Domain VII – Revenue Cycle (11%)

Domain VII – Revenue Cycle (11%) RHIT Prep Workshop Test Year 2014

Revenue Cycle • The regularly repeating set of events that produces revenue. • One Patient • One Bill • One Payment • All of this produces revenue for the facility.

Revenue Cycle Management The supervision of all administrative and clinical functions that contribute to the capture, management, and collection of patient service revenue.

Practice Question 1 • Which of the following is the definition of revenue cycle management? • The regularly repeating set of events that produce revenue or income • The method by which patients are grouped together based on aesthetic characteristics • The systematic comparison of the products, services, and outcomes of one organization with those of a similar organization • Coordination of all administrative and clinical functions that contribute to the capture, management, and collection of patient service revenue

Prospective Payment System (PPS) A type of reimbursement system that is based on preset payment levels rather than actual charges billed after the service has been provided; specifically, one of several Medicare reimbursement systems based on predetermined payment rates or periods and links to the anticipated intensity of service delivered as well as the beneficiaries condition;

Prospective Payment System (PPS) • Acute-care/Inpatient prospective payment system • Reimbursement for inpatient hospital services provided to Medicare, Medicaid beneficiaries that is based on the use of DRGs as a classification tool. • Home health prospective payment system (HH PPS) • The reimbursement system developed by CMS to cover home health services provided to Medicare beneficiaries.

Prospective Payment System (PPS) • Outpatient prospective payment system (OPPS) • The Medicare PPS used for hospital-based outpatient services and providers that is predicated on the assignment of ambulatory payment classifications (APCs). • Skilled nursing facility prospective payment system (SNF PPS) • A per diem reimbursement system implemented in July 1998 for costs (routine, ancillary and capital) associated with covered skilled nursing facility services furnished to Medicare Part A beneficiaries.

Practice Question 2 • Which of the following types of hospitals are excluded from the Medicare inpatient prospective payment system? • Children’s • Rural • State-supported • Tertiary

Exclusions from PPS At this time, several types of hospitals are excluded from Medicare acute inpatient prospective payment system (PPS) because the PPS diagnosis related groups cannot accurately account for the resource costs for the type of patients treated in those facilities. The following facilities are still paid on the basis of reasonable cost: psychiatric and rehabilitation hospitals, long-term care hospitals, children’s hospitals, cancer hospitals, and critical access hospitals (John’s 2011, 322)

Outpatient Prospective Payment System (OPPS) • The Medicare prospective payment system used for hospital-based outpatient services and procedures that is predicated on the assignment of ambulatory payment classifications. • The calculation of payment for services under the OPPS is based on the categorization of outpatient services in the APC groups according to CPT codes. ICD-9 coding is not utilized here.

Practice Question 3 • A Medicare patient has two physician office visits, underwent hospital radiology examinations, clinical laboratory test, I received take-home surgical dressings. Which of the following could be reimbursed under the outpatient prospective payment system? • A. clinical laboratory tests • B. physician office visits • C. radiology examinations • D. take-home surgical dressings

Practice Question 4 • In processing a Medicare payment for outpatient radiology exams, a hospital outpatient services Department would receive payment under which of the following? • DRGs • HHRGS • OASIS • OPPS

Coding Visits, such as inpatient or complex ambulatory surgery, require the diagnoses and operating room procedures to be coded by health information management (HIM) professionals. During the coding process, medical records are viewed and read by the coding staff. All diagnoses and procedures are identified, coded, and abstracted into the HIM coding system. This system then transfers the diagnoses and procedure codes to the patient accounting system, where they are posted to the patient’s claim prior to submission for payment. Principles of Healthcare Reimbursement Anne B. Castro, RHIA, CCS Elizabeth Layman, PhD, RHIA, CCS, FAHIMA

Coding Internal and external coding audits should be done annually. The case mix index (CMI) will go up or down depending on the severity of illness for the facility(inpatient). It is important to code all diagnoses when reviewing the medical record.

Practice Question 5 • The most recent coding audit has revealed a tendency to miss secondary diagnoses that would have increased the reimbursement for the case which of the five strategies will help to identify and correct these case in the short term? • Focused reviews on lower rated MS – DRGs from triplets and pairs • Facility top 10 to 15 APCs by volume and charges • Contracting with a larger consulting firm to do audits and education • Focus reviews on surgical complications

Practice Question 6 • Which of the following coding error classifications is most valuable in determining the impact on overall revenue cycle? • Errors by coding guideline • Percentage of cases that could have been improved if queried • Errors by coder • Errors that produced changes in MS – DRG assignment

Clinical Documentation Improvement (CDI) Documentation improvement programs were formed in an effort to work with care providers to appropriately reflect the quality of patient care while increasing accuracy in coding and reporting. Health information management (HIM) and clinical staff form the core of CDI programs working within a multidisciplinary team to provide guidance on documentation challenges. Effective Management of Coding Services Lou Ann Schraffenberger, Lynn Kuehn

CDI Staff and Process CDI staff can be made up of coders, nurses, nurse practitioners and physicians. CDI staff are responsible for ensuring the documentation in the medical record is consistent with the treatment provided. Charts are reviewed every 24 to 48 hours. If necessary queries are placed on the chart for completion by the physician.

CDI Staff and Process Continued An example of a query; the patient presents with symptoms of malnutrition and documentation for malnutrition is unclear. The query will show the indicators for malnutrition and ask the physician to be more specific such as mild, moderate or severe malnutrition. A query can in no way be leading. The physician must be able to check “unable to determine”.

Tracking CDI Progress • In order to ensure success of your CDI program the following percentages should be tracked. • Record review rate • Query rate • Query response rate • Query agreement rate

Practice Question 7 • CDI staff should revisit cases: • Every day • Weekly • Every 48 hours • Every 24 to 48 hours

CDI Scenario 1 • Patient admitted with UTI and cellulitis - DRG 690 (Kidney and UTI w/o MCC) Relative weight of .7870and G/LOS of 3.30 • Patient admitted with sepsis and cellulitis - DRG 872 (Sepsis or severe sepsis w/o MCC) Relative weight of 1.1339 and G/LOS of 4.30 Difference of approximately $1699.13 and 1day LOS

CDI Scenario 2 • Patient admitted with simple pneumonia and UTI - DRG 194 (Simple Pneumonia w/cc) RW of 1.0026 and GLOS of 4 • Patient admitted with MRSA pneumonia and UTI - DRG 178 (Respiratory Infection w/cc) RW of 1.4653 and GLOS 5.40 Difference of approximately $2266.32 and 1.4 day LOS

Practice Question 8 • A clinical documentation improvement (CDI) program facilitates accurate coding and helps coders avoid: • NCCI edits • Upcoding • Coding without the complete sheet • Assumption coding

Charge Description Master (CDM) • CDM is known by several names • Charge master • Charge compendium • Service master • Price compendium • Service item master • Charge list Effective Management of Coding Services Lou Ann Schraffenberger, Lynn Kuehn

Purpose of the CDM • Principal purpose to charge routine services and supplies to patients bill • Other purposes • Department workload statistics • Materials management • Budget reports Effective Management of Coding Services Lou Ann Schraffenberger, Lynn Kuehn

Elements of the CDM Charge codes Item description Gen. ledger key Revenue code CPT/HCPCS code Charges Activity date Effective Management of Coding Services Lou Ann Schraffenberger, Lynn Kuehn

Practice Question 9 • In most cases, the “owner” of the Charge Description Master (CDM) in a healthcare facility is the: • HIM department • Information technology department • Finance department • Patient accounts department

Practice Question 10 • Using the charge description master “CDM” to automatically link a service to the appropriate CPT/HCPCS code is referred to as: • Concurrent coding • Hard coding • The official coding • Up coding

Claims/Billing The claims processing area uses an internal auditing system to ensure claims are error-free. Once all data has been posted to the patient’s account, the claim can be reviewed for accuracy and completeness. Many facilities have internal auditing systems known as scrubbers. The auditing system runs each claim through a set of edits specifically designed for the third-party payer; identifying data that has failed edits and flags the claim for correction. Castro and Layman 2011, 254

Claims/Billing Claim – itemized statement of healthcare services in their costs divided by a hospital, physician’s office, or other healthcare provider; submitted for reimbursement to the healthcare insurance plan by either the insured party or by the provider.

Claims/Billing Claims processing activities include the capture of all billable services, claim generation, and a claim correction. Charge capture is a vital component of the revenue cycle. Castro and Layman 2011, 250

Practice Question 11 • After claim has been filed with Medicare, a healthcare organization had late charges posted to a patient’s outpatient account that change the calculation of the APC. What is best practice for this organization to receive the correct reimbursement from Medicare? • Nothing, because the claim has already been submitted • Bill the patient for any remaining balance after payment from Medicare is received • Submit an adjusted claim to Medicare • Return the account coding for review

Practice Question 12 • In a typical acute care setting, which revenue cycle area uses an internal auditing system (scrubber) to ensure that error-free claims (claim claims) are submitted to third-party payers? • Pre claims submission • Claims processing • Accounts Receivable • Claims reconciliation/collections

Practice Question 13 • In a typical acute care setting, charge capture is located in which revenue cycle? • Pre-claims submission • Claims processing • Accounts Receivable • Claims reconciliation/collections

Late charges Late charges are charges that are not posted to the patient’s account within the bill hold days. Once late charges are posted an adjusted claim must be filed and this can delay payment of the claim. Late charges are a problem in most hospitals and many have set up a process to monitor these charges.

Registration • Accurate billing begins at registration. It is extremely important that the registrar pay attention to all fields on the registration screen. An error can cause a delay in payment and the need to rework the claim manually. Common registration errors are: • Transposition of the Social Security number • Duplicate medical record number • Failure to update previous information • Incorrect insurance information

Accounts Receivable Department in a healthcare facility that manages the amounts owed to the facility by customers receiving services but the payment is made at a later date.

DNFB • The DNFB the report consists of accounts that have not final billed. • This report contains accounts that may not have passed edits, not coded, or are within the four-day bill hold. • Most facilities have a target for their DNFB. • e.g. an example of this target could be three days of estimated revenue. Some CFOs want coding done more quickly but that conflicts with late charges and chart assembly.

Bad debt • Services for which healthcare organizations expected, but did not receive, payment. • Expired insurance • Not eligible for Medicaid • Not medically necessary

Practice Question 14 • The phrase “bad debt” refers to accounts that include money owed by the patient and are: • Overdue by 90 days and are in process of being referred to collections • Paid in monthly installments under a payment agreement • Determined by the facility to be uncollectible • Waiting to be paid by the insurance company or third party payor

Hold days The bill hold days are usually set between three and four days. The purpose of the bill hold days is to give the departments time to process the medical record. The medical record needs to be assembled and coded within those four days. If the facility has an EMR time to process the chart may be shorter.

Practice Question 15 • The best practice for system hold for all charges to be entered into the billing system and outputting to be completed is: • 2 days post discharge or visit • 4 days post discharge or visit • 7 days post discharge or visit • 14 days post discharge or visit

Edits All claims are put through the facilities scrubber. Claims that fail must then be worked manually. An example of an edit is when a patient has a surgical procedure and is under the surgical service revenue code and a procedure is not coded.

Filing a Healthcare Insurance Claim Providers file (submit)health insurance claims for their patients and clients in most instances. The process of filing claims is similar for voluntary healthcare insurance plans, government sponsored health care programs, and managed care plans. Effective October 16, 2003, under the administrative simplification compliance section of the health insurance portability and accountability act of 1996, all healthcare providers must electronically submit claims to Medicare.

Filing a Healthcare Insurance Claim • The electronic formats are 837I for facilities and 837P for professionals. • These electronic formats correspond to the paper formats of: • The Uniform Bill 2004 (UB04) and • The Centers for Medicare and Medicaid Services 1500 (CMS 1500).

Goal Clean registration Timely charges Timely assembly/scanning of the record Accurate Coding of the recordwithin the bill hold days Clean edits Bill goes to Medicare

Practice Question 16 • When a provider accepts assignment, this means that the: • Patient authorizes payment to be made directly to the provider • Provider accept as payment in full the allowed charges from the fee schedule • Balance filing is a allowed on patient accounts, but at a limited rate • Participating provider receives a fee for service reimbursement

Practice Question 17 • What is the name of the federally funded program that pays the medical bills of the spouses and dependents of persons on active duty in the uniformed services? • HHS-CMS • TRICARE • CHAMPVA • Medigap

Practice Question 18 • An overarching limitation the maximum dollar plan limit on an insurance plan is also known as: • Benefit cap • Formulary • Copayment • Limitation

Domain VII – Revenue Cycle (11%)