medical coding chapter 1. chapter 1 reimbursement, hipaa, and compliance
TRANSCRIPT
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Medical Coding Chapter 1
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CHAPTER 1CHAPTER 1
REIMBURSEMENT, HIPAA, AND COMPLIANCE
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Third-Party Reimbursement Issues
Third-Party Reimbursement Issues
● Each coding system plays critical role in reimbursement● Your job is to optimize payment
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Your ResponsibilityYour Responsibility
● Ensure accurate coding data● Obtain correct reimbursement for services rendered● Upcoding (maximizing) is never appropriate
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Population ChangingPopulation Changing
● Elderly fastest growing patient population● By 2050, 20% of the population will be the
elderly● Medicare primarily for elderly
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Medicare—Getting Bigger All the Time!
Medicare—Getting Bigger All the Time!
● By 2018, national health care spending expected to reach $4.4 trillion
● Health care will continue to expand to meet enormous future demands– Job security for coders!
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Basic Structure MedicareBasic Structure Medicare
● Medicare program established in 1965 – 2 parts: A and B
● Part A: Hospital insurance● Part B: Supplemental—nonhospital
– Example: Physicians’ services and medical equipment
● Part C: Medicare Advantage, health care options (Added later and formerly termed Medicare + Choice)
● Part D: Prescription drugs
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Those CoveredThose Covered
● Originally established for those 65 and over
● Later disabled and permanent renal disease (end-stage or transplant) added
● Persons covered “beneficiaries”
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Officiating OfficeOfficiating Office
● Department of Health and Human Services (DHHS)● Delegated to Centers for Medicare and Medicaid
Services (CMS)– CMS runs Medicare and Medicaid– CMS delegates daily operation to Medicare Administrative
Contractors (MAC)– MACs usually insurance companies
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Funding for MedicareFunding for Medicare
● Social security taxes– Equal match from government
● CMS sends money to MACs● MACs handles paperwork and pays claims
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Medicare Covers (Part B)Medicare Covers (Part B)
● Beneficiary pays – 20% of cost of service – + annual deductible
● Medicare pays – 80% covered services
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Non-participating QIO ProvidersNon-participating QIO Providers
● Payment sent to patient● Non-QIOs receive 5% less than participating QIOs● Slower claims processing
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Participating QIO ProvidersParticipating QIO Providers
● Signed agreement with MACs● Agree to accept what MACs pay as payment in full
– Accept Assignment
● Block 27 on CMS-1500
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● Block 27 on CMS-1500, Accept Assignment
Courtesy U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services.
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Why Be a Participating Provider?
Why Be a Participating Provider?
● MACs usually do not pay charges provider submits– Significant decrease
● Participating providers receive 5% more than non-participating
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More Good Reasons to Participate:
More Good Reasons to Participate:
● Check sent directly from MACs to participating provider● Faster claims processing● Provider names listed in a directory
– Sent to all beneficiaries
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Part A, HospitalPart A, Hospital
● Hospitals submit charges on UB04● ICD-9-CM codes basis for payment
– MS-DRG (Medicare Severity Diagnosis Related Groups) ● More on this topic in Chapter 26
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Part A, Covered In-Hospital Expenses
Part A, Covered In-Hospital Expenses
● Semiprivate room● Meals and special diets in hospital● All medically necessary services
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Part A, Non-Covered In-Hospital Expenses Part A, Non-Covered
In-Hospital Expenses
● Personal convenience items ● Example:
– Slippers, TV– Non-medically necessary items
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Part A, Other Covered ExpensesPart A, Other Covered Expenses
● Rehabilitation● Skilled-nursing● Some personal
convenience items for long-term illness or disabilities
● Home health visits● Hospice care ● Not automatically
covered– Must meet certain
criteria
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Part B, Supplemental Part B, Supplemental
● Part B pays services and supplies not covered under Part A
● Not automatic● Beneficiaries purchase
– Pay monthly premiums
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Type of Items Covered by Part BType of Items Covered by Part B
● Physicians’ services● Outpatient hospital services● Home health care● Medically necessary supplies
and equipment
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Coding for Medicare Part B Services
Coding for Medicare Part B Services
● Three coding systems used to report Part B– CPT– HCPCS– ICD-9-CM (Vol. 1 & 2)
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Health Insurance Portability and Accountability ActHealth Insurance Portability and Accountability Act
● Established 1996● Administrative Simplification● Largest change● Includes:
– Electronic Transactions– Privacy– Security– National Identifier Requirements (NPI)
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Federal RegisterFederal Register
● Government publishes changes in laws ● Coding supervisors keep current on changes
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Issues of Importance in Federal Register
Issues of Importance in Federal Register
● October contains hospital facility changes● November and December contain outpatient facility
changes and physician fee schedule
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Federal RegisterFederal Register
Figure: 1.3Figure: 1.3From Federal Register, From Federal Register, August 3, 2010, Vol. 148, August 3, 2010, Vol. 148, No. 8, Proposed Rules.No. 8, Proposed Rules.
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Outpatient Resource–Based Relative Value Scale
Outpatient Resource–Based Relative Value Scale
● RBRVS● Physician payment reform implemented in 1992● Paid physicians lowest of
– 1. Physician’s charge for service– 2. Physician’s customary charge– 3. Prevailing charge in locality
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National Fee ScheduleNational Fee Schedule
● Replaced RBRVS● Termed Medicare Fee Schedule (MFS)● Payment 80% of MFS, after patient deductible● Used for physicians and suppliers
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Relative Value UnitRelative Value Unit
● Nationally, unit values assigned to each CPT code
● Local adjustments made:1. Work and skill required
2. Overhead costs
3. Malpractice costs
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Relative Value UnitRelative Value Unit
● Often referred to as fee schedule● Annually, CMS updates RVU based on national
and local factors● Beneficiary Protection
– Physician Payment Reform– Omnibus Budget Reconciliation Act of 1989– Maximum Actual Allowable Charge (MAAC) 1991
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Geographic Practice Cost Index (GPCI) and Conversion Factor (CF)
Geographic Practice Cost Index (GPCI) and Conversion Factor (CF)
● GPCI: Geographic Practice Cost Index– Scale of cost variance of charge locations
Charge location may be entire state● CF: Conversion Factor
– National dollar amount – Paid on Medicare Fee Schedule basis– Converts RVUs to dollars– Updated yearly
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Medicare Fraud and AbuseMedicare Fraud and Abuse
● Program established by Medicare – To decrease fraud and abuse
● Fraud – Intentional deception to benefit
Example:– Submitting for services not provided
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Beneficiary SignaturesBeneficiary Signatures
● Beneficiary signatures on file– Service, charges submitted without need for patient signature
● Presents opportunity for fraud
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FraudFraud
● Anyone who submits for Medicare services can be violator– Physicians– Hospitals– Laboratories– Billing services– YOU
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Fraud Can BeFraud Can Be
● Billing for services not provided● Misrepresenting diagnosis● Kickbacks● Unbundling services● Falsifying medical necessity● Routine waiver of copayment
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Office of the Inspector General (OIG)Office of the Inspector General (OIG)
● Each year develops work plan● Outlines monitoring Medicare program● MACs monitor those areas identified
in plan
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Complaints of Fraud or AbuseComplaints of Fraud or Abuse
● Submitted orally or in writing to MACs or OIG● Allegations made by anyone against anyone● Allegations followed up by MACs
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AbuseAbuse
● Generally involves– Impropriety – Lack of medical necessity for services reported
● Review takes place after claim submitted – May go back and do historic review
of claims
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KickbacksKickbacks
● Bribe or rebate for referring patient for any service covered by Medicare
● Any personal gain = kickback● A felony
– Fine or – Jail or – Both
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Protect YourselfProtect Yourself
● Use your common sense● Submit only truthful and accurate claims● If you are unsure about charges
– Check with physician or supervisor
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Managed Health CareManaged Health Care
● Network health care providers that offer health care services under one organization
● Group hospitals, physicians, or other providers
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Managed Care OrganizationsManaged Care Organizations
● Responsible for health care services to an enrolled group or person
● Coordinates various health care services● Negotiates with providers
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Preferred Provider Organization (PPO)Preferred Provider Organization (PPO)
● Providers form network to offer health care services as group
● Enrollees who seek health care outside PPO pay more
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Health Maintenance Organization (HMO)
Health Maintenance Organization (HMO)
● Total package health care● Out-of-pocket expenses minimal● Assigned physician acts as gatekeeper to refer patient
outside organization
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Drawbacks of Managed CareDrawbacks of Managed Care
● Organization has incentive to keep patient within organization– Services provided outside organization limited – Patient must have approval to go outside organization if
services to be covered
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ConclusionCHAPTER 1Conclusion
CHAPTER 1REIMBURSEMENT, HIPAA,
AND COMPLIANCE