Insurance & Billing Basics for the CPO Exam

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Understanding the basics of insurance and billing allows CPOs to assist with intake, verify coverage, communicate with patients about costs, and support accurate documentation. While detailed coding is typically the responsibility of billing specialists, CPOs encounter insurance-related questions and processes daily.

Medical vs. Vision Insurance

Two distinct insurance types cover eye care:

Vision insurance (such as VSP, EyeMed, Spectera, Davis Vision) covers routine wellness eye exams for healthy eyes, plus an allowance toward glasses or contact lenses. Benefits are typically annual and have set co-pays and frame/lens allowances.
Medical insurance (Medicare, Medicaid, and commercial health plans) covers the evaluation and treatment of eye diseases and conditions: glaucoma monitoring, diabetic retinopathy management, dry eye requiring prescription treatment, cataract evaluation, post-operative care, and emergency visits.

Many patients have both types of insurance. The type of visit determines which benefit is used. A healthy patient coming for an annual exam and new glasses uses vision insurance. The same patient with diabetic retinopathy on the same visit uses medical insurance for the disease management component.

A patient may report they have "insurance" without distinguishing between medical and vision. Always ask whether they have both a medical (health) plan and a separate vision benefit plan, and collect cards for each. Billing the wrong plan results in claim denials.

CPT Codes

Current Procedural Terminology (CPT) codes are five-digit numeric codes published by the American Medical Association that identify the services and procedures performed. Common ophthalmic CPT codes include:

92002/92004: Ophthalmological services (intermediate or comprehensive, new patient)
92012/92014: Ophthalmological services (intermediate or comprehensive, established patient)
92083: Visual field examination (Humphrey or Goldmann)
92134: OCT of the retina and optic nerve
92310: Contact lens prescription and fitting, bifocal or multifocal
66984: Cataract extraction with IOL insertion

ICD-10 Diagnosis Codes

ICD-10-CM (International Classification of Diseases, 10th Revision, Clinical Modification) codes identify the patient's diagnosis or condition. Claims require at least one ICD-10 code that supports the medical necessity of the procedure billed. In ophthalmology, specificity is important: codes often specify laterality (right eye, left eye, bilateral), stage, or type (e.g., primary open-angle glaucoma vs. narrow-angle).

Prior Authorization

Prior authorization (PA) is a requirement by some insurance plans that the provider obtain approval before performing a procedure or prescribing a medication. Failure to obtain required PA results in claim denial. CPOs may assist with PA by:

Identifying which procedures require PA for a given patient's plan.
Gathering the clinical documentation needed for the PA request.
Submitting the PA request via phone, fax, or online portal.
Following up on pending PA requests and documenting authorization numbers.

Copayments and Collections

Copayments are the fixed patient portion of a visit or service, collected at the time of service per the insurance contract. Best practice is to collect copayments at check-in, before the patient is seen. Outstanding balances from prior visits should also be addressed at check-in according to practice policy.

It is a fraud violation to routinely waive or discount patient copayments without documenting financial hardship, as this misrepresents the true charge to the insurer. Waived copayments must be handled strictly per practice policy and applicable law.

Key Takeaways

Vision insurance covers routine wellness exams and eyewear; medical insurance covers disease evaluation and treatment.
CPT codes identify procedures performed; ICD-10 codes identify diagnoses and must support medical necessity.
Prior authorization is required by some plans before certain procedures; obtain and document PA numbers before the service is rendered.
Collect copayments at check-in; outstanding balances should be addressed per practice policy.
Routine copayment waivers without documented financial hardship constitute insurance fraud.

Frequently Asked Questions

What is the difference between a copayment, a coinsurance, and a deductible?

A copayment (copay) is a fixed dollar amount a patient pays for a specific service at the time of service, regardless of the total cost (e.g., $20 for a specialist visit). Coinsurance is a percentage of the total allowed amount that the patient pays after meeting their deductible (e.g., the patient pays 20% and the insurer pays 80%). A deductible is the amount the patient must pay out-of-pocket each year before their insurance begins paying for most services. High-deductible health plans require patients to pay all costs up to the deductible amount before coinsurance kicks in. All three are patient cost-sharing mechanisms that must be explained clearly during financial discussions.

When is an eye exam billed to medical insurance rather than vision insurance?

An eye exam should be billed to medical insurance when the primary purpose of the visit is to evaluate, diagnose, or manage a medical condition affecting the eye. Examples include: any visit for glaucoma monitoring or treatment, diabetic retinopathy surveillance, dry eye requiring prescription management, a red or painful eye, evaluation for cataract or pterygium, contact lens-related complications, post-operative care, and evaluation of visual field defects or optic nerve abnormalities. Routine wellness exams for healthy patients with no ocular disease bill to vision insurance. A single visit may involve both medical and routine components, which can sometimes be split-billed between both insurances.

What is a prior authorization and what happens if it is not obtained?

Prior authorization (PA or pre-authorization) is advance approval from a patient's insurance plan that a proposed service is medically necessary and covered before the service is rendered. If a procedure that requires PA is performed without obtaining authorization, the claim will be denied as not authorized. The practice cannot then bill the full amount to the patient for non-emergency services; they typically receive the insurer's allowed amount minus the patient's share at best, or zero if the denial is upheld. Some denials can be appealed, but this takes time and is not always successful. Checking PA requirements before scheduling procedures is a core billing function.

What information is needed to verify a patient's insurance eligibility?

To verify insurance eligibility, the following information is needed: the patient's full name as it appears on the insurance card, date of birth, insurance member ID number, insurance group number if applicable, and the name of the insurance plan and carrier. The practice submits this information (electronically or by phone) to the insurer to confirm the plan is active, the patient is enrolled, what benefits apply to the scheduled visit, whether the practice is in-network, and any deductible or copayment amounts. Eligibility verification should be performed before every visit because insurance status can change at any time.

What is a superbill and how is it used in ophthalmic billing?

A superbill is an itemized receipt or encounter form that documents all services provided during a patient visit, including CPT procedure codes, ICD-10 diagnosis codes, fees, and the physician's signature. In ophthalmic practices, the superbill serves as the source document for claim generation. The examining physician or scribe completes or reviews the superbill at the end of the visit, and the billing department uses it to generate and submit insurance claims. Superbills also serve as proof of services if a claim is audited. They may be paper forms or generated automatically in EHR systems at visit close.