Change may come swiftly under new regulations
Don’t assume the government isn’t eyeing you now
Implementing ambulatory payment classifications (APCs) under the outpatient prospective payment system (PPS) means widespread changes through every health care system. But don’t assume you have a year to get in step with compliance issues, warns Julie Micheletti, director of clinical product strategies for HSS, a software company specializing in coding and reimbursement in Hamden, CT.
"Even though the Office of the Inspector General (OIG) says it will not touch the [outpatient prospective payment coding] area in the first year as hospitals get used to the system, I still think there is risk," Micheletti says. "We have not been careful on the outpatient side in the past, and now we have to be."
The Health Care Financing Administration (HCFA) will have the data to look at the increased volume of APCs that have higher levels, she adds. She suspects HCFA may examine the level of terminated procedures for suspected inappropriateness of the procedure. "There is also the risk of duplicate billing because of coding confusion," she adds. Overall, she says, this area is "rift with a series of compliance issues that will surface next year."
Impact is across the board’
One way to decrease risk is to recognize that the implementation of APCs will have an across-the-board impact in all outpatient departments. At the American Health Information Management Association (AHIMA)’s 72nd National Convention and Exhibit in September, Micheletti presented material on APC’s impact on key hospital departments. Here is what she has to say about the following departments:
• Admitting and registration: Admitting and registration is a strategically key area, she says. "If the information isn’t input correctly, there are problems on the back end, and it holds up your cash flow," she adds. Education of the medical staff is important in this area, she says. Medical staff and their office nurses have to understand the importance of conveying as much information as possible to the registrars when admitting their cases.
• Health information management (HIM): HIM professionals take on new responsibilities under the outpatient PPS, Micheletti says. Some providers are placing medical records people in admitting and registration. "We are seeing centralization of registration that incorporates medical records people. The medical records employees are helping department heads with their forms to make sure that the codes and descriptors match," she says. Other department heads are sending copies of the charge forms to medical records to see if services and equipment on the form match the documentation on the medical record.
Medical records personnel can lend coding expertise, but their assistance should only be temporary, Micheletti says. "I see medical records helping in that initial process, but then departments heads should be held accountable for running their departments."
Ensuring that codes are correct, however, isn’t always easy unless you have the appropriate information and tools. "Department heads need to have access to current coding books, UB92 editors, and material transmittals for Medicare that relate to these departments," Micheletti says. "There is so much information coming out of HCFA, someone in the facility needs to be the conduit to see that everyone gets the right tools they need to streamline their APC operations."
Providers also need to look at the capacity of their abstracting systems to support the new requirements, she adds. "We have to save a tremendous amount of outpatient data, something that we haven’t done in the past."
• Finance and patient accounts: "A tremendous amount of billing operations have to change to support compliance with the regulations," Micheletti says. One such change is the ban on late charges.
Billing operations also have to put in place some type of payment reconciliation process. "There needs to be a formalized claims rejection management program," she says. "When you get rejections, denials, or suspended claims, why are you getting them? Classifying some of those rejections into categories is important. Once you know the common reasons for the rejections, then you can work toward correcting them."
This department has a large number of new billing regulations to understand, Micheletti says. "If you have a patient who is being seen in the same revenue center for different reasons, for example, you have to report that using the condition code G-0 or you are going to risk edit rejections."
• Case management: Case management will expand in the new environment, Micheletti says. "As an example, hospitals need to decide to what extent they want to be in the observation business. Because there is financial incentive to admit patients rather than put them in observation, case managers will need to be doing admission review on those particular cases. I think case management will also get involved in monitoring high-cost, high-volume APCs or the procedures that support them."
• Radiology and ancillary departments: In the past, there has not been as much responsibility taken in the business aspects of the radiology and ancillary departments, Micheletti says. "Since HCFA no longer allows late charges, [these departments] have to be certain that they are including all of the charges on time and within the hospital bill hold window."
This is a major cultural change for those departments, she says. Some hospitals that Micheletti has visited have formed financial improvement task forces. The main function of this group is to investigate and manage write-offs, days in accounts receivable, denials, rejections, suspensions, late charges, and the timeliness of departmental response to held claims. "They run reports on which department has had the greatest amount of late charges, and then they ask those offending departments to be on this committee. It has the sentinel effect of raising awareness."
• Utilization review: The utilization review committee is another area that will expand in terms of the outpatient functions, Micheletti says. "There have been some areas that have been identified for focused medical review, like use of partial hospitalization." Utilization review will be looking at denials that relate to medical necessity as well as utilization of outpatient services.
The buzz on a new position
As Micheletti mentioned, someone acting as an information conduit can help hospitals departments stay abreast of APC updates. Several providers are creating a revenue management coordinator position. The discussion of this position generated a great deal of interest at AHIMA’s conference, she says.
"This person is an on-site resource for coding and charging issues," she explains. "The purpose of the position is to narrow the focus, the accountability, and the responsibility for implementation of additions, changes, and deactivations in the Chargemaster."
This person should monitor coding changes for governmental and other payer regulations, and school the department on coding and compliance issues or any other ensuing changes. This person should compare periodic departmental audits of charges with the medical records to ensure all charges are appropriate, she says.
"You have to be so careful," Micheletti says. "The quarterly updates that are going to impact the Chargemaster in terms of the transitional pass-throughs mean that the Chargemaster has to be so clean. You need someone who can pay close attention to the accuracy of the coding and can make sure that the information is actually making the bills."
Often information system issues in other departments affect the process because of the way the protocols are written, she says. For example, new codes may displace other codes when entering data into the Chargemaster. "If codes aren’t getting through to the bills, you could be missing quite a few APC payments," Micheletti says. "It’s important to look at the flow of information throughout a facility and then periodically audit what is input vs. what is output."
Those audits should be taking place now, she says. "By the beginning of the year, it’s going to be important to see what impact documentation and/or coding is having on APC assignment. And through your information systems capabilities, you should be able to generate appropriate APC management reports."
These reports will help identify the areas that have cost issues. "Hospitals will start looking at whether these costs are clinical issues or variations in cost-to-charge ratios," Micheletti says. "Identifying the clinical cost issues is important, and there are going to be reasons as to why practice is deviant. Then hospitals will make an effort toward cost control."
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