Reading an EOB/SOB for EMS Ambulance Insurance Billing

If you are manually entering a paper EOB from Medicare or Medicaid, you must be aware of the CO-253 reduction and how AngelTrack handles it.

A Typical Paper EOB from Medicare

Here is a very typical paper EOB received from your MAC, in this case Novitas:

Sample Medicare EOB

This EOB shows a BLS non-emergent stretcher call (A0428), from nursing home to hospital (NH), with 8 miles ground ambulance transport (A0425) and oxygen service (A0422). For this service, the EMS provider claimed $415.15. Medicare allowed a total charge of $285.17, refusing the oxygen charge (CO-97).

Of the $285.17 allowed charge, Medicare cut a check for $233.58 and left $57.03 as the patient's responsibility (aka "Coinsurance").

Oxygen claims are approved but do not pay anything

Notice the $105.00 claim for oxygen (A0422) was discounted to $0.00, with CO-97 given as the Claim Adjustment Reason [CAR] code. CO-97 means:

"The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated."
This is Medicare's way of saying that oxygen is already priced into the A0428 BLS rate, so they aren't going to pay it as a separate line item. Thus the claim for oxygen is approved (a denial would be confusing) but not paid anything.

Understanding CAR codes

The dollar amounts in the rightmost columns are each accompanied by a "Claim Adjustment Reason" [CAR] code, explaining the reason for the adjustment. The code consists of two parts: the group and the reason.

The group takes one of five possible values, called "Claim Adjustment Group" [CAG] codes or just CAGCs:

After the group is the reason code, giving specific details. In the oxygen example above, the CARC was CO-97, meaning the reduction was per contract, and the Medicare "contract" (i.e. the regulations) say that oxygen is already included in the pickup charge.

There are hundreds of different reason codes defined. You can find the full CARC list online. AngelTrack knows all of them, and will decode them for you automatically.

The Numbers Don't Add Up

Look closer at the numbers in the sample EOB given above:

Allowed amount:   $285.17
Amount paid: - $223.58
Patient responsibility:   $57.03 ←error!

The math is wrong. There is $4.56 missing from that equation. The missing money is the CO-253 reductions:

Allowed amount:   $285.17
Amount paid: - $223.58
CO-253 reduction (pickup): - $3.63
CO-253 reduction (mileage): - $0.93
Patient responsibility:   $57.03

The CO-253 reductions, totalling $4.56, are pseudo-payments. They ought to be reflected in the "Allowed amount", because they are in fact disallowals, but that is not how it is done. Instead, they will be subtracted from the amount due -- as though they are payments received -- in order to balance the numbers.

AngelTrack's Record a Payment Event page, which is used to input paper EOBs, has a popup calculator to assist you in adding and inputting the amounts:

Sample Medicare EOB

Affects only paper EOBs

This hassle with the math affects paper EOBs only. AngelTrack handles it automatically when importing EOBs electronically.

A few carriers do not do this

A few insurance carriers do not calculate their allowed amounts like this; instead they pre-subtract the sequestration amount from the allowed amount, in the manner that seems logical but which nevertheless diverges from the industry standard.

When AngelTrack sees an electronic EOB that does so, it will automatically correct it. If you are typing in a paper EOB that has the same problem, you will see that the calculated balance is lower than the patient responsibility by the sequestration amount. In that case, you must manually add the sequestration amount to the price allowed.

CO-253 Reductions Explained

CO-253 is a Claim Adjustment Reason [CAR] code that officially means "Sequestration - reduction in federal payment".... or simply "the sequestration".

The sequestration is an across-the-board federal spending cut affecting a broad swath of programs, including Medicare. In the case of EMS, this means a flat percentage reduction in all amounts owed to EMS providers. There is no chance of appeal; you simply get paid less than what you are owed, and you cannot invoice anyone else to recapture the loss.

The sequestration is listed separately on an EOB, rather than being automatically factored in to the allowed amount, so as not to confuse people and software programs that are comparing the Medicare rate tables against the allowed amount to check for discrepancies. By listing the sequestration amount separately, the allowed amount will still match the rate tables, and the rate tables do not need to be re-adjusted whenever the sequestration is increased or decreased. Unfortunately, this means that anyone typing in their EOBs must input the sequestered amounts themself, in order to balance the allowed amount, the amount paid, and the patient responsibility.

AngelTrack considers the sequestered amount as a quasi-payment, which reduces the balance owed (and the accrued revenue) even though it is not cash received. It simultaneously is and is not a payment.

Clear it with your legal team first

AngelTrack stores the sequestered amounts separately, so that they appear as a separate column in the Revenue Accrual and related reports. Your accountant will know whether and how to apply the sequestered amounts to your books and taxes.

Before using any data from AngelTrack concerning revenue, collections, or writeoffs, you should consult your legal team. Taxes and deductions in the healthcare industry are complex, especially when Medicare/Medicaid writedowns are in play. It is easy to make a serious and costly mistake, so don't proceed without first talking to experts.

Filing an Electronic Secondary Claim

If you wish to electronically file against a secondary carrier after receiving a paper EOB from the primary, follow these steps:

  1. Use Record a Payment Event to input the paper EOB.
  2. When doing that, click "Input the adjustments from a paper EOB" and input the chart of CARCs.
  3. Under "Next Steps", send the call back to "Billing Office", and leave the Payor set to "Insurance".
  4. The dispatch will reappear in the Insurance Filing Queue, and will already be switched to the secondary.
  5. Batch up the dispatch, and send the batch to your clearinghouse.

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