Ongoing team effort makes APCs work
Monitoring, customer service important
Key to the successful implementation of ambulatory payment classifications (APCs) is oversight by an ongoing multidisciplinary team that continues to function even after you go live with the process. That’s the No. 1 suggestion offered by Karen Geisler, HFMA, CHFP, patient financial systems consultant for Trinity Health, a multistate health care organization based in Novi, MI, that recently implemented a program for handling APCs. "Having the team is just essential," Geisler explains. "This is not a process that can be solved in patient accounting. It is a reimbursement change that affects operations; if they’re not involved, you can’t be successful."
After hiring an outside consulting firm to help with its APC readiness assessment, Trinity shared the results throughout the system and put in place APC teams of between eight and 15 people at its various hospitals, Geisler says. The teams include operations, clinical, and reimbursement personnel, she adds, and although the health system distributed a recommended structure, each facility designed a team that fit its own organization. The readiness assessment, meanwhile, helped Trinity identify areas on which to focus its attention, Geisler notes, including:
• The chargemaster. The teams looked at the chargemaster to determine how it could better reflect the way APCs would pay. The Health Care Financing Administration (HCFA) has acknowledged, for example, that CPT codes are for physicians and don’t exactly mirror hospital operations, Geisler points out. For that reason, HCFA stated that each facility could develop its own way of assigning evaluation and management (E&M) codes, but that it must have a policy and procedure for doing so.
"You need to have a plan," she says. "Will you assign [the code] via the chargemaster, or will medical records assign that code? There is no right or wrong, but a policy decision."
Another decision that must be made, Geisler says, is how the modifiers — indicators added to the CPT code that more fully describe the procedure — for APCs will be entered. "Are you going to drive [the modifiers] from the chargemaster or is the department responsible for entering them?"
If the department is given that task, the chargemaster is smaller, she notes, "but the clinical staff have to have a total grasp of APCs and when a modifier is appropriate." Some modifiers are entered by medical records staff, Geisler adds, while others are generated by the ancillary department, including those for radiology and those that are attached to E&M codes when there are additional services.
Creating a link
• The computer system. After making the above decisions, she notes, the hospital must then do the prep work from the perspective of the computer system. Trinity, for the most part, uses Atlanta-based McKesson-HBOC’s Star patient accounting applications, Geisler says, and works with 3M HIS in Salt Lake City because it offers products that link with those applications.
The 3M APC Finder is a coding tool that each facility, depending on its health information management (HIM) department, will "tell you they need or they don’t need," she adds. At Trinity, HIM directors made the decision as to whether the product was needed, based on the coding expertise of the personnel and the complexity of the patient mix, Geisler notes.
On the billing side, McKesson-HBOC developed an interface to the Star patient accounting applications with the 3M APC Grouper Plus, Geisler says. Grouper Plus groups the APCs, and checks for conflicts with the Correct Coding Initiative (CCI), a set of rules that looks at the relationships between groups of CPT codes, she explains. Basically, the CCI provides that if you do one procedure that you subsequently will group into an APC, you may not bill other procedures with it, Geisler says. Grouper Plus also gives the reimbursement for the claim, both for charges bundled under the APCs, and for those paid according to a fee schedule, such as lab charges, she adds.
APC implementation was challenging from a technical perspective, Geisler notes, because Trinity personnel "had to learn to work the interface and how to work the claims. For the most part, it was the hospitals’ first exposure to the CCI, so they not only had to learn a new reimbursement methodology, they had to learn the CCI edits."
• HCFA’s ongoing changes. "It’s hard to keep our heads above water," she points out. "Our biggest ongoing challenge is keeping up with changes to the regulations. HCFA continues to make frequent changes, and the vendor has to add those, then test and install."
Initially, there was a problem with the payments for coinsurance and deductibles from the fiscal intermediary, Geisler says. Although computed correctly, the electronic remittance advice was posted wrong, she notes. The claims "were paid correctly, but some erroneous hospital bills were sent to patients. We had to look at all the payments manually." That problem has since been solved, Geisler adds.
HCFA originally had an addendum to the APC regulations listing procedures that would be covered only if done in an inpatient setting, she notes. After realizing many of those are often done on an outpatient basis, the agency changed the list, "but implementation lagged behind the arrival of APCs," Geisler adds. "That was resolved by the first of January, but there were several months where we were told to hold the claims for those procedures."
One of the big APC issues has been the "pass-throughs" that have been allowed for medical equipment and some drugs, she says. These items — designated by "C" (equipment) and "J" (drug) codes — include some high-dollar equipment, such as pacemakers, and expensive drugs, Geisler says, and are paid in addition to the APC. The identification of those items has been a challenge because HCFA has changed the list many times since APCs became effective in August 2000, she notes. Part of the difficulty is that the codes for those items are now "vendor-specific and device-specific," Geisler says. "Somebody needs to monitor the chargemaster so these [changes] are reflected."
The need is not only to keep the chargemaster updated, she points out, but for users to understand that they need to charge for them. "If they’re not detailing them on the bill, the provider could be missing reimbursement for which it is eligible."
This kind of monitoring is one important reason why the APC teams must remain in place, Geisler notes. The hospitals also need to maintain a log of rejections from the payer, she adds. "They can take these back to the team and work through the issues. Until we get a real handle on reimbursement and rejection, [the teams] need to meet at least monthly, maybe more if there are specific issues to be addressed."
In some cases, Geisler says, it is effective to form subgroups to discuss issues involving, for example, a particular ancillary service. The group can address that concern and then report back to the team, she adds.
Get automated, monitor updates
Whether it’s the Grouper Plus or similar software offered by other vendors, Geisler says, she believes "an automated solution" to APCs is needed so that providers can get a handle on whether they’re being reimbursed as expected. It’s actually a three-way comparison that’s necessary, she adds. "Compare the charges against the expected reimbursement and against the reimbursement you receive so you can look back at how you charge. That will help you as you go forward."
The software is "a huge benefit," Geisler says, because "it allows us to edit our claims and prepare an accurate bill for the fiscal intermediary." The team is able to take the feedback on rejections back into the departments and change the procedures as needed, she notes.
"It’s a painful process," Geisler adds. "You might find, for example, that in radiology they always charge for these two X-rays, but the CCI edits say that when you charge for one, the second is included. That has not been hospital policy, which has treated them as two distinct [procedures]. Now you have to decide if they truly are two distinct procedures and [the code] needs a modifier, or if you change the procedure so that it’s one charge. [The grouper] gives you a tool to question that."
Geisler also offers the following advice for providers struggling with APC implementation:
• If you haven’t had your chargemaster reviewed by an outside firm, do it now. "You need to do this to make sure the right charges are set up, the right CPT codes are attached, and that they are assigned to the correct revenue codes for Medicare."
• Make sure someone is monitoring HCFA updates and implementing them into the process. Trinity has an employee that looks at the HCFA Web site (www.hcfa.gov), at least weekly, and distributes changes throughout the system, Geisler says.
• Keep groupers updated to the latest version of the software. The 3M grouper typically receives quarterly updates, she notes, but there have been patches in between because of HCFA updates.
• Keep customer service in mind. Along with the new outpatient prospective payment system has come a drastic change in the coinsurance process for beneficiaries, Geisler points out. Personnel should be trained to explain the changes and answer patients’ questions, she suggests. In Trinity’s case, she adds, each hospital developed its own training in this area, depending on computer system needs.
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