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Chapter 15 2
HOSPITAL INSURANCE Learning Outcomes15-1 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 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
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 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
Insurance components of records 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
Chapter 15 10
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
Discharge and Billing
Chapter 15 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
Chapter 15 12
HospitalDiagnosis 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 13
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 14
HospitalDiagnosis 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 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 16
Medicare InpatientPayment 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 17
Medicare OutpatientPayment 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 18
Private Insurers Often use standardized number of
days allowed for condition Many private insurers have adapted
the DRG system for their billing
Chapter 15 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
Chapter 15 20
The HIPAA 837I and the UB-04 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
Chapter 15 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
Chapter 15 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.