Please answer the following questions in essay format:1. What is the main difference between the fee-for-service and capitation reimbursement methods?What is the key to profitability? 2. What is the p

1. Insurance verification, including patient’s health plan identification number 2. Amount due from patient for copayment or deductible 3. Financial counseling  For patients with no insurance coverage or who are unable to pay co -copayment or deductible  Financing  Medicaid and other governmental programs Medical Record/Coding  Health Insurance Portability and Accountability Act (HIPAA) of 1996  Two coding systems 1. International Classification of Diseases, Tenth Revision, Clinical Modification (ICD - 10 -CM) 2. Healthcare Common Procedure Coding System (HCPCS) Medical Record/Coding, cont.  Diagnosis codes are three to seven digits, providing greater specificity at the sixth - and seventh - character level  Procedure codes  Used to report inpatient procedures  Diagnosis and procedure codes are used for DRG assignment, which is often used to determine payment ICD - 10 ICD - 9 - CM Diagnosis Codes Example 003 Other Salmonella Infections 003.0 Salmonella Gastroenteritis 003.1 Salmonella Septicemia 003.2 Localized Salmonella Infections 003.20 Localized Salmonella Infection, Unspecified 003.21 Salmonella Meningitis 003.22 Salmonella Pneumonia 003.23 Salmonella Arthritis 003.24 Salmonella Osteomyelitis 003.29 Other Localized Salmonella Infection 003.8 Other specified salmonella infections 003.9 Salmonella infection, unspecified HCPCS  Used by physicians for reporting both inpatient and outpatient procedures  Used by facilities for reporting outpatient procedures  Two tiers  Level I: Current Procedural Terminology (CPT), a five -digit code (maintained by AMA)  Level II HCPCS codes  These codes are often a major determinant of provider payment for both facilities and physicians. Level I: CPT Codes  Six main categories  Evaluation and Management  Anesthesia  Surgery  Radiology  Pathology and Laboratory  Medicine  May also contain modifier code that provides additional information essential to the claim Level II HCPCS Codes  Used to report products, services, supplies, materials, or procedures that are not present in the Level I (CPT) codes.  Five -digit codes beginning with an alphabetic character followed by four numeric characters  Two groups of codes:

 Permanent  Temporary • Used for needs not covered by the permanent codes • Can remain “temporary” indefinitely and is sometimes replaced by a permanent code Charge Entry  Represents the “capture” of products and services provided  Three greatest concerns in billing:

 Capture of charges for services performed  Incorrect billing  Billing late charges • Charge capture methods :  Charge slips posted as batch process  Order entry system • Charge explosion can be used when a uniform set of supplies is used Chargemaster  Also referred to as Charge Description Master (CDM)  A list of all the goods and services provided by a hospital, and the price (or prices) the hospital charges for each of those goods and services  Six elements:

 Charge code  Item description  Department number  Charge (price)  Revenue code  CPT/HCPCS code Chargemaster Sample ExtractItem Code Item Description Dept Num Standard Price Revenue Code HCPCS 3023001 DAILY CARE FOURTH N ORTH 13030 $665.50 111 3120000 DAILY CARE ICU 13120 1,172.50 200 4156159 MINERAL OIL 30ML 13190 11.50 250 4400206 SINGLE TOWEL 14430 2.25 270 4440302 HEP C ANTIBODIES -0288 14440 53.50 300 86803 4470220 HAND XRAY -0183 14470 102.50 320 73130 447253 8 C/T PELVIS W & W/O ENHANCEMENT 14302 1,069.75 350 72194 4416000 LASIK SURGERY - PER EYE 13190 2,105.25 360 66999 Billing/Claims Preparation • CMS -1500: the uniform professional claim form  Used by noninstitutional providers (e.g., physicians) to submit claims to Medicare and many other payers • CMS -1450 (a.k.a. UB -04): the uniform institutional claim form  Used by institutional providers to submit claims to Medicare and most other payers  Data from this form are used to determine DRGs (diagnosis -related groups) and APCs (ambulatory payment classifications)  One or more HCPCS codes must be present on the claim form if an APC is to be assigned (outpatient only). • Most claims now submitted electronically Sample UB - 04 Form Sample CMS - 1500 Form Claims Editing  Software designed to find errors in claims  Providers use it to maximize appropriate payment and to speed payment  Payers use it to determine minimum payment obligation and to delay payment for valid reasons  Error checking:

 Spelling errors  Missing data (e.g., date of service and diagnosis codes)  Internal validity (e.g., procedure consistent with gender)  CMS developed the National Correct Coding Initiative (NCCI) to promote correct coding methodologies.  NCCI edits are incorporated within the Outpatient Code Editor (OCE).

 Ensures that the most comprehensive groups of codes are billed rather than the component parts  Checks for mutually exclusive code pairs Claims Editing, cont.  Each OCE edit results in one of six dispositions  Claim -level dispositions • Rejection: Claim must be corrected and resubmitted • Denial: Claim cannot be resubmitted but can be appealed • Return to provider (RTP): Problems must be corrected and claim resubmitted • Suspension: Claim requires further information before it can be processed  Line -item -level dispositions • Rejection: Claim is processed but line item is rejected and can be resubmitted later • Denial: Claim is processed but line item is rejected and cannot be resubmitted Claims Editing, cont. Summary  Accurate billing and coding are essential to a healthcare provider’s financial viability.  Very complex area requiring specialized professionals  Many providers fail to capture all charges to which they are entitled.