Charging System Is Crucial For APC Success

After facilities set up a coding and billing system to handle line items as required by ambulatory payment classifications (APCs), the next obstacle involves assigning the charges. Beginning Jan. 1, 2001, the Health Care Financing Administration (HCFA) will require facilities to break out charges for individual procedures and services, according to Caral Edelberg, CPC, CCS-P, president of Medical Management Resources, an emergency medicine coding company in Jacksonville, Fla.

Many hospitals already break out the charges, but plenty are having trouble. A lot of it is charging the way they should have been charging all along, says Rick Gunling, technical director of the Healthcare Financial Management Association. It adds more complexity. A lot of people are working on this.

Edelberg says few facilities have addressed this issue because of the difficulty of assigning charges for services that have never been billed that way before. Software troubles add to the difficulty because some systems arent set up to assign line-item charges to procedures listed on the UB-92 form.

Although Gunling has seen few line-item reimbursement disasters, he admits that many facilities are just starting to get paid.

The idea of line-item charges may not seem important at first blush because APCs will reimburse according to their fee schedule, no matter what hospitals charge. But assigning the proper charges is important. Medicare clearly wants to track individual charges, Edelberg says. All charges are used to calculate outlier and transitional payment rates even though some may be bundled. For example, pharmacy and supply charges could be reported using the appropriate revenue codes and reflecting appropriate charges. HCPCS codes may not be required for items such as these but can be reported.

Operating room, recovery room, anesthesia, observation room and supply charges should also be itemized and not billed as global, because they also may affect transitional corridor payments and outliers for future APC revisions.

Gunling adds that facilities gain when they link their charges to costs, or to the marketplace. Charges are sort of like a reflection of resources being used. Its not a true cost-accounting system, of course, but its reflective of that.

Assigning the Charges

Figuring charges for services is a simple concept, but tricky in the execution. When a facility devises a methodology, keeping up with the numbers shouldnt be difficult, Gunling says. But all the possible systems for charge assignments take a lot of time to develop, and the best ones are the most complicated. The following three tips can help to assign charges.

1. Assign a markup over cost. For instance, facilities could mark up items costing less than $10 by 50 percent, and use a sliding scale with smaller mark-ups for more expensive items. Unfortunately, this system doesnt [...]

- Published on 2000-11-01