HOSPITAL/FACILITY BILLING RULES

Chapter 12


HOSPITAL/FACILITY BILLING RULES



Objectives


After completing this chapter, you should be able to:


image Explain diagnosis related groups (DRGs) for hospital inpatient facility reimbursement


image Discuss the importance of complications and comorbidities in the DRG process


image Describe ambulatory payment classifications (APCs) for hospital outpatient facility reimbursement


image Explain how inpatient and outpatient hospital facility billing differs from billing for physician services performed in an inpatient or outpatient hospital setting


image List at least two of the billing requirements for nursing facilities


image Explain when to use ICD-9-CM Volume 3 and when to use CPT-4 to code hospital inpatient procedures


image Find the codes for inpatient hospital procedures using ICD-9-CM Volume 3, and find codes for the same procedures using CPT-4


image Identify when to use the morphology codes in Appendix A of ICD-9-CM Volume 1


image Describe how to complete a UB-92 claim form for facility reimbursement


image Discuss the purpose of revenue codes



Key Terms



ambulatory payment classification (APC)


the prospective payment system used by Medicare to determine payment for hospital outpatient services. It is based on the procedure codes billed. Also called OPPS.


complications and comorbidities (CC)


those additional conditions that increase the length of stay by at least 1 day in at least 75% of patients.


diagnosis related group (DRG)


the prospective payment system used by Medicare to determine payment for hospital inpatient services. It is based on the diagnosis codes billed.


facility fee


a charge representing the expenses incurred by a facility when providing a service.


length of stay (LOS)


the actual length of time a patient spends as an inpatient in the hospital.


major diagnostic category (MDC)


each category groups patients who are medically related by diagnosis, treatment similarity, and statistically similar length of hospital stay. The more than 10,000 available ICD-9-CM diagnosis codes are divided into 25 major diagnostic categories.


outpatient prospective payment system (OPPS)


the prospective payment system used by Medicare to determine payment for hospital outpatient services. It is based on the procedure codes billed. Also called APC.


peer review organization (PRO)


PROs consist of physicians and other health care professionals (nurses, data technicians, etc.) who review the care given to Medicare patients. Hospitals must enter into a contract with a PRO in order to receive DRG payments. The federal government pays PROs, but they are separate from Medicare and have their own functions. The newest title for this organization is quality improvement organization, or QIO.


quality improvement organization (QIO)


the new title for PRO. QIOs consist of physicians and other health care professionals (nurses, data technicians, etc.) who review the care given to Medicare patients. Hospitals must enter into a contract with a QIO in order to receive DRG payments. The federal government pays QIOs, but they are separate from Medicare and have their own functions.


relative value unit (RVU)


a numeric value assigned to each procedure code in the RBRVS. This number represents the total of each of three parts (work, overhead, and malpractice). Each part is multiplied by the geographic practice site indicator (GPSI) and then added together to get a total adjusted RVU. The total adjusted RVU is multiplied by the conversion factor (the assigned per-RVU dollar value) to arrive at the RBRVS fee allowed for the service.


resource-based relative value system (RBRVS)


the prospective payment system used by Medicare to pay physicians. It considers the CPT code in relation to work, overhead expenses, and malpractice (risk). A geographical adjustment is then made to account for cost-of-living differences throughout the nation.


Uniform Bill 1992 (UB-92)


the claim form used in facility billing.



Introduction


Hospitals and facilities such as surgicenters and nursing homes bill for something called facility fees. Facility fees are the expenses incurred by the facility when providing a service. Often referred to as overhead costs, facility fees include some of the following:



Facility fees are submitted on a different claim form than the fees for physician services. Hospitals and facility services are sent out on a Uniform Bill claim form, most commonly referred to as the UB-92, but also called a CMS-1450 claim form. Physician services are sent out on a CMS-1500 claim form with the name and address of the facility listed in block No. 32. The payor then divides the total fee for the service between the physician and the facility, usually in a 60/40 split, with 60% going to the physician for his work and malpractice costs and 40% going to the facility for the facility’s overhead and malpractice costs.


In this chapter, you will learn the differences between the billing rules for physician services performed in a facility and the billing rules for hospitals and facilities, and you will learn how to complete a UB-92 claim for the facility fees.



Physician Reimbursement


You must first understand a bit about how Medicare and many other payors use the resource-based relative value system (RBRVS), also referred to as the resource-based relative-value scale, to calculate physician fees. Then it is easier to understand how fees are split when a physician performs services in a facility, with the facility absorbing the overhead costs of the service and part of the malpractice risk for the service.


The California Medical Committee on Fees originally developed the resource-based relative value system in 1956. They named it the California Relative Value Studies (CRVS). The purpose was to help physicians determine a fair market value (price) for their services. The studies were updated periodically from 1957 through 1974. In 1975, the Federal Trade Commission decided that the CRVS might constitute a price-fixing scheme. Consequently, the CRVS has not been updated since 1974.


Since then, workers’ compensation (in many states) and many other payors have adopted their own relative value systems based on the original California studies.


In 1992, the Health Care Financing Administration (HCFA, now called the Centers for Medicare and Medicaid Services [CMS]) commissioned a relative value unit (RVU) study for Medicare. The study was performed by Harvard University’s Public Health Department and was named the Resource-Based Relative Value Study (RBRVS). RBRVS is the basis for today’s Medicare physician fee schedule, and it has been adopted by many other payors that use relative values to determine fee schedules.




The RBRVS fee schedule considers the CPT code in relation to three additional factors:



The diagnosis code order and the code specificity for every listed diagnosis are considered in the determination of both the amount of work performed and the amount of inherent risk. Geographic considerations are used to determine the overhead portion of the RBRVS fee.


A specific number of RVUs are assigned to each of the three factors considered in the procedure code. A payor contract will specify the dollar value, or conversion factor (CF), of each RVU. The number of RVUs for each factor is multiplied first by the geographic practice site indicator (GPSI) (a fixed number for each location), the three parts are added together, and the sum is then multiplied by the conversion factor (dollar value per unit) to determine the fee for each procedure.


Although the GPSI is a fixed number for each location, sometimes the GPSI is the same for each factor of the procedures for that location, and sometimes it is different for each factor of the procedures for that location. For example: In one location the work GPSI is 1.0, the overhead GPSI is .99, and the malpractice GPSI is 1.3. However, in another location the work GPSI is .99, the overhead GPSI is .99, and the malpractice GPSI is .99. Therefore it is standard in the industry to multiply the GPSI for each factor separately and then add them together before multiplying the sum by the conversion factor: [(work RVU = work GPSI) + (overhead RVU = overhead GPSI) + (malpractice RVU = malpractice GPSI)] = CF = $ fee.




Occasionally a contract will specify different conversion factors for different types of service. For example, surgical procedures might have a higher conversion factor than medical procedures. Additional information about using RVUs to find the fee is included in Chapter 14.


Sometimes the only difference between physician fee schedules for the various plans is the RVU conversion number, but be aware that there is more than one version of RBRVS. One physician office often must work with multiple contracts, each of which uses a specific version of RBRVS. Medicare’s version only includes services that are covered services for Medicare. Other versions of RBRVS usually cover a greater number of services. You must be careful to always use the correct version of RBRVS for each payor.


When the physician performs his or her services in a facility, such as for a hospital inpatient, the physician receives the work portion plus a portion for the physician’s malpractice costs. The facility then receives the overhead portion plus a portion for the facility’s malpractice costs. The physician sends a bill on the CMS-1500 and lists the facility in block No. 32. The physician’s fee is calculated using the version of RBRVS specified in the contract.


The facility sends a bill on the UB-92 claim form. Each numbered block on the UB-92 is called a field locator (FL). The facility sends a bill on the UB-92 claim form with the name of the attending physician and the physician’s ID number in FL 82, and physicians other than the attending physician are listed with their ID numbers in FL 83. The facility’s fee portion of the total fee for the service is calculated using diagnosis related groups (DRGs) for inpatients and ambulatory payment classifications (APCs) for outpatients. DRGs, APCs, and details about specific field locators (FLs) on the UB-92 claim form are discussed later in this chapter.




STOP & REVIW


Answer the following questions:




Diagnosis Related Groups (DRGs)-Inpatient Hospital Reimbursement


Diagnosis related groups (DRGs) are an inpatient classification system that was developed at Yale University and tested from 1977 to 1979. Originally, it was developed for utilization review and it considered medical necessity and length of stay when determining whether the cost of the services provided were appropriate for each patient.


Medicare took a look at the DRG system and decided it could easily be adapted for payors to use when making payment decisions. Paying by DRGs would put the burden of limiting medical costs on the hospital and not the payor. Medicare adopted DRGs under the prospective payment system (PPS) for payment of all hospitalizations and other specific hospital-related expenses, effective October 1, 1983. Since that time, any time the hospital expenses on behalf of a patient exceed Medicare’s DRG payment, the hospital loses money. As a result, hospitals are now very motivated to contain costs as much as possible.


In the DRG system, the more than 10,000 available ICD-9-CM diagnosis codes are grouped into 25 major diagnostic categories (MDCs) and are assigned a three-digit code from 001 to 475. Each category groups patients who are medically related by diagnosis, treatment similarity, and statistically similar length of hospital stay. Each MDC is then subdivided into DRG groups based on the historical data for the nationwide average payment amounts per hospitalization. Similar payment amounts within an MDC are grouped into one DRG and are then assigned a fixed payment value.


Hospitals use DRG grouper software to evaluate all the pertinent factors, starting with discharge diagnosis, and assign a DRG for each hospitalization. Six variables are included in the calculations to determine DRG classification:



The principal diagnosis is the diagnosis that after study is found to be chiefly responsible for the hospitalization. The principal diagnosis cannot be determined until the time of discharge. Usually the physician lists it first among the diagnoses listed in the discharge summary.


Secondary diagnoses are other diagnoses that affect this hospitalization. They do not include diagnoses that do not affect this hospitalization. If the patient is given treatment, including medication or increased monitoring, the diagnosis has affected the hospitalization and is included. If the physician had to consider the diagnosis when making treatment decisions, the diagnosis is included. Only the physician can make that determination. If the diagnosis was relevant the last time the patient was admitted, but the condition resolved and does not affect this hospitalization, the diagnosis is not included.


Surgical procedures that cause the hospital to incur significant expense are each listed on the claim form and are considered when the DRG is chosen. Minor surgical procedures that do not cause the hospital to incur significant expense, such as suturing a small, simple laceration, are not listed on the claim form and are not considered when the DRG is chosen. The physician may bill for the minor surgical procedures that require the expertise of a physician, but the facility does not because it does not significantly increase the facility fees.


Complications and comorbidities (CC) are defined as conditions that increase the length of stay by at least 1 day in at least 75% of the patients nationwide. This section allows the hospital to identify which of the secondary diagnoses and other specific circumstances usually cause a significant increase in facility fees. The versions of the ICD-9-CM codebook used by hospitals (Volumes 1, 2, and 3) often list acceptable CC and excluded CC under the code number and description for diagnoses that are considered acceptable to be principal diagnoses. This makes the determination of which additional diagnoses to enter into the DRG grouper software a little more straightforward so the correct overall DRG can be assigned.


Age is important because patients of extreme age (very young and very old) often have significantly increased average costs. Therefore age can provide medical necessity for a higher DRG payment group. Gender is important because many procedures and many diagnoses are gender specific. The gender for the diagnosis and/or procedure must match the gender of the patient to meet medical necessity requirements.


Discharge status tells the circumstances of the patient upon discharge—where the patient went and whether additional skilled care was required. Some examples of discharge status include: own home with no home health care, own home with home health care, home of friend or relative with assistance from friend or relative, independent living facility, assisted living facility, nursing facility, hospice, county morgue, and funeral home.


The DRG reimbursement rate for Medicare is a fixed dollar amount based on the average of all patients in a specific DRG category in the base year. Reimbursement is adjusted periodically for inflation, economic factors, and bad debt. Other payors may have a higher DRG payment rate than Medicare, but with the possible exception of Medicaid, they cannot have a lower DRG payment rate than Medicare. The DRG payment rates for specific other payors are negotiated in the contracts between each payor and the facility.


Hospitals must enter into a contract with a quality improvement organization (QIO, formerly peer review organization, PRO) in order to receive DRG payments. QIOs consist of physicians and other health care professionals (nurses, data technicians, etc.) who review the care given to Medicare patients. The federal government pays QIOs, but they are separate from Medicare and have their own functions.


QIOs investigate patient complaints for care provided in the following settings:



QIOs determine:



A hospital may request a QIO review when it receives a Medicare remittance notice (MRN) that states noncoverage was determined for a claim and no payment will be sent. A QIO review is required before an appeal can be filed. The only communication from a QIO follows a review. When a Medicare patient’s care is still denied following the QIO process, the hospital, physician, or patient may appeal the denial.


When a physician submits a claim (using a CMS-1500 medical claim form) for services rendered to an inpatient, the primary diagnosis listed on the physician’s claim should fall within the DRG category billed by the hospital (on a UB-92 medical claim form).




STOP & REVIW


Answer the following questions:



For Questions 6 to 8, name three of the variables assessed when assigning a DRG:



For questions 9 and 10, name two of the things that QIOs determine:




Ambulatory Payment Classifications (APCs)—Outpatient Hospital Reimbursement


The Omnibus Reconciliation Act (OBRA) of 1986 instructed the Health Care Financing Administration (HCFA), now called the Centers for Medicare and Medicaid Services (CMS), to develop an outpatient prospective payment system (OPPS) for payment of the facility fees for hospital-based outpatient care and for payment of the facility fees for ambulatory surgery center procedures. Effective July 1, 1987, OBRA also required all outpatient claims to be submitted with CPT codes to standardize the reporting of procedures performed by hospital outpatient departments. The revisions were supposed to assist in controlling outpatient payments to hospitals, but originally they did not cover every outpatient service.


HCFA (now the CMS) contracted with 3M Health Information Systems (3M HIS) to develop an OPPS that was based on the amount of resources used. The system 3M HIS developed was called ambulatory payment groups (APGs). APG payments are based on the number and type of procedures performed rather than the diagnosis. This system was developed and tested over a 10-year period, but implementation was repeatedly delayed. The APG system ultimately was scrapped by HCFA in 1999, as APG did not adequately address the newest “hot topic”: medical necessity. During the years of APG testing, a number of other payors began using the APG system in anticipation that it would become a national standard.


A new system called ambulatory payment classification (APC) was released in 1999. APC was designed to consider diagnoses and procedures, as well as the appropriateness of each service and medical necessity. Codes are assigned by combining two factors: (1) The level of CPT service, and (2) MDC similar, but not identical, to those used for DRG classifications.


The final rule for the OPPS was issued on April 1, 2000, with a compliance deadline (implementation date) only 90 days later on July 1, 2000. In the final rule, Medicare dropped the requirement added in 1999 to include diagnosis codes in the APC classification. In the final rule, APCs are based on procedure codes only and the number of APC classifications was increased to 451 classifications.


Currently, physicians report services they perform in a hospital outpatient facility using a CMS-1500 claim form with the name and address of the hospital listed in block No. 32. The procedures listed by the physician on the CMS-1500 as having been performed in the hospital outpatient department must match the procedures reported by the hospital on the UB-92 claim form.


Hospitals report the facility fees for outpatient services on a UB-92 claim form, with the name of the physician and the physician’s ID number in field locator 82 (FL 82). When more than one physician is seen on a single date of service, other physicians are listed with their ID numbers in FL 83.


Although each physician will send separate CMS-1500 claim forms, the facility can report their facility fees for multiple encounters for one date of service on one UB-92 claim form. Only one APC is assigned for the facility for the date of service.


Unlike DRGs, the APC for an episode of care is not listed on the UB-92 claim form. The facility’s fee for the day is calculated using APC grouper software and is used internally by the hospital to estimate correct payment and to check for accuracy when payment is received from the payor.


Initially, APC has been used only in hospital out-patient departments. Soon, however, CMS plans to require also an OPPS similar to hospital outpatient APCs for ambulatory surgery centers, and eventually also for nursing facilities, and physician billing.



Nursing Facility Services


The term nursing facility includes:



When a hospital discharge is performed on the same date as admission to a nursing facility, both the hospital discharge and the nursing facility admission are coded, and separate claims are sent by each facility.


People in nursing facilities are called residents, not patients. Nursing facilities are required by law to provide a variety of periodic evaluations or assessments of each resident.


Physician services rendered in nursing facilities are governed by rules similar to inpatient settings, and there are three levels of service. Physician services are classified in two main categories: comprehensive nursing facility assessments and subsequent nursing facility care. See the evaluation and management section of the CPT codebook for complete descriptions of these services. Nursing facility discharge codes are time based, so time must be documented in the medical record.


Physician services rendered in a nursing facility are reported on the CMS-1500 claim form with the name and address of the facility listed in block No. 32. Physicians send their claims at the time service is rendered.


Nursing facilities send claims monthly at the end of the month, or upon discharge. The facility fees are reported by the nursing facility on the UB-92 claim form with the name and ID number of the attending physician listed in field locator 82 (FL 82), and the name and ID of any other physicians who provided services at the nursing facility during that month listed in FL 83.



STOP & REVIEW


Answer the following questions:



1. What is APC an abbreviation for?_____________


2. What company spent 10 years developing the APGs that were ultimately discarded by Medicare?__________________


3. What claim form do physicians use to report services provided in a hospital outpatient department?_________________


4. What claim form do hospitals use to report facility fees for outpatient services?________________


5. Does MDC mean the same thing for both hospital inpatient billing and hospital outpatient billing?_________________


6. Do nursing homes currently use APCs?______________


7. Do surgicenters currently use APCs?_____________


8. What is the name for people who receive treatment at a nursing facility?_________________________


9. Which claim form do physicians use to report services provided in a nursing facility?__________________________


10. Which claim form do nursing facilities use to report their facility fees?________________________




Utilization Review


The utilization review (UR) team, usually a group of RNs, LPNs, and/or certified coders trained in DRGs and hospital reimbursement issues, work to help the hospital remain profitable. CC are those complicating factors and underlying diseases that have been determined in at least 75% of the cases to increase a patient’s length of stay by at least 1 day.


The UR team has a computer system that tells them the average number of hospital days for each DRG classification. They use this information to analyze the expected length of stay (LOS) for each patient. They encourage doctors to either document why it is medically necessary for a patient to stay longer than the average, or to send the patient home if the physician cannot document medical necessity for a longer stay.


Many hospitals have a punishment system in place, often fines, for physicians who do not work with the utilization review team to safeguard the profitability of the hospital. Some hospitals go so far as to remove repeat offenders from their roster of physicians on staff at the hospital.



Facility Coding for Inpatient Services


Medicare pays hospitals based on the DRG code assigned each inpatient hospital stay. The DRG system requires the use of ICD-9-CM Volumes 1 and 2 to locate the codes for diagnoses (please see Chapter 5) and ICD-9-CM Volume 3 to locate the codes for procedures. Only the hospital’s inpatient facility fee is billed on the UB-92 claim form using ICD-9-CM diagnosis and procedure codes. The facility fee is paid by Medicare using the DRG system to determine payment amount.


Many of the other payors also use the DRG payment system for inpatient charges. However, please be aware that there are few payers that want CPT codes for inpatient hospital charges for procedures. If you want the hospital to receive the correct payment, you must use the codebook preferred by each payor.


When you are doing hospital coding, your most important task is to identify the principal diagnosis. The principal diagnosis is not always the same as the admitting diagnosis. The admitting diagnosis is the reason the person was admitted to the hospital, whereas the principal diagnosis is the diagnosis that, after study, is determined to be chiefly responsible for the hospitalization.




Once you have identified the admitting diagnosis and the principal diagnosis, you look for any other valid diagnoses. You code the additional established diagnoses that affect this hospital stay. Then you code any differential, or “rule-out” diagnoses. Lastly, you code any symptoms not already included in a diagnosis.


Please remember that the only time you may code the differential, or “rule-out” diagnoses is for hospital inpatients. In every other instance, you may only code the symptoms. The diagnosis coding guidelines that govern this issue, including code order, are found in the ICD-9-CM codebook just before the main index in Volume 2. Also remember that coding guidelines can and often do change from year to year. The guidelines may have changed since this text was written. Current-year coding guidelines always take precedence, so any time there is a discrepancy with the information in this textbook, please follow the guidelines.


If the case you are coding is for a patient with either a benign or a malignant neoplasm, you might need to code an additional morphology code. These codes are found in Appendix A of the ICD-9-CM Volume 1, Tabular List. Not every hospital chooses to participate in using morphology codes. However, if your hospital does use the morphology codes, you will be required to use them for every neoplasm case. Although the morphology codes are not found in the neoplasm table in ICD-9-CM, they can be found by looking up the main term for the specific neoplasm in the alphabetic index in Section 1 of ICD-9-CM Volume 2.




Like physician offices, hospitals also use E-codes to show the external causes of accidents and poisonings. There is a special box on the UB-92 claim form for the first E-code, and any additional E-codes are listed after the other additional diagnoses.


Volume 3 of ICD-9-CM, for inpatient hospital procedures, begins with an alphabetical index and is followed by the tabular list. Volume 3 uses the same index usage rules as the Volume 2 index in ICD-9-CM. Please note that these are not the same rules as the CPT index.


Look up the procedure in the alphabetical index, then confirm the code in the tabular list. The main term is usually the name of the procedure. Because Volume 3 of ICD-9-CM is used to report the hospital’s facility fees for the procedures rather than the skill of the physician, the code descriptions in ICD-9-CM volume 3 are not identical to those in CPT.




When you do physician billing for inpatient procedures, you want to be sure your CPT code matches the description of the ICD-9-CM Volume 3 code billed by the hospital. Some codebook publishers also publish “Crosswalk” books to aid in this task. A surgical crosswalk will tell you both the CPT code and the matching Volume 3 of ICD-9-CM code for each surgical procedure. Codebook publishers (e.g., Ingenix, PMIC, AMA) often publish this type of coding reference book.



Completing the UB-92 Claim Form


The data fields on the UB-92 claim forms, called field locators (FLs), are numbered from FL 1 to FL 86 (Figure 12-1). The UB-92 claim form does not clearly separate patient and insured information from physician and supplier information the way the CMS-1500 claim form does. Yet the patient and insured information is still supplied by the patient, and the provider of the services still supplies the remaining information.


image
FIGURE 12-1 UB-92 claim form.

Every medical claim is a legal document. It is the patient’s responsibility to provide the most current and accurate demographic and insurance information for every claim that is filed on their behalf. It is the facility’s responsibility to supply accurate information about the services rendered, the necessary supplies, and any other associated costs. Knowingly supplying false or inaccurate information on a medical claim form is considered fraud, a federal crime, and is punishable by fines, prison or both.


It is the biller’s responsibility to compare the patient information gathered during check-in with the information already on file and to compare billed charges with the documentation in the medical record. When a discrepancy is noted, the biller must verify which information is correct and update the file from which the claim is printed. In most hospitals, the billing and coding are performed in different departments. The biller may not change codes and may not change the code order from that submitted by the coding department. However, the biller can ask the coding department to reevaluate the codes if the biller finds a discrepancy between the codes and the information in the medical record.


The primary payor is the medical plan that is responsible for paying when there is only one payor and the medical plan that pays first when there is coverage from more than one payor.


If you want to file clean claims and receive correct payments the first time, you must learn to look at each claim through the payor’s eyes. Follow optical character recognition (OCR) and electronic data inter-change (EDI) guidelines as listed in Chapter 4. Use only alphanumeric characters with no punctuation.


When a claim arrives at the payor, the claim editing and claim auditing processes begin immediately. Any time there is a discrepancy, there is no obligation for payment and the claim will be either rejected or penalized, or both. The payor wants to know:



image Was the claim sent to the correct address as listed on the patient’s insurance card? Each payor has different billing addresses for different policies.


image Is the “insured” for the primary plan listed on the claim form covered under that plan?


image Is the patient covered by the plan?


image Is the insurance policy current?


image Is the correct payor identified as primary payor?


    If not, there is no obligation for payment until the primary payor has paid and correct information is submitted.


image Does the demographic information for both the patient and the insured match payor records?


image Were the services rendered appropriate for the age and gender of the patient?


image Were the services rendered appropriate for the nature of the presenting illness?


image Are any required modifiers present, and are they reported correctly? Note that modifiers are not a part of ICD-9-CM Volume 3 for inpatient hospital claims. Only CPT and HCPCS codes require modifiers. The front cover of the CPT codebook usually lists the modifiers approved for use in outpatient facilities.


image Are the type of service and place of service codes appropriate for the service rendered?


image Does the facility accept assignment of benefits? If not, all authorized payments will be sent to the patient.




STOP & REVIEW


Answer the following questions:



1. What is the name of the team, usually a group of RNs trained in DRGs and hospital reimbursement issues, that works to help the hospital remain profitable?____________________


2. What are those complicating factors and underlying diseases that have been determined in at least 75% of cases to increase a patient’s length of stay by at least 1 day called?___________________


3. What is LOS an abbreviation for?_______________________


4. Medicare pays hospitals based on what number that is assigned each inpatient hospital stay?_________________________


5. Who supplies the patient and insurance information?____________________


6. Who supplies the remaining information?_______________________


7. Knowingly supplying false or inaccurate information on a medical claim form is considered____________________and is punishable by fines, prison, or both.



PROVIDER AND PATIENT INFORMATION (FL 1 TO FL 23) (FIGURE 12-2)


FL 1—Provider Name, Address, and Telephone Number


FL 1 is for the name of the facility submitting the bill and the address where payment is to be sent. FL 1 is a required field. The data in this field are matched to the provider number in FL 51 to verify the provider’s identity. FL 1 allows four lines of text with a maximum of 25 characters per line.


image
FIGURE 12-2 FL 1 to Fl 23 from UB-92 claim form.

Abbreviations accepted by the post office may be used. The 2-digit state abbreviation should be entered in capital letters. The country code can be found in the front of the telephone book.


Line a: Enter the name of the facility.


Line b: Enter the street address or post office box number of the facility.


Line c: Enter the city, state, and 9-digit zip code of the facility.


Line d: Enter the telephone number(s) of the facility as follows: area code first, telephone number, fax number, country code.




FL 3—Patient Control Number


Enter the patient control number in FL 3. The patient control number is a unique number assigned by the facility to identify individual patient accounts, case records, and medical records. It is used when posting payments and to find records when payors request additional information.


The patient control number is used to identify where to post payments received. Third party payors are required to reference this number on payment checks and vouchers, explanation of benefits (EOB) forms, and Medicare’s remittance advice or remittance notice (RA/MRN) forms. The patient control number further identifies the patient and distinguishes between patients who have the same name.


FL 3 is a required field for all payors. FL 3 allows for 20 characters, with no spaces between digits. The data in FL 3 must be left justified.



FL 4—Type of Bill


FL 4 is a required field for all payors. The 3-digit number entered here provides the payor with specific information for billing and payment purposes. The type of bill code and the provider number in FL 51 must be consistent with the type of service rendered. The outpatient code editor uses this field to determine which outpatient claims to edit and estimate for an APC payment under the OPPS.



image The first digit identifies the type of facility (hospital, ambulatory surgery center, nursing facility, home health agency [HHA], etc.).


image The second digit classifies the type of care being billed. Each type of facility is authorized to use specific second-digit codes. Hospitals may use 1, 2, 3, 4, 8; skilled nursing facilities (SNFs) may use 1, 2, 3; HHAs may use 2 or 3. Each digit has a specific use. For example, the second digit: 1 is used for inpatient (Medicare Part A); 2 is used for inpatient (Medicare Part B, HHA with Part B plan of treatment); 3 is used for outpatient (HHA with Part A plan of treatment and durable medical equipment [DME] under Part A).


image The third digit indicates the sequence of a bill for a specific episode of care. A facility may bill Medicare after 60 days and every 60 days thereafter, or it may submit the entire claim upon discharge. Psychiatric units, cancer units, and children’s hospitals must bill monthly, upon discharge, when the need for care changes, and when benefits are exhausted. Specific digits tell the circumstances, such as whether discharge has occurred, whether the patient is still an inpatient, and whether the bill is for services in the middle of a long stay. The third digit is cross-referenced with many other fields on the claim form, and the information must be consistent with the information provided elsewhere.


There are many other considerations for FL 4 that deal with payment issues for specific circumstances. Most hospital billing computer-systems have dropdown boxes to guide you in the selection of each digit for FL 4.


There are also outside resources available to guide you in selections for FL 4. For example, the UB-92 Editor published by Ingenix with quarterly updates for 1 year, gives more than 60 pages of detailed guidance about selections for each digit in FL 4 and how to avoid conflicts with the cross-referenced items in other fields.




FL 6—Statement Covers Period


Enter the beginning and ending dates for the services reported on the bill using the 8-digit format with a 2-digit month, a 2-digit day, and a 4-digit year: MMDDYYYY for OCR claims sent on paper and YYYYMMDD for EDI claims sent electronically. The dates cannot be earlier than the date of admission or start of care date listed in FL 17.


Do not report dates of services before the entitlement date for the medical plan billed. A medical plan will not pay for services that occurred before a person was entitled to receive coverage from that plan for those services.


For services rendered on a single date, both the “from” and “through” dates will be the same.


When a patient is discharged or dies before the end of a normal billing cycle, the “Through” date is the date of discharge or the date of death.


FL 6 is cross-referenced with FL 4, FLs 7 to 8, FL 22, FLs 24 to 30, FLs 39 to 41, and FLs 45 and 46. The information entered here must be consistent with the information entered in each of these fields.



FL 7—Covered Days


The number of inpatient days expected to be covered by the primary payor is entered here. The number of covered days should equal the number of accommodation units (FL 46) reported with the room and board (FL 42).


The date of discharge or death is not counted as a covered day unless admission and discharge occurred on the same day.


FL 7 allows three numeric characters. The number of covered days must not exceed 150 days for hospitals and 100 days for skilled nursing facilities.


For Medicare patients, the number of covered days, including any lifetime reserve days, entered here for the billing period, are also applied to the Medicare cost report. Please see Chapter 10 to learn more about Medicare’s lifetime reserve days.


FL 7 is cross-referenced with FL 4, FL 6, FLs 8 to 10, FLs 24 to 30, FL 42, FL 46, and FL 50. The information entered here must be consistent with the information entered in each of these fields.



FL 8—Noncovered Days


The number of inpatient days not expected to be covered by the primary payor is entered here. FL 8 allows four numeric characters.


FL 8 is required in Medicare billing, both for Medicare as primary payor and for Medicare as secondary payor. Enter the total number of noncovered days for the billing period that are not considered Medicare patient days on the Medicare cost report. These are days under Part A utilization that will not be charged to the Beneficiary according to Medicare Publication 100-04, Chapter 25, Section 60. However, when the facility notifies the patient in writing that a Medicare service is a noncovered service using an Advance Beneficiary Notice (ABN) (see Figures 3-8, 3-9, and 3-10 in Chapter 3), the patient is responsible for any charges incurred after the date notified. This notice must include the patient’s name, address, Medicare number, a specific reason for noncoverage, whether the patient requested a demand bill, the provider’s signature, the date of determination, the patient’s signature, and the date the patient received the notice.


The day of discharge or death is not counted as a noncovered day.


The number of noncovered days in FL 8 added to the number of covered days in FL 7 must equal the number of days covered by the billing period for this claim.


FL 8 is cross-referenced with FL 4, FLs 6 to 8, FLs 24 to 30, FLs 32 to 35, FLs 39 to 42, FL 46, FL 50, and FL 84. The information entered here must be consistent with the information entered in each of these fields.






FL 12—Patient Name


FL 12 is a required field. Enter the name as last name, first name, middle initial (when applicable). The patient’s name must be spelled exactly as it appears on the insurance card. FL 12 allows 30 alphanumeric characters.


The name entered in FL 12 is the name of the patient—the person who received the treatment(s) or service(s) listed on the claim form. Only one patient name may be entered on each claim form. When you are filing a batch of claims for patients who have similar names, be very careful to verify that each piece of information is completed for the correct person.


The name entered in FL 12 should be the patient’s legal name. However, if the patient has changed names, such as occurs when a woman marries, do not change the name in the facility records until the insurance card lists the new legal name. The name in the medical record must match the name on the claim form. If the claim is filed using the new name before the insurance company changes their records, the payor will not recognize the patient, and the claim will be denied. Be very careful with record keeping during the interval between the time a patient’s name legally changes and the time the payor recognizes the new name. However, be sure to list the correct information in FL 16, marital status.


Also, call the payor to see if coverage changed when the patient married. A dependent daughter who marries is no longer covered under a parent’s policy. Knowingly supplying false or inaccurate information is considered a federal crime and is punishable by fines, imprisonment, or both.


FL 12 is cross-referenced with FL 4. The information entered here must be consistent with the information entered in that field.








FL 18—Admission Hour


FL 18 contains the hour of the day during which the patient was admitted for inpatient care or initiated out-patient care. Hours are entered in military time (24-hour clock) using two numeric characters as follows:
















































































00 12:00 midnight — 12:59 AM
01 01:00 — 01:59 AM
02 02:00 — 02:59 AM
03 03:00 — 03:59 AM
04 04:00 — 04:59 AM
05 05:00 — 05:59 AM
06 06:00 — 06:59 AM
07 07:00 — 07:59 AM
08 08:00 — 08:59 AM
09 09:00 — 09:59 AM
10 10:00 — 10:59 AM
11 11:00 — 11:59 AM
12 12:00 (noon) — 12:59 PM
13 01:00 — 01:59 PM
14 02:00 — 02:59 PM
15 03:00 — 03:59 PM
16 04:00 — 04:59 PM
17 05:00 — 05:59 PM
18 06:00 — 06:59 PM
19 07:00 — 07:59 PM
20 08:00 — 08:59 PM
21 09:00 — 09:59 PM
22 10:00 — 10:59 PM
23 11:00 — 11:59 PM
99 hour unknown (This code was discontinued effective October 16, 2003.)

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May 25, 2017 | Posted by in GENERAL & FAMILY MEDICINE | Comments Off on HOSPITAL/FACILITY BILLING RULES

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