Learn as you go’ is motto as APCs join health care

It’s still unclear what role access will play

Now that the dust is settling on the final rule for the outpatient prospective payment system, hospitals are getting down to the business of determining what the advent of ambulatory payment classifications (APCs) means to them.

The role access services will play varies, depending on whom you talk to, and there is a big "learn as you go" factor, most sources say.

Despite the Health Care Financing Administration’s (HCFA) prediction that hospitals will see an overall 4.6% increase in reimbursement the first year of the new system, most industry observers say significant decreases in reimbursement will be more common.

A study of some 60 member hospitals of the VHA West Coast projects that the majority of those hospitals will see double-digit decreases, says Karen Oppliger, CHE, director of managed care for the El Segundo, CA-based organization. "Initially, before the final regulations, HCFA said there would be a 5% to 7% decrease in reimbursement, while we found a 16.3% decrease. When we reran the numbers, we found an average decrease of 17%. I don’t think it will be that bad, but it certainly won’t be plus 4.6%."

In any event, Oppliger says, two issues are key to getting a handle on APCs. "First, everyone needs to identify the grouper. The challenge is where you’re going to house that." She recommends putting the grouper, which is software that looks at all the care, tests, and services given to a patient and determines whether all the necessary codes have been used, on the front end and back end of the billing process to fully understand the process.

"Another thing is that we have to identify the technology to monitor what we expect to get paid and what we actually get paid," Oppliger adds. "That will be very valuable, especially in the first six months."

The most important thing for access managers to understand, whatever their level of involvement in coding, she says, is the increased emphasis on accuracy. "What we’ve been talking to people about is [communicating to] key stakeholders — and they are in various parts of the organization — that now, more than ever, whatever you do to the patient needs to be captured in the chart so that individual services and devices will be captured in the billing."

Before, she points out, outpatient billing wasn’t driven by coding. "It wasn’t that specific. Now, what you code and also how you document it influences what you are paid."

CCI complications

Access managers will be affected in a host of ways, Oppliger says, and should, first of all, be included in any APC task force formed by an organization. "One of the things that is more critical now is the coordination of getting the patient through the system — the encounter process, the visit process — because who bills for what is so important," she adds. "One of the questions to ask, for example, is, Do you need a health information management person in the emergency department?’"

The issue of late charges is critical, Oppliger says. "You can go through and rebill, but you need to get everything on the chart and posted quickly. You need to review the process to make sure that when the bill is sent, it’s complete and accurate. The bar’s a little higher now."

Training programs are important because the accuracy of coding is so crucial, she notes. "I’ve heard [health care managers] say historically that those doing the coding in the outpatient areas are neophytes. That is no longer true. Illogically, this reimbursement methodology, which will probably result in less reimbursement, will demand more FTEs [full-time equivalents], but [hospitals] aren’t likely to get them.

"Focusing on coders and getting them to work more efficiently is an interesting challenge we’ve faced before [with the advent of the inpatient diagnosis-related group (DRG) system]," she says. "You staff up to get less money."

APCs drag along a set of rules called the Correct Coding Initiative (CCI) that looks at the relationships between groups of CPT codes, points out Jack Duffy, CHAM, corporate director of patient financial services for ScrippsHealth in San Diego. "If you do one procedure, which will subsequently group into an APC, you may not bill other procedures with it," Duffy notes. "In radiology alone, there are 8,000 conflicted procedures."

That means an order that has to be filtered through medical necessity guidelines now must be filtered a second time through a piece of software that checks for CCI conflicts, he says.

"In radiology, 30% of the orders can be modified from the time the patient presents or schedules to the time when the radiologist makes adjustments," he explains. "In the past, it’s been the good ole boys club.’ The orders didn’t have to match the work to be done. They would joke that Dr. Jones never gets it right, doesn’t know his left from right, and we always have to fix [the order].’"

Now, he says, "fixing" is illegal, which leads to the question of what role access will play in the process. "These things require precoding of all services, and CCI requires all correct CPT codes, so you have to go through the process of whether [the codes] are conflicted and only bill for those that aren’t.

"I think the software of the future will say, Don’t send that claim because you can’t bill Medicare for these two services,’" Duffy adds. "So I’m saying conflicts should be understood from the point of contact so you don’t have to rebill."

How it works

There are a number of ways to get the specificity required for accurate coding under the APC system, notes Pete Kraus, CHAM, a business analyst in patient accounts services at Atlanta’s Emory University Hospital. It can come through the access department if the information received from a physician’s office or taken from central scheduling was complete and accurate, he says.

"You might get it from access if the information received from the doctor said, to use a completely hypothetical example, not just that the patient was having a hangnail removed, but that it was being removed from the left index finger," Kraus adds.

Even that level of detail may not be all that’s necessary, he says. "When the patient presents for treatment, other tests might be run or unforeseen procedures performed. Also, HCPCS/CPT4 codes appear on charges that access is not likely to see. Maybe the ancillary department can include [the necessary information], or maybe it can only be done by looking at the procedural notes that go to medical records. If that’s the case, medical records personnel could add the codes.

"If, while having the hangnail done, the patient is also having something done to the right knee," he points out, "you now have two procedures. Unlike with DRGs, where there is always just one code, you can have multiple codes. You won’t get paid the whole amount [for both procedures]. The second one is prorated."

If, because of inaccurate coding, the bill doesn’t specify that it’s the left index finger, "that could change what you’re going to get," Kraus says. "That may mean no payment for the hangnail, just the payment for the knee. Bottom line, access is not likely to have complete information for APC coding."

Ensure coding is accurate

Hospitals don’t have to use a grouper to determine the correct APCs in advance, he points out. "When it reaches Medicare, it will be done, but if [hospitals] don’t do it, they won’t know whether they’re putting in the charge modifiers they need or if they have conflicted procedure codes."

As to what point in the process a grouper is used, Kraus says he may have created a small stir when he mentioned Emory’s current strategy at a recent conference of users of Atlanta-based McKesson HBOC software. While that vendor and others have come up with all sorts of software to use on the billing end of patient accounts, he notes, his organization doesn’t plan to go in that direction.

"Instead, we’re working from the medical records perspective," Kraus says. "The APC grouper will be installed on our medical records system, and there will be software to monitor and edit for CCI. In the final analysis, we think medical records has the best repository of data and has the greatest expertise to ensure that coding accurately reflects the tests, procedures, and treatments our patients receive."

There are several keys to making such a system work, he says. "In order for medical records to have complete information, there must be excellent data flow from physicians and ancillary departments. The medical records APC grouper and CCI software must also be able to factor in codes that appear on charges. I don’t think that is part of the normal medical records/billing flow for most facilities. That’s something we’re working on here at Emory."

Because medical records was not coding outpatient accounts before, that department may not even get a record of what procedure is being done, and if it does receive one, it may not be complete, Kraus explains. "There will be a big need for education of ancillary departments and for getting that flow of information."

At Emory, medical records already codes some outpatient records, just not all of them, he says. "We hold bills for the outpatient claims that medical records codes until coding is complete. That said, medical records’ volume is likely to increase with APCs, and the factors that contribute to accurate coding are much more complex."

One reason for the emphasis on installing a grouper on the billing end, he suggests, is that vendors believe their customers want to estimate APC coordination of benefits (COB) amounts at the time of billing. "We’re not going to try," Kraus notes. "Medicare outpatient claims reflect only 5% of our business in terms of dollars, and not all claims will be paid under APCs. It doesn’t seem worth the effort."

Of course, Emory wants to be paid correctly, he says. Monitoring payments will feed charge and medical records data to its costs accounting and claims adjudication system, as it already does, and will let that system calculate the APC amount to compare with what Medicare actually pays.

Kraus points out that APCs are used to calculate only Medicare reimbursement, at least for now. "So why code all outpatient accounts to APC standards? One reason is that when research studies are conducted in years to come, it is important that all accounts are coded the same way. Otherwise, the data is at best misleading, at worst useless."

Access role questioned

Although noting that hospitals with centralized scheduling systems would have more of an interest in handling APCs at the point of access, Kraus says he sees little point in doing so otherwise. "I suppose the point would be that the level of coding required to deal with APCs cannot be handled effectively by access staff," he adds. "At best, they can be a pass-through. I suppose you could add professional coders to the staff, but why do that when coders are a scarce commodity and medical records has the expertise? We’ll see how it all plays out."

Kraus emphasizes that his and other health care facilities are now "in the interpretive stage" with APCs. "Perspectives change daily, and what we plan to do now will almost certainly require revision as we get further into the process."

Whatever approach a hospital takes, he suggests, it should make every effort to follow HCFA rules and to obtain clarification from HCFA or its fiscal intermediary when unsure how to proceed. "There are tons of APC-related Web sites. Try the HCFA [www.hcfa.gov] and the Healthcare Financial Management Association [www.HFMA.org] sites for starters."