APCs will make accurate documentation more crucial

New billing rules demand doctor/coder cooperation

Although the exact timetable for implementation of the final ambulatory payment classifications (APCs) for hospital-based outpatient facilities and ambulatory surgery centers is still up in the air, this much is certain, experts say: When APCs do become a reality, physician cooperation in the coding process will be crucial to your organization’s success.

Final regulations for the Health Care Financing Administration’s (HCFA) outpatient prospective payment system (PPS) could come as early as this month, with an expected implementation date of July 2000. As Hospital Peer Review went to press, however, Congress and representatives from the Clinton administration were still considering several proposals that phase in the new system more slowly. The existing inpatient PPS, after all, was phased in over a five-year period. But talk of phasing in the system shouldn’t make health care facilities complacent, says Dave Fee, product marketing manager with 3M Health Information Systems in Salt Lake City, which initially developed the APCs on which the outpatient PPS will be based. He emphasizes that Congress and the White House aren’t trying to discontinue implementation of APCs. "Phase-in doesn’t mean delay," he says.

Don’t wait too late

Even so, the final rule is expected to contain some significant changes from the proposed regulations published in the Sept. 8, 1999, Federal Register. These changes are likely to center around ways to minimize the initial financial risk to outpatient programs. Nevertheless, experts warn, if facilities wait until the final rule is published before preparing for the advent of APCs, they could be overwhelmed with the coding changes they have to make.

Currently, hospitals are reimbursed for outpatient services in a variety of ways, explains Rita Scichilone, MHSA, RRA, CCS, practice manager in coding products and services for the Chicago-based American Health Information Management Association (AHIMA). Some services, like laboratory tests, are reimbursed via a fee schedule, with surgical procedures paid via a combination of ASC reimbursement and the Medicare cost report. HCFA’s new PPS will shift outpatient reimbursement for hospitals into APCs, which are similar to diagnosis-related groups for inpatient payments.

The proposed system groups more than 5,000 outpatient codes into 346 APCs, each of which includes a related group of clinical services for which Medicare will reimburse hospitals at a single, predetermined rate. That approach will dramatically reduce the number of payment levels that need to be tracked. But don’t expect that to make your job easier; the consolidation of codes will make coding accuracy more important than ever, Scichilone says.

"I don’t know that it would be a whole lot more labor-intensive, except for the fact that hospitals will now want to run their CPT [Current Procedural Terminology] codes through a grouper so they can make sure that they receive all of the potential APCs that they’re entitled to, and that’s an extra step in the coding process," Scichilone says. "And then there’s the fact that these CPT codes are going to be so important in accurate payment that it may slow down the process somewhat."

Because of the importance of coding accuracy, complete and accurate documentation by physicians will be crucial, Scichilone adds. Unfortun ately, influencing physician behavior can be difficult at the best of times, and it can be especially problematic when it comes to coding issues. "Physicians are reimbursed from Medicare based on RBRVS [resource-based relative value scale], which means they also get reimbursed on the basis of CPT codes," Scichilone says. "And in the case of outpatient surgery, you’d like to think that the physician and the hospital are reporting the same CPT code. But that’s not always the case, because the documentation that the physician provides the hospital may or may not explain exactly what he did and what he chose to bill for his professional services."

In addition to creating reimbursement problems, such discrepancies could put your facility at risk of fraud and abuse charges, Scichilone warns. "The reason why you may have a discrepancy is that documentation may either be misinterpreted by the coder, or the physician may not be documenting what he’s doing. He knows it in his head, and he bills for it on his HCFA 1500, but he doesn’t get it communicated through his operative report accurately enough so that the hospital gets the right code."

The solution, when it comes to ambulatory care, is to give physicians better tools for capturing the documentation, Scichilone recommends. "The ambulatory part has been difficult, because sometimes the encounter is fairly short. Sometimes it’s just a radiology exam that gets ordered, for example. So the documentation there is directed mainly at justifying the test."

For surgical procedures, the quality of coding can sometimes be improved by using a well-designed form. "That way, the physician has a look at the possible CPT codes and is able to direct his or her documentation toward specific codes and is documenting in the same language the CPT is written in," Scichilone says. She adds that she’s seen this approach work effectively for endoscopy procedures as well as for pain management.

Scichilone also recommends conducting internal studies to compare how physician Part B and hospital Part A coding match up for particular procedures.