HOSPITAL INSURANCE

Chapter 15

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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.

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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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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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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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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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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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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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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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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

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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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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

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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

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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

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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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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

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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

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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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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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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

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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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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.