1. ©2011 Coventry Health Care. All rights reserved. Proprietary – Do not copy, distribute or disclose without permission of Coventry Health Care. Provided by Coventry ® Illinois Medical Bill Reviewer Training Program Unit 2: Hospital Guidelines Module 1: Inpatient Guidelines

2. Illinois Regulation Training – Inpatient, Outpatient, ASC 2 Overview Hello fellow Americans, lets start by discussing what inpatient services are and how they are determined. Inpatient Hospital Guidelines What Inpatient Hospital Services Are How Inpatient Fees are Determined Definition of Payment Billing Examples

3. Illinois Regulation Training – Inpatient, Outpatient, ASC 3 History Illinois State Capital, Springfield, IL In 2006, the State of Illinois revised the payment composition of the Inpatient Hospital Fee Schedule. The changes became effective for discharge services on or after February 1, 2006. Lets take a look…

4. Illinois Regulation Training – Inpatient, Outpatient, ASC 4 What are inpatient services? Inpatient services are when a patient is admitted to a hospital, skilled nursing facility or immediate care facility for bed occupancy. Services include, but not limited to, diagnostic or therapeutic services and medical and surgical services. If in doubt, remember… if the patient occupied a bed at midnight, it is an inpatient stay!

5. Illinois Regulation Training – Inpatient, Outpatient, ASC 5 A person is considered inpatient… When formally admitted as an inpatient, with the expectation of remaining at least overnight and occupying a bed, even though it later develops that the patient can be discharged or transferred to another facility and did not actually use a bed overnight.

6. Illinois Regulation Training – Inpatient, Outpatient, ASC 6 Determining Inpatient Fees Inpatient reimbursement is based on Diagnosis Related Group (DRG). The DRG system is used nation-wide to group related diagnosis (es) and principle procedures performed. It helps us classify patients based on principal diagnosis, surgical procedure, age, the presence of morbidities, complications and other pertinent data. 559 DRG Relative listings…. Reflects the maximum medical reimbursement amount for the entire inpatient hospital stay. In Illinois, there are two Inpatient Fee Schedules; One is the standard DRG fee schedule, that applies to the majority of Inpatient bills. The other is the Trauma DRG fee schedule, which applies to a small number of inpatient bills that involve trauma admissions.

7. Illinois Regulation Training – Inpatient, Outpatient, ASC 7 Reimbursement As stated, DRG codes determine the reimbursement for an entire hospital stay. However, there are services not covered under the DRG fee schedule amount. These are referred to as Pass-Through codes. Pass-through codes are carved out and not subject to fee schedule pricing. The following services are the exception…. Prosthetics/Orthotics Implants (274) Pacemakers (275) Lens implants (276) Investigational devices (624) Drugs requiring detailed coding (636) Ambulance (540 & 545) Charges classified as Pass-Through are paid at 65% of the charged amount

8. Illinois Regulation Training – Inpatient, Outpatient, ASC 8 Reimbursement In addition, when new or unvalued DRG codes are listed in the fee schedule, they are paid at 76% of billed charges. However, they are subject to pass-through revenue code considerations. Example DRGs: 541, 542, 543, 544, 545, 546, 547, 548 & 549

9. Illinois Regulation Training – Inpatient, Outpatient, ASC 9 Cost Outliers Outliers are Admissions with extraordinary cost warranting additional reimbursement beyond the maximum allowance. In determining if an additional reimbursement is warranted, the following condition applies: If, after subtracting the pass through revenue code charges, the balance of the bill is equal to or above two times the fee schedule (DRG) amount, the charged amount meets the definition of a cost outlier.

10. Illinois Regulation Training – Inpatient, Outpatient, ASC 10 Cost Outliers Other factors when additional reimbursement is warranted, are… The pass through revenue code charges is recommended for payment at 65% of the billed charges. The balance of the bill will be reimbursed at the fee schedule (DRG) amount plus 76% of the portion of the charges that exceed the fee schedule amount.

11. Illinois Regulation Training – Inpatient, Outpatient, ASC 11 Trauma Reimbursement The Maximum Medical Reimbursement for Trauma is based on DRG, Admit Date, and the Providers geographic location (Geozip). In addition, hospitals are required to be State designated Level I and II trauma centers. Trauma Hospitals Rockford Memorial Hospital Hinsdale Hospital Carle Foundation Hospital Loyola University Health System Trauma DRGs Burns: 505-511 Multiple Trauma Sites: 484-487

12. Illinois Regulation Training – Inpatient, Outpatient, ASC 12 Trauma Reimbursement In Bill Review, trauma bills are identified when the Trauma field indicator displays Yes. Qualifying Trauma Hospitals display 75 in the Action Reason Code field, in the Provider Detail panel.

13. Illinois Regulation Training – Inpatient, Outpatient, ASC 13 Emergency Room Facilities (1)Is licensed by the State as an emergency room or emergency department. (2)Is held out to the public as providing care for emergency medical conditions without requiring an appointment. (3)Or during its previous calendar year, has provided at least one-third of all its outpatient visits for the treatment of emergency medical conditions on an urgent basis. The 76% of charged amount reimbursement level will apply to all facility fees from any department or facility of a hospital, whether situated on or off the main hospital campus, that: All emergency room facility fees shall be paid at 76% of charged amounts.

14. ©2011 Coventry Health Care. All rights reserved. Proprietary – Do not copy, distribute or disclose without permission of Coventry Health Care. Provided by Coventry ® Illinois Medical Bill Reviewer Training Program Unit 2: Hospital Guidelines Module 2: Outpatient & Ambulatory Surgery Center (ASC) Guidelines

15. Illinois Regulation Training – Inpatient, Outpatient, ASC 15 In this module, you will review current hospital outpatient billing practices, how fees are determined and how services are billed. Now, lets examine what outpatient and ASC services are and how injured workers are treated as outpatients. Overview Outpatient Hospital and Ambulatory Surgery Center (ASC) Guidelines… How Fees are Determined Implant Billing Summary What Outpatient/ACS Services Are Where Outpatients are Treated

16. Illinois Regulation Training – Inpatient, Outpatient, ASC 16 Outpatient Hospital All hospital outpatient services are recommended for payment at 76% of charged amount. Services provided by a hospital will not be reduced according to the professional or HCPCS fee schedules. In addition, when hospital outpatient services involve an ambulatory surgical procedure, payment will be recommended at 76% of the charged amount.

17. Illinois Regulation Training – Inpatient, Outpatient, ASC 17 What are outpatient services? Outpatient services are rendered to patients for the purpose of administering medical treatment that does not require an overnight stay at a hospital. An outpatient receives health care services without being admitted to a hospital. Instead, they are registered as an outpatient in hospital records. Examples of services injured workers might be treated for as an outpatient are… Broken bones Minor burns Wounds

18. Illinois Regulation Training – Inpatient, Outpatient, ASC 18 Place holder Outpatient Implants Keep in mind, Implants are exceptions to the Outpatient Hospital reimbursement rules, as well. Payment is recommended at 65% of charged amount for prosthetics/orthotics, pacemaker, lens implants, implants, ambulance, investigational devices and drugs requiring detailed coding. The following carve-out categories/revenue codes, are paid at 65% of charge: 274 (prosthetics/orthotics) 275 (pacemaker) 276 (lens implants) 278 (implants) 540 and 545 (ambulance) 624 (investigational devices) 636 (drugs requiring detailed coding)

19. Illinois Regulation Training – Inpatient, Outpatient, ASC 19 Ambulatory Surgical Centers (ASC) An ASC on the other hand is any surgical clinic or ambulatory surgical center that is: Certified to participate in the Medicare program or any surgical clinic accredited by an approved accrediting agency. Or Used by physicians or podiatrists who are not part of the practice. Or Used by the physicians or podiatrists for surgical procedures which constitute more than 50 percent of the activities at that location.

20. Illinois Regulation Training – Inpatient, Outpatient, ASC 20 Ambulatory Surgical Centers (ASCs) Remember: When a place is located within and operated in conjunction with the offices of a single physician or podiatrist, or a group of physicians or podiatrists, it shall not be considered an ambulatory surgical treatment center. In addition, the following institutions are not considered ASCs, as well: Hospitals - Any institution, place, building or agency required to be licensed pursuant to the Hospital Licensing Act. Long-term care facilities - Any person or institution required to be licensed pursuant to the Nursing Home Care Act. ASCs continued…

21. Illinois Regulation Training – Inpatient, Outpatient, ASC 21 Ambulatory Surgical Centers (ASC's) More institutions that are not considered ASCs: State facilities - Hospitals or ambulatory surgical treatment centers maintained by the State or any Department or agency thereof, where such department or agency has authority under law to establish and enforce standards for the hospitals or ambulatory surgical treatment centers under its management and control. Federal facilities - Hospitals or ambulatory surgical treatment centers maintained by the federal government or agencies thereof. Dental surgery facilities - Any place, agency, clinic, or practice, public or private, whether organized for profit or not, devoted exclusively to the performance of dental or oral surgical procedures.

22. Illinois Regulation Training – Inpatient, Outpatient, ASC 22 Summary The term Ambulatory Surgical Center does not include: Hospitals, Long Term facilities, State or Federal facilities or Dental Surgery facilities. Pass-through charges are allowed (carved out) in addition to Outpatient and ASC charges and paid at 65% of billed charge. Outpatient services do not require an overnight stay in a hospital. Outpatient and Ambulatory Surgical Center services a paid at 76% of billed charges. Inpatient reimbursement is based on Diagnosis Related Group (DRG). Outliers are Admissions with extraordinary cost warranting additional reimbursement beyond the maximum allowance The Maximum Medical Reimbursement for Trauma is based on DRG, Admit Date, and Geozip. If the patient occupies a bed at midnight, it is an inpatient stay. All emergency room facility fees shall be paid at 76% of charged amounts.