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Copyright © 2013 by Saunders, an imprint of Elsevier Inc.

CHAPTER 1 REIMBURSEMENT, HIPAA,

AND COMPLIANCE


Third-Party Reimbursement Issues • Each coding system plays critical role in

reimbursement

• Your job is to _______ payment optimize


Your Responsibility

• Ensure accurate coding data

• Obtain correct reimbursement for services rendered

• ________ (maximizing) is never appropriate Upcoding


Population Changing

• Elderly fastest growing patient segment • By 2050, 20% of the population will be 65 or

older • 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 _: Hospital insurance

• Part _: Supplemental—nonhospital – Example: Physicians’ services and medical equipment

• Part _: Medicare Advantage, health care options (Added later and formerly termed Medicare + Choice)

• Part _: Prescription drugs

A

B

C

D


Those Covered

• Originally established for those 65 and over

• Later disabled and permanent renal disease (end-stage or transplant) added

• Persons covered “___________” beneficiaries


Officiating Office

• ___________________________ ________ (DHHS)

• Delegated to Centers for Medicare and Medicaid Services (CMS) – CMS runs Medicare and Medicaid

– CMS delegates daily operation to Medicare Administrative Contractors (MACs)

– MACs usually insurance companies

Department of Health and Human Services


Funding for Medicare

• Social Security taxes – Equal match from government

• CMS sends money to MACs

• MACs handles paperwork and pay claims


Medicare Covers (Part B)

• Beneficiary pays – __% of cost of service

– + annual _________

• Medicare pays – __% covered services

20

deductible

80


Non-participating QIO Providers • Payment sent to patient

• Non-QIOs receive 5% less than participating QIOs

• Slower claims processing


Participating QIO Providers

• Signed QIO 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

(Paper form) 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 _% more than non-participating

5

(Cont’d…)


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

• Check sent directly from MACs to participating provider

• _____ claims processing

• Provider names listed in a _______ – Sent to all _____________

Faster directory

beneficiaries


Part A, Hospital

• More than 99% of hospital claims submitted electronically

• Hospitals submit paper charges on _____ • Diagnosis codes basis for payment

– MS-DRG (Medicare Severity Diagnosis Related Groups)

• More on this topic in Chapter 31

UB04

(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

• Skilled-nursing

• Some personal convenience items for long-term illness or disabilities

• Home health visits

• Hospice care

• Not automatically covered – Must meet certain

criteria


Part B, Supplemental

• Part B pays services and supplies not covered under Part A

• Not automatic

• Beneficiaries purchase – Pay monthly _________ premiums

(Cont’d…)


Type of Items Covered by Part B

(…Cont’d)

• Physicians’ services

• Outpatient hospital services

• Home health care

• ________________ supplies and equipment Medically necessary


Coding for Medicare Part B Services • Three coding systems used to

report Part B – CPT

– HCPCS

– ICD-10-CM/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)

• _______ contains hospital facility changes

• ________ and _________ contain outpatient facility changes and physician fee schedule

October November December


Federal Register

Figure: 1.3 From Federal Register, January 4, 2012, Vol. 77, No. 2, Rules and Regulations.


Outpatient Resource–Based Relative Value Scale • RBRVS

• Physician payment reform implemented in 1992

• Paid physicians _____ of – 1. Physician’s charge for service

– 2. Physician’s _________ charge

– 3. ________ charge in locality

lowest

customary

Prevailing


National Fee Schedule

• Replaced RBRVS

• Termed Medicare Fee Schedule (MFS)

• Payment __% of MFS, after patient deductible

• Used for physicians and ________

80

suppliers


Relative Value Unit

• Nationally, unit values assigned to each CPT code

• Local adjustments made: 1. Work and skill required

2. ________ costs

3. Malpractice costs

Overhead

(Cont’d…)


Relative Value Unit (…Cont’d)

• Often referred to as ___ schedule

• ________, 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

fee Annually


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 – _________ deception to benefit

• Example: – Submitting for services not provided

Intentional


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

• _________ services

• Falsifying ______ necessity

• Routine _____ of copayment

Unbundling

medical

waiver


Office of the Inspector General (OIG) • Each year develops Work Plan

• Outlines monitoring Medicare program

• _____ monitor those areas identified in plan MACs


Complaints of Fraud

• Submitted orally or in writing to MACs or OIG

• Allegations made by anyone against anyone

• Allegations followed up by MACs and/or OIG


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

• A felony – Fine or

– Jail or

– Both

gain


Protect Yourself

• Use your common sense

• Submit only truthful and accurate claims

• If you are unsure about charges – Check with _______ or supervisor physician


Managed Health Care

• Network health care providers that offer health care services under one organization

• Group hospitals, physicians, or other providers


Managed Care Organizations

• 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

• ___________ expenses minimal

• Assigned physician acts as _________ to refer patient outside organization

Out-of-pocket

gatekeeper


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

Slide 46

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