Principles of Healthcare Reimbursement

Student Workbook
Chapter 9 Revenue Cycle Management

Principles of Healthcare Reimbursement:

Student Workbook Chapter 9

Activities with Keys

Theory into Practice
Anywhere Hospitals CFO for the past 20 years, Jim Smith, just retired. He worked for the hospital for 40 years and was greatly respected by his staff. The hospital governing board has hired a new CFO, Todd White. Jim Smith utilized the silo approach to revenue cycle management during his tenure. He relied on his key management personnel to contact upper management of other departments in the hospital to discuss issues and to resolve problems and vice versa. Todd White, however, had implemented an integrated revenue cycle team at his former hospital three years ago and strongly believed in the power of teamwork. His previous team had gained numerous efficiencies and improved accounts receivable by millions. So when Todd started at Anywhere Hospital he planned on implementing a similar revenue cycle team. As with any change, Todd was met with much resistance. But after speaking with many of his managers in patient accounts and finance he realized that the employees did not know how to effectively work in teams. And why should theythe previous CFO had not asked them to do so in several years. 1. What are some creative ways that Todd can help Anywhere Hospital understand the importance of an integrated revenue cycle team? 2. How can a manager improve teamwork amongst his or her employees? Does Todd need assistance from a Change Management Leader? Explain your answer.

Application Exercises
1. You are the CDM Coordinator at Anywhere Hospital. Answer the following questions about the IPPS new technology add-on payment items/devices for the new fiscal year. 1.1 1.2 1.3 1.4 When would these items/devices be incorporated into the CDM? How would these items/devices be incorporated into the CDM? Which departments/units within Anywhere Hospital would you provide educational sessions? How would you explain the importance of the new technology add-on payment to various department/unit managers?

Principles of Healthcare Reimbursement:

Student Workbook Chapter 9

2. Read the article Diagnosis Coding and Medical Necessity: Rules and Reimbursement by Janis Cogley, located on the AHIMA Body of Knowledge (BoK) at www.ahima.org. This article discusses how Medicare carriers and fiscal intermediaries (FIs) use coverage determinations to establish medical necessity. When the condition(s) of a patient are expected not to meet medical necessity requirements for a test, procedure, or service, the provider has the obligation under the Beneficiary Notices Initiative to alert the Medicare beneficiary prior to rendering the service. The Medicare beneficiary is notified via the Advance Beneficiary Notice (ABN). The Medicare beneficiary may choose to complete the ABN and provide out-ofpocket reimbursement for the service, or may elect to not have the service performed. If the provider fails to alert the Medicare beneficiary with an ABN, then the facility may not balance bill the patient for the non-covered charges denied by the Medicare Carrier, FI, or MAC. Scenario You are the revenue cycle coordinator for Anywhere Hospital. The decision support department at Anywhere Hospital is concerned because the volume of remittance advice remark code #M39 (The patient is not liable for payment for this service because the advance notice of non-coverage you provided the patient did not comply with program requirements.) on Medicare remittance advice logs has increased over the past three months. Further analysis of the denied claims shows that 75 percent of the claims have code 93798 (physician services for outpatient cardiac rehabilitation with continuous ECG monitoring) present. Therefore, they are requesting that the revenue cycle team perform further investigation for this issue. After auditing the remittance advice logs and medical records for a sample of cardiac rehabilitation claims, the revenue cycle team has determined that medical necessity is not being met for code 93798. Further, they have discovered that a new LCD was issued for code 93798 in October (three months ago). The only ICD-9-CM diagnosis codes that support medical necessity for code 93798 are 410.00410.92 Acute myocardial infarction of anterolateral wall episode of care unspecified through acute myocardial infarction of unspecified site subsequent episode of care 412 Old myocardial infarction 413.0413.9* Angina decubitus through other and unspecified angina pectoris V45.81 Post surgical aortocoronary bypass status
* There is no specific code assigned to stable angina. Therefore, these codes should be used to identify stable angina and documentation should support that diagnosis.

Further, around $20,790.00 has been written off due to ABNs not being issued for this cardiac rehabilitation service. 2.1 What went wrong in the revenue cycle?

Principles of Healthcare Reimbursement:

Student Workbook Chapter 9

2.2 2.3

How would you suggest rectifying this issue? How will your team monitor improvements?

3. Review the following excerpt from the charge description master file at Anywhere Hospital. Closely examine the line items and identify and correct the elements that need to be updated or revised.
ITEM CODE 12345 12347 12350 12351 12348 12346 12349 12352 12353 SERVICE DESCRIPTION BILIRUBIN TOTAL & DIRECT CHROMOSOME STUDY - AMNIOTIC FLUID SKIN TEST CAND TRANSCATHETER PLACEMENT.IVSTENT VESSLE CT CHEST W/WO ABD&PELVIS W/CONTRAST CATHETERIZATION URETHRA COMPLICATED OPERATING ROOM-III 1ST 30 MINUTES HOT/COLD THERAPY PT LEVEL 2 DRUG REVENUE CODE 310 300 300 320 352 360 360 430 250 CPT CODE 82251 86458 95960 53675 PRICE $25.00 $0.00 $20.00 $1,125.00 $1.00 $270.00 $2,267.00 $75.00 $3,000.00

4. The executive finance team at Anywhere Hospital is reviewing charge levels for various surgical units. The team leader has requested a CDM management report from the CDM coordinator. She would like the report to include the Medicare reimbursement, cost, and profit for procedures performed during first quarter 20XX. Additionally, she would like third-party payer average reimbursement, cost, and profit for the same time period. Using the information in table 1 complete the data elements provided in table 2. The average reimbursement rate for all third-party payers at Anywhere Hospital is 62 percent of billed charges. The outpatient ratio of cost to charge for revenue code 360 is 0.4043. The outpatient ratio of cost to charge for revenue code 320 is 0.5267. Is either of the payers profitable for Anytime Hospital in this outpatient surgical area?

Principles of Healthcare Reimbursement:

Student Workbook Chapter 9

Table 1
CHARGE CODE 49213 49214 49215 49216 49217 49218 49219 49220 49221 49222 49223 49224 49225 49226 49227 49228 49229 49230 49231 49232 49233 49234 49235 49236 49237 49238 49239 49240 49241 49242 49243 49244 49245 49246 49247 49248 49249 49250 49251 49252 CODE DESCRIPTION BIOPSY BREAST PERCUT W/O IMAGING GUIDANCE BIOPSY OF BREAST, OPEN BIOPSY BREAST, PERCUT, W IMAGING GUIDANCE BIOPSY BREAST, PERCUT W DEVICE CRYOSURG ABLATE FIBROADENOMA, EACH NIPPLE EXPLORATION EXCISE BREAST DUCT FISTULA REMOVAL OF BREAST LESION EXCISION, BREAST LESION EXCISION, ADDL BREAST LESION REMOVAL OF CHEST WALL LESION PREOP PLACE NEEDLE LOCAL WIRE BREAST PREOP NEEDLE LOCALIZATION ADD'L LESIONS TISSUE MARKER PLACEMENT PLACE BALLOON CATHETER FOR RADIOELEMENT APP PLACE BALLOON CATHETER WITH PART MASTECTOMY PLACE BRACHYTHERAPY CATHETER REMOVAL OF BREAST TISSUE PARTIAL MASTECTOMY P-MASTECTOMY W LYMPHADENECTOMY MASTECTOMY, SIMPLE, COMPLETE MASTECTOMY, SUBCUTANEOUS MASTECTOMY, MODIFIED RADICAL SUSPENSION OF BREAST REDUCTION OF LARGE BREAST ENLARGE BREAST ENLARGE BREASE WITH IMPLANT REMOVAL OF BREAST IMPLANT REMOVAL OF BREAST IMPLANT MATERIAL IMMEDIATE BREAST PROSTHESIS DELAYED BREAST PROSTHESIS BREAST RECONSTRUCTION CORRECT INVERTED NIPPLE(S) BREAST RECONSTRUCTION BREAST RECONSTRUCTION SURGERY OF BREAST CAPSULE REMOVAL OF BREAST CAPSULE REVISE BREAST RECONSTRUCTION DESIGN CUSTOM BREAST IMPLANT BREAST SURGERY PROCEDURE CPT CODE 19100 19101 19102 19103 19105 19110 19112 19120 19125 19126 19260 19290 19291 19295 19296 19297 19298 19300 19301 19302 19303 19304 19307 19316 19318 19324 19325 19328 19330 19340 19342 19350 19355 19357 19366 19370 19371 19380 19396 19499 REV CODE 360 360 360 360 360 360 360 360 360 360 360 320 320 320 360 360 360 360 360 360 360 360 360 360 360 360 360 360 360 360 360 360 360 360 360 360 360 360 360 360 REVENUE AREA 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 1196 1196 1196 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 1137 CHARGE 826.80 3944.25 1359.48 2594.22 6059.85 3944.25 3944.25 3944.25 3944.25 3944.25 3076.44 65.00 65.00 65.00 10810.92 10810.92 10810.92 3944.25 3944.25 7608.72 6059.85 6059.85 7608.72 6059.85 7608.72 7608.72 10810.92 6059.85 6059.85 7608.72 10810.92 3944.25 6059.85 10810.92 6059.85 6059.85 6059.85 7608.72 6059.85 3944.25 MEDICARE VOL 58 37 87 63 21 12 14 76 45 36 22 43 10 17 5 8 10 21 24 21 18 17 15 11 9 0 0 5 0 0 17 4 0 6 7 5 6 4 0 2 TPP VOL 115 76 112 123 32 14 17 87 90 54 43 98 65 24 24 12 32 68 45 65 47 56 63 2 12 23 25 13 16 34 27 47 3 25 24 12 9 8 23 1

Principles of Healthcare Reimbursement: Table 2

CHARGE CODE 49213 49214 49215 49216 49217 49218 49219 49220 49221 49222 49223 49224 49225 49226 49227 49228 49229 49230 49231 49232 49233 49234 49235 49236 49237 49238 49239 49240 49241 49242 49243 49244 49245 49246 49247 49248 49249 49250 49251 49252 CODE DESCRIPTION BIOPSY BREAST PERCUT W/O IMAGING GUIDANCE BIOPSY OF BREAST, OPEN BIOPSY BREAST, PERCUT, W IMAGING GUIDANCE BIOPSY BREAST, PERCUT W DEVICE CRYOSURG ABLATE FIBROADENOMA, EACH NIPPLE EXPLORATION EXCISE BREAST DUCT FISTULA REMOVAL OF BREAST LESION EXCISION, BREAST LESION EXCISION, ADDL BREAST LESION REMOVAL OF CHEST WALL LESION PREOP PLACE NEEDLE LOCAL WIRE BREAST PREOP NEEDLE LOCALIZATION ADD'L LESIONS TISSUE MARKER PLACEMENT PLACE BALLOON CATHETER FOR RADIOELEMENT APP PLACE BALLOON CATHETER WITH PART MASTECTOMY PLACE BRACHYTHERAPY CATHETER REMOVAL OF BREAST TISSUE PARTIAL MASTECTOMY P-MASTECTOMY W LYMPHADENECTOMY MASTECTOMY, SIMPLE, COMPLETE MASTECTOMY, SUBCUTANEOUS MASTECTOMY, MODIFIED RADICAL SUSPENSION OF BREAST REDUCTION OF LARGE BREAST ENLARGE BREAST ENLARGE BREASE WITH IMPLANT REMOVAL OF BREAST IMPLANT REMOVAL OF BREAST IMPLANT MATERIAL IMMEDIATE BREAST PROSTHESIS DELAYED BREAST PROSTHESIS BREAST RECONSTRUCTION CORRECT INVERTED NIPPLE(S) BREAST RECONSTRUCTION BREAST RECONSTRUCTION SURGERY OF BREAST CAPSULE REMOVAL OF BREAST CAPSULE REVISE BREAST RECONSTRUCTION DESIGN CUSTOM BREAST IMPLANT BREAST SURGERY PROCEDURE CPT CODE 19100 19101 19102 19103 19105 19110 19112 19120 19125 19126 19260 19290 19291 19295 19296 19297 19298 19300 19301 19302 19303 19304 19307 19316 19318 19324 19325 19328 19330 19340 19342 19350 19355 19357 19366 19370 19371 19380 19396 19499

Student Workbook Chapter 9

MCR Reimb

TPP Reimb

MCR Cost

TPP Cost

MCR Profit

TPP Profit

Principles of Healthcare Reimbursement:

Student Workbook Chapter 9

5. Identify five new CPT codes for the upcoming calendar year. Create a workflow to ensure that all data elements required in the CDM are identified, verified, and signed off on for inclusion in the CDM. Identify any compliance issues for these new CPT codes.