in an overall decrease of deposits for the respective ALC.
    39. Subject Matter Expert.  A person who is an expert in a particular area or topic.
    40. Subsidiary Ledger.  A ledger detailing transactions that support the summary postings to the accounting system and referring to the RPMS A/R package and UFMS.
    41. Third-Party Collections.  Receipts generated from healthcare services rendered within an IHS Facility.
    42. Third-Party Internal Controls Online Self-Assessment Tool.  A Web-based system designed to assist IHS management with tracking and monitoring compliance with 5-1 IHM.
    43. Third-Party Revenue.  See Third-Party Collections.
    44. Transfer.  The movement of collections or revenue between IHS locations.
    45. Treasury Deposit Number.  The number assigned by the Department of Treasury for all deposits recorded within the ALC.
    46. Unified Financial Management System.  The official accounting system for the IHS and the HHS.
  6. Acronyms.
    1. ACH             Automated Clearing House
    2. ALC             Agency Location Code
    3. ASUFAC      Area SU Facility Code
    4. BAP              Budget Activity Program
    5. BRRP          Brief (single-line) claims listing Report
    6. EDI               Electronic Data Interchange
    7. EHR              Electronic Health Record
    8. IMN              Internal Machine Number
    9. IPAC            Intra-governmental Payment and Collection
    10. PI                 Private Insurance
    11. RPMS          Resource and Patient Management System
    12. SF                 Standard Form
    13. TDN              Treasury Deposit Number
    14. UFMS           Unified Financial Management System
    15. VA                 Department of Veterans Affairs


  1. Director, IHS.  The Director, IHS, has the:
    1. Overall responsibility for ensuring the integrity of the entire Third-Party Revenue program.
    2. Delegated authority up to $100,000, exclusive of interest, to compromise, suspend, or terminate a debt, including third-party revenue identified by the "Debt Management" chapter found at 9-4 IHM.
  2. Deputy Director for Field Operations.  The Deputy Director for Field Operations (DDFO) provides guidance to the Area Directors and Chief Executive Officers (CEO).  The DDFO is:
    1. The liaison to Area Directors and CEO.
    2. Responsible to relay and communicate all correspondence related to third-party revenue.
  3. Chief Medical Officer.  The Chief Medical Officer (CMO) works with the Director, ORAP, to improve and enhance IHS third-party reimbursement.The CMO is responsible for:
    1. Representing the medical profession in planning and developing a comprehensive health program for the IHS.
    2. Serving in a key role for all activities involving data systems, including planning, developing, implementing, and evaluating medical documentation processes; advising the IHS Director on policy formulation and activities involving the documentation of all medical services provided, data quality, and third-party reimbursement in all types of facilities.
    3. Providing professional and technical guidance to Area CMOs developing and administrating medical services documentation programs to enable IHS facilities to meet IHS goals and objectives; planning the recruitment, professional development, and effective use of professional and technical level medical provider personnel throughout the IHS.
    4. Developing, implementing, and/or maintaining processes and procedures for the timely, complete and accurate recording of all medical services provided.
    5. Planning orientation and training activities for medical providers.
  4. Director, Office of Resource Access and Partnerships.  The Director, Office of Resource Access and Partnerships (ORAP) together with the Director, OFA, will coordinate efforts to meet all legislative and statutory or administrative reporting requirements.  The Director, ORAP is responsible for:
    1. 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 patient-related revenue function.
    2. The annual IHS-wide policy compliance reviews and internal audits for all categories of patient-related revenue.
    3. Formulating the general standards and policy guidance for all patient-related revenue and related functions.
    4. Providing 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 monitoring discrepancies.
    5. Monitoring compliance with this chapter through reports submitted through the Third-Party Internal Controls Online Tool.
  5. Director, Office of Finance and Accounting.  The Director, OFA, coordinates with the Director, ORAP, to meet all legislative and statutory or administrative reporting requirements.  The Director, OFA, is the IHS Chief Financial Officer (CFO).  The CFO is responsible 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 CFO:
    1. Provides executive leadership and is responsible for maintaining financial systems that meet all Federal statutory requirements.
    2. Provides financial management policy guidance and advice to the IHS with regard to legislation and Government-wide policies on A/R or revenue reporting.
    3. Develops and prepares the budget submission for the IHS and Facilities appropriation to the HHS, OMB, and the President's budget.
    4. Participates with HHS officials in budget briefings for the OMB and the Congress.
    5. Distributes, coordinates, and monitors resource allocations.
    6. Develops and implements budget, fiscal, and accounting procedures and conducts reviews and analyses to ensure compliance in budget activities in collaboration with HQ officials and the Tribes.
    7. Provides cost advisory and audit resolution services in accordance with applicable statutes and regulations.
    8. Supports the Agency's Medicare Cost Report efforts by providing necessary financial data to the contractor preparing the cost reports.
    9. Participates in cross-cutting issues and processes including, but not limited to emergency preparedness/security, budget formulation, self-determination issues, Tribal shares computations, and resolution of audit findings as may be needed and appropriate.
  6. Director, Office of Information Technology.  The Director, Office of Information Technology (OIT) is responsible for:
    1. Providing automated system services and support for nationwide applications that support third-party billing and collection activities.
    2. Developing, implementing, and maintaining automated programs for these functions.
    3. Providing guidance on automated system services and support for nationwide applications that support third-party billing and collection activities.
    4. Providing guidance to ensure the timely and adequate distribution of software and user manuals.
    5. Providing related training.
  7. Director, Office of Urban Indian Health Programs.  The Director, Office of Urban Indian Health Programs (UIHP), reviews and evaluates all eligible programs on the feasibility and means for collecting patient-related revenue at UIHP facilities.
  8. Chief, Health Information Management.  The Chief, Health Information Management (HIM) works with the Director, ORAP, to improve and enhance IHS third-party reimbursement.  The Chief, HIM is responsible for:
    1. Representing the HIM profession in planning and developing a comprehensive health program for the IHS.
    2. Serving in a key role for all activities involving data systems, including planning, developing, implementing, and evaluating systems; advising the IHS Director on policy formulation and activities involving HIM services, data quality, and third-party reimbursement in all types of facilities.
    3. Providing professional and technical guidance to Area HIM consultants in developing and administrating HIM programs to enable IHS facilities to meet IHS goals and objectives; planning the recruitment, professional development, and effective use of professional and technical level HIM personnel throughout the IHS.
    4. Planning orientation and training activities for HIM personnel.
  9. Area Directors.  Pursuant to the IHS Administrative Delegation of Authority (DOA) No. 4, "Claims Collections," Area Directors have the delegated authority to compromise, suspend, or terminate a debt up to $20,000, exclusive of interest.  Area Directors can make the decision to suspend compromise or terminate the collection of any debt, specifically uncollectible third-party claims, once all efforts have been made to recoup revenue owed to IHS in accordance with 9-4 "Debt Management," IHM.  All records pertaining to the suspension, compromise, or termination of an uncollectible third-party debt must be kept in accordance with the IHS Records Disposition Schedule (RDS).  Area Directors are responsible for:
    1. Managing and directing all patient-related revenue functions and activities for their respective organizations.
    2. 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.
    3. Developing and documenting Area specific procedures for establishing the processes and systems required by this chapter.  Including, ensuring updated Facility Specific Procedures are in place at each SU.
    4. Planning and budgeting for those activities necessary to implement, maintain, and support the functions required by this policy and comply with 5-16 IHM, "Management Control Systems."
  10. Area or Service Unit Financial Management Officer.  The Area Financial Management Officer (FMO) (or a SU FMO, if appropriate) is responsible for:
    1. Providing overall direction of accounting for third-party revenue.
    2. Developing, implementing, and/or maintaining processes and procedures for the timely recording and execution of all third-party accounting transactions received from RPMS into UFMS.
    3. Receiving, reviewing, validating, consolidating, clearing, and reconciling all financial data or information received from RPMS.
    4. Maintaining the proper documentation for audit or evaluation and the preparation of analyses, summaries, distributions, operating plans, and other reports as needed.
    5. Coordinating with the Business Office Coordinator (BOC) and their field counterparts to provide expert advice and technical assistance, as required, on financial management policy and procedural matters.
  11. Area Business Office Coordinator.  The Area BOC or designee is responsible for:
    1. Overseeing the patient account management function in general and for providing instructions and guidance to the SU.
    2. Ensuring that documented processes and procedures are in place for receiving and posting collections, adjustments, refunds, unallocated cash, denials, and transfers between facilities.
    3. Providing coordination, oversight, and management of the RPMS or UFMS transmissions among the SU, business offices, and the Area Finance Office to facilitate reconciliation with UFMS and ensuring that information is submitted accurately and timely.
    4. Providing procedures and best practices intended to safeguard revenue for health services that are provided and for advising management on all collection activities.
    5. Coordinating with Area and SU Finance, Business Office, HIM, and Information Technology (IT) managers to provide expert advice, training, and technical assistance, as required, on all patient-related revenue operations.
  12. Area or Service Unit Information Technology Specialist or Coordinator.  The Area or SU IT Specialist or Coordinator is responsible for:
    1. Planning (both short-term and long-term) for information resource requirements and establishing strategies for managing information resources.
    2. Coordinating and implementing IHS-wide information resources management (IRM) goals and strategic plans, including the provision of technical support for nationwide initiatives related to patient-related billing and collection activities.
    3. Participating in the budget development process with I/T/U managers, facility IRM managers, and end-users.
    4. Establishing mechanisms to track IT progress against plans; monitor new initiatives to ensure that objectives, and intended purposes are met.
    5. Monitoring and maintaining facility RPMS databases, establish mechanisms for electronic file or report capture and storage, ensuring the installation of current updates or new releases, patches, routines, globals, and data element tables.
    6. Coordinating or providing analyses of computer or IT operations.
    7. Recommending daily operating procedures, data collection, data quality, equipment environments, preventive maintenance, and automated IT security measures.
    8. Participating in the planning and execution of the IHS IT Security Program.
  13. Area Health Information Management Consultant.  The Area HIM Consultant is responsible for:
    1. Assisting in planning and developing a comprehensive health program for the Area that is consistent with IHS goals and objectives.
    2. Advising the Area Director, Area staff, the CEO, and SU staffs on the implementation of policies and activities involving health records, data quality, third-party reimbursement, utilization review, and quality improvement.
    3. Participating in planning, developing, implementing, and evaluating data systems to include coding.  The HIM Department is responsible to review and analyze health records in order to apply diagnostic and procedural codes to individual patient encounters for retrieving and analyzing data, and processing claims.
    4. Advising and assisting SU HIM staff in performing quality review programs to meet requirements of the Joint Commission, Centers for Medicare and Medicaid Services (CMS), the Accreditation Association for Ambulatory Health Care, and other regulatory and/or accrediting agencies.
    5. Assisting in recruitment, use, and evaluation of professional and technical level SU HIM staff.
    6. Assisting in planning for career advancement and professional development of Area HIM staff using workshops, institutes, online courses, audio seminars, and college-based HIM courses.
    7. Providing orientation to Area professional and administrative personnel on HIM policies and standards training.
    8. Assisting the CEO and SU staff with orientation and indoctrination in HIM.
    9. Assisting Area and SU staff in complying with the Privacy Act of 1974, Health Insurance Portability and Accountability Act (HIPAA), Freedom of Information Act, and Confidentiality of Alcohol and Drug Abuse Patient Records regulations.
    10. Writing and submitting narrative reports for submission to the Chief HQ HIM Consultant.
    11. Reporting at the biannual Area HIM Consultants and National Business Office Coordinators meetings.  The report should briefly discuss (as appropriate) staffing levels in each facility for the following categories:
      1. Permanent, temporary, credential levels, and positions encumbered by credentialed professionals.  (Credentialed is defined as an active registration or accreditation by the American Health Information Management Association (AHIMA) and/or American Academy of Professional Coders (AAPC).)
      2. Changes in HIM positions, personnel components, and vacancies; accomplishments.
      3. Proposed action for future quarter.
      4. Recruiting activities.
    12. Coordinating with Area and SU Finance, Business Office, Health Information Management and IT managers to provide expert advice, training, and technical assistance, as required, on all patient-related revenue operations.
  14. Area Chief Medical Officer.  The Area Chief Medical Officer (CMO) ensures that plans are in place at each SU for provider enrollment and credentialing; which are key to the Business Office process.  The Area CMO will also assist and direct SU Clinical Directors in the Area's coding, documentation, and training needs.
  15. Chief Executive Officers.  The CEO, in coordination with the Area FMO, recommends write-off of uncollectible debts consistent with their delegated authority to the Area Director.  Pursuant to the Administrative DOA No. 4, "Claims Collection," a CEO is responsible for:
    1. Expending all efforts needed to recoup revenue owed to IHS in accordance with Section 9-4.9B "Criteria," IHM.
    2. Overseeing the SU revenue cycle including developing location specific procedures consistent with the requirements of this policy for patient registration, medical documentation of services provided, coding or data entry, billing, processing, or follow-up on claims, posting collections, denials, and adjustments and other processes pertinent to patient accounts.
    3. Ensuring 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.
    4. Completing any request for monitoring and oversight requested from IHS HQ, including the Third-Party Internal Controls Online Tool.
    5. Budgeting for adequate staffing levels and ongoing training in all third-party revenue functions and the related requirements of this policy including debt management.
  16. Service Unit Health Information Management Director.  The SU HIM Director is responsible for:
    1. Providing overall direction of all HIM activities at their respective SU facilities, i.e., hospitals, clinics, health centers, etc.
    2. Developing and implementing policies and procedures to properly direct and administer the medical records program.
    3. Assisting in the planning and development of comprehensive health information programs that meet IHS goals and objectives.
    4. Advising the CEO and staff on all policy and procedural matters related to health records and data quality.
    5. Assisting in the evaluation and analysis of statistical data for epidemiological or other studies, program planning, and budgeting.
    6. Performing quality review studies in coordination with professional personnel from other disciplines to meet IHS and other organizational requirements, i.e., Joint Commission certification or accreditation.
    7. Coordinating with the Business Office Manager (BOM) to ensure that all over lapping revenue cycle issues are addressed.
    8. Providing HIM orientation or training for new employees, health records personnel, and departmental managers.
    9. Advising and informing the CMO and/or Clinical Director on their responsibilities for timely, accurate, and proper documentation of medical services.
  17. Service Unit Clinical Director, Medical Director, and Chief of Staff.  These individuals are responsible to ensure that all healthcare providers and departments comply with their specific responsibilities in the SU's revenue cycle, including:
    1. At the time of initial medical staff appointment and continuously thereafter, all medical providers must possess and maintain medical licensure, National Patient Identifier registration, and Medicare and Medicaid provider enrollment.
    2. In special circumstances, all medical providers may also be required to possess and maintain board certification and licensure.  Provide periodic updates to Third-Party Payers to maintain participating provider status.
    3. All healthcare providers must legibly and accurately record all patient encounters, with adequate documentation to support all International Classification of Diseases and Current Procedural Terminology codes assigned to that patient encounter.  Medical providers must also document special patient encounters including, but not limited to operative reports, procedure notes, inpatient histories and physicals, and narrative summaries of inpatient hospitalizations.
    4. All healthcare providers are also responsible to work collaboratively with other departments to maximize third-party collections for services which require medical staff oversight, but not necessarily direct care from medical providers.  Examples of such collaboration include, but are not limited to:
      1. Ensuring that pharmacy departments submit claims for point of sale third-party collections and that they make appropriate corrections to rejected claims for resubmission.
      2. Ensuring that physician standing orders exist for nurse managed or pharmacist managed clinical services when third-party reimbursement is available with a medical provider's co-signature.
      3. Ensuring that physician standing orders exist for community based services such as those provided by public health nurses when third-party reimbursement is available with a medical provider's co-signature.
      4. All healthcare providers are responsible to deal promptly with requests from HIM and Business Office staff to address issues such as incomplete medical records, inaccuracies in documentation, and corrections in International Classification of Diseases (ICD) and Current Procedural Terminology (CPT) codes.
      5. And other ancillary departments as necessary.
  18. Service Unit Business Office Manager.  The SU BOM is responsible for:
    1. Monitoring and ensuring successful transmission of RPMS to UFMS files and the correction of any resulting errors.
    2. Ensuring that the RPMS subsidiary ledger reconciles with the UFMS A/R module.
    3. Timely, accurate, and proper billing and collection of claims for all services provided, ensuring optimal reimbursement from third-party payers and non-beneficiaries.
    4. Ensuring the efficient and accurate collection of all data/information related to patient services, i.e., patient registration, admissions, eligibility, third-party resources, A/R, etc.
    5. Making/Requesting changes or improvements to Business Office operations as deemed necessary.
    6. Implementing and maintaining processes and procedures that meet the specific needs of their facilities while ensuring compliance with all regulatory or policy requirements.
    7. Establishing management controls and tracking tools to monitor assignments, tasks, and performance standards.
    8. Directing the development or preparation of required financial, statistical and other summary management reports; researching variances within the financial information and providing documented explanations.
    9. Identifying risks and suggesting solutions and/or making proper adjustments to subsidiary transactions as necessary.
    10. Maintaining reports and records for all third-party transactions.
    11. Developing and maintaining productive, effective working relationships with SU HIM Directors, administrative staff, clinical staff, etc.
    12. Providing expert advice and technical assistance, as required.


  1. Area Specific Procedures.  All AO, BOC or his or her designee will collaborate with their respective Area or SU, Finance Office, Medical Staff, Information Technology Office, and Business Office to establish and document Area specific procedures for:
    1. Billing and invoicing
    2. Receiving and posting collections (includes refunds, unallocated cash, and transfers)
    3. Patient account management
    4. Debt management
    5. Reconciliation
  2. Local Procedures.  All SU must have operating procedures in place to be in compliance with the requirements contained in this chapter and location specific procedures for:
    1. Patient registration (Patient Demographics and Eligibility Capturing)
    2. Benefits coordination (Patient Advocacy for Alternate Resources)
    3. Medical documentation
    4. Coding or data capturing
    5. Billing (Creating and approving)
    6. Processing or follow-up on claims (All aspects of Patient Account Management)
    7. Posting collections
    8. Accounting for denials
    9. Accounting for adjustments
    10. Debt management
    11. Other processes pertinent to patient accounts
  3. Separation of Duties.  All procedures developed at the local level must ensure the separation of duties for the following processes:
    1. Minimum Requirements.  At a minimum, billing, receipt of payment, posting of payment/adjustments, review of aged accounts, and approval of write-offs.
    2. Alternative Recommendations concerning Small Facilities.  If these duties cannot be separated due to minimal staff at small facilities then there must be a mitigating control of documented supervisory review of all transactions.
  4. Ethical Conduct.  All employees are prohibited from performing any transactions for their immediate family and/or self.
  5. Patient Accounts.  All healthcare services must be recorded in RPMS.  A patient account will be established at the time of service for all patients regardless of their status, i.e., beneficiary, non-beneficiary, insured, non insured, etc.:
    1. Financial Class.  All healthcare services will be identified by the financial class/insurer type that defines the payment sources, i.e., Medicare, Medicaid, Beneficiary Medical Program (BMP), Non-Beneficiaries, Breast and Cervical Cancer Program (BCCP), Workers' Compensation, guarantor, self-pay, etc.
    2. Third-Party Liability.  All Federal Medical Care Recovery Act (FMCRA) activities or functions are to be performed in accordance with the IHS Circular, No. 2006-02, "Reporting Third-party Tortfeasor Claims and Recovery of Funds under the Federal Medical Care Recovery Act."  These types of accounts will not be entered into RPMS but will be captured as described in IHS Circular No. 2006-02.
    3. Payments/Co-pays/Deductibles.  Payments/co-pays/deductibles for all non-beneficiary patients covered under local, State, and Federal guidelines must be collected at the time of registration or check-in.  Exceptions should be made for Federal Emergency Medical Treatment and Labor Act, 42 U.S.C. § 1395dd, cases.  Once a person has been treated, stabilized, and has received services, all efforts to collect payments/co-pays/deductibles should be made.
    4. Patient Registration.  Identify if a prior authorization is needed and refer to the appropriate office for processing.  Third-party eligibility and patient demographic data is to be determined and/or verified at each and every patient encounter.  This includes:
      1. Collecting and/or updating patient information/demographic data and third-party eligibility in RPMS at the time of registration and check-in.
      2. Referral to the Benefits Coordination Office for reviewing and evaluating a patient's eligibility for alternate resources.
    5. Benefits Coordination.  Educate and assist patients to identify and obtain access to all available alternate resources.
    6. Patient Check-in.  The RPMS Practice Management Application Suite, Registration, and Scheduling modules must be utilized at the time of registration and check-in.
  6. Health Information Management Coding/Data Entry.  Coding is an integral part of the revenue cycle; therefore timely and accurate coding is necessary.  The HIM Director, Clinic Director, and CEO must ensure that there is effective communication to keep accurate, complete, and current coding.
    1. Coding Timelines.
      1. All applicable codes must be entered, verified, and completed in RPMS within 4 business days of the date of service for all outpatient services.
      2. All efforts should be made to enter, verify and complete codes within 4 days after chart completion of the inpatient stay.
        1. Accreditation guidelines allow providers up to 30 days to complete a chart after an inpatient stay.
        2. The maximum time allowed for all codes to be entered and verified in the RPMS system is 34 days.
      3. Providers have 1 business day to address and provide any additional information once an issue is identified and communicated.
    2. Classification System and Coding.  The current versions of ICD, American Dental Association, and CPT 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.
    3. Healthcare Common Procedure Coding System.  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. Patient Care Component Encounter.  Services provided at ancillary departments (radiology, laboratory, etc.) without a provider visit on the same day, must generate a visit in to 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.]
    5. Certified Coders.  Each facility must have at least one coder, performing coding functions, who is certified by the American Academy of Professional Coders or the American Health Information Management Association.  Certified coders must take the appropriate training necessary to maintain their certification.
    6. Independent Coding/Data Entry Review Requirements.  Each facility must have an independent/peer certified coder perform a quarterly review (by random sampling) of all coding/data entries.  The review must be conducted by someone who did not do the original coding/data entry, i.e., someone from another facility, a contractor, etc.
    7. Coding/Data Entry Training.  Coding/Data Entry Training must be completed for all coding and classification systems including current versions of ICD, CPT, HCPCS, and related software applications before an employee is allowed to independently perform this function.  The employee must work with oversight by a certified coder until 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 most current version with annual updates provided to all individuals involved in the coding/billing functions of the SU.
  7. Claims and Billing.  All healthcare related claims/bills must be recorded in the RPMS Third-Party Billing application when services are provided, within the following parameters:
    1. Manual Entry of Bills.  The manual entry of RPMS bills based on the receipt of a check is prohibited.  The account should be established when the service is provided and review the ROM section to ensure how to handle capitated payments, interest payments, etc.  (Additional guidelines regarding Health Professional Shortage Areas, unbilled reimbursements, Managed Care Fees, etc., are provided in the ROM.)
    2. 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.
    3. Establishing the Amount of the Bill or Invoice
      1. 25 U.S.C. § 1621e.  Pursuant to 25 U.S.C. § 1621e, IHS has the right to recover its reasonable billed charge, or, if higher, the highest amount the third-party would pay for care and services furnished by providers other than governmental entities, to any individual to the same extent that such individual, or any non-governmental provider of such services, would be eligible to receive damages, reimbursement, or indemnification for such charges or expenses if (1) such services had been provided by a non-governmental provider; and (2) such individual had been required to pay such charges or expenses and did pay such charges or expenses.  Reasonable billed charges sought by IHS under 25 U.S.C. § 1621e shall be consistent with "usual and customary" or "prevailing" rates charged by other healthcare providers in the same geographic area, or consistent with rates charged by other IHS facilities.  To the extent the IHS and a third-party payer mutually agree to a rate or amount that differs from the bill, or the amount that is otherwise recoverable under 25 U.S.C. § 1621e, the rates so agreed upon shall constitute the debt owed to the IHS and shall be deemed compliant with 25 U.S.C. § 1621e.
      2. Medicare, Medicaid, and the Federal Medical Care Recovery Act.  All IHS hospitals and clinics bill and seek recovery for services under Medicare and Medicaid in accordance with rates and methodologies published each year in the Federal Register.
      3. Other Authorities.  The amount of a bill or invoice established under other authorities (i.e., VA/IHS reimbursement agreement) shall be consistent with such authority.
    4. Billing for Services.
      1. All outpatient claims are to be billed within 6 business days of date of service.
      2. Secondary and tertiary claims must be billed within 3 business days of the posting of the primary payment/denial.
      3. Inpatient claims are to be billed and all codes entered and verified within 10 business days from the coding completion.
      4. The maximum time allowed for an inpatient claim to be billed and all codes entered and verified is 44 days from the date of discharge.
    5. Billing Monitoring at the local and Area Level. Monitoring must be completed on a daily basis to ensure that all goods and services provided are billed within the established timelines set forth by Third-Party Payers.
    6. The RPMS Edit for Bill Creation.  In certain situations an RPMS system edit will be used to prevent the approval of a bill, for example, if the "Assignment of Medical Benefits Form" is not on file (or documentation the patient refused to sign).  The RPMS system provides a level of error checking and all billing errors must be corrected and approved within two business days of claim creation.
    7. Submission of Approved Claims.  Once approved, all claims are to be submitted to the responsible payer by the close of the next business day (within one business day from the date of approval).  Exceptions can be made if approved by the Area Director and the Director, ORAP.  All exceptions must have proper documentation to support any exception.
    8. Electronic Transmissions.  Reconciliation of electronic transmissions to payer confirmation reports must be documented, and the files must be maintained by each location.  All transmissions must be compliant with the HIPAA and meet all requirements related to privacy transactions, security, and code sets.
    9. Error Files.  Transmission error files to third-party payers are to be reviewed and corrected on a daily basis.
    10. Deleting or Canceling Claims.  Deleting (Open/Close) or canceling a claim must only be accomplished by a supervisor or a manager.  Each deleted or canceled claim must include the reason or explanation codes as appropriate and documented.
    11. Timely Filing Limits.  All claims or 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. Private Insurance and Workers' Compensation.  The timely filing limit for PI companies and Workers' Compensation varies according to plan requirements.  The CEO or (his or her) designee must identify the timely filing limits for each third-party payer billed and bill in accordance with the applicable time limits.  However, the six year deadline for commencing civil actions under 28 U.S.C. § 2415 is applicable to recoveries from PI and workers pursuant to 25 U.S.C. § 1621e(j).  Accordingly, time limits established by PI and workers' compensation do not legally restrict IHS' ability to recover under Federal law.
      2. Medicare Part A and Part B.  The IHS can bill up to 1 year from the date of service (DOS).
        1. Institutional Claims.  Use UB-04 Form and form 8371 for claims that include span dates of service (i.e., a "from" and "through" date span on the claim), the "Through" date on the claim will be used to determine the DOS for claims filing timeliness.
        2. Professional Claims.  (CMS 1500 Form and Form 837P).  For claims submitted by physicians and other suppliers that include span DOS, the line item "From" date will be used to determine the DOS and filing timeliness.  (This includes supplies and rental items.)
      3. Medicaid (including State Children's Health Insurance Program if applicable).  The IHS can bill in accordance with individual State timely filing limits.  Any bill submitted past this time limit will be denied by Medicaid.  Each CEO or designee must identify the timely filing limits for each State Medicaid program billed.
      4. Beneficiary Medical Program.  The IHS can bill for up to 1 year from the DOS for services provided to USPHS Commissioned Corps Officers and their Dependents.
      5. Non-beneficiary.  The IHS can bill for up to six years from the date that the debt was incurred.
      6. Veterans Administration.  The IHS can bill up to 1 year from the DOS.
  8. 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.  (See IHS Circular No. 2006 02, "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. Private Insurance - Budget Activity Program 7132-AP-0515 and 7132-AP-0555
    2. Medicare - Budget Activity Program 7120-AP-0121 and 7120-AP-0141
    3. Medicaid - Budget Activity Program 7122-AP-0222 and 7122-AP-0242
    4. Other Reimbursements (BMP, Non-Beneficiaries, BCCP, Workmen's Compensation, etc.) - Budget Activity Program 7100-AP-0108 and 7100-AP-0168
    5. Veterans Administration - Budget Activity 7170-AP-0000
    6. EHR Incentives Medicare - Budget Activity 7120-AP-0131 and 7120-AP-0151
    7. EHR Incentives Medicaid - Budget Activity 7122-AP-0232 and 7122-AP-0252
    8. RPMS Reimbursement/Receipts (only) - Budget Activity 7100-AP-0109
  9. Accounts Receivables or Posting Transactions.  All A/R or posting transactions must be in compliance with the "Electronic Remittance Advice" (ERA) 835 requirements (when available by the payer) and recorded in accordance with the instructions for each transaction category or type identified in ROM.  All ERA electronic transmissions must be HIPAA compliant.
    1. Detailed Subsidiary Ledger.  The CEO or (his or her) designee must post all receipts and adjustments to the RPMS A/R no later than three business days after the receipt of all supporting documentation.
    2. Standard Adjustment Reason Codes.  The HIPAA, "Standard Adjustment and Reason Codes" are to be used when posting payments and adjustments into RPMS.  Additional local adjustment codes may be used if approved by either, the Director, ORAP, or the Director, OFA.
    3. Account Review and Aged Accounts Follow-up.  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 within 30 to 45 days consistent with the current debt collection policy and Federal guidelines for outstanding debts submission to Treasury.  All follow-up efforts should be properly documented in the RPMS A/R message field.  This process is in addition to the policies and procedures set forth in 9-4, IHM.  The CEO or his or her designee must ensure that they follow their local operating procedure (guidance found in the Revenue Operations Manual) for the specific third-party revenue identified in 9-4 "Debt Management," IHM, for recoupment of payment.

      This procedure includes the processes outlined in the Debt Management chapter for collecting debt from IHS employees; collecting debt from non-IHS employees; administrative wage garnishment; litigation; and collection of debts which are over 180 days delinquent.  Monitoring of debt management processes will be done by the ORAP staff utilizing the TPICP Online Reporting Tool, details of the monitoring process is explained in Section 5.1-7.  Additional requirements may be added to the online tool depending on priority and need.

  10. Data Integrity.
    1. Managing the Integrity of the RPMS A/R Data.  The CEO or (his or her) designee must maintain the data integrity of RPMS to facilitate month end processing.
    2. Accounts Receivable Bill and Transaction Synchronization Report.  Finance Officers, Administrative Officers, BOM, or their designee must print the A/R Bill and Transaction Synchronization Report found in the RPMS Maintenance Reports menu.  The information contained in the A/R Bill and Transaction Synchronization Report will identify any discrepancies within the RPMS transaction file and the RPMS A/R bill file.  The Finance Officers, Administrative Officers, BOM, or their designees will research, document, and correct each discrepancy to ensure proper synchronization of the RPMS transaction file and the RPMS A/R bill file.
    3. Timeline for Report.  The AR Bill and Transaction Synchronization Report must be printed and corrected once each month.  The BOM as part of the internal control process must complete the A/R Bill and Transaction Synchronization Report prior to month end reconciliation.
  11. Information Technology or RPMS Technical Guidance.  The Director, OIT, must provide on a continuing basis RPMS program applications that support the third-party revenue cycle.  This includes developing, implementing, and maintaining automated program applications 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 at the requirements level is a collaborative effort with input from program users, professionals, and technical experts.  All development efforts must follow the HHS Enterprise Performance Life Cycle process.
    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 and the Director, ORAP.  This includes commercial off-the-shelf software as well as contractor or independently developed automated systems.
    3. Information Technology Implementation and Maintenance.Every Area Director and SU CEO must:
      1. Implement and maintain automated systems or programs for third-party revenue functions.
      2. Ensure timely or adequate distribution of software, hardware, and user manuals.
      3. Provide budgetary resources and training.
      4. Ensure successful backups are accomplished at regular intervals.
    4. Unified Financial Management System.  The Area FMO or (his or her) designee must ensure that the SU transmissions from RPMS to UFMS are completed.  Further, Area FMOs or their designees must ensure that both RPMS and UFMS are reconciled at the Area level and also that this has been completed at the SU level per IHM 5-1.2R(2).  This will ensure that the RPMS subsidiary system is in balance with UFMS.
    5. Access and Maintenance.  Access to and maintenance of RPMS tables is restricted to authorized personnel and must be monitored by the CEO or (his or her) designee.  The CEO or (his or her) designee will review the RPMS tables for proper authority, timeliness, reasons for updates or changes, and individual responsibility.  Access and maintenance must be specifically controlled for the following:
      1. "Remit To" Addresses.  Access to RPMS table maintenance to change the "Remit To" address must be specifically controlled to safeguard third-party revenue.
      2. Directories.  Access to and saving files to RPMS directories, which contain personal health information, must be restricted in accordance with the HIPAA and Privacy Act requirements.
      3. Manager Menu.  Access to the RPMS Manager Menu for:
        1. Deleting or canceling a claim must be limited to supervisors and managers.
        2. Table Maintenance for Patient Registration, Third-Party Billing, and Accounts Receivable
  12. Exporting and Storage.  The CEO or (his or her) designee will determine on a case-by-case basis and order of precedence the exporting and storage of all reports, files transmission logs, random sampling, reviews, etc.  All documents must be exported or maintained in accordance with the IHS RDS or the National Archives and Records Administration General Records Schedule.


  1. Accounts Receivable Balance.  Each FMO, BOC, or BOM or their designees must maintain and reconcile the UFMS/RPMS interface and the UFMS A/R balance for each type of budget activity, at least monthly.  The current procedures are available in the ROM.  This includes managing the RPMS to UFMS file transmission process and reconciling the balances in both systems.
  2. Collections and Deposits.  Only a collections clerk or officer designated by the FMO is authorized to collect funds, which includes currency (cash), checks, money orders, credit cards, and lockbox receipts.  All collections received must be recorded in the UFMS according to their proper fund and BAP combination.
  3. Receipts and Logs.  The CEO, Administrative Officer, or their designee must maintain the record for the receipt of all physical paper checks received.  The record must identify the date received, date sent, amount of payment, and disposition for all in-house payments.  All deposits for your location must be reconciled with the Receipts and Logs record.
  4. Lockbox.  The implementation of the 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 AO or SU level.
  5. Submission of Paper Checks.  Should a paper check be received, they are to be submitted to the lockbox or deposited daily in the assigned bank or via
  6. Federal Medical Care Recovery Act Receipts.  All FMCRA receipts are to be processed in accordance with IHS Circular No. 2006 02, "Reporting Third-party Tortfeasor Claims and Recovery of Funds under the Federal Medical Care Recovery Act."   Circular No. 2006 02 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 Counsel or its designee.
  7. Month End Processing and Reconciliation.  Month end processing and reconciliation must occur for the following:
    1. File Transmission.  The AO or SU must obtain reconciliation data by performing file transmissions which may be accomplished by uploading or downloading files over a computer network (see ROM).
    2. Treasury Reconciliation.  Each FMO (or his or her designee) must perform a monthly reconciliation of the UFMS accounts to the Department of Treasury.
    3. Reconciliation.  Each FMO (or his or her designee) must reconcile balances from the RPMS A/R system with the UFMS A/R balance by individual invoice.  The individual invoices in UFMS are by location, FY, and allowance category.  If the "Subsidiary Accounts" do not reconcile with the UFMS accounts, Finance personnel must work with the respective locations in order to identify and adjust the differences.
    4. 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 RDS, HIPAA requirements, and Privacy Act regulations.
  8. Allotments.  Weekly transfers are made to the general ledger which in turn creates allotments that the Director, OFA, sends to the Area FMOs.  These allotments are based upon each individual SU's previous week's posted collections.
  9. Financial Agreements.  Only the FMO or designee is authorized to sign ACH, Electronic Data Interchange, and Electronic Funds Transfer agreements.
  10. Allowances for Doubtful Accounts.  The FMO or designee must perform a quarterly bad debt/doubtful accounts assessment by allowance category.  The A/R Federal Lead will work with the FMO and Director, OFA, to set the quarterly allowance for doubtful accounts.


  1. Internal Control.  All IHS Area Directors and CEOs must meet the general and specific internal control standards established by legislation, regulation, and policy for recording, controlling, and accounting for patient-related resources.  The Area Director and CEO or their designees must:
    1. Perform verifiable periodic reviews to ensure that the general and specific internal control standards are met.  As appropriate, internal control reviews must be conducted in accordance with this chapter and must not be delegated to an individual who is responsible for the day-to-day activities being reviewed.
    2. Ensure that the reviews identified above are monitored on their predefined schedule.
    3. Use the data obtained from the reviews to prepare reports to monitor, assess, and improve the overall integrity of the program.
  2. Types of Management Reviews.  Management reviews will include all components of the revenue cycle:
    1. Credentialing.  Regular and timely credentialing and background checks must be performed for proper certifications, credentials, and experience.
    2. Weekly.  Weekly reviews must be performed to determine the current status of or on the backlog of:
      1. Patient Registration (data verification, eligibility counts, audit reports)
      2. Benefits Coordinator (productivity and application types)
      3. Coding or data capture (coding queue, errors, and productivity)
      4. Billing or Claims (productivity, billed amounts, errors)
      5. Payment/Adjustment Posting (productivity)
      6. Aged receivables (outstanding aged accounts)
      7. Collections (third-party revenue for specified time frame)
      8. Number of Days to A/R (identifying delays in process flow)
      9. A/R Account Reconciliation between RPMS and UFMS (subsidiary and General Ledger Accounts Receivable balance reconciliation)
      10. File Reconciliation between RPMS and UFMS (RPMS file transmissions are received at UFMS)
      11. Collections to Allotments/Allowance Reconciliation (receipts received at UFMS were allotted by Area Finance to SUs)
      12. Cash Reconciliation by TDN (treasury deposit amounts have been accounted for in UFMS)
    3. Monthly.  Monthly reviews on the current status of, the backlog of or trending/monitoring of:
      1. UFMS/RPMS Dashboard report (discrepancies between UFMS and RPMS amounts billed, amounts received, amounts adjustment and TDNs)
      2. RPMS and UFMS A/R account negative balances
      3. Access to and any changes to RPMS table maintenance
      4. Collections/Allotments in RPMS and UFMS
      5. Deposits
      6. Amounts billed
      7. Point of Sale rejections
      8. Adjustments/Denial of claims
      9. Adjustments by allowance category/age/payer
      10. Open/closed claims
      11. Canceled claims
      12. Debt Management claims
    4. Quarterly.
      1. Coding/Data Entry.  Each facility must have an independent or peer 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.
      2. Timely Process Reviews.  Using random sampling methodology, perform an independent/peer 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.
      3. Aged Receivable Review.  Perform an independent/peer review (random sampling) of A/R that is older than 120 days to verify accuracy, compliance, completeness, and proper submission and follow-up. Accounts in this category should not exceed 20% of total A/R for the entire facility/location.
    5. Semiannual.  The CEO must ensure that the Third-Party Internal Controls online self-assessment tool sections are assigned to the SMEs within their facility and completed.  The CEO will review and approve the completed sections and forward the sections to the Director, ORAP.
  3. Internal or External Reviews, Evaluations, and Audit Results.  All internal or external reviews, evaluations, and audit findings must be addressed and corrective actions implemented within 30 days of issuance.
  4. Trend Analysis.  Trend analysis will be done for collections, deposits, amounts billed, point of sale rejections, denials, and adjustments by allowance category, age, or payer. All analysis should be based on past or current operations to allow managers to see potential or actual problems and where improvements can be made to increase revenues and decrease losses.


  1. Director, IHS - Delegated Authority.  The Director, IHS, has the authority to collect a claim (hereinafter "bill/invoice") of the IHS for money, including third-party revenue; compromise a debt of the IHS of not more than $100,000 (excluding interest); and may suspend or end collection action on a bill/invoice when it appears that no person liable on the bill/invoice has the present or prospective ability to pay a significant amount of the bill/invoice or the cost of collecting the bill/invoice is likely to be more than the amount recovered.  See 9-4 IHM, "Debt Management"
  2. Area Director - Delegated Authority.  Area Directors have the delegated authority to compromise, suspend, or terminate a debt up to $20,000, exclusive of interest per debt.  Area Directors may suspend, compromise, or terminate the collection of any debt, specifically uncollectible third-party bill/invoices, once all efforts have been made to recoup revenue owed to the IHS.
  3. Records.  All records pertaining to the suspension, compromise, or termination of uncollectible debts or third-party bill/invoice should be kept in accordance with the IHS RDS.  Every CEO must ensure that they follow their local operating procedure for recoupment of specific third-party revenue.
  4. Noncustodial Parents.  Noncustodial parents are not considered liable third parties and their assets are not available for medical support for IHS-eligible children who receive health services at an IHS facility or as alternate resources for the purpose of Purchased/Referred Care (PRC) eligibility.
  5. Uncollectable Debt.  The IHS may determine that a debt is uncollectable in accordance with applicable federal guidelines, including the Department of the Treasury, Financial Management Services, Managing Federal Receivables, Chapter 7, "Termination of Collection Action, Write-off and Close-out/Cancellation of Indebtedness."  A debt may be determined uncollectable when one or more of the following criteria apply:
    1. The agency is unable to collect any substantial amount.
    2. The agency is unable to locate the debtor.
    3. Costs of collection are anticipated to exceed the amount recoverable.
    4. The debt is legally without merit or enforcement of the debt is barred by applicable statute of limitations.
    5. The debt cannot be substantiated.
    6. The debt against the debtor has been discharged in bankruptcy.


  1. Internal Control.  The internal control process is used to identify, evaluate, and report on compliance with the FMFIA.  The Third-Party Internal Controls Online Tool is used by the IHS to measure compliance with requirements of 5-1 IHM.

    The Third-Party Internal Controls Online Tool is a self-reporting online tool that contains questions based on criteria found in 5-1 IHM to determine compliance with all requirements of 5-1 IHM and Red Flag Items.  It provides a monitoring mechanism that allows a proactive approach in identifying revenue cycle disruptions and establishes IHS-wide follow-up standards.  The ORAP staff reviews and monitors the data submitted and provides guidance and direction on how Red Flag items may be corrected and in compliance.  The ORAP staff will provide bi-annual reports to the Director, ORAP on the correction of Red Flag items and compliance.

  2. Data Collection Period.
    1. The 1st and 2nd Quarter data collection period for each FY will begin on April 1st of each year and remain open until May 1st of that same FY.
    2. The 3rd and 4th Quarter data collection period for each FY will begin on October 1st of each year and remain open until November 1st of that same FY.
    3. Any reports that are submitted for each of these periods must be all inclusive, e.g., the Period Summary Report should be for entire 1st and 2nd Quarter.
    4. The Aged Summary Report should be run at the end of the 2nd Quarter and 4th Quarter of each submission period.
    5. During the time the Online Tool is turned on and accepting data the Director, Division of Business Office Enhancement (DBOE), will issue weekly status reports.
  3. Red Flagged Items Follow-up Process.  All Red Flagged Items will be identified within two weeks from the close of the data capture period.  The Director, ORAP or (his or her) designee, will transmit the Red Flagged Items to the Area Directors for immediate action and follow-up.  The Red Flagged Items are considered critical and if not corrected will have an adverse impact on the collection of third-party revenue at the identified facility.  Red Flagged Items are:
    1. Facilities that have a backlog of 30 days or more in coding.
    2. Facilities that have a backlog of 30 days or more in billing.  (Outpatient)
    3. Facilities that have a backlog of 30 days or more in billing.  (Inpatient)
    4. Facilities that are not transmitting approved claims within 1 business day.
    5. Facilities that are not posting within 72 hours from the receipt of supporting documentation.
    6. Facilities that are not reviewing and researching aging accounts within 45 days.
  4. Corrective Action Plans.  A corrective action plan (CAP) is required for all Red Flagged items to be put in place within 21 days from the date identified and sent to the Area Director for review and approval.
    1. If a facility has more than one item identified, a CAP must be in place for each item unless they can be corrected simultaneously using the same corrective elements, i.e., coding backlog is affecting the billing backlog; you could develop a CAP that would correct both elements.
    2. The Area Director must review and approve (or disapprove) all CAPs and forward a copy of the approved or disapproved CAP to the Director, ORAP.
    3. The CAP must have a compliance deadline within 1 year of the identified Red Flag item.
  5. Completion Status Details Report.
    1. The spreadsheet may be fluid to account for any changes of key elements due to vulnerabilities in our Third-Party Revenue Cycle.
    2. Once all data has been verified and submitted, the Director, DBOE or his or her designee, will analyze the data and look for anomalies.
    3. The report will be available via the online tool.
    4. Once the comments sections are completed by the Director, ORAP or (his or her) designee will notify the facilities' CEO that the Completion Status Details Report ready for review.
    5. The CEO or designee has 45 days from notification to follow-up on all items identified in the comments section and send a report back to the Director, ORAP.  Details for follow-up procedures are located in the ROM.
  6. Monitoring and Evaluation.  The ORAP staff will use data provided through the Third-Party Internal Controls Online Tool and other national reporting mechanisms (i.e., UFMS A/R dashboard, Days to A/R) to evaluate progress of facilities, accuracy of data and determine if additional resources are needed at the facilities in the form of onsite reviews, SME consultations, or external assistance.

5-1.8  RECORDS

  1. Medical Record Files.  Medical record files must be managed in compliance with IHS policy and all statutes and regulations related to medical data or information.  Access to medical record files is limited to authorized personnel only.  Patients are not allowed to transport their own medical record file unless a specific waiver has been granted.
  2. Transaction Records.  All Business Offices 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. CMS -1500
    2. Uniform Billing Form (most current version)
    3. American Dental Association Forms
    4. Remittance Advices
    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. New forms
    15. Trading Partnership Agreements
    16. Electronic Data Information Agreements
    17. Business Associate Agreements
  3. Records Maintenance and Disposition.  All records shall be maintained in accordance with 5-15 "Records Management," IHM, and disposed of in accordance with the IHS Records Disposition Schedule.  Current retention schedules must be obtained from the Area Records Management Officer or the SU Records Management Liaison.