Preparation Will Ease Conversion To Line Item Billing

Ambulatory payment classifications (APCs) have changed the way facilities must code and bill for outpatient services. Most hospitals APC teams contain at least one representative from the coding department to ensure that the people who will be hardest hit by these changes are taken into account during the planning.

Most hospitals are getting used to the idea of fee-schedule reimbursement for outpatient services, but few are prepared for the imposition of line-item coding on Jan. 1, 2001, according to Caral Edelberg, CPC, CCS-P, president of Medical Resource Management Inc., an emergency department coding consulting firm in Jacksonville, Fla. Although hospitals can now bundle the charges for multiple procedures into one line-item charge, that loophole ends in a few months, and facility revenue will be threatened.

Most private insurers still pay on a cost-to-charge basis, and few hospitals can accommodate dual-track billing, Edelberg says. Their computer systems are not adaptable. Theyre opting to prioritize private pays, and that guarantees revenue losses.

A lot of hospitals are dropping off procedures and will bill just APC visit levels. What they dont want to do is load up their charge masters with all these services, and there are probably three or four hundred of them or more.

Edelberg says that from what she has seen, approximately 35 percent of the Medicare patients are admitted through the emergency department (ED) and the rest are treated as outpatients. Thats just ED. What about cataracts, colonoscopies, etc? Thats a considerable amount of revenue.

There is more at stake than revenue loss, says Kelly Kracher, manager of oncology services at the Nebraska Health System in Omaha, which comprises the former University and Clarkson Hospitals, private practice physicians, University Medical Associates and primary outreach programs. If Medicare comes in and does an audit, Im going to make the assumption that there could be some retribution.

Although some facilities may balk at the idea of changing to accommodate line-item billing, Edelberg believes that recalcitrance will evaporate after a few weeks of lost revenue. The APC system is designed to provide reimbursement comparable to that generated under a cost-based system, but only if all the regulations are followed and hospitals take advantage of all the provisions the Health Care Financing Administration (HCFA) wrote into them.

Dealing with this new rule will require the cooperation of everyone involved in APCs.

APC Task Force

To make sure the preparation for line-item billing is done right, the APC task force must take the lead in gathering information and harnessing manpower. By now, the task force should have completed its study on the costs of procedures, streamlined the coding and billing process, and trained its coders in the new system. Switching to line-item billing will require [...]

- Published on 2000-10-01