Chapter 15 HOSPITAL INSURANCE

HOSPITAL INSURANCE Learning Outcomes 15-1 Compare inpatient and outpatient hospital services. 15-2 List the major steps relating to hospital claims processing. 15-3 Describe two differences in coding diagnoses for hospital inpatient cases and physician office services. 15-4 Describe the procedure codes used in hospital coding. 15-5 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 Diagnosis-related group (DRG) Emergency care Health information management (HIM) Inpatient Master patient index MS-DRGs (Medicare- Severity DRGs) Present on Admission (POA) indicator Principal diagnosis Principal procedure Prospective Payment System (PPS) Registration UB-92 UB-04 837I claim 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 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 Insurance components of records 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 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 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 Coding ICD-9 Volumes 1 and 2 used for inpatient diagnosis codes ICD-9 Volume 3 used for inpatient procedure codes CPT not used for hospital procedure coding HCPCS may be used for some claims Chapter 15

Hospital Diagnosis Coding Principal diagnosis Condition responsible for this admission established after study Listed first in medical record and insurance billing Admitting diagnosis Condition identified at time of admission 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 Shown in patient medical record as CC May list up to 8 on claim 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 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 Part A provides hospital coverage Diagnosis Related Groups (DRGs) Groupings created based on relative value of resources used for patients with similar conditions Helps to control costs Prospective Payment System (PPS) Payment set ahead of time based on DRG Chapter 15

Medicare Outpatient Payment System PPS used by CMS since 2000 Prior to 2000, paid on a fee-for-service basis Grouped by Ambulatory Patient Classification (APC) rather than DRGs Reimbursement made according to preset amounts based on the value of each APC 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-04, is accepted under some circumstances Implemented as of May 2007; formerly known as the Uniform Billing 1992 (UB-92) form Also known as CMS-1450 Chapter 15

The HIPAA 837I and the UB-04 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 Department coordinates with Patient Accounting Department Remittance Advice reviewed to assure payment received matches payment anticipated 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. The two diagnoses may not match after the patient has been treated. Chapter 15