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California Medical Bill Reviewer Certification

California Medical Bill Reviewer Certification. Unit 4: Hospital Guidelines Module 2: Outpatient/ ASC Guidelines. Overview. Let’s start by discussing what outpatient services are and how injured workers are treated as outpatients.

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California Medical Bill Reviewer Certification

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  1. California Medical Bill Reviewer Certification Unit 4: Hospital Guidelines Module 2: Outpatient/ ASC Guidelines

  2. Overview Let’s start by discussing what outpatient services are and how injured workers are treated as outpatients. In this module, you will learn about current hospital outpatient billing practices, how fees are determined and how services are billed. Outpatient/ASC Guidelines… • What Outpatient/ACS Services Are • Where Outpatients are Treated • Billing Terminology • How Fees are Determined • Billing Examples • Special Circumstances • Summary • What Outpatient/ACS Services Are • Where Outpatients are Treated

  3. What are outpatient services? Outpatient services are rendered to patients for the purpose of administering medical treatment that does not require an overnight stay at a hospital. An outpatient receives health care services without being admitted to a hospital. Instead, they are registered as an outpatient in hospital records. Place holder Examples of services injured workers might be treated for as an outpatient are… • Broken bones • Minor burns • Wounds

  4. Where are outpatients treated? Outpatient services are performed at hospitals and Ambulatory Surgery Centers (ASCs). In the ASC/outpatient environment, staffing outside the immediate procedural location is minimal,which helps to reduce costs.

  5. Hospital Outpatient Services By definition, hospital outpatient services are furnished by any hospital defined in the California Health and Safety Code Section… or a hospital certified to participate in the Medicare program to treat a patient who has not been admitted as an inpatient, but who is registered as an outpatient in the records of the hospital.

  6. Ambulatory Surgery Centers An ASC on the other hand is any surgical clinic or ambulatory surgical center that is certified to participate in the Medicare program or any surgical clinic accredited by an approved accrediting agency.

  7. Limitations Certain limitations exist to distinguish outpatient from inpatient services and to ensure patient safety during procedures. Only hospitals can charge for emergency room visits. ASCs and hospital outpatient departments are also prohibited from performing extensive surgeries designated in the Federal Register by a “C” status, like craniotomies, liver transplants, hip fracture repairs, and other inpatient procedures. Only hospitals and ASCs may charge a facility fee for surgical services provided on an outpatient basis.

  8. Limitations • In these settings, a patient is guaranteed… • Anesthesia services, • A sterile environment, and • Emergency care • …if something unexpected should occur. Cost savings occur because there is no need for an overnight stay, as once the patient is awake and stable they can be discharged home.

  9. Cost Savings The costs are very different for an ASC or Outpatient facility compared to Inpatient care facilities. • With inpatient services, significant costs are incurred with 24-hour care of a patient… • Room • Personnel • Dietary care • Inpatient pharmacy • Many other costs With outpatient services, cost savings are experienced since the patient requires less care, as they are typically more self-sufficient and require less medical attention.

  10. Check Point Now let’s take a look at some billing examples and associated terminology. Outpatient/ASC Guidelines… • What Outpatient/ACS Services Are • Where Outpatients are Treated • Billing Terminology • How Fees are Determined • Billing Examples • Special Circumstances • Summary • Billing Terminology • How Fees are Determined • Billing Examples

  11. Billing Outpatient Services Any incurred charges not represented by CPT codes 99281-99285 (emergency room) or 10040-69990 (surgery) are included in their respective fee schedules. Drugs are paid 100% of Medi-Cal rates from their fee schedule. Ambulance services are paid according to the Ambulance Fee Schedule. Clinical diagnostic tests are paid according to the Pathology and Clinical Lab Fee Schedule DME, prosthetics, and orthotics are paid by the DMEPOS Fee Schedule. The ASCs and outpatient hospital departments providing these supplies or services covered by other fee schedules are not paid differently for any of the above items than any other provider.

  12. Standard Calculation APC Relative Weight and Adjusted Conversion Factor are two concepts that you’ll see in the upcoming examples, as we explore Standard Calculation. APC stands for Ambulatory Payment Classification and is a part of the Fee Schedule that deals with outpatient procedures. The APC Relative Weight helps keep reimbursement fees in check or “relative” to keep insurance companies and patients from overpaying or underpaying for a service. The Adjusted Payment Calculation helps determine the reimbursement a provider receives for rendering a particular service. It adjusts the amount of a reimbursement based on the history of related costs and expenses in previous years. For example, the conversion factor for 2006 is the 2005 unadjusted factor… $55.703 x 1.037, which is the 2006 market basket inflation factor and equals 57.76.

  13. There is a column in the Federal Register marked Relative Weight with a value corresponding to each CPT listed. There is a column in the Federal Register marked Relative Weight with a value corresponding to each CPT listed. Standard Calculation The standard calculation used when billing hospital or ASC outpatient services is… APC Relative Weight x Adjusted Conversion Factor x 1.22 The standard calculation used when billing hospital or ASC outpatient services is… APC Relative Weight x Adjusted Conversion Factor x 1.22 StatusIndicators APC Relative Weight is taken from a table of all reimbursable CPT procedure codes, which are identified by status indicator codes S, T, X or V.

  14. Listed and Unlisted Facilities Hospital outpatient departments and ASCs are paid with two different methods. Listed Method Listed hospitals have a Medicare ID number. Medicare ID#: XXXXXX If the hospital is listed, it will have a wage-adjusted conversionfactor associated with it. Unlisted Method Unlisted hospitals do not have a Medicare ID number. Medicare ID#:?????? If the hospital is not listed, the zip code will be used to get the county-wide wage-adjusted conversion factor to use for that facility.

  15. The Adjusted Conversion Factor helps determine the reimbursement a provider receives for rendering a particular service. It adjusts the amount of a reimbursement based on the history of related costs and expenses in previous years. Standard Calculation The adjusted conversion factor is a value taken from two different tables, depending upon whether the hospital is listed and has a Medicare ID number or not. APC Relative Weight x Adjusted Conversion Factor x 1.22 The adjusted conversion factor is a value taken from two different tables, depending upon whether the hospital is listed and has a Medicare ID number or not. APC Relative Weight x Adjusted Conversion Factor x 1.22 The Provider is listed by Medicare ID. Listed By Facility Unlisted By County

  16. Standard Calculation Since care in California is more expensive than the average state, the California Workers’ Compensation system applies a “factor” of 1.22 to Medicare values to compensate for this expense in the Golden State. APC Relative Weight x Adjusted Conversion Factor x 1.22 Since care in California is more expensive than the average state, the California Workers’ Compensation system applies a “factor” of 1.22 to Medicare values to compensate for this expense in the Golden State. APC Relative Weight x Adjusted Conversion Factor x 1.22 California Workers’ Comp Compensation Factor 1.22

  17. Unlisted Billing Example Let’s look at an example using an unlisted hospital in Alameda County. Berkeley Surgical Center is charging for a diagnostic thoracoscopy (CPT #32601).

  18. From the Federal Register, the APC Relative Weight is 30.9541 From Table A, the Adjusted Conversion Factor is 76.70 Unlisted Billing Example Remember the formula… APC Relative Weight x Adjusted Conversion Factor x 1.22 30.9541 x 76.70 x 1.22 = $2896.50 30.9541 x 76.70 x 1.22 = $2896.50 30.9541 x 76.70 x 1.22 = $2896.50 30.9541 x 76.70 x 1.22 = $2896.50

  19. This is a pretty straight forward calculation. Take a look! • Multiply, the APC Relative Weight by the Adjusted Conversion Factor, and then • Multiply, that product by the CA Workers’ Comp Factor Next we’ll try one from a listed hospital! Math Check APC Relative Weight 30.9541 Adjusted Conversion Factor 76.70 (Alameda County) CA Workers’ Comp Factor 1.22 Standard Calculation APC Relative Weight x Adjusted Conversion Factor x 1.22 30.9541 x 76.70 $2374.18 x 1.22 = $2896.50 30.9541 x 76.70 $2374.18 x 1.22 = $2896.50

  20. Listed Billing Example Let’s look at an example using a listed hospital. Kaiser Hospital is charging for the implant of a patient-activated cardiac event recorder.

  21. From the Federal Register, the APC Relative Weight is 74.9052 Qualifier Status Indicator “S” From Table B, the Adjusted Conversion Factor is 76.70 Listed Billing Example Remember the formula… APC Relative Weight x Adjusted Conversion Factor x 1.22 $7009.18 76.70 74.9052 x 76.70 x 1.22 = $7009.18 74.9052

  22. In some cases, facilities can bill outside of the normal payment schedule. You’ll see this next in High Cost Outlier Services! Again… pretty straight forward. • Multiply, the APC Relative Weight by the Adjusted Conversion Factor, and then • Multiply, that product by the CA Workers’ Comp Factor Math Check APC Relative Weight 74.9052 Adjusted Conversion Factor 76.70 CA Workers’ Comp Factor 1.22 Standard Calculation APC Relative Weight x Adjusted Conversion Factor x 1.22 74.9052 x 76.70 $5745.22 x 1.22 = $7009.18 74.9052 x 76.70 $5745.22 x 1.22 = $7009.18

  23. High Cost Outlier Services The Alternative Payment Method permits a facility to bill outside the normal payment schedule, after applying to the State to do so. These facilities are assigned a “cost-to-charge ratio”, a ratio of the facility’s total operating costs to total gross charges during the preceding calendar year. A provider may select this method if they think their operating costs are higher than the norm and thus losing revenue.

  24. Lower Conversion Factor Although a lower conversion factor is assigned(1.20 instead of 1.22), a provider may be paid more than the standard reimbursement if costs of a procedure are significantly outside the norm. 1.20 Currently, less than 30 facilities in the whole state are using this method.

  25. Alternative Method Qualification According to this regulation, the charges must meet two criteria to qualify for the additional outlier payment: 1) The facility charges multiplied by the provider’s cost-to-charge ratio must exceed the standard payment for the code by $1,250.00* (*effective 2/15/06). 2) The facility charges multiplied by the cost-to-charge ratio must also exceed the standard payment multiplied by 1.75.

  26. Apr. 1, 2005 - Mar. 31, 2006 Outpatient surgery centers Cost-to-charge ratio Premier Outpatient Surgery Center .393 Long Beach Pain Center Medical Clinic, Inc. .20 Westlake Spine and Outpatient Surgery Alliance Surgery Center .159 .225 Apr. 1, 2006 - Mar. 31, 2007 Hospital outpatient departments Cost-to-charge ratio Pacific Hospital of Long Beach .258 Pomona Valley Hospital Medical Center .226 Apr. 1, 2006 - Mar. 31, 2007 Outpatient surgery centers Cost-to-charge ratio Pacific Hospital of Long Beach 0.243 California Minimally Invasive Surgical Center 0.387 Apr. 1, 2004 - Mar. 31, 2005 Ambulatory surgical centers Cost-to-charge ratio Alliance Surgery Center 0.212 Hospital outpatient departments Cost-to-charge ratio Central Valley Orthopedic and Spine Institute 0.328 Colusa Regional Medical Center 0.335 Doctors Medical Center of San Pablo 0.143 Emanuel Medical Center 0.238 Feather River Hospital 0.217 Huntington Memorial Hospital 0.287 John F. Kennedy Memorial 0.113 Midway Hospital Medical Center 0.106 North Bay Medical Center 0.235 Pacific Hospital Long Beach 0.323 Pioneers Memorial Healthcare District 0.251 Presbyterian Intercommunity Hospital 0.215 Redbud Community Hospital 0.301 San Dimas Community Hospital 0.175 Sonoma Valley Hospital 0.259 St. Helena Hospital 0.303 Tri-City Regional Medical Center 0.279 Vaca Valley Hospital 0.234 Qualifying Hospitals and ASCs Ready for an example? This is a list of qualifying hospitals and ASCs, with their respective cost-to-charge ratios. You can see how they differ, based upon their ratio of total operating costs to total gross charges during the previous calendar year. I knew you would be!

  27. Apr. 1, 2005 - Mar. 31, 2006 Outpatient surgery centers Cost-to-charge ratio Premier Outpatient Surgery Center .393 Long Beach Pain Center Medical Clinic, Inc. .20 Westlake Spine and Outpatient Surgery Alliance Surgery Center .159 .225 Apr. 1, 2006 - Mar. 31, 2007 1.20 Hospital outpatient departments Cost-to-charge ratio Pacific Hospital of Long Beach .258 Pomona Valley Hospital Medical Center .226 Apr. 1, 2006 - Mar. 31, 2007 Outpatient surgery centers Cost-to-charge ratio Pacific Hospital of Long Beach 0.243 California Minimally Invasive Surgical Center 0.387 Apr. 1, 2004 - Mar. 31, 2005 Ambulatory surgical centers Cost-to-charge ratio Alliance Surgery Center 0.212 Hospital outpatient departments Cost-to-charge ratio Central Valley Orthopedic and Spine Institute 0.328 Colusa Regional Medical Center 0.335 Doctors Medical Center of San Pablo 0.143 Emanuel Medical Center 0.238 Feather River Hospital 0.217 Huntington Memorial Hospital 0.287 John F. Kennedy Memorial 0.113 Midway Hospital Medical Center 0.106 North Bay Medical Center 0.235 Pacific Hospital Long Beach 0.323 Pioneers Memorial Healthcare District 0.251 Presbyterian Intercommunity Hospital 0.215 Redbud Community Hospital 0.301 San Dimas Community Hospital 0.175 Sonoma Valley Hospital 0.259 St. Helena Hospital 0.303 Tri-City Regional Medical Center 0.279 Vaca Valley Hospital 0.234 You receive a claim from Pacific Hospital of Long Beach for the insertion of a pacemaker, to the tune of $75,000. High Cost Outlier Example Pacific Hospital of Long Beach has a cost-to-charge ratio of .258. Pacific Hospital of Long Beach has a cost-to-charge ratio of .258. They are listed on Facility Table B, with a Hospital Specific Wage Index of 1.1793. They have chosen to take the lower conversion factor of 1.20. According to the Federal Register table for Relative Weight, CPT #33206 has a relative weight of 117.0463. They are listed on Facility Table B, with a Hospital Specific Wage Index of 1.1793. They have chosen to take the lower conversion factor of 1.20. According to the Federal Register table for Relative Weight, CPT #33206 has a relative weight of 117.0463.

  28. High Cost Outlier Example Let’s see if they qualify! Remember the requirements for the additional outlier payment. Pacific Hospital’s Charge for CPT #33206 $75,000 To qualify for additional outlier payment… 1) The facility charges multiplied by the provider’s cost-to- charge ratio must exceed the standard payment for the code by $1,250. $75,000 x.258 > (117.0463 x 55.703 x 1.1793 x 1.20)+$1,250* *Effective 2/15/06 AND 2) The facility charges multiplied by the cost-to-charge ratio must also exceed the standard payment times 1.75. $75,000 x .258 > (117.0463 x 55.703 x1.1793x1.20) x 1.75 1) The facility charges multiplied by the provider’s cost-to- charge ratio must exceed the standard payment for the code by $1,250. 2) The facility charges multiplied by the cost-to-charge ratio must also exceed the standard payment times 1.75.

  29. The facility charges multiplied by the cost-to-charge ratio exceeds the standard payment when multiplied by 1.75! The provider’s cost-to-charge ratio exceeds the standard payment by $1,250 AND It looks like Pacific Hospital does qualify for the High Cost Outlier Payment. High Cost Outlier Example The facility charges multiplied by the provider’s cost-to-charge ratio must exceed the standard payment for the code by $1,250. $75,000 x .258 > (117.0463x55.703 x 1.1793x1.20) + $1,250 $19,350.00 > $9,226.61 + $1,250 $19,350.00 > $10,401.61 AND The facility charges multiplied by the cost-to-charge ratio must also exceed the standard payment times 1.75. $75,000 x .258 > (117.0463x55.703 x 1.1793x1.20) x 1.75 $19,350.00 > $9,226.61 x 1.75 $19,350.00 > $16,146.57 $19,350.00 > $10,401.61 $19,350.00 > $16,146.57

  30. Keep in mind that in determining the additional payment, the facility’s charges and payment for devices with status code indicator “H” shall be excluded from the computation. Therefore, when additional outlier payment is applicable, implants are allowed at cost plus 10% or a maximum of $250 added to the cost, whichever is the lesser payment. So, all that work for an additional $1,601.72 above the standard payment of $9,226.61. If the charges had not met the criteria, the payment would only have been $9,226.61 Since both criteria have been met, the additional outlier reimbursement is calculated like this. Math Check Facility charges x Cost-to-Charge Ratio - (Standard Payment x 1.75) x .50 Facility charges x Cost-to-Charge Ratio - (Standard Payment x 1.75) x .50 = Outlier Payment $75,000 X .258 $19,350 - $16,146.57 $3,203.43 $3,203.43 x.50 = $1,601.72 $75,000 (Facility Charges) X .258 (Cost-to-Charge Ratio) $19,350 $75,000 (Facility Charges) X .258 (Cost-to-Charge Ratio) $19,350 $19,350 - $16,146.57 (Standard Ratio x 1.75) $3,203.43 - $16,146.57 (Standard Ratio x 1.75) $3,203.43 = $1,601.72 $3,203.43 x.50 $3,203.43 x.50

  31. Sole Community Hospitals For services rendered on or after February 15, 2006, by rural, sole community hospitals (SCH) a different calculation must be used. APC Relative Weight x Unadjusted Conversion Factor x 1.071 x Wage Adjusted Factor x 1.20 Example for CPT #33218 in Alameda County 55.9362 x 55.703 x 1.071 x 1.5463 x 1.20 $3,337.03 x 1.5463 x 1.20 $6,192.06

  32. System Calculations Fortunately, as a bill processor you do not have to determine these calculations manually. The Bill Review system has been automated to perform these calculations itself. • It is important for you to see what factors are used when determining how to reimburse providers, in the event that • Manual processing is required, or • Inquiries are made

  33. Summary Outpatient services do not require an overnight stay in a hospital. Ambulatory Surgical Centers are certified by Medicare to perform outpatient services. With outpatient services, cost savings are experienced since the patient requires less care, as they are typically more self-sufficient and require less medical attention. Care in California is more expensive than the average state, so the California Workers’ Compensation system applies a factor of 1.22 to Medicare values to compensate for the added expense. The Alternative Payment Method permits a facility to bill outside the normal payment schedule, after applying to the State to do so.

  34. Module 2 Quiz Click on the link to go directly to the quiz. Feel free to review any of the material before you move on. Good Luck! Quiz: U4M2: Outpatient Hospital /ASC Guidelines

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