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Reimbursement Methodologies

AHIMA

American Health Information Management Association

ALOS

Average Length of Stay

CC

Complication/ComorbidityPreexisting

CDIP

Clinical Documentation Improvement Program

CDM

Charge Description Master

CHF

Congestive Heart Failure

CMI

Case-Mix Index

CMS

Centers for Medicare & Medicaid Services

COPD

Chronic Obstructive Pulmonary Disease

DHHS

U.S. Department of Health and Human Services

GMLOS

Geometric Length of Stay

HCPCS

Healthcare Common Procedure Coding System

HH

Home Health

HMO

Health Maintenance Organization

HPR

Hospital Payment Rate

IPPS

Inpatient Prospective Payment System

LCDs

Local Coverage Determinations

LMRP

Local Medical Review Policies

LOS

Length of Stay

LTC

Long-Term Care

MAC

Medicare Administrative Contractor

MDC

Major Diagnostic Category

MI

Myocardial Infarction

MIC

Medicaid Integrity Contractor

MS-DRG

Medicare Severity Diagnosis-Related Group

NCDs

National Coverage Determinations

NPI

National Provider Identifier

PEPPER

Program for Evaluating Payment Patterns Electronic Report

PPO

Preferred Provider Organization

PPS

Prospective Payment System

QIO

Quality Improvement Organization

RAC

Recovery Audit Contract

RPS

Retrospective Payment System

RW

Relative Weight

SNF

Skilled Nursing Facility

SOW

Scope of Work

TEFRA

Tax Equity and Fiscal Responsibility Act

UB-40

Uniform Bill-04

ZPIC

Zone Program Integrity Contractor

MS-DRG Reimbursement Formula

RW x HPR = MS-DRG Payment

Case-Mix Index

A measurement used by hospitals to define how sick their patients are

Charge Description Number

A number that designates a particular service or procedure, used to generate a charge on a patient bill

Chargemaster/CDM

A listing of the service, procedures, drugs, and supplies that can be applied to a patient's bill

Comorbidity

A preexisting condition (present on admission) that may lead to increased resource use

Complication

A condition that arises during a patient's hospitalization that may lead to increased resource use

Department Number

Ancillary departments such as radiology, laboratory, and emergency room will have a specific hospital department number

Encoder

Coding software that is used to assign diagnosis and procedure codes

Grouper

Specialized software used to assign the appropriate MS-DRG

Health Maintance Organization (HMO)

Type of managed care in which hospitals, physicians, and other providers contract to provide health care for patientsm usually at a dicounted rate

Local Coverage Determinations (LCDs)

Local policy that may include certain time frames for testing, certain age requirements, and that a particular diagnosis or condition must be present for a procedure or treatment to be considered medically necessary

Maximization

The manipulation of codes to result in maximum reimbursement without supporting documentation in the health record or with disregard for coding conventions, guidelines, and UHDDS definitions

Medical Necessity

Criteria or guidelines for what is determined to be reasonable and necessary for a particular medical service

National Coverage Determinations (NCDs)

National policy that may include certain time frames for testing, certain age requirements, and that a particular diagnosis or condition be present for a procedure to be considered medically necessary

Optimization

The process of striving to obtain optimal reimbursement or the highest possible payment to which a facility is legally entitled on the basis of documentation in the health record

Preferred Provider Organization (PPO)

Type of managed care in which hospitals, physicians, and other providers have an arrangement with a third party payer to provide health care at discounted rates to third party payer clients

Principal Diagnosis

Condition established after study to be chiefly responsible for occasioning the admission of the patient to the hospital for care

Prospective Payment System

Method of reimbursement in which payment is made on the basis of a predetermined, fixed amount rather than for billed charges

Reimbursement

Payment for healthcare services

Revenue Code

A four-digit code that is utilized on the UB-40 to indicate a particular type of service

Self-insured Plans

Self-insurance fund is set up by an employer to provide health claim benefits for employees

Third Party Payer

Makes payments for health services on behalf of the patients; may be a governemtn program, insurance company, or managed care plan

What are 4 commonly missed CCs or MCCs?

1.) Atelectasis
2.) COPD
3.) Malnutrition
4.) Respiratory Failure

The billing form that is currently in use in hospitals is?

UB-40

The interrelated parts of a case-mix are?

1.) Severity of illness
2.) Prognosis
3.) Treatment difficulty
4.) Need for intervention
5.) Resource intensity

MCC

Major Complication/Comorbidity

Who implemented the Medicare Severity Diagnosis-Related Groups and in what year?

CMS in October 1, 2007

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