Billing and Coding for Health Services

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(No Transcript)
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Chapter 2

• Billing and Coding for Health Services

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Topics Covered

• Healthcare Claims
• Registration
• Medical Record/Coding
• Charge Entry/Chargemaster
• Billing/Claims Preparation
• Claims Editing

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Objectives
1. Describe the revenue cycle for health care
firms. 2. Understand the role of coding
information in health care organizations in claim
generation. 3. Define the basic characteristics
of charge masters. 4. Define the two major bill
types used in health care firms. 5. Appreciate
the role of claims editing in the bill submission
process.
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Figure 21 Revenue Cycle
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Billing Process

• Claims Generation Process
• Overview of Process

CPT/HCPCS (Dynamic) and ICD-9-CM Code Development
Medical Record
Services Outpatient Inpatient
UB-04 HCFA-1500 Claims Generation Detailed
Bill Statement Generation
Charge Master Information
Charge SlipsOrder Entry
Charge Codes
Charge Master Charge Codes Revenue
Codes Charges CPT/HCPCS Codes

• Activities
• 1. Services Provided
• 2. Services Documented
• 3. Charges Developed
• 4. Coding Performed
• 5. Bill/Claim Produced
• 6. Payment Received

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Major Revenue Cycle Steps

• Registration
• Medical Record/Coding
• Charge Entry/Chargemaster
• Billing/Claims Preparation
• Claims Editing

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Registration

• Basic information collected on the patient
• 3 major activities
• Insurance verification, including patients
  health plan identification number
• Amount due from patient for co-payment or
  deductible
• Financial counseling
• For patients with no insurance coverage or who
  are unable to pay co-payment or deductible
• Financing
• Medicaid and other governmental programs

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Medical Record/Coding

• Health Insurance Portability and Accountability
  Act (HIPAA) of 1996
• Two coding systems
• International Classification of Diseases, Ninth
  Revision, Clinical Modification (ICD-9-CM)
• Healthcare Common Procedure Coding System (HCPCS)

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Medical Record/Coding
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ICD-9

• Diagnosis codes are 3 digits, sometimes followed
  by a decimal point and a 4th digit or 4th and 5th
  digits
• Procedure codes
• Used to report inpatient procedures
• Up to 4 digits in length, with a decimal point
  after the first two digits
• Diagnosis and procedure codes are used for DRG
  assignment, which is often used to determine
  payment

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ICD-9-CM Diagnosis Codes Example

• 003 Other Salmonella Infections
• 003.0 Salmonella Gastroenteritis
• 003.1 Salmonella Septicemia
• 003.2 Localized Salmonella Infections
• 003.20 Localized Salmonella Infection,
  Unspecified
• 003.21 Salmonella Meningitis
• 003.22 Salmonella Pneumonia
• 003.23 Salmonella Arthritis
• 003.24 Salmonella Osteomyelitis
• 003.29 Other Localized Salmonella Infection
• 003.8 Other specified salmonella infections
• 003.9 Salmonella infection, unspecified

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HCPCS

• Used by physicians for reporting both inpatient
  and outpatient procedures
• Used by facilities for reporting outpatient
  procedures
• Two tiers
• Level ICurrent Procedural Terminology (CPT), a
  5-digit code (maintained by AMA)
• Level II HCPCS codes
• These codes are often a major determinant of
  provider payment for both facilities and
  physicians.

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Level ICPT Codes

• Six Main Categories
• Evaluation Management
• Anesthesia
• Surgery
• Radiology
• Pathology and Laboratory
• Medicine
• May also contain modifier code that provides
  additional information essential to the claim

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Level II HCPCS Codes

• Used to report products, services, supplies,
  materials, or procedures that are not present in
  the Level I (CPT) codes.
• 5-digit codes beginning with an alphabetic
  character followed by 4 numeric characters
• Two groups of codes
• Permanent
• Temporary
• Used for needs not covered by the permanent codes
• Can remain temporary indefinitely and sometimes
  replaced by a permanent code

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Charge Entry

• Represent the capture of products and services
  provided
• Three greatest concerns in billing
• Capture of charges for services performed
• Incorrect billing
• Billing late charges
• Charge capture methods
• Charge slips posted as batch process
• Order entry system
• Charge explosion can be used when a uniform set
  of supplies is used

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Chargemaster

• Also referred to as Charge Description Master
  (CDM)
• A list of all the goods and services provided by
  a hospital, and the price (or prices) the
  hospital charges for each of those goods and
  services
• Six elements
• Charge code
• Item description
• Department number
• Charge (price)
• Revenue code
• CPT/HCPCS code

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Chargemaster Sample Extract
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Billing/Claims Preparation

• CMS-1500 the uniform professional claim form
• Used by non-institutional providers (e.g.,
  physicians) to submit claims to Medicare and many
  other payers
• CMS-1450 (aka UB-04) the uniform institutional
  claim form
• Used by institutional providers to submit claims
  to Medicare and most other payers
• Data from this form is used to determine DRGs
  (diagnosis-related groups) and APCs (ambulatory
  payment classifications)
• One or more HCPCS codes must be present on the
  claim form if an APC is to be assigned
  (outpatient only).
• Most claims now submitted electronically

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Sample UB-04 Form
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Sample CMS-1500 Form
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Claims Editing

• Software designed to find errors in claims
• Providers use to maximize appropriate payment and
  to speed payment
• Payers use to determine minimum payment
  obligation and to delay payment for valid reasons
• Error checking
• Spelling errors
• Missing data (e.g., date of service and diagnosis
  codes)
• Internal validity (e.g., procedure consistent
  with gender)

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Claims Editing

• CMS developed the National Correct Coding
  Initiative (NCCI) to promote correct coding
  methodologies
• NCCI edits are incorporated within the Outpatient
  Code Editor (OCE)
• Ensures that the most comprehensive groups of
  codes are billed rather than the component parts
• Check for mutually exclusive code pairs
• 83 edits as of March 2010

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Claims Editing

• Each OCE edit results in one of six dispositions
• Claim-level dispositions
• RejectionClaim must be corrected and resubmitted
• DenialClaim cannot be resubmitted but can be
  appealed
• Return to provider (RTP)Problems must be
  corrected and claim resubmitted
• SuspensionClaim requires further information
  before it can be processed
• Line-item-level dispositions
• RejectionClaim is processed but line item is
  rejected and can be resubmitted later
• DenialClaim is processed but line item is
  rejected and cannot be resubmitted

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Summary

• Accurate billing and coding are essential to a
  healthcare providers financial viability
• Very complex area requiring specialized
  professionals
• Many providers fail to capture all charges to
  which they are entitled