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Survey of Medical Insurance pp ch18

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Survey of Medical Insurance pp ch18

  1. 1. 18 Hospital Billing and Reimbursement
  2. 2. Learning Outcomes <ul><li>When you finish this chapter, you will be able to: </li></ul><ul><li>18.1 Distinguish between inpatient and outpatient hospital </li></ul><ul><li>services. </li></ul><ul><li>18.2 List the major steps relating to hospital billing and </li></ul><ul><li>reimbursement. </li></ul><ul><li>18.3 Describe two differences in coding diagnoses for hospital inpatient cases and physician services. </li></ul><ul><li>18.4 Describe the classification system used for coding hospital procedures. </li></ul>18-2
  3. 3. Learning Outcomes (Continued) <ul><li>When you finish this chapter, you will be able to: </li></ul><ul><li>18.5 Describe the factors that affect the rate that Medicare pays for inpatient services. </li></ul><ul><li>18.6 Discuss the important items that are reported on the </li></ul><ul><li>hospital health care claim. </li></ul>18-3
  4. 4. Key Terms <ul><li>admitting diagnosis (ADX) </li></ul><ul><li>ambulatory care </li></ul><ul><li>ambulatory patient classification (APC) </li></ul><ul><li>ambulatory surgical center (ASC) </li></ul><ul><li>ambulatory surgical unit (ASU) </li></ul><ul><li>at-home recovery care </li></ul><ul><li>attending physician </li></ul><ul><li>case mix index </li></ul>18-4 <ul><li>charge master </li></ul><ul><li>CMS-1450 </li></ul><ul><li>comorbidities </li></ul><ul><li>complications </li></ul><ul><li>diagnosis-related groups (DRGs) </li></ul><ul><li>837I </li></ul><ul><li>emergency </li></ul><ul><li>grouper </li></ul><ul><li>health information management (HIM) </li></ul>
  5. 5. Key Terms (Continued) <ul><li>home health agency (HHA) </li></ul><ul><li>home health care </li></ul><ul><li>hospice care </li></ul><ul><li>hospital-acquired condition (HAC) </li></ul><ul><li>hospital-issued notice of noncoverage (HINN) </li></ul><ul><li>inpatient </li></ul><ul><li>Inpatient Prospective Payment System (IPPS) </li></ul>18-5 <ul><li>major diagnostic categories (MDCs) </li></ul><ul><li>master patient index (MPI) </li></ul><ul><li>Medicare-severity DRGs (MS-DRGs) </li></ul><ul><li>never events </li></ul><ul><li>observation services </li></ul><ul><li>Outpatient Prospective Payment System (OPPS) </li></ul>
  6. 6. Key Terms (Continued) <ul><li>present on admission (POA) </li></ul><ul><li>principal diagnosis (PDX) </li></ul><ul><li>principal procedure </li></ul><ul><li>registration </li></ul><ul><li>sequencing </li></ul><ul><li>skilled nursing facility (SNF) </li></ul><ul><li>UB-92 </li></ul><ul><li>UB-04 </li></ul>18-6 <ul><li>Uniform Hospital Discharge Data Set (UHDDS) </li></ul>
  7. 7. 18.1 Health Care Facilities: Inpatient Versus Outpatient <ul><li>Inpatient— person admitted for services that require an overnight stay </li></ul><ul><li>Inpatient services: </li></ul><ul><ul><li>Those involving an overnight stay </li></ul></ul><ul><ul><li>Provided by general and specialized hospitals, skilled nursing facilities, and long-term care facilities </li></ul></ul><ul><li>Skilled nursing facility (SNF)— facility in which licensed nurses provide services under a physician’s direction </li></ul>18-7
  8. 8. 18.1 Health Care Facilities: Inpatient Versus Outpatient (Continued) <ul><li>Emergency— situation where a delay in patient treatment would lead to a significant increase in the threat to life or body part </li></ul><ul><li>Outpatient services: </li></ul><ul><ul><li>Provided by ambulatory surgical centers or units, by home health agencies, and by hospice staff </li></ul></ul><ul><ul><li>Ambulatory care— outpatient care that does not require an overnight hospital stay </li></ul></ul><ul><ul><li>Ambulatory surgical unit (ASU)— hospital department that provides outpatient surgery </li></ul></ul><ul><ul><li>Ambulatory surgical center (ASC)— clinic that provides outpatient surgery </li></ul></ul>18-8
  9. 9. 18.1 Health Care Facilities: Inpatient Versus Outpatient (Continued) <ul><li>Outpatient services are also provided in patients’ home settings: </li></ul><ul><ul><li>Home health care— care given to patients in their homes </li></ul></ul><ul><ul><li>Home health agency (HHA)— organization that provides home care services </li></ul></ul><ul><ul><li>At-home recovery care— assistance with daily living provided in the home </li></ul></ul><ul><ul><li>Hospice care— public or private organization that provides services for terminally ill people </li></ul></ul>18-9
  10. 10. 18.2 Billing Cycle <ul><li>The first major step in the hospital claims processing sequence: </li></ul><ul><ul><li>Patient is admitted and registered </li></ul></ul><ul><ul><li>Personal and financial information is entered in the hospital’s health record system </li></ul></ul><ul><ul><li>Insurance coverage is verified </li></ul></ul><ul><ul><li>Consent forms are signed by the patient </li></ul></ul><ul><ul><li>A notice of the hospital’s privacy policy is presented to the patient </li></ul></ul><ul><ul><li>Some pretreatment payments are collected </li></ul></ul>18-10
  11. 11. 18.2 Billing Cycle (Continued) <ul><li>The second step: </li></ul><ul><ul><li>The patient’s treatments and transfers among the various departments in the hospital are tracked and recorded </li></ul></ul><ul><li>The third step: </li></ul><ul><ul><li>Discharge and billing </li></ul></ul><ul><ul><li>Follows the discharge of the patient from the facility and the completion of the patient’s record </li></ul></ul>18-11
  12. 12. 18.2 Billing Cycle (Continued) <ul><li>Health information management (HIM)— hospital department that organizes and maintains patient medical records </li></ul><ul><li>Registration— process of gathering information about a patient during admission to a hospital </li></ul><ul><li>Master patient index (MPI)— hospital’s main patient database </li></ul>18-12
  13. 13. 18.2 Billing Cycle (Continued) <ul><li>Attending physician— clinician primarily responsible for a patient’s care from the beginning of a hospitalization </li></ul><ul><li>Hospital-issued notice of noncoverage (HINN)— form used for inpatient hospital services </li></ul><ul><li>Observation services— service provided in a hospital room but billed as an outpatient service </li></ul><ul><li>Charge master— hospital’s list of the codes and charges for its services </li></ul>18-13
  14. 14. 18.3 Hospital Diagnostic Coding <ul><li>Diagnostic coding for inpatient services follows the rules of the Uniform Hospital Discharge Data Set (UHDDS)— classification system for inpatient health data </li></ul><ul><li>Inpatient coding differs from physician and outpatient diagnostic coding in two ways: </li></ul><ul><ul><li>The main diagnosis, called the principal rather than the primary diagnosis, is established after study in the hospital setting </li></ul></ul><ul><ul><li>Coding an unconfirmed condition (rule-out) as the admitting diagnosis is permitted </li></ul></ul>18-14
  15. 15. 18.3 Hospital Diagnostic Coding (Continued) <ul><li>Principal diagnosis (PDX)— condition established after study to be chiefly responsible for admission </li></ul><ul><li>Admitting diagnosis (ADX)— patient’s condition determined at admission to an inpatient facility </li></ul><ul><li>Sequencing— guideline for listing the correct order of a principal diagnosis </li></ul>18-15
  16. 16. 18.3 Hospital Diagnostic Coding (Continued) <ul><li>Comorbidities— admitted patient’s coexisting conditions that affect the length of hospital stay or course of treatment </li></ul><ul><li>Complications— conditions an admitted patient develops after surgery or treatment that affect length of hospital stay or course of treatment </li></ul>18-16
  17. 17. 18.4 Hospital Procedure Coding <ul><li>Volume 3 of the ICD-9-CM, Procedures , is used to report the procedures for inpatient services </li></ul><ul><ul><li>Organized by surgical procedures divided into body systems, followed by diagnostic and therapeutic procedures </li></ul></ul><ul><ul><li>The three- or four-digit codes are assigned based on the principal diagnosis </li></ul></ul><ul><li>Principal procedure— procedure most closely related to treatment of the principal diagnosis </li></ul>18-17
  18. 18. 18.5 Payers and Payment Methods <ul><li>Medicare pays for inpatient services under its Inpatient Prospective Payment System (IPPS)— Medicare payment system for hospital services </li></ul><ul><ul><li>Uses diagnosis-related groups (DRGs) to classify patients into similar treatment and length-of-hospital-stay units and sets prices for each classification group </li></ul></ul><ul><ul><li>Diagnosis-related groups (DRG)— system of analyzing conditions and treatments for similar groups of patients </li></ul></ul><ul><ul><li>Grouper— Software used to assign DRGs </li></ul></ul>18-18
  19. 19. 18.5 Payers and Payment Methods (Continued) <ul><ul><li>Each hospital’s case mix index is an average of the DRG weights handled for a specific period of time </li></ul></ul><ul><li>Other factors affect the pay rate a hospital negotiates with CMS: </li></ul><ul><ul><li>Geographic location, labor and supply costs, and teaching costs </li></ul></ul><ul><ul><li>MS-DRGs— new type of DRG designed to better reflect the differing severity of illness among patients who have the same basic diagnosis </li></ul></ul><ul><li>Major diagnostic categories (MDC)— categories where MS-DRGs are grouped </li></ul>18-19
  20. 20. 18.5 Payers and Payment Methods (Continued) <ul><li>Present on admission (POA)— code used when a condition exists at the time the order for inpatient admission occurs </li></ul><ul><li>Hospital-acquired condition (HAC)— condition a hospital causes or allows to develop </li></ul><ul><li>Never events— preventable medical errors resulting in serious consequences for the patient </li></ul>18-20
  21. 21. 18.5 Payers and Payment Methods (Continued) <ul><li>Outpatient Prospective Payment System (OPPS)— payment system for Medicare Part B services that facilities provide on an outpatient basis </li></ul><ul><li>Ambulatory patient classification (APC)— Medicare payment classification for outpatient services </li></ul>18-21
  22. 22. 18.6 Claims and Follow-up <ul><li>837I— HIPAA-mandated electronic transaction for hospital claims </li></ul><ul><li>UB-04— Current paper claim form for hospital billing </li></ul><ul><ul><li>CMS-1450— another name for the UB-04 paper claim form </li></ul></ul><ul><ul><li>UB-92— former hospital paper claim form </li></ul></ul><ul><li>The UB-04 reports: </li></ul><ul><ul><li>Patient data </li></ul></ul><ul><ul><li>Information on the insured </li></ul></ul><ul><ul><li>Facility and patient type </li></ul></ul>18-22
  23. 23. 18.6 Claims and Follow-up (Continued) <ul><li>The UB-04 reports (continued): </li></ul><ul><ul><li>The source of the admission </li></ul></ul><ul><ul><li>Various conditions that affect payment </li></ul></ul><ul><ul><li>Whether Medicare is the primary payer (for Medicare claims) </li></ul></ul><ul><ul><li>The principal and other diagnosis codes </li></ul></ul><ul><ul><li>The admitting diagnosis </li></ul></ul><ul><ul><li>The principal procedure code </li></ul></ul><ul><ul><li>The attending physician </li></ul></ul><ul><ul><li>Other key physicians </li></ul></ul><ul><ul><li>Charges </li></ul></ul>18-23

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