Preparing for APGs ot easy, but doable

Question: How can we prepare to do as well as possible under APGs?

Answer: In order to do as well as possible, providers will need to take steps long before an APG-based payment system is proposed and implemented in the marketplace. The following steps can be helpful in preparing:

• First, the organization needs to ensure that the CPT-4 coding contained in the medical record is as complete as possible. This means that your coders and billers are accurately capturing all procedures performed during each visit and that the data are correctly documented on the claim.

• Next, management and staff should acquaint themselves thoroughly with APG concepts and classifications. A number of consultants, books, journals, and seminars are easily available that are excellent resources. Your local hospital association or state health information management group can probably recommend some. Furthermore, most national APG software vendors offer technical assistance and tutorials on APG grouper technology.

Group data into APGs

• It also is extremely important for facilities to learn how to group, or assign, their own coded data into APGs and calculate their case-mix by relative weight. Assigning your codes to APGs requires the help of either the APG grouper software or a user’s manual. 3M Health Information Systems’ APG Definitions Manual for Version 2.0 contains a full breakdown of APGs by CPT codes. The manual is broken down by categories of APGs and related codes.

A good grouper also can help you calculate your weighted case-mix. The software is likely to contain a modeling component with a full set of weights used by many large payers. The vendor can guide you through the modeling feature.

• Facilities also need to begin comparing their charges for individual services to sample payment rates derived from the APG system used by a particular payer. Modeling allows you to calculate payment results using different relative weights or payment policies, which involve packaging, discounting, and consolidation of the APG values.

Determine your payment for service

It also enables you to determine what your payment should be for particular services under different payer scenarios. The information can be valuable in benchmarking complex case rates in future negotiations with insurers.

For example, in order to optimize your payments, you must have the ability to put all services performed on a patient during a single patient visit on a single UB-92 form prior to claims submission. Many facilities lack either the technology or the awareness that it is important to merge all procedures into a single visit under APGs.

Remember, APGs are visit-based. When a payer implements APGs, it will define a patient visit for you whether a visit is defined as a one-day encounter or a three-day encounter. If providers don’t merge the services on a single UB-92, the payer’s fiscal agent may pay the first claim under the diagnosis and deny everything else. The facility then has to go back and resubmit the entire claim.

• Finally, the facility’s data storage capacity and management reporting capabilities also may have to be expanded through software enhancement to manage larger amounts of information. And the Chargemaster should be reviewed and updated to reflect current coding and pricing. However, billing formats should not have to change under an APG implementation.