Outpatient Hospital Facilities Chapter 6 Chapter Outline Introduce students to 1. Different outpatient facilities 2. Different departments involved in the reimbursement process 3. The Chargemaster 4. Terminology 2 1
Program Instructions Medicare program instructions MUST HAVE tool CMS has consolidated service and reimbursement rules into online manuals Organized by Function Starts at 100-01through 100-24 Each online publication Includes links to Individual chapters, online templates Crosswalks Guide user from a specific section of the old manual to where the information is in the new manual 3 Terminology and Abbreviations Assignment arrangement in which the provider submits the claim on behalf of the patient and is reimbursed directly by the patient s plan Bundling (Outpatient Service) practice of combining all services provided on the day of outpatient surgery into the major procedure Condition Code two digit code that is entered on the UB-04 (inpatient) claim form to indicate that a condition applies to the bill that affects processing and payment of the claim MAC Medicare Administrative Contractor processing Part B and Part A claims for CMS. MS-Medicare Severity Diagnosis Related Group (MS-DRG) inpatient classification used for Medicare s hospital inpatient reimbursement system. Classifies patients based on principal diagnosis, surgical procedure, age, presence of co-morbidities or complications and severity of illness Prospective Payment System (PPS) system of paying for services at a predetermined rate for each type of discharge or for services based on a standard type of case 4 2
The Chargemaster Master inventory list of everything that can be reported or performed in the hospital Includes CPT codes Revenue codes Charge descriptions Other services Chargemasters typically updated by: Technical department manager Financial department that handles patients accounts HIM department for surgical and diagnostic coding Sometimes, outside company will come in to perform the comprehensive update 5 The Chargemaster Hospitals may have task force or single individual who is responsible for maintaining accurate data within the CDM Review, at least annually Maintain updates throughout year as new procedures or supplies are incorporated into the hospital s service line Review and maintain payer information and make CDM adjustments based on that information 6 3
The Chargemaster Ten steps to a successful chargemaster review: 1. Determine the type of review to be conducted 2. Assemble a cross-functional review team 3. Establish a project leader or liaison 4. Allocate resources to the process 5. Establish communication mechanism for project team 6. Assemble the CDM database for review and revision capture 7. Schedule and prepare for departmental interviews 8. Conduct interviews and review line items per department 9. Research CDM-related issues 10. Finalize changes to the CDM database 7 Outpatient Hospital Departments Typical Outpatient Flow: Patient encounter in an outpatient facility department Clinician documents his/her services rendered during patient encounter as well as all diagnostic information Charges are entered into the computer system by the various departments involved in the patient s care Revenue codes are assigned via charge description master (CDM) that links from the charging system to the revenue center HCPCS codes are assigned either by CDM (usually non-surgical services and supplies) or manually by coding staff (usually for surgeries and other interventional procedures) ICD-9-CM codes are typically assigned by coding staff or outpatient departments Claims are created by compiling the charges, revenue codes, CPT, HCPCS, and ICD-9-CM codes and assigning them appropriately 8 4
Types of Outpatient Facilities Hospital Outpatient Surgery Center (Outpatient Facility) Hospital ASCs may be contained within hospital building or independent Independent ASCs Now subject to the Outpatient Prospective Payment System Not owned by a hospital facility, but is a private or corporate entity not affiliated with a hospital 9 Types of Outpatient Facilities Independent ASCs: Centers for Medicare and Medicaid Services independent ASCs are now incorporated into the OPPS Medicare allows payment to ASCs for any surgical procedure performed in an ASC. Surgical procedures that are determined payable under the independent ASC benefit CMS covers procedures published on a list of ASC approved procedures for the independent ambulatory surgery center(s) Surgical procedures that are considered commonly office based have a payment limit in ASCs Medicare program payment for the independent ASC 80 percent of the total payment amount Beneficiary coinsurance is 20 percent of the total payment amount Screening flexible sigmoidoscopies and screening colonoscopies is 75 percent and the beneficiary coinsurance is 25 percent Surgeries that are typically office based procedures are paid at a lower rate in the independent ASC 10 5
Types of Outpatient Facilities Hospital Based ASCs: An ASC may be part of a hospital The building space constituting an ASC must be physically separated from any other health services offered by a hospital Are billed and reimbursed as an outpatient hospital department The same billing and coding information applies to hospital ASCs as other hospital outpatient services 11 Types of Outpatient Facilities Hospital Based ASCs: When billing for hospital outpatient surgeries Facility is charging costs for providing those services to the patients Facility component includes costs incurred for Nursing personnel Room costs (operating, treatment, cast, etc.) Reimbursement is variable, depending on geographical location 12 6
Types of Outpatient Facilities Hospital ASC and an Independent ASC: An independent ASC must be financially independent from the hospital for it to be recognized as a separate facility or a freestanding ASC Independent ASC must have a separate tax identification number for claim submission, and be removed from the hospital cost report Physician services are not coded and billed by the facility unless the physician is employed by the ASC 13 Types of Outpatient Facilities Hospital ASC and an Independent ASC Most clinical laboratory and pathology services Reimbursed on a separate fee schedule that lists the services for which Medicare will pay Other ways commercial and managed care payers may reimburse hospitals Standard or reasonable costs Managed care contracted agreements Fee-for-service Predetermined fee-per-visit/procedure 14 7
Types of Outpatient Facilities Outpatient Diagnostic Testing Some patients only require diagnostic services that cannot be performed in a Physician s office or Independent diagnostic testing facility (IDTF) Patients present to the laboratory, radiology or outpatient department for diagnostic study Results are typically communicated by their attending physician who receives the written report Outpatient Therapy Patient will present to outpatient department on a regular basis to receive Physical, speech, occupational therapy Recurring account numbers are used by hospital To capture all charges under the same account for billing 15 Types of Outpatient Facilities Outpatient Cancer Center Patient receiving chemotherapy or radiation therapy Present to cancer center to receive treatments Frequency is dependent on what is prescribed by the oncologist Dialysis Services Services for End-Stage Renal Disease (ESRD) Reimbursed under specific Medicare regulations Hospital Emergency Department Hospital-based facility Used for patient that require immediate attention Must be accessible 24 hours per day Additional charges for diagnostic testing and therapeutic services May result from the ED encounter Professional charges are billed separately by professional entity that rendered the services 16 8
Types of Outpatient Facilities Critical Access Hospital Beneficiaries in rural areas can receive Inpatient rehabilitation and Psychiatric services in critical care facilities Services will be reimbursed based on Inpatient Rehabilitation Facility Prospective of acute care hospitals These hospitals are limited service hospitals Receive cost based reimbursement To be certified as a CAH, they must be located in a county or equivalent unit of a local government in a rural area 17 Types of Outpatient Facilities Freestanding Emergent or Urgent Care Centers: Offer medical services for Acute but not highly complex services Perform minor procedures Services offered are usually at a lower charge than emergency rooms Hours are typically extended, not 24 hours a day 18 9
Other Outpatient Departments Admitting Offices: When patient presents to facility, may be registered for the visit by Admitting office, clinics within a facility, Ambulatory Surgery Centers or Hospital ASC that may establish its own admitting area Anytime a patient presents for care the admitting office is notified to obtain Insurance information Demographics Type of services required Insurance card is generally copied for verification purposes 19 Other Outpatient Departments Admitting Offices (continued) Account is established through computerized system Transfers patient information for hospital wide availability during patient care Smaller hospitals will transfer information via patient s medical record Admitting office is also required to obtain consent to treat 20 10
Other Outpatient Departments Business Office Generally a separate department from HIM Responsible for: Claim generation Processing of remittance documents Filing incomplete or rejected claim forms Payment posting Appeals Other reimbursement issues 21 Other Outpatient Departments Health Information Management Departments (HIM) Organize and store patients medical information in the medical record May be paper or computerized Used for direct patient care, studies, other purposes HIPAA privacy rule has dual effect on medical records department Rule assures protection of individuals health information Allows the flow of health information needed, to provide and promote high quality health care 22 11
Other Outpatient Departments Teaching Hospitals and Documentation Standards Have distinctive issues that relate to these types of facilities Receiving payment under Part B for residents services, with or without presence of teaching physician Experimental and/or research projects initiated by provider in teaching hospital Documentation standards established by Medicare affect these concerns Standards should be followed for all patients Establishes consistency Maintains standard of care 23 Other Outpatient Departments Graduate Medical Education Residency program approved by Accreditation Council for Graduate Medical Education of the American Medical Association Other accrediting agencies for training physicians in specialties Teaching hospitals take part in GME residency program Medicine, osteopathy, dentistry and/or podiatry Conforming policies should be written in documentation guidelines Teaching setting receive direct Medicare GME payments for residents services Resident salaries, fringe benefits Teaching physician compensation for services not payable on fee schedule 24 12
Other Outpatient Departments Graduate Medical Education (continued) Payments are made on Per resident basis and are hospital specific Medicare Part A payments Made for inpatient hospital stays through MS-DRGs Additional payments made to teaching facility for higher indirect costs incurred with MS-DRG payments 25 Comprehensive Outpatient Rehabilitation Facility (CORF) Must supply at least Physician services Physical therapy Social or psychological services May cover other areas Oncology Transplants AIDS therapy Renal dialysis 26 13
Comprehensive Outpatient Rehabilitation Facility (CORF) Adequate space and equipment to provide services established in treatment plan is required Services are paid under Medicare Part A based on Lesser of either 80% of reasonable cost or Reasonable cost less of what they have charged the patient CORF services subject to Part B deductibles and coinsurance provisions Patient may be billed Unmet portion of deductible and 20% of customary charges for covered services Facility pays the contracted provider(s) 27 ICD-9-CM Facility Coding Volume 3 procedure codes named as the HIPAA standard code set for inpatient hospital procedures Hospitals may capture ICD-9-CM procedure codes for: Internally tracking or monitoring hospital outpatient services When conducting standard transactions Providers can continue to report hospital outpatient services with ICD-9-CM procedures If required by health plan Health plan must realize this is not compliant and Make steps to change this requirement to come into compliance 28 14
Ambulatory Payment Classifications (APC) Balanced Budget Act of 1997 includes CMS requirement to move from cost-based reimbursement for hospital outpatient services to implementation of OPPS OPPS went into effect August 2000 for hospital facilities Independent ASCs 2008 for independent facilities 29 Ambulatory Payment Classifications (APC) APC created by Center for Health Plans and Providers (CHPP) Includes more than 90 groups of surgical procedures Replaces the current nine ambulatory surgical center payment groups This will adopt payment classification system consistent with upcoming PPS for hospital outpatient services Procedures performed in independent ASC Have lower costs than those performed in hospital setting Because of difference in the cost APC system will differ for the two entities Rates will be based on cost in the ASC 30 15
The End 31 16