Professional Documents
Culture Documents
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SECTION TWO
Hospital Billing
and Coding
Process
Patient Accounts and Data Flow in the Hospital
The Hospital Billing Process
Accounts Receivable (A/R) Management
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Chapter 4
standing of the patient care process and how data flow within a
hospital from the time a patient is admitted to when charges are
submitted for patient care services. The flow of information is a
critical factor in providing efficient patient care and billing for
services rendered during the patient visit. The process of
admitting, treating, discharging, and billing patient care services
requires various departments to perform specific functions
simultaneously. One function is to document all information
regarding patient care services including the patients condition,
disease, injury, illness, or other reason for treatment. Designated
personnel within each department are responsible for documenting patient care services in the patients medical record.
Patient care services are coded and charges are entered by
specified personnel in various clinical departments and by the
Health Information Management (HIM) Department.
Patient charges are submitted to patients and third-party
payers after the patient is discharged. The concepts presented in
this chapter are critical to understanding the hospital billing and
claims process, which will be discussed in the next chapter.
Chapter Objectives
Outline
PATIENT ACCOUNTS DATA FLOW
Outpatient
Ambulatory Surgery
Inpatient
PATIENT ADMISSION
Preadmission Testing
Utilization Review (UR)
Admission Evaluation Protocol (AEP)
Peer Review Organization (PRO)
THE PATIENT CARE PROCESS
THE ADMISSIONS PROCESS
Patient Interview
Patient Registration
Utilization Review (UR)
Insurance Verification
Patients Medical Record (Chart)
Room/Bed Assignment
Admission Summary (Face Sheet)
Census Update
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Key Terms
Accounts receivable (A/R) aging report
Admission
Admission Evaluation Protocol (AEP)
Admission summary
Advanced Beneficiary Notice (ABN)
Advanced directives
Ambulatory payment classification (APC)
Assignment of benefits
Charge capture
Charge Description Master (CDM)
CMS-1450 (UB-92)
CMS-1500
Co-insurance
Co-payment
Concurrent review
Deductible
Diagnosis related group (DRG)
Explanation of Benefits (EOB)
Explanation of Medicare Benefits (EOMB)
Encounter form
Facility charges
Financial class
Guarantor
Informed Consent for Treatment
Insurance verification
Medical necessity
Medical record
Medical record number (MRN)
Patient registration form
Professional charges
Prospective review
Remittance advice (RA)
Retrospective review
Written Authorization for Release of Information
sp 3 hd
1 hd
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Operation Departments
Central supply, quality
assurance, risk management,
utilization management, HIM
Administrative Departments
Human resources, volunteer
services, purchasing, legal,
compliance
Health Information
System
Patient account information
Electronic medical record
Charge/order entry
Charge description master
Encoder/grouper
Financial management information
Finance Departments
Accounting, admitting,
patient financial services,
credit and collections
BOX 4-1
KEY POINTS
Flow of Information
Flow of information includes the following patient
information:
Demographic information
Insurance information
Medical information
Outpatient
Outpatient services are those that are provided on the
same day that the patient is released. The patient is
received in various outpatient areas such as the Emergency Department, laboratory, radiology, clinic, or primary care office. Admission tasks required to receive
the patient are performed. Patient care services are rendered. Pharmaceuticals and other items such as supplies
and equipment may be required. All patient care services are recorded in the medical record. Charges for
outpatient services are entered through the Charge
Description Master (CDM), commonly referred to as
the chargemaster, which is a computerized system used
by the hospital to inventory and record services and
items provided by the hospital. Charges for services
provided in a clinic or primary care office are posted
to the patient account. The patient is released and
Clinical Departments
Medical staff, ancillary and
other clinical departments
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Outpatient
Physician order/requisition
or referral
Emergency
Department
(ED physician orders services)
Ancillary Departments
(Pathology/laboratory, radiology,
physical rehabilitation,
occupational and speech therapy)
(Physician order/requisition
required)
Medical/surgical supplies
Durable medical equipment
(DME)
Pharmacy
Durable medical equipment
(DME)
Radiology
Pathology/laboratory
Outside providers,
documentation
(services not billed by
the hospital)
Health Information Management
(medical records)
Charge Description
Master (CDM)
A/R Management
Credit and collections
BOX 4-2
Physician Services
Various physicians are part of the patient care team
within the hospital. They provide services to patients
and document those services in the patients medical
record. Each physician bills charges for his or her service to the patient and third-party payers. Physician services are not billed by the hospital unless the physician
is employed by or under contract with the hospital.
KEY POINTS
Ambulatory Surgery
Ambulatory surgery is a surgical procedure that is
performed on a patient on the same day the patient is
released (sent home). It is considered an outpatient
service. Ambulatory surgeries can be performed in a
hospital-based ambulatory surgery center (ASC) or in a
designated area within the hospital. Physicians orders
are prepared by the surgeon and submitted to the
ambulatory surgery unit. The patient is received in the
ambulatory surgery unit or the preadmission testing
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Radiology Requisition
727-722-1800
07/16/xx
Suzie Hanrahan
DATE
Dr. Kay Waltermeyer
chronic cough, wheezing and chest pain
CLINICAL DIAGNOSIS/SYMPTOMS:
July 19, 20xx
APPT. DATE
TIME 9:45 a.m.
PATIENTS NAME
PHYSICIANS SIGNATURE
GENERAL X-RAY
74415
74000
74020
74022
73610
72050
72040
71020
73080
73550
73630
73090
73130
73500
73060
73564
72110
72170
71100
71110
73030
70210
70220
70260
73590
72080
73110
Other
IVP
KUB
Abdominal Series (2V)
Acute Abdominal Series (3V)
Ankle L/R
C-Spine (min 4V)
C-Spine (max 3V)
Chest (2V)
Elbow L/R
Femur L/R
Foot L/R
Forearm L/R
Hand L/R
Hip L/R
Humerus L/R
Knee L/R
L Spine (min 4V)
Pelvis
Ribs - Unilat L/R
Ribs - Bilat
Shoulder L/R
Sinus - LTD
Sinus
Skull
Tib/Fib L/R
T-Spine
Wrist L/R
MRI
74181
74182
74183
70551
70552
70553
72141
72156
71550
71551
71552
73721
Abd wo/contrast
Abd w/contrast
Abd w/wo contrast
Brain wo/contrast
Brain w/contrast
Brain w/wo contrast
C-Spine w/o contrast
C-Spine w/wo contrast
Chest wo/contrast
Chest w/contrast
Chest w/wo contrast
Lower Extremity (jt.) R/L
MRA
74185
71555
70544
70546
70545
73725
70547
70548
70549
73225
Other
MRV
Abd w/wo contrast
Chest w/wo contrast (Exe Myocardium)
Head wo/contrast
Head w/wo contrast
Head w/contrast
Lower Ext. w/wo contrast
Neck wo/contrast
Neck w/contrast
Neck w/wo contrast
Upr. Ext. w/wo contrast
CT SCAN
ULTRASOUND
76700
76705
93925
93926
93930
93931
76645
93880
76880
76801
76805
76856
76830
76770
76870
76536
93970
93971
Other
Abd Total
Abd. Single Organ/Quadrant
Arterial Lower Ext. - Bilat.
Arterial Lower Ext. - Unilat. L/R
Arterial Upper Ext. - Bilat.
Arterial Upper Ext. - Unilat. L/R
Breast L/R
Carotid
Extremity, Non Vascular L/R
OB - 1st Trimester
OB - After 1st Trimester
Pelvic - Transabdominal
Pelvic - Transvaginal
Renal/Aorta
Scrotum
Thyroid
Venous (Upr. or Lower) Bilat. Ext.
Venous (Upr. or Lower) Unil. Ext. L/R
MAMMOGRAPHY
76092 Screening mammo
76091 Diagnostic mammo - Bilat
76090 Diagnostic mammo - Unil L/R
DEXA SCAN
CORRELATION or
*TRANSPORTATION PROVIDED FOR MRI/CT/PET:
PLEASE REQUEST AT TIME OF SCHEDULING
BOX 4-3
KEY POINTS
Outpatient Services
Services are provided in accordance with
physiciansorders, requisition, or referral. Services are
performed and the patient is released on the same day.
The following areas are involved:
Emergency Department
Laboratory
Radiology
Clinic
Primary care office
COMPARISON:
Day
Year
FIGURE 4-2
(cont.d)
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FIGURE 4-2
Physician Services
Ambulatory surgery involves a team of physicians such
as a surgeon and anesthesiologist. Similar to the process
for outpatient services, physician services performed for
an ambulatory surgery are recorded in the patients
medical record. Each physician submits charges for
services performed.. Professional charges for physician
services are not billed by the hospital.
(cont.d)
Inpatient
In an inpatient admission, the patient is admitted to the
hospital with the expectation that he or she will be
there for longer than 24 hours. A room/bed is assigned,
and 24-hour nursing care is provided. There are several
ways a patient can be referred to the hospital for an
inpatient admission: through the ER, by outside physician
referral, or from another facility.
Physicians orders are prepared by the admitting
physician and provided to the hospital. Admission tasks
required to receive the patient are performed. The
appropriate clinical departments render patient care
services. Pharmaceuticals, supplies, equipment, and
other items may be required. All patient care services
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Ambulatory Surgery
(Hospital-based surgery center
or area within the hospital)
Physicians orders
Ambulatory
Surgery Admission
(UR)
Nursing
Medical/surgical supplies
DME (central supply)
Operating room/recovery
Outside providers
(surgeon, anesthesiologist,
radiologist, etc.) document
care provided
Pharmacy
Radiology
Pathology/laboratory
Charge Description
Master (CDM)
A/R Management
Credit and collections
BOX 4-4
KEY POINTS
Ambulatory Surgery
Ambulatory surgery services are provided in accordance
with physician orders. Ambulatory surgery is
performed in a hospital-based ambulatory surgery
center (ASC) or other designated area within the
hospital.
Surgery is performed on the patient on the same day the
patient is released.
Ambulatory surgery is an outpatient service.
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Inpatient
(admit patient)
Emergency Department
Physician referral
Other facility
Physicians orders
Admissions Department
(UR)
Accommodation
(room/bed)
Outside providers
Physicians
Nursing
Medical/surgical supplies
DME (central supply)
Operating/recovery room
Radiology
Pathology/laboratory
Physical rehabilitation
Occupational and speech
therapy, social services
Charge Description
Master (CDM)
A/R Management
Credit and collections
BOX 4-6
BOX 4-5
KEY POINTS
Inpatient Services
A patient is admitted with the expectation that he or she
will be in the hospital for more than 24 hours.
Services are provided in accordance with physician
orders.
The patient is assigned a room/bed.
Nursing care is provided on a 24-hour basis.
Diagnostic and therapeutic services are provided by
various clinical departments.
KEY POINTS
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Physician Services
PATIENT ADMISSION
As discussed previously, physician services are documented in the patients medical record. Each provider
submits charges for his or her services. They are not
billed by the hospital. Professional charges for physicians such the radiologist, cardiologist, surgeon, or
anesthesiologist are not billed by the hospital.
Regardless of where the patient is received, the data
collected at admission flows to various clinical departments that are involved in the patients care. Each
department involved in patient care, directly or
indirectly, records pertinent information regarding
patient care services in the patients medical record.
Charges are posted to the patients account through
the chargemaster. The chargemaster is reviewed and
updated continually by the HIM Department. When
the patient is discharged, the medical record is forwarded to the HIM Department for review, coding, and
assignment of the appropriate prospective payment
group such as the Diagnosis Related Group (DRG) for
inpatient cases or ambulatory payment classification
(APC) for outpatient surgical cases.
The Utilization Management (UM) Department is
responsible for case management and utilization review
of patient cases, as discussed in the previous chapter.
UM conducts reviews of patient cases to determine
the appropriateness of services provided based on the
patients condition. The initial review performed by
UM is done when the patient is admitted.
The billing process utilizes all information that has
accumulated during the patient care process to submit
charges to the patient and third-party payers. Outstanding accounts are monitored for follow-up by the Patient
Financial Services (PFS) Department, commonly referred
to as the Credit and Collections Department. The
chargemaster and prospective payment systems will be
discussed in detail in future chapters.
To provide a better understanding of the flow of
patient account data and the patient care process, we
will first discuss the concept of patient admission.
Preadmission Testing
Preadmission testing is required when a patient is admitted on an inpatient basis or for ambulatory surgery.
The admitting physician prepares orders outlining preadmission testing requirements. Preadmission testing
will vary based on the reason the patient is being
admitted and the patients condition. Preadmission
testing can include but is not limited to blood tests,
EKG, X-ray, urinalysis, ultrasound, and echocardiograms. The purpose of preadmission testing is to
identify potential medical problems prior to surgery
and to obtain a baseline of health care information on
the patients body system functions. The tests are done
prior to admission to allow time for the results to be
reviewed prior to admission of the patient.
BOX 4-8
BOX 4-7
KEY POINTS
KEY POINTS
Admission
Admission is defined as the act of being received into a
place or patient accepted for inpatient services in a
hospital.
Patients can be received at the Emergency Department,
an ancillary department, a clinic, a primary care office,
ambulatory surgery, or inpatient admission.
The admission process includes various functions required
to receive a patient at the hospital facility for the
purpose of obtaining required information to address
patient care needs and bill for services rendered.
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Utilization Review
The purpose of the UR process, as discussed in the
previous chapter, is to ensure that the care provided is
medically necessary and that the level where care is
provided is appropriate based on the patients condition. Medical necessity refers to services or procedures that are reasonable and medically necessary in
response to the patients symptoms, according to
accepted standards of medical practice. The definition
of medical necessity varies from payer to payer.
Hospitals have implemented utilization management
measures to ensure that patient care standards are met
as required by:
Federal and state licensing requirements
Joint Commission for Accreditation of Healthcare
Organizations (JCAHO) standards
Participating provider agreements with various
payers and government programs
A PRO, which has the authority to deny payment
for services that do not meet stated requirements
The hospitals UM Department performs various
functions to ensure that all guidelines for utilization are
met and that hospital services are reimbursed
appropriately. The UM Department monitors health
care resources utilized at the facility by conducting URs
of patient cases to determine whether:
Services are medically necessary as defined in
participating provider agreements
The level of service for provision of health care is
appropriate according to the patients condition
Quality patient care services are provided in
accordance with standards of medical care
The hospital length of stay is appropriate
The UM Department will determine whether documentation provides explanation and support for medical necessity, level of care, length of stay, and quality of
care. If the documentation is not sufficient, a request for
additional information is submitted to the provider.
Discharge planning is another function performed by
the UM Department; it includes an evaluation of the
patient to determine whether discharge is appropriate
and to identify patient needs after discharge. The
BOX 4-9
KEY POINTS
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Severity of Illness
Notes/Examples
Newly discovered
Newly discovered
4. WBC >15,000/cu.mm
Newly discovered
Newly discovered
Newly discovered
BUN, Blood urea nitrogen; HCT, hematocrit; IV, intravenous; WBC, white blood count.
based on time are referred to as prospective, concurrent, or retrospective reviews, as defined below:
Prospective Review
Retrospective Review
Concurrent Review
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TABLE 4-2
Intensity of Service
Notes/Examples
6. Respiratory assistance
Ventilator, O2
9. Radiation
a. Intracavitary or interstitial therapy
b. Irradiation of weight-bearing bone subject to fracture
c. Implantation of radioactive material in head, neck,
or in reproductive organs
d. Isolation required due to radiation implant
e. IV pain medication necessary during radiation therapy
f. IV hydration necessary during radiation therapy
Discharge Indicators
1. Continued care and services could be rendered safely and
effectively in an alternate setting
2. Oral temperature <101F for at least 24 hours without
antipyretics
3. Type and/or dosage of major drug unchanged for past
24 hours
4. No parental analgesics/narcotics for last 12 hours
5. Voiding or draining urine (at least 800 cc) for last
24 hours or catheter removed and voiding sufficiently
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Intensity of Service
Notes/Examples
BOX 4-10
KEY POINTS
BOX 4-11
Patient admission
Tasks required to recieve a patient at the
hospital on an outpatient or inpatient basis
(UR)
KEY POINTS
Charge capture
Coding
Patient discharge
HIM review/coding
Billing process
Review record and charges, prepare
charges for submission
Figure 4-5
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BOX 4-1
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BOX 4-12
BOX 4-13
KEY POINTS
KEY POINTS
Admissions Process
Admission
Patient care services
Medical record documentation
Charge capture and coding
Patient discharge
Billing
Accounts receivable management
Patient interview
Patient registration
Utilization review
Insurance verification
Patients medical record(chart)
Room/bed assignment
Admissions summary (face sheet)
Census update
mentation, charge capture and coding, patient discharge, billing, and accounts receivable management.
Patient presents
for patient services
Patient Interview
The patient interview is conducted for the purpose of
obtaining information regarding the patient and his or
her insurance. Required consents and authorizations are
also obtained during the patient interview, including a
signed informed consent for treatment, written authorization for release of information, signed assignment
of benefits, the patients advanced directives, and an
advanced beneficiary notice when appropriate. The
information obtained from the patient is entered into
PATIENT INFORMATION
Acct. No.
Admit Date
Time
PT
FC
DOB
Patient Name
Patient Address
Census
update
Patient
interview
Employer
Race
Svc
Religion
Sex
Ma Stat
Phone
Employer Address
Occupation
Phone
Address
NOK Employer
Patient
registration
Age
Bed
Next of Kin
Admission
summary
(face sheet)
Room
Phone
Relat.
Phone
INSURANCE INFORMATION
Primary Carrier
Subscriber
Auth/Group/Plan
Identification #
Secondary Carrier
Subscriber
Auth/Group/Plan
Identification #
GUARANTOR INFORMATION
Guarantor Name
Room/bed
assignment
Relation
Guarantor Employer
Address
Utilization
review (AEP)
Figure 4-6
Insurance
verification
Phone
Phone
DIAGNOSIS/PHYSICIANS
Referring/Admit/Attend/Ed Phys
Patient
medical
record
(chart)
Address
Phys No
Accident Date
Time
Previous Service
Adm By
Discharge Date
Assem By
Analysis By
Advance Directive
On File
Arrive By
COMMENTS
Figure 4-7
Time
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Financial Information
Patient Information
This section is utilized for recording the patients demographic information. Demographic information is data
about the patient such as the patients name, address,
phone number, date of birth, sex, religion, and employer. A copy of the patients drivers license is
generally obtained for identification purposes.
Insurance Information
This section is utilized to record information regarding
the insurance carrier or government program under
which the patient has coverage. Insurance information
includes the name, address, and phone number of the
primary and secondary carrier. The plan information is
also required, such as plan and group number and
patient identification number. The subscriber name is
required if the patient is not the policyholder.
Insurance card(s) contain information regarding the
insurance plan or government program under which the
patient has coverage. A copy of the insurance card is
made (front and back) and maintained in the patients
medical record. It is important to copy both sides of the
card since they contain information regarding the patients co-payments, the authorization phone numbers,
and the insurance company address.
Guarantor Information
This section is utilized to record the name, address,
phone number, and social security number of the guarantor. The guarantor is the individual who is responsible
for paying for services rendered. The patient is the
guarantor unless he or she is a minor or incapable. In
these situations the patients guardian or person holding
the power of attorney may be the guarantor, for
example, when a power of attorney is designated for an
elderly patient who is unable to handle his or her affairs.
Assignment of Benefits
The patient signs the Assignment of Benefits form to
instruct the insurance company or government plan to
forward benefits (payments for services) to the hospital.
BOX 4-14
KEY POINTS
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Date
Advanced Directives
The patients advanced directives provide instructions
regarding measures that should or should not be taken
in the event that medical treatment is required to
prolong life. The hospital can provide a patient with
advanced directive forms for completion if the patient
has no advanced directives.
An Advanced Directive can be either a living will or a
durable power of attorney. A living will is a written document
that allows a competent adult to indicate his or her wishes
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Patient Registration
The patient registration process consists of creating a
patient account on the hospitals computer system
and entering patient information obtained during the
patient interview. The patients account is the computerized record by which the patient information is
recorded and maintained. An account and medical
record number are assigned to each patient either by
the system or by the person entering the information.
The account is updated when required to reflect new
information or changes in current information. Financial activity is also entered on the patients account.
Financial activity is discussed in detail in Chapter 5.
Utilization Review
As discussed previously, the UM Department performs a
UR to ensure that AEP criteria are met and that patient
care services are appropriate and medically necessary.
BOX 4-15
KEY POINTS
Insurance Verification
Insurance verification is the process of contacting the
patients insurance plan to determine various aspects
of coverage such as whether the patients coverage is
active, what services are covered, authorization require-
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Figure 4-10
BOX 4-16
KEY POINTS
Insurance Verification
Contact is made with the patients insurance plan to:
Verify that the patients insurance is active
Ascertain what services will be covered
Ensure that Admission Evaluation Protocol (AEP)
criteria are met
Obtain prior authorization or precertification
Determine the patients responsibility
BOX 4-17
KEY POINTS
Patient Responsibility
The patient is required to pay the following in
accordance with his or her health care plan:
Deductible. An annual amount determined by the
payer that the patient must pay before the plan pays
benefits
Co-insurance. A percentage of the approved amount
that the patient is required to pay
Co-payment. A fixed amount determined per service
that the patient must pay
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Room/Bed Assignment
Census Update
Medical record documentation is critical to the provision of patient care services and for billing patient
care services. The HIM Department is involved in both
areas as it is responsible for the patients medical record
and performs many important functions related to
reimbursement for patient care services.
As discussed previously, all pertinent information
regarding patient care services is recorded in the pa-
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Patient Name
Activity
Purpose of Documentation
The purpose of medical record documentation is to
have a detailed accounting of all patient care activities.
Medical record documentation serves many purposes in
a health care facility, such as enhancing communications, supporting charges billed, improving utilization
review, and providing protection from liability.
Communication
A detailed recording of all information regarding the
patients condition and patient care services enhances
communication between providers involved with the
patients care. Review of complete and detailed documentation can assist providers in gaining a better understanding of all aspects of the patient case. This
knowledge is critical to the providers ability to assess
the patients condition and develop an effective
treatment plan.
Utilization Review
Documentation is utilized for UR conducted within the
hospital to determine the appropriateness of care.
Documentation is also utilized for payer reviews such
as those conducted by the PRO.
Liability
Thorough and complete documentation is considered
the best defense in a liability case. Medical records are
BOX 4-18
KEY POINTS
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BOX 4-2
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BOX 4-19
KEY POINTS
Purpose of Documentation
Documentation provides a detailed accounting of all
patient care activity, which serves the following purposes:
Enhancement of communications among providers
Support for charges billed
Improvement of utilization review
Protection in liability review
BOX 4-20
109
KEY POINTS
Documentation is a chronological recording of a patients assessment, diagnosis, treatment plan, and outcomes of treatments. Specific elements are required in
documentation:
All conditions, diagnosis, injury, illness, disease,
and/or other reasons for the visit
Plan of care for treatment of the patients condition
All diagnostic and therapeutic procedures
performed
Outcomes of diagnostic and therapeutic procedures
Documentation is maintained in a chart called the
medical record. The chart is organized in sections that
contain relative forms and notes. The medical record
contains the following documents: admission forms, admission summary, history and physical, physician orders,
progress notes, ancillary and other clinical department
reports, medication administration records, and discharge summary. Figure 4-13 gives a list of the medical
record documents.
Admitting Forms
Various forms are obtained when the patient is admitted, including patient registration, authorizations,
release of information, written consent for treatment,
assignment of benefits, advanced directives, and ABN
when required.
Lupe, Debra P
MR# 76954732
Admission summary
BOX 4-21
KEY POINTS
Content of Documentation
Medication administration records
Discharge summary
Figure 4-13
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Physicians Orders
Physicians orders outline instructions provided by the
admitting physician regarding diagnostic and therapeutic care that the patient is to receive according to
the treatment plan, such as lab tests, X-ray procedures,
diet, and physical restrictions. Physicians orders can be
written or they can be given orally (Figure 4-15). Physicians orders and instructions are entered into an order
BOX 4-22
KEY POINTS
Physicians Orders
Services provided in the hospital are performed in
accordance with a physicians order:
Outlines instructions provided by the admitting
physician regarding the diagnostic and therapeutic care
the patient is to receive in accordance with the
treatment plan
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entry system and distributed to the appropriate department(s) to render patient care services.
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Patient information
112
2/6/06
tion regarding the patient and insurance. Clinical personnel in the ER who record information regarding the
patients condition and patient care services provided
utilize this form. The ER physician documents orders
for services and items required on the ED record
(Figure 4-18).
medication ordered, the dose, and the route of administration. Clinical personnel, such as a nurse, record
administration of a medication. The nurse also places
his or her initials, the date, and the time on the record.
If medication is refused, the nurse will note this on the
record. The medication administration record is
sometimes referred to as Med Mars (Figure 4-19).
Discharge Summary
The discharge summary provides an overview of patient
care activity during the patient stay, including the
patients condition at admission, care provided during
the course of the hospital stay, and the patients history
and physical status prior to discharge. Elements of a
discharge summary include the admitting diagnosis,
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is ready to be discharged. The admitting physician completes the discharge summary when the patient is
discharged (Figure 4-20).
Sonia Sample
12-34-56
04/19/00
04/27/00
Accommodations
Patients who are admitted on an inpatient basis are
assigned a room/bed. The patient may be assigned a
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BOX 4-3
2. Provide a brief explanation of Health Information Managements responsibilities related to the patients
medical record.
4. Discuss how medical record documentation is utilized to support charges submitted to payers.
7. Outline the types of admitting forms that are found in the patients medical record.
8. Discuss physician orders and what purpose they serve in the patient care process.
10. Explain the difference between an admission summary and a discharge summary.
Pharmacy
Medications and other pharmaceuticals required
during the patient stay are provided by the Pharmacy
Department in accordance with the physicians orders.
Figure 4-22 illustrates physicians orders with
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Service Category
Accommodations (room
and board) Inpatient
Description
AdmissionRoom/bed
assigned to the patient on
admission. Rooms may be
private or semiprivate (more
than one bed).
Rooms are assigned on various
units or wards: medical,
surgical, OB/GYN, oncology,
psychiatric, intensive care,
coronary care, or nursery.
Nursing services are included
in overhead charges.
Pharmacy
Ancillary services
115
Stat
Routine
Doctor Ordering
Todays Date
Requested by
CSD (Central Service Department)
Adult disposable diapers
Alternating pressure pad
Colostomy kit
Colostomy irrigation bag
Egg-crate mattress
Elastic abdominal binder
size
Footboard
Feeding pump with bag and tubing
Feeding bag and tubing
Footboard
Foot cradle
Hypothermia machine
Isolation pack
IV infusion pump with tubing
K-pad with motor
Nasal gastric tube type
Pleur-evac
Pneumatic hose
Restraints
type
Sitz bath, disposable
Stomal bags
type
Suction canister and tubing
Suction catheter type
Ted hose size
Vaginal irrigation kit
size
size
size
Sterile Trays:
Bone marrow
Central line
Lumbar puncture (spinal tap)
Paracentesis
Thoracentesis
Tracheostomy
Write in item
Smith, Johnathan
ID #354792
CBC
U/A
CXR
KEFLEX
500mg
THERAGRAM
TABSQD
Monopril 10 mg P.O. bid
Dlamane 15 mg P.O. gh.s.
Figure 4-22 Physician orders for medications. (Modified from
Davis N, Lacour M: Introduction to health information technology,
ed 1, St Louis, 2002, Saunders.)
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Figure 4-23 Computer order screens for laboratory, radiology, physical rehabilitation, and respiratory therapy ancillary services.
(Modified from Brooks ML, Gillingham ET: Health unit coordinating, ed 5, St Louis, 2004, Saunders.)
Ancillary Services
Various ancillary departments such as Pathology/
Laboratory, Radiology, Physical Rehabilitation, and
Respiratory Therapy provide diagnostic and therapeutic
services ordered by the physician. Figure 4-23 illustrates
computerized order screens that highlight examples
of the types of services provided by these departments, such as CBC, chest X-ray, training on crutches,
and oxygen or other breathing treatments.
BOX 4-23
KEY POINTS
CHARGE CAPTURE
A hospital cannot maintain financial stability if the cost of
providing care is not reimbursed appropriately. From the
time a patient is received at the hospital to discharge,
services and items are provided. The complexity of
providing patient care services and capturing charges
within a hospital setting requires efficient systems that
can capture all data required. It is important to remember
that the access to and flow of patient care data are
enhanced by the automation of the patients account and
other functions. Information collected at registration is
utilized throughout the patient stay for order entry,
rendering of patient care services, and capturing charges.
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BOX 4-24
Physician orders a
complete blood count
(CBC)
II
Blood specimen is
obtained by nursing staff or
by laboratory personnel
and forwarded to the
laboratory
III
CBC performed by
the laboratory
Results filed in
the patients
medical record
IV
Charge posted by
laboratory
personnel
Order Entry
Patient care services are provided in accordance with
physicians orders. Orders are entered into the computer order entry system. Services and items to be provided are communicated to the appropriate departments
by computer or by requisition.
Documentation
All patient care services are documented in the
patients medical record, including a detailed description of the service, results, and other information about
the service. Items utilized to perform the service are
also documented.
Charge Posted
The department providing the service or item is
generally responsible for posting appropriate charges to
the patients account through the chargemaster. In
KEY POINTS
Charge Capture
Charge capture is the process of gathering charge
information and recording it on the patients account,
including the following:
Order entry
Patient care services rendered
Documentation
Charge posted
Hospital Charges
Hospital charges are referred to as facility charges, as
they represent the technical component of patient care
services. The professional component of patient care
services is recorded in the patients medical record;
however, the hospital only bills professional services
when the physician is employed by or under contract
with the hospital. Figure 4-25 illustrates examples of
hospital facility charges. To bill hospital services
accurately, it is important for hospital professionals to
understand the difference between the technical and
professional component of services.
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Room and
Board
Private,
semi-private
Time
Surgery,
recovery,
and
catherization
laboratory,
endoscopy
suite
Medical/
Surgical
Supplies/
Instruments
Sutures,
bandages,
dressings,
suction unit,
blades
Pharmacy
Medications
and
pharmaceuticals,
pain
medications,
and antibiotics
PATIENT DISCHARGE
Prior to discharge, the admitting physician performs an
H & P and prepares discharge orders so the patient can
be processed for discharge. Patients may be discharged
to home or they may be discharged to other facilities
such as a rehabilitation center or nursing home. After
the patient is discharged, the patients record is forwarded to the HIM Department for review and coding
of clinical information.
Ancillary
Services
Blood work,
X-ray,
massage,
breathing,
treatments
Other
Clinical
Services
Medicine,
surgery,
anesthesia,
emergency
department
BOX 4-25
H.I.M.S. Codes
H.I.M.S. Codes
Procedure(s) and Date(s) (List Principal Procedure first. Principal Procedure should be for definitive treatment.)
H.I.M.S. Codes
KEY POINTS
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Services/Items
HCPCS Level I Current Procedural Terminology (CPT-4)
HCPCS Level II Medicare National Codes
International Classification of Diseases 9th Revision, Clinical
Modification (ICD-9-CM)-Volume III (alphabetical and numerical
listing of procedures)
Organization
Credentials
American Academy of
Professional Coders
(AAPC)
American Health
Information
Management Association
(AHIMA)
American Association of
Healthcare Administration Management
(AAHAM)
Conditions
International Classification of Diseases 9th Revision, Clinical
Modification (ICD-9-CM)-Volume I & II (alphabetical and
numerical listing of diseases, signs and symptoms, encounters
and external causes of injury)
119
B
Figure 4-27 A, Coding systems utilized in the hospital. B, Various credentials obtained by hospital coding and billing
professionals. (B Modified from Davis N, Lacour M: Introduction to health information technology, ed 1, St Louis, 2002, Saunders.)
BOX 4-26
KEY POINTS
BOX 4-27
KEY POINTS
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BOX 4-4
3. Categories of services provided in the hospital include accommodations. Explain this category.
4. Provide an explanation of patient care services that may be provided by ancillary departments.
5. Discuss the relationship between patient accounts data flow and charge capture.
6. List the automated systems that enhance the flow and access of data related to charge capture.
9. What department is generally responsible for posting charges to the patients account?
10. Explain the difference between facility charges and professional service charges.
12. List two reasons why the HIM Department reviews patient medical records.
13. What type of document is utilized to abstract information from the patient record regarding the patients
diagnosis/diagnoses and procedure/procedures performed during the patient stay?
paid (Figure 4-28). As illustrated previously, automation of the registration, order entry, and charge capture process allows for the gathering of data required
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Charge capture
Charge Description Master
(CDM) HCPCS Codes
Department personnel
Patient care
Order entry
Ancillary/clinical
departments
Admission
Registration
Admitting
department
Charge
submission
Patient invoice/
statement
PFS
Reimbursement
Post transactions
Patient Financial Services
(PFS)
121
Chart reviewing/coding
Post discharge procedures
Health Information Management
(HIM)
Payer review
Payment determination
Third-party payers
Reimbursement
Paid
PFS
Charge submission
Claims process
Claim preparation (scrubber)
Patient Financial Services (PFS)
Claim submission
CMS-1500
CMS-1450
manual/electronic
Patient Financial
Services (PFS)
Reimbursement
Denied
PFSCollections
A/R Management
Monitor and follow-up
on outstanding claims
PFSCredit and collections
Figure 4-28
of patient transactions. The billing process includes preparation and submission of claim forms to third-party
payers, preparation and submission of patient statements,
and posting patient transactions such as payments and
adjustments. This section will provide a brief overview of
the billing process to illustrate the flow of information.
The billing process is discussed in detail in Chapter 5.
Charge Submission
Hospitals submit charges after the patient is discharged.
On discharge the HIM Department receives the patients
medical record for review, coding, and DRG or APC
assignment. When the HIM Department functions are
complete, the PFS Department prepares insurance claim
forms and patient statements for submission of charges.
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Figure 4-29
(UB-92).
Patient Statements
Patient statements list dates of service, description of
services, charges, payments, and balance due. They are
printed and mailed to patients. Patient statements
generally include messages regarding outstanding balances.
Patient Transactions
Payers review claims submitted to determine payment
on the claim. When payment determination is made,
the payer communicates how the claim was processed
and the payment status with the hospital utilizing a
remittance advice (RA), a document prepared by
payers to communicate payment determination to hos-
CMS-1450
pitals and patients. The RA includes detailed information about the charges submitted and an explanation
of how the claim was processed. Payers utilize different
names to describe this document, such as an Explanation of Medicare Benefits (EOMB) or Explanation of
Benefits (EOB). Patient transactions are posted to the
patients account when the RA is received (Figure 4-31).
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CARRIER
PLEASE
DO NOT
STAPLE
IN THIS
AREA
GROUP
HEALTH PLAN
(SSN or ID)
CHAMPVA
(Medicare #)
DD
FECA
BLK LUNG
(S SN)
YY
M
5. PATIENTS ADDRESS (No., Street)
CITY
STATE
Spouse
Child
Other
8. PATIENT STATUS
Single
ZIP CODE
CITY
Married
Other
ZIP CODE
Employed
Full-Time
Part-Time
Student
Student
10. IS PATIENTS CONDITION RELATED TO:
b. AUTO ACCIDENT?
YES
SEX
M
STATE
YES
DATE
P
AM
MM
DATE(S) OF SERVICE
To
From
MM
DD
DD
YY
SIGNED
YES NO
22. MEDICAID RESUBMISSION
CODE
ORIGINAL REF. NO.
3.
LY
21. DIAGNOSIS OR NATURE OF ILLNESS OR INJURY. (RELATE ITEMS 1,2,3 OR 4 TO ITEM 24E BY LINE)
2.
24.
N
EO
EX
1.
NO
NO
YES NO
SEX
M
PLACE (State)
SIGNED
NO
c. OTHER ACCIDENT?
YES
(ID)
SEX
PICA
4.
B
C
D
Place Type PROCEDURES, SERVICES, OR SUPPLIES
of
of
(Explain Unusual Circumstances)
YY Service Service CPT/HCPCS
MODIFIER
DIAGNOSIS
CODE
$ CHARGES
G
H
I
DAYS EPSDT
OR Family
EMG
UNITS Plan
COB
RESERVED FOR
LOCAL USE
MEDICAID
PICA
1. MEDICARE
123
6
25. FEDERAL TAX I.D. NUMBER
SSN EIN
SIGNED
DATE
PIN#
GRP#
Patient Payments
Patient payments are posted to the patients account.
Patient statements are generally mailed monthly when
the patient account has a remaining balance.
BOX 4-28
Figure 4-30
CMS-1500.
KEY POINTS
Billing Process
Charge Submission
Insurance claim forms
Patient statements Patient Transactions
Third-party payer transactions
Patient payments
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Figure 4-31 Sample Medicare remittance advice (RA). (Modified from Centers for Medicare & Medicaid Services: Sample Medicare
remittance advice, www.cms.hhs.gov/manuals/pm_trans/ AB02142.PDF, 2005.)
Patient
Name
Service
Date
Total
Charges
Payment
01 BC/BS
Adams, Harold
Boyter, Susan
Johns, Tina
Xavier, George
Yohanson, Phil
02/02/2002
03/17/2002
06/22/2002
02/25/2002
05/31/2002
$1,356.50
$27,865.00
$42,677.97
$18,433.56
$879.97
$868.16
$17,833.60
$27,313.90
$11,797.48
$563.18
$271.30
$5,573.00
$8,535.59
$3,686.71
$175.99
$217.04
$4,458.40
$6,828.48
$2,949.37
$140.80
02 Commercial
Beard, Bobby
Baxter, Morris
James, John
Hatley, Hanna
Mannie, Minnie
06/22/2002
03/17/2002
02/25/2002
02/02/2002
05/31/2002
$42,677.97
$27,865.00
$18,433.56
$1,356.50
$879.97
$27,313.90
$17,833.60
$11,797.48
$868.16
$563.18
$8,535.59
$5,573.00
$3,686.71
$271.30
$175.99
$6,828.48
$4,458.40
$2,949.37
$217.04
$140.80
03 Medicaid
Harold, Adam
Harpo, Harold
Morris, Baxter
Polo, Marco
Smith, Ima
02/02/2002
03/17/2002
06/22/2002
02/25/2002
05/31/2002
$572.00
$877.97
$256.34
$72.82
$10,423.00
$171.60
$0.00
$76.90
$0.00
$0.00
$400.40
$614.58
$179.44
$50.97
$7,296.10
$0.00
$263.39
$0.00
$21.85
$3,126.90
04 Medicare
Anson, Annie
Chan, William
Cater, Cody
Janson, Jonnie
Williams, Meta
02/02/2002
02/25/2002
03/17/2002
05/31/2002
06/22/2002
$1,356.50
$18,433.56
$27,865.00
$879.97
$42,677.97
$868.16
$11,797.48
$17,833.60
$563.18
$27,313.90
$271.30
$3,686.71
$5,573.00
$175.99
$8,535.59
$217.04
$2,949.37
$4,458.40
$140.80
$6,828.48
Figure 4-32
Contractual Balance
Adjustment
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125
Name
Phone
Current
Applebee, Carla
Borden, Andrew
Cox, Anthony
Freeman, Tina
Holtsaver, Marshall
James, John
Marcus, Xavier
Peters, Samantha
Snowton, Michael
(813) 797-4545
(813) 423-9678
(813) 233-7794
(727) 665-7878
(727) 874-2945
(813) 201-2054
(727) 779-3325
(413) 544-2243
(941) 333-4325
31-60
61-90
91-120
200.00
175.00
695.00
485.72
400.00
350.00
121-150
151-180
Total
Balance
724.45
724.45
247.52
1069.53
592.14
1583.66 2469.38
1313.68
2745.21
2567.92
4568.00
2308.11 16297.83
47.52
199.53
592.14
963.68
2745.21
1545.23
1314.00
1022.69
3254.00
Report Totals
660.72
2945.21
4304.23
3254
2825.56
% Aged
4.05%
18.07%
26.41%
19.97%
17.34%
0.00%
Figure 4-33
180+
14.16%
BOX 4-29
KEY POINTS
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BOX 4-5
3. Explain what department performs billing functions and how automation assists with those functions.
6. Discuss types of documents used to submit charges to patients and third-party payers.
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CHAPTER SUMMARY
The patient account and data flow is a critical
element in the hospitals ability to effectively access
and utilize data collected throughout the hospital.
Automated systems for registration, order entry,
charge capture, billing, and accounts receivable management enhance the ability of various departmental
personnel to access and utilize data simultaneously.
Data collected are utilized through the patient care
process for admissions, rendering patient care
services, and billing for those services. The patient
care process from admission to discharge involves
capturing and recording information regarding the
patient and care provided. Patient information is
127
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T
T
T
T
F
F
F
F
Research Project
Refer to the CMS Web site at www.cms.gov.
Find information on general admission procedures in the hospital manual.
Discuss the procedures discussed in Section 300 of the hospital manual.
Discuss how to handle situations where you cannot obtain information in Section 301 of the hospital
manual.
128
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129
GLOSSARY
Accounts receivable (A/R) aging report A report outlining
categories of claims based on the age of the account.
Admission The act of being received into a place or a
patient accepted for inpatient services in a hospital.
Admission Evaluation Protocols (AEP) Outlines
appropriate conditions for a hospital admission based on
standards referred to as the IS/SI criteria. IS refers to the
intensity of service criteria. SI refers to the severity of
illness criteria.
Admission summary A summary of information about the
patients admission, such as the patients name and
address, insurance company name, reason(s) for admission,
attending physicians name, and referring physicians
name. The admission summary is also known as a face
sheet.
Advanced Beneficiary Notice (ABN) A notice informing
the patient that there is reason to believe the admission
will not be covered by Medicare. The patients signature is
required on this form to acknowledge that he or she will
be financially responsible if Medicare does not cover the
service.
Advanced directives Provide instructions regarding
measures that should or should not be taken in the event
medical treatment is required to prolong life.
Ambulatory payment classification (APC) A Prospective
Payment System (PPS) implemented to provide
reimbursement for hospital outpatient services. Under
APC, the facility is paid a fixed fee based on the resources
utilized to provide the service or procedure.
Assignment of benefits Instructs the insurance company or
government plan to forward benefits (payments for
services) to the hospital.
Charge capture The process of gathering charge
information and recording it on the patients account.
Charge Description Master (CDM) A computerized system
used by the hospital to inventory and record services and
items provided by the hospital. CDM is commonly
referred to as the chargemaster.
CMS-1450 (UB-92) Universally accepted claim form used
to submit facility charges for hospital inpatient and
outpatient services.
CMS-1500 Universally accepted claim form for submission
of physician and outpatient services and Durable Medical
Equipment (DME).
Co-insurance An amount the patient is responsible to pay
that is calculated based on a percentage of approved
charges.
Co-payment A set amount that is paid by the patient for
specific services. Co-payment is commonly referred to as a
copay.
Concurrent review Ongoing review throughout the hospital
stay to determine appropriateness of the admission and
care provided.
Deductible An annual set amount determined by each
payer that the patient must pay before the plan pays
benefits for services.
Diagnosis Related Groups (DRG) A Prospective Payment
System (PPS) implemented to provide reimbursement for
hospital inpatient services. Under DRG, the facility is paid