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Overview of inpatient coding.

The main classification-based and nomenclature-based coding systems used in the United States, as well as the process and importance of documenting in the patient record, are discussed. Hospital pharmacists usually have limited knowledge of and exposure to coding and reimbursement in the inpatient system. Coding allows for reporting of mortality data to the World Health Organization (WHO), reporting morbidity data in the U.S., and providing data for reimbursement from third-party payers to hospitals for services provided. Coded information is also the primary source for administrative management of medical services and a source of epidemiologic and statistical data from inpatient stays. In order to better understand inpatient coding and reimbursement, this article will discuss the International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM) coding system; the Healthcare Common Procedure Coding System (HCPCS); the process and importance of appropriate chart documentation; and the development of the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) coding system. Coding in the inpatient setting enables hospital billing and provides statistical data for epidemiology and financial planning. The ICD-9-CM is a clinically modified version of the international ICD-9 system used for coding both diagnoses and procedures in the United States. Coding is derived from documentation found in the patient's chart. Appropriate documentation is key for quality and continuity of care and compensation for resources utilized. In the future the ICD-9-CM will be replaced by the 10th revision, ICD-10, which is already in use in many countries in Europe.

Abstracting and Indexing↗

Understanding basic concepts and strategies for obtaining pharmaceutical reimbursement.

PURPOSE: The rules that govern pharmaceutical reimbursement and strategies for obtaining reimbursement for hospital inpatients and outpatients and patients treated at physician-owned clinics are discussed. SUMMARY: The use of certain claim forms and provision of information about the patient location, drug, Healthcare Common Procedure Coding System (HCPCS) code, status indicator, billing unit, revenue code, and International Classification of Diseases, 9th Revision (ICD-9) code are required to obtain reimbursement for pharmaceuticals from the Centers for Medicare & Medicaid Services. Requirements for hospital inpatients and outpatients differ. Claims for patients treated at physician-owned clinics are handled differently from claims for those treated at hospital outpatient clinics, but pharmaceutical reimbursement rates are the same in the two settings. CONCLUSION: Frequent changes in the rules for obtaining pharmaceutical reimbursement present a challenge. A knowledge of the rules and requirements for different patient treatment settings is needed to obtain reimbursement.

Ambulatory Care Facilities↗

Medicare program; changes to the hospital outpatient prospective payment system and calendar year 2006 payment rates. Final rule with comment period.

This final rule with comment period revises the Medicare hospital outpatient prospective payment system to implement applicable statutory requirements and changes arising from our continuing experience with this system and to implement certain related provisions of the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003. In addition, the final rule with comment period describes changes to the amounts and factors used to determine the payment rates for Medicare hospital outpatient services paid under the prospective payment system. This final rule with comment period also changes the requirement for physician oversight of mid-level practitioners in critical access hospitals (CAHs). In this final rule with comment period, we also are responding to public comments received on the November 15, 2004, final rule with comment period pertaining to the ambulatory payment classification (APC) group assignment of Healthcare Common Procedure Coding System (HCPCS) codes identified in Addendum B of that rule with the new interim (NI) comment indicator. These changes are applicable to services furnished on or after January 1, 2006.

Ambulatory Care↗

Medicare program; changes to the hospital outpatient prospective payment system and calendar year 2005 payment rates. Final rule with comment period.

This final rule with comment period revises the Medicare hospital outpatient prospective payment system to implement applicable statutory requirements and changes arising from our continuing experience with this system and to implement certain related provisions of the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003. In addition, the final rule with comment period describes final changes to the amounts and factors used to determine the payment rates for Medicare hospital outpatient services paid under the prospective payment system. These changes are applicable to services furnished on or after January 1, 2005. In this final rule with comment period, we are responding to public comments received on the January 6, 2004 interim final rule with comment period relating to MMA provisions that were effective January 1, 2004, and finalizing those policies. Further, we are responding to public comments received on the November 7, 2003 final rule with comment period pertaining to the ambulatory payment classification assignment of Healthcare Common Procedure Coding System (HCPCS) codes identified in Addendum B of that rule with the new interim (NI) comment indicators (formerly referred to as condition codes).

Centers for Medicare and Medicaid Services, U.S.↗

Assessment of risk in radiology using malpractice RVU.

INTRODUCTION: Analysis on the causes and remedies needed to reduce the incidence of malpractice has been under continual studies, although limited data is available regarding quantitative evaluation of the risk. OBJECTIVES: To determine radiological risk in a preventive and quantitative manner and verify if the malpractice relative value units (MP-RVU) are a good indicator of associated risk factors. MATERIALS AND METHODS: Radiological examinations executed by our Radiology Department in 2000-2004 have been codified according to nomenclature HCPCS (Healthcare Common Procedure Coding System) used by United States of America Centers for Medicare and Medicaid Services (CMS). For every examination was calculated the annual weight of malpractice. The data has been groupped in macroaggregates by methodology. The ratio MP-RVU/no. examinations has been considered as an index of insurance risk (MP index) RESULTS: A total of 133,005 examinations were performed, which produced 25,252 MP-RVU points, the total mp index was 0.193. Traditional radiology represents 38% of the examinations, accounting for 8% of MP-RVU with a MP index=0.039. Ultrasound represents 35% of the examinations, accounting for 23% of MP-RVU with a MP index=0.125. CT represents 13% of the examinations, accounting for 28% of MP-RVU with a MP index=0.434. MR represents 11% of the examinations, accounting for 39% of MP-RVU with a MP index=0.667. CONCLUSIONS: Malpractice relative value units (MP-RVU) are indicative of the risk considered globally and when subgrouped. MP index correlates this risk with number of exams carried out divided by methodology. This model providing quantitative data for projects concerning risk management and in allowing the correlation between data obtained in different departments.

Diagnostic Imaging↗

Medicare program; revisions to payment policies and five-year review of and adjustments to the relative value units under the physician fee schedule for calendar year 2002. Final rule with comment period.

This final rule with comment period makes several changes affecting Medicare Part B payment. The changes affect: refinement of resource-based practice expense relative value units (RVUs); services and supplies incident to a physician's professional service;anesthesia base unit variations;recognition of CPT tracking codes; and nurse practitioners, physician assistants, and clinical nurse specialists performing screening sigmoidoscopies. It also addresses comments received on the June 8, 2001 proposed notice for the 5-year review of work RVUs and finalizes these work RVUs. In addition,we acknowledge comments received on our request for information on our policy for CPT modifier 62 that is used to report the work of co-surgeons. The rule also updates the list of certain services subject to the physician self-referral prohibitions to reflect changes to CPT codes and Healthcare Common Procedure Coding System codes effective January 1, 2002. These refinements and changes will ensure that our payment systems are updated to reflect changes in medical practice and the relative value of services. The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 modernizes the mammography screening benefit and authorizes payment under the physician fee schedule effective January 1, 2002; provides for biennial screening pelvic examinations for certain beneficiaries effective July 1, 2001; provides for annual glaucoma screenings for high-risk beneficiaries effective January 1,2002; expands coverage for screening colonoscopies to all beneficiaries effective July 1, 2001; establishes coverage for medical nutrition therapy services for certain beneficiaries effective January 1, 2002; expands payment for telehealth services effective October 1, 2001; requires certain Indian Health Service providers to be paid for some services under the physician fee schedule effective July 1, 2001; and revises the payment for certain physician pathology services effective January 1, 2001. This final rule will conform our regulations to reflect these statutory provisions. In addition, we are finalizing the calendar year (CY) 2001 interim RVUs and are issuing interim RVUs for new and revised procedure codes for calendar year (CY) 2002. As required by the statute, we are announcing that the physician fee schedule update for CY2002 is -4.8 percent, the initial estimate of the Sustainable Growth Rate (SGR) for CY 2002 is 5.6 percent, and the conversion factor for CY 2002 is $36.1992.

Fee Schedules↗

Validation of data collection for the HEDIS performance measure on chlamydia screening in an MCO.

OBJECTIVE: To determine the validity of calculating the chlamydia Health Plan Employer Data and Information Set (HEDIS) measure using administrative data available in a mixed-model managed care organization (MCO). STUDY DESIGN: Retrospective cohort study. METHODS: A review of International Classification of Diseases, Ninth Revision (ICD-9), Current Procedural Termin-ology (CPT), Healthcare Common Procedure Coding System (HCPCS), and National Drug Code codes and electronic laboratory files in 1998 and a medical chart review to validate sexual activity and chlamydia testing codes specified by the National Committee for Quality Assurance (NCQA) in 1999 for the chlamydia HEDIS 2000 measure. RESULTS: Fewer than 25% of female enrollees with laboratory evidence of a chlamydia test had a CPT code for chlamydia testing as specified by the NCQA. Non-pathogen-specific test codes instead of NCQA-specified codes were used in 1998 to code chlamydia tests. By incorporating electronic laboratory data into the automated claims-generating process, all chlamydia tests performed at staff-model clinics were coded. Use of pharmacy dispensing data to identify contraceptive prescriptions increased the proportion of enrollees classified as sexually active by 4% to 5% vs documentation of sexual activity using ICD-9, CPT, and HCPCS codes only. CONCLUSIONS: The MCO quality assurance specialists examining chlamydia testing rates under HEDIS may want to evaluate chlamydia testing coding practices in their MCOs to determine whether simple changes in coding practices may present a more accurate picture of actual testing practices. The proportion of female enrollees classified as sexually active using different data available in the staff and network models varied only slightly.

Adolescent↗

Medicare program; payment for respiratory assist devices with bi-level capability and a backup rate. Final rule.

This final rule clarifies that respiratory assist devices with bi-level capability and a backup rate must be paid as capped rental items of durable medical equipment (DME) under the Medicare program and not paid as items requiring frequent and substantial servicing (FSS), as defined in section 1834(a)(3) of the Social Security Act. Before 1999, respiratory assist devices with bi-level capability (with or without a backup rate feature) were referred to as "intermittent assist devices with continuous positive airway pressure devices'' under the Medicare program and in the Healthcare Common Procedure Coding System (HCPCS). This final rule responds to public comments received on a proposed rule published in the Federal Register on August 22, 2003, and finalizes the policy in that proposed rule. The rule will ensure that respiratory assist devices are consistently and properly paid under Medicare as capped rental items.

Durable Medical Equipment↗

Effect of the Medicare Prescription Drug Improvement and Modernization Act on the bottom line.

PURPOSE: An historical perspective on the impact of the Medicare Prescription Drug Improvement and Modernization Act (MMA) on pharmaceutical reimbursement, and the financial bottom line at health systems and various strategies to use in the inpatient and outpatient setting to improve the bottom line are described. SUMMARY: Implementation of MMA has affected the entire healthcare continuum by reducing pharmaceutical reimbursement rates and health system revenues and increasing prescription drug copayments, emergency department visits, and hospital admissions. Physician-owned clinics are less profitable than in the past because of MMA, which may prompt clinic closures and shift the patient care burden to clinics at public hospitals. Negotiating carve-outs for costly drugs and evaluating the feasibility of obtaining outlier payments can improve the bottom line in the hospital inpatient setting. Ensuring that billing codes are accurate and verifying that reimbursement was received can help minimize the impact of MMA on the financial bottom line in the outpatient setting. Negotiating favorable purchasing contracts and ensuring that drugs are used appropriately by following evidence-based guidelines can improve the financial bottom line in both the inpatient and outpatient settings. CONCLUSION: Strategies to decrease drug acquisition costs and increase reimbursement rates can help minimize the adverse impact of MMA on the financial bottom line at health systems.

Ambulatory Care Facilities↗

Efficiency of a semiautomated coding and review process for notification of critical findings in diagnostic imaging.

OBJECTIVE: When a significant unexpected finding such as malignancy is noted on a study, the standard of care generally holds that the radiologist communicate the findings to the referring physician and document the communication in the radiology report. Despite this standard, for a variety of reasons it remains possible that the direct care provider might receive such notification but not initiate an appropriate workup. On the basis of prior root cause analysis, we developed and instituted a semiautomated process for notification of critical diagnostic imaging findings. We now report our 12-month experience with the process. MATERIALS AND METHODS: A diagnostic code was attached to every radiology report. When a significant unexpected finding occurred, our radiologists, in addition to contacting the appropriate clinician, gave the report the designation code 8. On a weekly basis, a list of code 8 cases was passed to the cancer registrar at our institution, who tracked the cases to ensure that they were appropriately followed up. RESULTS: In the 12-month period after initiation of this system, we performed 37,736 radiologic examinations at our institute. Of these, 395 cases were given code 8. All code 8 cases were followed up by the tumor registrar. In 35 cases, no workup was documented after 2 weeks. Of these, eight cases would have been completely lost to follow-up if this safety net had not been in place. CONCLUSION: Failures of communication, documentation errors, and various system failures may lead to an untoward outcome for the patient. We devised a simple system to ensure that significant unexpected findings on imaging received appropriate attention. An additional level of redundancy has increased the probability of optimal patient outcome.

Critical Illness↗

Development and assessment of a Web-based evaluation and management coding curriculum for residents.

OBJECTIVE: The purpose was to assess a Web-based learning module for residents on evaluation and management coding, and to determine whether using a point system based on reimbursement is an effective way to measure improvement in performance. STUDY DESIGN: Nineteen residents at a university-based residency completed an online module on evaluation and management coding. Pretest and posttest were administered consisting of 10 actual patient notes from which to abstract the level of service. Tests were scored by percent correct as well as assigning points to correct responses equal to 2004 Medicare reimbursement for that item's level of service. Incorrect responses were debited points equal to the absolute difference in reimbursement between the incorrect and correct evaluation and management level. RESULTS: Average percent correct was 44.2 on the pretest and 45.3 on the posttest (P = 1.0), with only 47% of subjects improving their performance. The mean point score was 513.44 on the pretest and 555.87 on the posttest (P = .02), with 84% improving. Most subjects (84%) rated the module equal or superior to a didactic format and felt that their knowledge was improved by the exercise. CONCLUSION: An electronic learning module on evaluation and management coding for residents, using scoring based on reimbursement schedules, is effective for instruction and assessment and well accepted by learners.

Curriculum↗

Maximizing reimbursement from trauma response fees (UB-92: 68X) - lessons learned from a hospital comparison.

BACKGROUND: The trauma response fee (UB-92:68x) recently has been approved, to be used by hospitals to cover expenses resulting from continuous trauma team availability. These charges may be made by designated trauma centers for all defined trauma patients when notification has been received before arrival (eligible pt). This study compares two trauma centers' performance in collecting this fee help define methodologies that can enhance reimbursement. METHODS: Our trauma system uses two hospitals (A and B) that are designated as the Level I trauma center for the region on alternate years. This allows hospital performance comparisons with relatively consistent patient demographics, injury severity, and payer mix. Data were collected for a one-year period beginning on January 1, 2003 and included charges, collections, and payer source for the trauma response fee. This time frame allowed the comparison of two six-month sequential periods at each trauma center. RESULTS: Out of a total of 871 trauma patients, 625 were eligible for the trauma response fee (72%): hospital A = 65% and hospital B = 77%. Total trauma response fee charges for both centers were 1,111,882 dollars with collections of 319,684 dollars (28.8%). The following payer sources contributed to the collections: Indemnity insurance (77.4%), Managed Care (22.1%), Medicare (0.3%), and Medicaid (0.2%). No collections were obtained from any self-pay patient. Eligible patients were charged a trauma response fee much less frequently in Hospital A than B (29.35% versus 95.2%) but revenue / charge ratios were equivalent at both hospitals (0.32 versus 0.28). These differences resulted in markedly enhanced revenue for each eligible patient in Hospital B compared with A (735 dollars versus 174 dollars) CONCLUSIONS: Enhanced collection by hospital B was a result of a higher charge, compulsive billing of all eligible patients, and emphasis on pre-admission designation of trauma patients. Effective billing and collection process related to trauma response fees results in substantial additional revenue for the trauma center without additional expense.

Academic Medical Centers↗

Teaching residents coding and documentation: effectiveness of a problem-oriented approach.

OBJECTIVE: We sought to assess the effectiveness of a problem-oriented approach to teaching residents accurate coding and documentation of ambulatory gynecology visits. STUDY DESIGN: This was a pilot before-and-after study. Nine resident volunteers underwent 4 individual instructional sessions on coding and documentation with a trained faculty member over 6 weeks. Outcomes were assessed by comparing the appropriateness of procedure and diagnostic codes billed in participant continuity clinic prior to and in the 6 to 9 months following the intervention. RESULTS: Following the intervention, participants demonstrated an increase in the accuracy of coding the correct category of the evaluation and management service, an increase in the appropriate use of modifiers, and a decline in undercoding errors. CONCLUSION: Problem-oriented interactive learning appears to be an effective method of teaching residents proper coding and documentation.

Feasibility Studies↗