Reimbursement Exam 2 with Complete
Solutions
Explain the concept of a prospective payment system - ANS-Payment rates established
in advance and based on average levels of resource use for certain types of healthcare
Describe the reasons medicare converted from a cost-based payment system to
prospective payment system - ANS-Created an incentive for hospitals to control costs
Process used to calculate Medicare IPPS Payment
**DRGPAYME
DISCHSPECPAYME** - ANS-1. MS-DRG Assignment
2. Establish Initial Payment
3. Assign Patient Discharge Status
4. Establish any special payments
5. Submit claim within 3 days.
Hospital Acquired Conditions - ANS-A medical condition or complication that a patient
develops during a hospital stay which was not POA. HAC's are harmful events or
negative outcomes that result from the processes of care and treatment rather than
from a natural progression of underlying illness.
Explain how HAC's can impact reimbursement - ANS-They do not get reimbursed
Type 1 transfer - ANS-Between IPPS Acute Care
Example: Inpatient transferred from Liberty hospital to KUMC
Example: Inpatient left AMA from KUMC and was admitted same day at Truman.
Type 2 Transfer - ANS-From an IPPS Acute Care to Hospital excluded from IPPS
Example: Inpatient discharged from acute care at Heartland Health and admitted to
SNF at Heartland Health
Patient discharge status code and calculating payment for transfer
**DONDE? - ANS-a. indicated where the patient went after leaving the hospital
b. the code can have an impact on payment
c. certain codes indicate to payer that patient was transferred.
Components of HOPPS
**Uses,Uses,Services*** - ANS--Uses HCPCS to report services, procedures, supplies
-Uses packaging and bundling concepts as a way to combine payment for multiple
services during an encounter
, -Services: Clinic, ED and Outpatient surgery
-Variety of payment methods
Payment determination steps for HOPPS payment
*(7)(APC2WFCSO)** - ANS-1. APC Assignment
2. Unadjusted APC payment rate
3. Wage Index Adjustment
4. Fee Schedule amounts applied
5. Reasonable Costs amounts applied
6. Sum all Medicare Payments
7. Outlier add-on applied (if applicable)
Components of Medicare PFS
*10,000* - ANS-Provides physician services with associated relative value units, a fee
schedule status indicator, and various payment policy indicators (payment for assistant
at surgery, team surgery, etc.) needed for payment adjustment.
Also provides geographic adjustment for different areas
Authoritative resources for coding and billing screening and preventive services - ANS-
What is considered a preventive service - ANS-a. Reasonable and necessary for the
prevention or early detection of illness or disability
b. Appropriate for individuals entitle to benefits under Part A or enrolled under Part B of
the Medicare Program
Front End - ANS-Scheduling and Registration, insurance verification, patient financial
counseling, point of service collection
Middle End - The 6 C's - ANS-Case Management and utilization management, chart
capture, chargemaster, CDI, coding, case mix index
Back End
*$$$* - ANS-Claims processing and payment posting, denial management, revenue
audit and recovery
Coordination of benefits - ANS-Patient with more than one insurance policy require
determination of which policy is primary and which policy is secondary
EOB - ANS-Explanation of Benefits, sent by 3rd party payer to patient to explain
services provided, amounts billed and payments made
MSN - ANS-Medicare Summary Notice, sent by medicare to beneficiary to explain
services provided, amount billed and payments made
Hard Coding - ANS-Codes submitted via chargemaster
Solutions
Explain the concept of a prospective payment system - ANS-Payment rates established
in advance and based on average levels of resource use for certain types of healthcare
Describe the reasons medicare converted from a cost-based payment system to
prospective payment system - ANS-Created an incentive for hospitals to control costs
Process used to calculate Medicare IPPS Payment
**DRGPAYME
DISCHSPECPAYME** - ANS-1. MS-DRG Assignment
2. Establish Initial Payment
3. Assign Patient Discharge Status
4. Establish any special payments
5. Submit claim within 3 days.
Hospital Acquired Conditions - ANS-A medical condition or complication that a patient
develops during a hospital stay which was not POA. HAC's are harmful events or
negative outcomes that result from the processes of care and treatment rather than
from a natural progression of underlying illness.
Explain how HAC's can impact reimbursement - ANS-They do not get reimbursed
Type 1 transfer - ANS-Between IPPS Acute Care
Example: Inpatient transferred from Liberty hospital to KUMC
Example: Inpatient left AMA from KUMC and was admitted same day at Truman.
Type 2 Transfer - ANS-From an IPPS Acute Care to Hospital excluded from IPPS
Example: Inpatient discharged from acute care at Heartland Health and admitted to
SNF at Heartland Health
Patient discharge status code and calculating payment for transfer
**DONDE? - ANS-a. indicated where the patient went after leaving the hospital
b. the code can have an impact on payment
c. certain codes indicate to payer that patient was transferred.
Components of HOPPS
**Uses,Uses,Services*** - ANS--Uses HCPCS to report services, procedures, supplies
-Uses packaging and bundling concepts as a way to combine payment for multiple
services during an encounter
, -Services: Clinic, ED and Outpatient surgery
-Variety of payment methods
Payment determination steps for HOPPS payment
*(7)(APC2WFCSO)** - ANS-1. APC Assignment
2. Unadjusted APC payment rate
3. Wage Index Adjustment
4. Fee Schedule amounts applied
5. Reasonable Costs amounts applied
6. Sum all Medicare Payments
7. Outlier add-on applied (if applicable)
Components of Medicare PFS
*10,000* - ANS-Provides physician services with associated relative value units, a fee
schedule status indicator, and various payment policy indicators (payment for assistant
at surgery, team surgery, etc.) needed for payment adjustment.
Also provides geographic adjustment for different areas
Authoritative resources for coding and billing screening and preventive services - ANS-
What is considered a preventive service - ANS-a. Reasonable and necessary for the
prevention or early detection of illness or disability
b. Appropriate for individuals entitle to benefits under Part A or enrolled under Part B of
the Medicare Program
Front End - ANS-Scheduling and Registration, insurance verification, patient financial
counseling, point of service collection
Middle End - The 6 C's - ANS-Case Management and utilization management, chart
capture, chargemaster, CDI, coding, case mix index
Back End
*$$$* - ANS-Claims processing and payment posting, denial management, revenue
audit and recovery
Coordination of benefits - ANS-Patient with more than one insurance policy require
determination of which policy is primary and which policy is secondary
EOB - ANS-Explanation of Benefits, sent by 3rd party payer to patient to explain
services provided, amounts billed and payments made
MSN - ANS-Medicare Summary Notice, sent by medicare to beneficiary to explain
services provided, amount billed and payments made
Hard Coding - ANS-Codes submitted via chargemaster
