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Chapter 6& Chapter 8 Medicare-Medicaid Prospective Payment Systems for Inpatients
Principles of Healthcare Reimbursement 4th Edition Anne Casto
Terms in this set (24)
The name of the computer software that assigns the inpatient DRG
The name of the entity that pays Medicare Part A claims
Medicare Administrative Contractors
List at least two major reasons that Medicare administrators turned to the prospective payment concept for Medicare beneficiaries.
Medicare payments to hospitals grew annually by 19 percent; the Medicare hospital deductible had expanded, placing a burden on beneficiaries; the solvency of the Medicare Trust Fund was endangered by escalating costs; expenditures for hospital inpatient care jeopardized Medicare's ability to fund other necessary health programs; Medicare's payments for comparable services were vastly different across hospitals nationwide; and the cost-based system imposed burdensome reporting requirements.
How do MS-DRGs encourage inpatient facilities to practice cost management?
Because DRGs are a fully packaged system, the predetermined payment for each MS-DRG is full payment for all hospital services performed during an encounter, so facilities accept profit or loss based on the cost of providing the services.
Why was a severity of illness refinement performed on the DRG system? Was it supported by the healthcare community?
The severity of illness refinement allows cases with a higher severity of illness ranking to be more appropriately reimbursed. Yes, the refinement was supported by the healthcare community.
List the steps of MS-DRG assignment.
1. Pre-MDC Assignment
2. MDC Determination
3. Medical/Surgical Determination
Why does the IPF PPS length-of-stay adjustment factor grow smaller during the patient encounter?
The length-of-stay adjustment was implemented because data showed that per-diem costs for psychiatric cases decreases as LOS increases.
Describe at least two patient-level adjustments for IPF PPS claims and explain why they are used.
Costly comorbidities necessitated an adjustment. An adjustment was implemented for older patients because regression analysis shows the cost per day as increasing with increasing patient age. Another adjustment was implemented for patients receiving electroconvulsive therapy, the cost of which is associated with longer stays and increased use of ancillary services.
What is the labor portion of the IPF PPS per diem rate? What is the non labor portion of the IPF PPS per diem rate?
70.317 percent is the labor portion and 29.683 percent is the non-labor portion.
Why was the initial stay and reimbursement provision included in the IPF PPS?
CMS did not want to provide an incentive for facilities to prematurely discharge patients and then subsequently re-admit them because the length of stay adjustment is weighted heavier for the beginning days for an admission.
Describe the medical necessity provision on the IPF PPS.
Medical necessity must be established by the physician at the start of the inpatient psychiatric admission. Medical necessity must be re-evaluated and established for admissions that extend past the 18th day.
When performing the payment determination for IPF PPS admissions, which step comes first: Wage-index adjustments or Application of the patient and facility level adjustements?
Wage index adjustment
What services are included in the consolidated billing of the SNF PPS? What services are excluded from the consolidated billing of the SNF PPS?
Services included in the consolidated billing of SNFs are outpatient services that a resident may receive from outside vendors, such as laboratory tests, x-rays, and pharmaceuticals. Services excluded from consolidated billing are emergency services, inpatient services, and other extensive procedures (such as radiation therapy).
How are per diem rates for SNF PPS patients determined for various cases?
Per-diem rates are case-mix adjusted using the groups of the RUG-IV.
For CMS to define a facility as an LTCH, how many days must its Medicare patients' average length of stay be?
Its average length of stay for Medicare patients must be 25 days or more.
How are MS-LTC-DRGs determined?
The principal diagnosis is the primary determinant of the MS-LTC-DRG, but secondary diagnoses affect the assignment. Grouper software classifies patients for MS-LTC-DRG assignments using principal diagnosis, additional diagnoses, procedures performed, sex of the patient, and discharge status.
On the IRF PAI, the patient's ability to perform activities of daily living, or ________, is recorded on the __________.
functional status; functional status assessment tool
For inpatient rehabilitation facility patients, codes on the IRF PAI should follow the UHDDS and UB-04 guidelines.
Facilities transmit IRF PAIs to the Centers for Medicare and Medicaid Services using CMS's free IRVEN software.
In HHPPS, the _________ software is used to collect and submit OASIS data.
Home assistance validation and entry (HAVEN).
How is durable medical equipment (DME) reimbursed in the HHPPS?
DME is excluded from the per-episode HHPPS reimbursement system and is reimbursed under the DME fee schedule.
Explain why the home health HIPPS code is called an "intelligent" code.
The codes are "intelligent" because the number or letter in each position provides information:
First position: Payment grouping step for episode (numeric characters only)
Second, third, and fourth positions: clinical, functional, and service dimensions, in order (alphabetic characters only)
Fifth position: Severity of nonroutine medical supplies (NSR severity) (alphanumeric characters)
Base payment rate
Rate per discharge for operating and capital related components for an acute care hospital. Prospectively set payment rate made for services that Medicare beneficiries receive in healthcare settings. The base rate is adjusted for geographic location, inflation case mix, and other factors.
Labor related share (portion ratio)
Sum of facilities relative proportion of wages and salaries, employee benefits professional fees, postal services, other labor-intensive services, and the labor-related share of capital costs from the appropriate market basket. Labor-related share is typically 70 to 75 percentof healthcare facilities cost adjusted annually and published in the Federal Register.
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