Chapter 15 HOSPITAL INSURANCE

HOSPITAL INSURANCE Learning Objectives Compare inpatient and outpatient hospital services. List the major steps relating to hospital claims processing. Describe two differences in coding diagnoses for hospital inpatient cases and physician office services. Describe the procedure codes used in hospital coding. Discuss the important items that are reported on the HIPAA hospital claim, the 837I. Chapter 15

Key Terms Admitting diagnosis Ambulatory care Attending physician Charge master or Charge ticket CMS-1450 Emergency care Health information management (HIM) Inpatient Master patient index Principal diagnosis Principal procedure Prospective Payment System (PPS) Registration 837I Chapter 15

Inpatient Care Patient stays overnight or longer Includes: Inpatient hospital care Skilled nursing facilities Long-term care facilities Hospital emergency departments Chapter 15

Outpatient or Ambulatory Care No overnight stay Includes: Same-day surgery Care provided in patients’ homes Home Health Agencies Skilled nursing care, physical therapy, etc. Assistance with Activities of Daily Living (ADLs) Home health aides Hospice care Chapter 15

HIM Department Health Information Management Organizes and maintains patient medical records Three Major Steps in a Patient’s Hospital Stay: Admission Treatment and Charges Discharge and Billing Chapter 15

Admission Registration Process Create/update patient’s medical record Verify insurance coverage Secure consent for release of information Collect advance payments, as appropriate Emergency departments usually have separate registration/admission Chapter 15

Admission (cont’d) Registration Process Medicare patients receive one-page printout Entitled “An Important Message from Medicare” Explains rights as hospital patient All patients receive copy of hospital’s privacy practices Based on the HIPAA Privacy Rule Receipt is acknowledged with signature Chapter 15

Confidentiality is important - Why Treatment and Charges Medical record contains Notes, ancillary documents, and correspondence from attending physician and all other physicians/providers Patient data, including insurance information Charges for all treatments and tests; supplies and equipment used; medication; room and board; and time spent in special facilities Confidentiality is important - Why Chapter 15

Discharge and Billing Goal is to file a claim within 7 days of discharge Items recorded on charge master Similar to practice’s encounter form Hospital’s computer system tracks patient’s services Chapter 15

Inpatient (Hospital) Coding HIM (Health information Management) Responsible for diagnostic & procedural of patient’s medical records. Coding is done as soon as the patient is discharged. Inpatient Coders: Generalists Maybe skilled as surgical coders or Medicare Coders. Chapter 15

Inpatient (Hospital) Coding Cont. ICD-9 Volumes 1 and 2 used for inpatient diagnoses codes ICD-9 Volume 3 used for inpatient procedure codes HCPCS may be used for some claims Chapter 15

Hospital Diagnosis Coding Admitting Diagnosis Condition identified at time of admission Principal Diagnosis Condition responsible for this admission established after study Listed first in medical record and insurance billing Chapter 15

Hospital Diagnosis Coding (cont’d) Suspected or unconfirmed diagnosis Usually used as an admitting diagnosis Often referred to as “rule outs” The admitting diagnosis may not match the principal diagnosis once the patient has been treated Chapter 15

Hospital Diagnosis Coding (cont’d) Comorbidities and Complications Comorbidities (co-existing conditions) are other conditions that affect a patient’s stay or course of treatment Complications are conditions that develop as a result of surgery or treatment Shown in patient medical record as “CC” May list up to 8 on claim Chapter 15

Hospital Procedural Coding ICD-9 Volume 3 used Includes an Alphabetic Index and a Tabular List similar to those in Volumes 1 and 2 Codes are 3 or 4 digits Principal Procedure Most closely related to the treatment of the principal diagnosis Chapter 15

Medicare Inpatient Payment System Diagnosis Related Groups (DRGs) – Cost reimbursement method developed by Medicare for its prospective payment system (PPS) for reimbursement of medical fees for a patient. DRG system analyze conditions and treatment for similar groups of patients used to establish Medical fees for hospital inpatient services. Under the DRG classification system: Groupings were created based on relative value of the resources that physicians and hospitals nationally used for patients with similar conditions. Chapter 15

Medicare Inpatient Payment System Cont. The Calculations Each DRG category is based on patient characteristics (e.g., age, sex), diagnosis, and medical procedures all of which are condensed into a single DRG that applies to a specific patient. Chapter 15

Medicare Inpatient Payment System Cont. Prospective Payment System (PPS) At the same time the DRG system was created, Medicare changed the way hospitals were paid. Payment changed from a fee-for-service approach to Medicare Prospective Payment System (PPS). Payment set ahead of time based on DRG. Chapter 15

Medicare Inpatient Payment System Cont. Quality Improvement Organization Made up of practicing physicians and other health care experts contracted by CMS in each state to review Medicare & Medicaid claims for appropriateness of hospitalization and clinical care. QIO’s goal is to ensure that payment is made only for medically necessary services. Set up when DRG was established, The program replaced the “Peer Review Organization”. Monitor and improve the usage and quality of care for Medicare beneficiaries. Chapter 15

Medicare Outpatient Payment System DRGs (Diagnosis Related Groups) Implemented for outpatient hospital services, previously were paid on a fee-for-service basis Hospital Outpatient Prospective Payment System (PPS) is used to pay for hospital outpatient services. In place of DRGs, patients are grouped under an Ambulatory Patient Classification Reimbursement made according to preset amounts based on the value of each APC (ambulatory Patient Classification). Chapter 15

Private Insurers Often use standardized number of days allowed for condition Many private insurers have adapted the DRG system for their billing Chapter 15

Filing Claims Medicare Part A HIPAA 837I claim is mandated by CMS Electronic claim I in 837I stands for Institutional Paper claim, UB-92, is accepted under some circumstances Uniform Billing 1992 (UB-92) form Also known as CMS-1450 Chapter 15

The HIPAA 837I and the UB-92 Contain: Principal and other diagnosis codes Admitting diagnosis Principal procedure code Attending and other physician Charges Contain: Patient data Information on insured Facility/patient type Source of admission Various conditions that affect payment Whether Medicare is primary payer Chapter 15

Remittance Advice Received when payment is transmitted to account HIM (Health Information Management) Department coordinates with Patient Accounting Department Remittance Advice reviewed to assure payment received matches payment anticipated Chapter 15

Quiz ICD-9 Volume 3 is used by ______________. hospital coders In the hospital medical record, CC refers to _____________________________. comorbidities and complications Medicare ___________ pays for inpatient and outpatient hospital costs. Part A The I in 837I stands for ____________. institutional An encounter form is created for hospital services. (T/F) False, the charge master is used in hospitals. Chapter 15

Critical Thinking What is the difference between the admitting diagnosis and the principal diagnosis? The admitting diagnosis is usually the reason identified at the time of admission. The principal diagnosis is determined after study and is listed first in the medical record and insurance claim. Chapter 15