HOSPITAL INSURANCE

1. HOSPITAL INSURANCE Chapter 15

2. HOSPITAL INSURANCE • Learning Objectives • Compareinpatientand outpatient hospital services. • List the major steps relating to hospital claims processing. • Describe two differences in coding diagnosesfor hospital inpatient cases and physician office services. • Describe the procedure codesused in hospital coding. • Discuss the important items that are reported on the HIPAA hospital claim,the837I. Chapter 15

3. 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 Key Terms Chapter 15

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

5. 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

6. 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

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 Chapter 15

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 Chapter 15

9. 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

10. Discharge and Billing • Goal is to file a claim within 7 days of discharge • Items recorded oncharge master • Similar to practice’sencounter form • Hospital’s computersystem tracks patient’s services Chapter 15

11. 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

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

13. HospitalDiagnosis 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

14. HospitalDiagnosis 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

15. HospitalDiagnosis Coding (cont’d) • Comorbidities and Complications • Comorbidities(co-existing conditions) are other conditions that affect a patient’s stay or course of treatment • Complicationsare 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

16. Hospital Procedural Coding • ICD-9 Volume 3 used • Includes anAlphabetic Indexand aTabular Listsimilar to those in Volumes 1 and 2 • Codes are3 or 4 digits • Principal Procedure • Most closely related to the treatment of the principal diagnosis Chapter 15

17. Medicare InpatientPayment 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

18. Medicare InpatientPayment 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

19. Medicare InpatientPayment 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

20. Medicare InpatientPayment 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

21. Medicare OutpatientPayment 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

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

23. 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

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

25. 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

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

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