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admission review

A review for appropriateness and necessity of admissions

ambulatory payment classifications

APCs, A system of outpatient hospital reimbursement based on procedures rather than diagnoses.

appropriateness evaluation protocols

AEP, Nineteen criteria for admission under the prospective payment system, separated into tow categories, severity and intensity of illness. To allow a patient admission to an acute care facility, one criterion from each category must be met.


A system of payment used by managed care plans in which physicians and hospitals are paid a fixed per capita amkount for each patient enrolled over a stated period regarless of the type and number of services provided. reimbursement to teh hospital on a per member per month basis to cover costs for the members of the plan. Capitation can also mean a set amount to be paid per claim.

case rate

An averaging after a flat rate is given to certain categories of procedures

charge description master

CDM, A computer program that is linked to various hospital departments and includes procedure codes, procedure descriptions, service descriptions, fees, and revenue codes; also know as charge master


The dollar amount a hospital bills an outlier case based on the itemized bill

clinical outliers

Cases that cannot adequately be assigned to an appropriate DRG owing to unique combinations of diagnoses and surgeries , very rare conditions, or other unique clinical reasons. Such cases ae grouped together into clinical outlier DRGs and therefore are considered outliers

code sequence

The correct order of diagnostic codes (1,2,3,4) when submitting an insurance claim that affects maximum reimbursement. Other factors affecting maximum reimbursement. Other factors affectign maximum reimbursement are accurate diagnostic coed selection and linking the proper service or procedures provided to the patient


An ongoing condition that exists along with the conditions for which the patient is receiving treatment; in regard to DRGs, a preexisting condition that, because of its presence with a certain principal diagnosis, will cause an increase in length of stay by at least 1 day in approximately 75% of cases.

cost outlier

A typical case that has an extraordinarily high cost when compared with most discharges classified to the same DRG

cost outlier review

A review by a professional review organization (PRO) for the necessity of a patient's hospital admission and to determine whether all services rendered were medically necessary. Cost outlier cases are recognized only if the case is not eligible for day outlier status.

day outlier review

A review of potential day outliers (short or unusually long length of hospital stay) to determine the necessity of admission and number of days before the day outlier threshold is reached as well as the number of days beyond the threshold is reached as well as the number of days beyond the threshold. The PRO determines the certification of additional days.

diagnosis-related groups

DRGs, A patient classification system that categorizes patients who are medically related with respect to diagnosis and treatment medically related with respect to diagnosis and treatment and statistically similar in length of hospital stay. Medicare hospital insurance payments are based on fixed dollar amounts for a principal diagnosis as listed in DRGs.

DRG creep

Coding that is inappropriately altered to obtain a higher payment rate; also known as coding creep, diagnostic creep, or upcoding

DRG validation

To find out whether the diagnostic and procedural information affecting DRG assignment is substantiated by the clinical information the patients chart

elective surgery

A surgical procedure that may be scheduled in advance, is not an emergency, and is discretionary on the part of the physician and patient


The computer software program that assigns DRGs of discharged patients using the following information: patient's age, sex, principal diagnosis, complications/comorbid conditions, principal procedure, and discharge status.


A term used when a patient is admitted to the hospital for overnight stay.

ICD-9-CM,International Classification of Diseases, Ninth Revision, Clinical Modificatoin

ICD-9-CM, A diagnostic code book that uses a system for classifying diseases and operation to facilitate collection of uniform and comparable health information. A code system to replace this is ICD-10, which is being modified for use in the United States


The automated grouper (computer software program that assigns DRGs ) process of searching all listed diagnoses for the presence of any comorbid condition or complication, or searching all procedures for operating room procedures or other specific procedures.

major diagnostic categories

MDCs, A broad classifications of diagnoses. There are 83 coding systems-oriented MDCs in the origial DRGs and 23 body system-oriented MDCs in the revised set of DRGs


A patient who receives services in a health care facility, such as a physician's office, clinic, urgent care center, emergency department, or ambulatory surgical center and goes home the same day.

percentage of revenue

The fixed percentage of the collected premium rate that is paid to the hospital to cover services.

per diem

A single charge for a day in the hospital regardless s of any actual charges or cost incurred

preadmission testing

Treatment, tests, and procedures done 48 to 72 hours before admission of a patient into the hospital. This is done to eliminate extra hospital days.

principal diagnosis

A condition established after study that is chiefly responsible for the admission of the patient to the hospital.

Quality Improvement Organization program

QIO, A program that replaces the peer review organizatoin (PRO) program and is designed to monitor and improve the usage and quality of care for Medicare beneficiaries.

readmission review

A review of patients readmitted to a hospital within 7 days with problems related to the first admission, to determine whether the first discharge was premature or the second admission is medically necessary


When the insurance billing editor checks for errors before forwarding the claim to the proper claims office

stop loss

An agreement between a managed care company and a reinsurer in which absorption of prepaid patient expenses is limited; or limiting losses on an individual expensive hospital claim or professional services claim; form of reinsurance by which the managed care program limits the losses of an individual expensive hospital claim

transfer review

Review of transfers to different areas of the same hospital that are exempted from prospective payment

Uniform Bill CMS 1450 paper or electronic claim form

UB-04, A Uniform Bill insurance claim form developed by the National Uniform Billing Committee for hospital inpatient billing and payment transactions.

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