Chapter 001

CHAPTER 1
REIMBURSEMENT, HIPAA,
AND COMPLIANCE
Copyright © 2011, 2010, 2009, 2008, 2007, 2006, 2005, 2004, 2002 by Saunders, an imprint of Elsevier Inc. Slide 1

Third-Party
Reimbursement Issues
• Each coding system plays critical role
in reimbursement
• Your job is to optimize payment
_______


Your Responsibility
• Ensure accurate coding data
• Obtain correct reimbursement for
services rendered
• Upcoding (maximizing) is never
________
appropriate


Population Changing
• Elderly fastest growing patient segment
• By 2050, 20% of the population will be the
elderly
• Medicare primarily for elderly


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!


Basic 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
_


Those Covered
• Originally established for those 65
and over
• Later disabled and permanent renal
disease (end-stage or transplant)
added
beneficiaries
• Persons covered “___________”


Officiating Office
• _____________________________
Department of Health and Human
________ (DHHS)
Services
• 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


Funding for Medicare
• Social security taxes
– Equal match from government
• CMS sends money to MACs
• MACs handles paperwork and pays
claims


Medicare Covers (Part B)
• Beneficiary pays
– 20 % of cost of service
__
– + annual _________
deductible
• Medicare pays
– 80% covered services
__


Non-participating QIO
Providers
• Payment sent to patient
• Non-QIOs receive 5% less than
participating QIOs
• Slower claims processing


Participating QIO Providers
• Signed agreement with MACs
• Agree to accept what MACs pay as
payment in full
– Accept Assignment
• Block __ on CMS-1500
27

(Cont’d…)


(…Cont’d)

• Block 27 on
CMS-1500,
Accept
Assignment
Courtesy U.S. Department of Health and Human Services, Centers for
Medicare and Medicaid Services.


Why Be a
Participating Provider?
• MACs usually do not pay charges
provider submits
– Significant decrease
• Participating providers receive 5 %
_
more than non-participating

(Cont’d…)


More Good Reasons
to Participate:
(…Cont’d)

• Check sent directly from MACs to
participating provider
• ______ claims processing
Faster
• Provider names listed in a directory
________
beneficiaries
– Sent to all _____________


Part 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

(Cont’d…)


Part A, Covered
In-Hospital Expenses
(…Cont’d)

• Semiprivate room
• Meals and special diets in hospital
• All medically necessary services

(Cont’d…)


Part A, Non-Covered
In-Hospital Expenses
(…Cont’d)

• Personal convenience items
• Example:
– Slippers, TV
– Non-medically necessary items

(Cont’d…)


Part A, Other Covered
Expenses
(…Cont’d)

• Rehabilitation • Home health visits
• Skilled-nursing • Hospice care
• Some personal • Not automatically
convenience items covered
for long-term illness – Must meet certain
or disabilities criteria


Part B, Supplemental
• Part B pays services and supplies not
covered under Part A
• Not automatic
• Beneficiaries purchase
premiums
– Pay monthly __________

(Cont’d…)


Type of Items Covered by Part B
(…Cont’d)

• Physicians’ services
• Outpatient hospital services
• Home health care
• Medically necessary supplies
_________________
and equipment


Coding for Medicare
Part B Services
• Three coding systems used to
report Part B
– CPT
– HCPCS
– ICD-9-CM (Vol. 1 & 2)


Health Insurance Portability
and Accountability Act
• Established 1996
• Administrative Simplification
• Largest change
• Includes:
– Electronic Transactions
– Privacy
– Security
– National Identifier Requirements (NPI)


Federal Register
• Government publishes changes in laws
• Coding supervisors keep current on
changes

(Cont’d…)


Issues of Importance in
Federal Register
(…Cont’d)

• October contains hospital facility
_______
changes
• _________ and December contain
November _________
outpatient facility changes and
physician fee schedule


Federal
Register

Figure: 1.3
From Federal Register,
August 3, 2010, Vol. 148,
No. 8, Proposed Rules.


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 _________ charge
customary
Prevailing
– 3. _________ charge in locality


National Fee Schedule
• Replaced RBRVS
• Termed Medicare Fee Schedule (MFS)
• Payment 80 % of MFS, after patient
__
deductible
• Used for physicians and suppliers
________


Relative Value Unit
• Nationally, unit values assigned
to each CPT code
• Local adjustments made:
1. Work and skill required
2. Overhead costs
________
3. Malpractice costs

(Cont’d…)


Relative Value Unit
(…Cont’d)

• Often referred to as ___ schedule
fee
• ________, CMS updates RVU based on
Annually
national and local factors
• Beneficiary Protection
– Physician Payment Reform
– Omnibus Budget Reconciliation Act of 1989
– Maximum Actual Allowable Charge (MAAC) 1991


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


Medicare Fraud and Abuse
• Program established by Medicare
– To decrease fraud and abuse
• Fraud
– Intentional deception to benefit
_________
• Example:
– Submitting for services not provided


Beneficiary Signatures
• Beneficiary signatures on file
– Service, charges submitted without need
for patient signature
• Presents opportunity for _____
fraud

(Cont’d…)


Fraud
(…Cont’d)

• Anyone who submits for Medicare
services can be violator
– Physicians
– Hospitals
– Laboratories
– Billing services
– YOU
____


Fraud Can Be
• Billing for services not provided
• Misrepresenting diagnosis
• Kickbacks
• Unbundling services
__________
medical
• Falsifying _______ necessity
waiver
• Routine ______ of copayment


Office of the Inspector
General (OIG)
• Each year develops work plan
• Outlines monitoring Medicare program
• MACs monitor those areas identified
_____
in plan


Complaints of Fraud or Abuse

• Submitted orally or in writing to MACs or OIG
• Allegations made by anyone against anyone
• Allegations followed up by MACs


Abuse
• 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


Kickbacks
• Bribe or rebate for referring patient for
any service covered by Medicare
• Any personal ____ = kickback
gain
• A felony
– Fine or
– Jail or
– Both


Protect Yourself
• Use your common sense
• Submit only truthful and accurate
claims
• If you are unsure about charges
physician
– Check with _________ or supervisor


Managed Health Care
• Network health care providers that
offer health care services under one
organization
• Group hospitals, physicians, or other
providers

(Cont’d…)

Managed Care
Organizations
(…Cont’d)

• Responsible for health care services
to an enrolled group or person
• Coordinates various health care
services
• Negotiates with providers


Preferred Provider
Organization (PPO)
• Providers form network to offer health
care services as group
• Enrollees who seek health care outside
PPO pay more
________


Health Maintenance
Organization (HMO)
• Total package health care
• Out-of-pocket expenses minimal
____________
• Assigned physician acts as gatekeeper
__________
to refer patient outside organization


Drawbacks 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


Conclusion
CHAPTER 1
REIMBURSEMENT, HIPAA,
AND COMPLIANCE

Chapter 001

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