copyright © 2011, 2006 by saunders an imprint of elsevier inc. understanding hospital billing and...

Copyright © 2011, 2006 by Saunders an imprint of Elsevier Inc.Copyright © 2011, 2006 by Saunders an imprint of Elsevier Inc.

UNDERSTANDING HOSPITAL UNDERSTANDING HOSPITAL BILLING AND CODINGBILLING AND CODING

CHAPTER 3CHAPTER 3

Hospital Organizational Structure and Hospital Organizational Structure and FunctionFunction

22Copyright © 2011, 2006 by Saunders an imprint of Elsevier Inc.Copyright © 2011, 2006 by Saunders an imprint of Elsevier Inc.

INTRODUCTIONINTRODUCTION The mission of a hospital is to provide effective The mission of a hospital is to provide effective

and efficient patient care.and efficient patient care. Survival of a hospital is directly related to Survival of a hospital is directly related to

carrying out the hospital’s mission and carrying out the hospital’s mission and maintaining a sound financial base. It is maintaining a sound financial base. It is essential for personnel to understand how they essential for personnel to understand how they contribute to the organization’s mission. contribute to the organization’s mission.

Billing and coding professionals play a Billing and coding professionals play a significant role in maintaining a sound financial significant role in maintaining a sound financial base through accurate billing and coding and base through accurate billing and coding and ensuring that the hospital is in compliance with ensuring that the hospital is in compliance with billing, coding, and documentation guidelines. billing, coding, and documentation guidelines.


HOSPITAL MISSION STATEMENT HOSPITAL MISSION STATEMENT

To provide the highest qualityTo provide the highest quality

care to the members of ourcare to the members of our

community and distant community and distant

communities effectively andcommunities effectively and

efficiently with compassion, efficiently with compassion,

integrity, and kindness through integrity, and kindness through

maintaining excellence in maintaining excellence in health-care professions health-care professions


HOSPITAL ORGANIZATIONAL HOSPITAL ORGANIZATIONAL STRUCTURESTRUCTURE

The organizational structure of a hospital The organizational structure of a hospital highlights the complex network of personnel highlights the complex network of personnel within various departments working together to within various departments working together to accomplish patient care tasks. Hospital accomplish patient care tasks. Hospital organizational structures may vary based on: organizational structures may vary based on: Type of services providedType of services provided Type of hospitalType of hospital


HOSPITAL FUNCTIONS HOSPITAL FUNCTIONS CATEGORIZEDCATEGORIZED

EFFICIENT ORGANIZATIONAL DESIGNEFFICIENT ORGANIZATIONAL DESIGN

Departmentalization is an efficient Departmentalization is an efficient organizational design because it involves organizational design because it involves grouping functions into like categories.grouping functions into like categories. FinancialFinancial OperationalOperational AdministrativeAdministrative ClinicalClinical


DEPARTMENTAL FUNCTIONSDEPARTMENTAL FUNCTIONS ADMINISTRATIVE FUNCTIONSADMINISTRATIVE FUNCTIONS

Involve the coordination and management of various tasks required to provide Involve the coordination and management of various tasks required to provide patient care services, such as recruitment and management of personnel, patient care services, such as recruitment and management of personnel, marketing, public relations, purchasing and inventory of supplies, materials, marketing, public relations, purchasing and inventory of supplies, materials, and equipment, and various legal tasks including complianceand equipment, and various legal tasks including compliance

FINANCIAL FUNCTIONSFINANCIAL FUNCTIONSInvolve the overall management of the hospital’s finances, such as planning, Involve the overall management of the hospital’s finances, such as planning, organizing, and controlling the hospital’s finances (including income and organizing, and controlling the hospital’s finances (including income and expenses of the organization)expenses of the organization)

OPERATIONAL FUNCTIONSOPERATIONAL FUNCTIONS Entail tasks related to the operation and physical environment of the hospital. Entail tasks related to the operation and physical environment of the hospital. Some of the functions in operations include support services, plant operations, Some of the functions in operations include support services, plant operations, satellite development, quality assurance, utilization management, medical staff satellite development, quality assurance, utilization management, medical staff credentialing, social services, and health information management credentialing, social services, and health information management

CLINICAL FUNCTIONSCLINICAL FUNCTIONSConsist of various patient care tasks performed by personnel in specialized Consist of various patient care tasks performed by personnel in specialized departments including Nursing, Radiology, Pathology/Lab, Physical Therapy, departments including Nursing, Radiology, Pathology/Lab, Physical Therapy, and Social Servicesand Social Services


DEPARTMENTAL FUNCTIONS: DEPARTMENTAL FUNCTIONS: ADMINISTRATIVEADMINISTRATIVE

Hospital departments that are responsible for Hospital departments that are responsible for administrative functions include: administrative functions include: Human Resources DepartmentHuman Resources Department Volunteer ServicesVolunteer Services Marketing DepartmentMarketing Department Public Relations DepartmentPublic Relations Department Purchasing DepartmentPurchasing Department Legal DepartmentsLegal Departments

ComplianceCompliance


DEPARTMENTAL FUNCTIONS: DEPARTMENTAL FUNCTIONS: FINANCIALFINANCIAL

Hospital departments that are responsible for Hospital departments that are responsible for financial functions include:financial functions include: Accounting DepartmentAccounting Department Admitting DepartmentAdmitting Department Patient Financial Services DepartmentPatient Financial Services Department Credit and CollectionsCredit and Collections



ACCOUNTING DEPARTMENTACCOUNTING DEPARTMENT

The accounting department is responsible for The accounting department is responsible for various financial tasks:various financial tasks: Record keeping Monitoring, and analyzing financial transactions Posting to the general ledger Accounts payable Payroll Cost accounting Cost reports


DEPARTMENTAL FUNCTIONS DEPARTMENTAL FUNCTIONS FINANCIALFINANCIAL

ADMITTING DEPARTMENTADMITTING DEPARTMENT

The admitting department is responsible for the admissionThe admitting department is responsible for the admission

process required to receive a patient in the hospital such as:process required to receive a patient in the hospital such as: Obtain demographic, insurance and medical information Obtain demographic, insurance and medical information Registration, which involves entering data into the Registration, which involves entering data into the

computer system computer system Obtain appropriate consents, authorizations, Advanced Obtain appropriate consents, authorizations, Advanced

Beneficiary Notice (ABN) as required Beneficiary Notice (ABN) as required Prepare patient chart Prepare patient chart Assign a room and bed Assign a room and bed Update hospital censusUpdate hospital census



PATIENT FINANCIAL SERVICES (PFS)PATIENT FINANCIAL SERVICES (PFS)PFS is commonly referred to as Patient AccountsPFS is commonly referred to as Patient Accountsor the Business Office. PFS is responsible foror the Business Office. PFS is responsible forrecording patient transactions and submission ofrecording patient transactions and submission ofcharges to patients and other payerscharges to patients and other payers

RECORD PATIENT TRANSACTIONSRECORD PATIENT TRANSACTIONS Charges, payments, adjustments, and write-offsCharges, payments, adjustments, and write-offs

PREPARATION OF CHARGES FOR SUBMISSIONPREPARATION OF CHARGES FOR SUBMISSION Patient statementsPatient statements Claim form—CMS-1450 (UB-04) Claim form—CMS-1450 (UB-04) Claim form—CMS-1500Claim form—CMS-1500


DEPARTMENTAL FUNCTIONS: DEPARTMENTAL FUNCTIONS: FINANCIAL FINANCIAL

CREDIT AND COLLECTIONS DEPARTMENTCREDIT AND COLLECTIONS DEPARTMENT Follow up on accounts receivable Follow up on accounts receivable

(Accounts receivable is money owed to the (Accounts receivable is money owed to the hospital by patients, insurance companies, and hospital by patients, insurance companies, and other payers)other payers)

Resolve billing issues through research, Resolve billing issues through research, communications with payers, and the appeals communications with payers, and the appeals processprocess


DEPARTMENTAL FUNCTIONS: DEPARTMENTAL FUNCTIONS: OPERATIONALOPERATIONAL

Hospital departments that are responsible for operationalHospital departments that are responsible for operational

functions include: functions include: PLANT OPERATIONS DEPARTMENTPLANT OPERATIONS DEPARTMENT SATELLITE DEVELOPMENT DEPARTMENTSATELLITE DEVELOPMENT DEPARTMENT CENTRAL SUPPLY DEPARTMENTCENTRAL SUPPLY DEPARTMENT QUALITY ASSURANCE (QA) DEPARTMENTQUALITY ASSURANCE (QA) DEPARTMENT UTILIZATION MANAGEMENT (UM) DEPARTMENTUTILIZATION MANAGEMENT (UM) DEPARTMENT RISK MANAGEMENT DEPARTMENTRISK MANAGEMENT DEPARTMENT MEDICAL STAFF CREDENTIALING DEPARTMENTMEDICAL STAFF CREDENTIALING DEPARTMENT SOCIAL SERVICES DEPARTMENTSOCIAL SERVICES DEPARTMENT HEALTH INFORMATION MANAGEMENT (HIM)HEALTH INFORMATION MANAGEMENT (HIM)

DEPARTMENTDEPARTMENT



PLANT OPERATIONS PLANT OPERATIONS

The primary responsibility of plant operations isThe primary responsibility of plant operations is

the maintenance of:the maintenance of: Hospital buildings Equipment Grounds Repairs Air conditioning, heating and other systems



SATELLITE DEVELOPMENT DEPARTMENTSATELLITE DEVELOPMENT DEPARTMENT

Identifies and develops areas for various types of Identifies and develops areas for various types of

out-patient services to be performed:out-patient services to be performed: Primary care office Primary care office Urgent care center Urgent care center Walk-in clinic Walk-in clinic Imaging Center Imaging Center Ambulatory surgery center (ASC)Ambulatory surgery center (ASC)



QUALITY ASSURANCE (QA) DEPARTMENTQUALITY ASSURANCE (QA) DEPARTMENT

QA is designed to monitor and improve the QA is designed to monitor and improve the quality of service, product, or processquality of service, product, or process

QA functions help hospitals identify areas that QA functions help hospitals identify areas that do not meet specified standards and to do not meet specified standards and to implement actions to improve standards in implement actions to improve standards in those areasthose areas



UTILIZATION MANAGEMENT (UM) DEPARTMENTUTILIZATION MANAGEMENT (UM) DEPARTMENT FOCUS OF UMFOCUS OF UM

Monitoring healthcare resources used in the hospital to Monitoring healthcare resources used in the hospital to ensure maximum resource utilizationensure maximum resource utilization

FUNCTIONS OF UMFUNCTIONS OF UM Utilization review (UR) Utilization review (UR) Case management Case management Discharge planningDischarge planning



RISK MANAGEMENT DEPARTMENTRISK MANAGEMENT DEPARTMENT

Concentrates on reducing risk to the hospitalConcentrates on reducing risk to the hospital Develop and implement procedures designed Develop and implement procedures designed

to minimize the potential for injury within the to minimize the potential for injury within the hospital hospital

Address liability situations as they ariseAddress liability situations as they arise



MEDICAL STAFF CREDENTIALING MEDICAL STAFF CREDENTIALING DEPARTMENTDEPARTMENT

Credentialing is the process required to Credentialing is the process required to evaluate providers who wish to become a part evaluate providers who wish to become a part of the hospital and/or have admitting privilegesof the hospital and/or have admitting privileges

Privileges define the scope of patient services Privileges define the scope of patient services and types of patients that can be seen by the and types of patients that can be seen by the healthcare provider healthcare provider

Required documentation includes information Required documentation includes information regarding licensing, education, and training, regarding licensing, education, and training, clinical competence, an individual’s health clinical competence, an individual’s health status, and liability insurance coverage status, and liability insurance coverage



HEALTH INFORMATION MANAGEMENT (HIM) HEALTH INFORMATION MANAGEMENT (HIM) DEPARTMENTDEPARTMENT Responsible for tasks required to organize, Responsible for tasks required to organize, maintain, produce, store, retain, disseminate and maintain, produce, store, retain, disseminate and secure patient health information including:secure patient health information including: Transcribe medical and surgical notesTranscribe medical and surgical notesCode diagnoses, procedures, and other itemsCode diagnoses, procedures, and other itemsRelease of health informationRelease of health informationRetrieval and storage medical informationRetrieval and storage medical informationManagement off databasesManagement off databasesFile informationFile information


DEPARTMENTAL FUNCTIONS: DEPARTMENTAL FUNCTIONS: CLINICALCLINICAL

Hospital departments responsible for clinical functions include:Hospital departments responsible for clinical functions include: NURSING DEPARTMENTNURSING DEPARTMENT ANCILLARY DEPARTMENTSANCILLARY DEPARTMENTS

Pathology/LaboratoryPathology/Laboratory RadiologyRadiology Physical RehabilitationPhysical Rehabilitation Respiratory Therapy Respiratory Therapy PharmacyPharmacy

OTHER CLINICAL DEPARTMENTSOTHER CLINICAL DEPARTMENTS Medicine Medicine SurgerySurgery AnesthesiaAnesthesia PulmonaryPulmonary CardiologyCardiology Emergency Department (ED)Emergency Department (ED)


HOSPITAL SERVICESHOSPITAL SERVICES

TECHNICAL VS. PROFESSIONAL COMPONENTSTECHNICAL VS. PROFESSIONAL COMPONENTSTECHNICAL COMPONENTTECHNICAL COMPONENT Technical charges represent technician, supplies, Technical charges represent technician, supplies,

materials, equipment, and other overhead materials, equipment, and other overhead required to perform the procedurerequired to perform the procedure

PROFESSIONAL COMPONENTPROFESSIONAL COMPONENT Professional charges represent fees for physician Professional charges represent fees for physician

or other non-physician professional services or other non-physician professional services Hospitals may bill professional charges when the Hospitals may bill professional charges when the

physician or other non-physician provider is an physician or other non-physician provider is an employer or under contract with the hospitalemployer or under contract with the hospital


LEVELS FOR PROVISION LEVELS FOR PROVISION OF SERVICES OF SERVICES

OUTPATIENT OUTPATIENT Services performed at the hospital and the patient is released on the Services performed at the hospital and the patient is released on the same daysame day Ambulatory surgery Ambulatory surgery Observation Observation Emergency Department Emergency Department Outpatient clinic Outpatient clinic Primary care networkPrimary care network

INPATIENT INPATIENT A patient who requires care on an ongoing basis for more than 24 A patient who requires care on an ongoing basis for more than 24 hours is admitted to the hospital as an inpatient.hours is admitted to the hospital as an inpatient.

NON-PATIENT NON-PATIENT Non-patient care is provided when Pathology/Laboratory receives a Non-patient care is provided when Pathology/Laboratory receives a specimen for processing. The specimen is delivered to the hospital and specimen for processing. The specimen is delivered to the hospital and the lab processes the specimen. The patient is not present during the lab processes the specimen. The patient is not present during processing.processing.


LEVELS FOR PROVISION LEVELS FOR PROVISION OF SERVICESOF SERVICES

OUTPATIENTOUTPATIENT Ambulatory surgery center (ASC)Ambulatory surgery center (ASC) ObservationObservation Emergency DepartmentEmergency Department Outpatient clinicOutpatient clinic Primary care networkPrimary care network



OUTPATIENT AMBUALTORY SURGERY OUTPATIENT AMBUALTORY SURGERY Is also referred to outpatient surgery because it isIs also referred to outpatient surgery because it isperformed and the patient is released the same day. performed and the patient is released the same day. Hospitals generally have an ambulatory surgery Hospitals generally have an ambulatory surgery

area where outpatient surgeries can be area where outpatient surgeries can be performed. Hospitals can have an ambulatory performed. Hospitals can have an ambulatory surgery area within the hospital or a freestanding surgery area within the hospital or a freestanding ambulatory surgery center. ambulatory surgery center.

The hospital charges the technical component of The hospital charges the technical component of the surgical procedure, which includes space, the surgical procedure, which includes space, nursing and technical staff, supplies, instruments, nursing and technical staff, supplies, instruments, drugs, equipment, and other materials required for drugs, equipment, and other materials required for the surgery.the surgery.



OUTPATIENT OBSERVATION SERVICESOUTPATIENT OBSERVATION SERVICES The attending physician monitors the patient The attending physician monitors the patient

closely for a period of 24 hours (some payers closely for a period of 24 hours (some payers allow observation services for up to 72 hours) allow observation services for up to 72 hours) or more but does not see the need to admit or more but does not see the need to admit the patient on an inpatient basis the patient on an inpatient basis

Observation services include nursing care Observation services include nursing care and normal monitoringand normal monitoring



OUTPATIENT EMERGENCY DEPARTMENTOUTPATIENT EMERGENCY DEPARTMENT The Emergency Department (ED) or emergency The Emergency Department (ED) or emergency

room (ER) is an area in the hospital where services room (ER) is an area in the hospital where services are provided to patients presenting with a condition are provided to patients presenting with a condition or illness that requires immediate attention. The or illness that requires immediate attention. The patient is treated and released the same day patient is treated and released the same day unless further medical care is required and the unless further medical care is required and the patient is admitted as an inpatient. patient is admitted as an inpatient.

The ER physician performs an Evaluation and The ER physician performs an Evaluation and Management (E/M) service to determine a plan of Management (E/M) service to determine a plan of treatment for the patient’s condition. Other services treatment for the patient’s condition. Other services and procedures may be performed such as and procedures may be performed such as diagnostic tests or surgical procedures. diagnostic tests or surgical procedures.



OUTPATIENT CLINIC OR PRIMARY CARE OFFICEOUTPATIENT CLINIC OR PRIMARY CARE OFFICE Patient care services may be provided on an Patient care services may be provided on an

outpatient basis in a hospital-based clinic or outpatient basis in a hospital-based clinic or primary care officeprimary care office

The hospital may bill for the professional and The hospital may bill for the professional and technical component of services performed when technical component of services performed when the physician is an employee of or under contract the physician is an employee of or under contract with the hospital with the hospital



INPATIENTINPATIENT A patient who requires care on an ongoing basis for more A patient who requires care on an ongoing basis for more

than 24 hours is admitted to the hospital as an inpatient.than 24 hours is admitted to the hospital as an inpatient. The patient can be admitted from various locations: home, The patient can be admitted from various locations: home,

clinic, nursing home, emergency room, or other facility. The clinic, nursing home, emergency room, or other facility. The attending physician determines what type of admission is attending physician determines what type of admission is required.required.

The inpatient admission requires assignment of a room/bed to The inpatient admission requires assignment of a room/bed to the patient. The hospital provides 24-hour nursing care during the patient. The hospital provides 24-hour nursing care during the stay. Throughout the patient stay, various departments the stay. Throughout the patient stay, various departments contribute to the patient’s care and treatment.contribute to the patient’s care and treatment.

The attending physician determines when to discharge the The attending physician determines when to discharge the patient. The discharge orders are prepared by the attending patient. The discharge orders are prepared by the attending physician and the patient is discharged.physician and the patient is discharged.


NON-PATIENTNON-PATIENT

Non-patient care is provided when the Non-patient care is provided when the Pathology/Laboratory department receives a Pathology/Laboratory department receives a specimen for processing. The specimen is specimen for processing. The specimen is processed and results are forwarded to the processed and results are forwarded to the requesting physician. The patient is not present requesting physician. The patient is not present during the processing. during the processing.


copyright © 2011, 2006 by saunders an imprint of elsevier inc. understanding hospital billing and...

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