22 Jun DRG Reimbursement And Inpatient Coding
A long time ago, inpatient care was paid for on a per diem basis, where services were paid a certain fee. For instance, the hospital would be paid a certain amount for each day of basic care (room/board and nursing care). X-rays and other tests, medications, and other treatments were paid for as added fees. Now there is the PPS, or prospective payment system, where the facility is reimbursed set amount for the entire hospitalization. This arrangement was to encourage hospitals to provide the most efficient and effective care possible while keeping costs down by cutting the patient’s length of stay shorter and discouraging unnecessary expenses. The federal government implemented a PPS for Medicare inpatients in the early 1980s based on diagnosis related groups (DRG). DRGs are a classification system of group inpatient hospitalizations on the basis of use of resources.
Basic coding principles should be followed and the coder has to be aware of how the codes affect reimbursement. Because the DRG assignment depends on the selection of the principal diagnosis, the patient’s record needs to be reviewed carefully when assigning the principal diagnosis code.
Other things to be aware of:
1. Identify all OR procedures because they affect DRG assignment and surgical DRGs usually pay more than related medical DRGs.
2. Complications and comorbidities must be identified because their presence increases reimbursement.
Factors other than principal diagnosis, complications, and comorbidities, and OR procedures may affect individual DRGs.
Physicians Billing Service
Documents that are a part of the billing process are:
• Acknowledgement statement
• Physician profile
• Accounts receivable
• Remittance advice
The acknowledgement statement’s purpose is to ensure that the physician is made aware of serious consequences when it comes to misconduct in reporting. Diagnoses and procedures need to be accurate and to the best of their knowledge. This statement is required according to Medicare reimbursement regulations.
The UB-92 is a billing form that is used to submit claims to from the providers to third-payer sources. It can be submitted electronically or by paper.
Hospitals often develop reports that help them monitor their charges by DRG. One report that used is the physician profile, where physicians can compare the cost of patient care and their average hospital stay for each DRG. Other reports can be to examine hospital costs per DRG or other services. Daily account receivables (AR) can list what DRGs have not been paid because of codes that are not available. The large amounts that have not been paid can be looked into so that efforts are focused on the bigger issues and facilitate the coding.
The remittance advice can be a monitoring tool to see what coding is done for DRGs and indicates what amounts the hospital was paid. The report should be checked for any discrepancies between what the hospital determined during the coding process and the fiscal intermediary. If there is a problem, it should be checked out. It could be a clerical error, a code may be transposed, or other thing other than an actual code error.