1. Chapter 15
HOSPITAL INSURANCE

2. 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.
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3. 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
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4. Inpatient Care Patient stays overnight or longer Includes:
Inpatient hospital care
Skilled nursing facilities
Long-term care facilities
Hospital emergency departments
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5. 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
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6. HIM Department Health Information Management
Organizes and maintains patient medical records
Insurance components of records
Admission
Treatment and charges
Discharge and billing
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7. 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
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8. 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
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9. 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
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10. 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
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11. 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
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12. 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
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13. 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
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14. 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
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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
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16. 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
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17. 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
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18. Private Insurers
Often use standardized number of days allowed for condition
Many private insurers have adapted the DRG system for their billing
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19. 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
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20. 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
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21. 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
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22. 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.
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