Time Is Running Out on Late Charges: APC System Wont Allow Facilities To Rebill if They Forget Something

Often, hospital billers gather information from several departments for a complex procedure, then submit the bill. But days later, they receive belated documentation from another department regarding that same procedure, so they send another bill for the new increment of money. Under ambulatory payment classifications (APCs), they will have only one option in this situation: Get it right the first time.

The Health Care Financing Administration (HCFA) is unlikely to allow any wiggle room for late charges, according to Roger Sipe, manager of patient accounting and practice manager for Lexington Medical Center in West Columbia, S.C. Late charges would become obsolete. And thats going to cost hospitals money.

Currently, payment is based on an established cost-to-charge ratio, so for the most part, each service item is reimbursed separately, says Caral Edelberg, CPC, CCS-P, president of Medical Management Resources Inc., an emergency department coding consulting firm in Jacksonville, Fla. Charges submitted late are still recognized and paid. Under APCs, the payment is based on the global rate for the services after they are combined, and the all-inclusive rate, once established, is not expected to make allowances for late charges. In other words, once Medicare makes its decision and assigns the APC to the combination of services, there will be no mechanism to revise the charge.

APCs will force billing departments to improve the efficiency of the billing process internally. That change doesnt bother Sipe, however. He considers the new rule a benefit and calls the current system used for late charges a mess.

Currently under inpatient diagnosis-related groups (DRGs), facilities can submit corrected claims if the new claim changes the DRG. Although APCs resemble DRGs in many ways, APCs will close this loophole for outpatient charges.

Industrywide Problem

Although APCs bring the issue of late charges into the spotlight, many hospitals and clinics have been working on the problem for years, Sipe says. I think a lot of facilities figure a threshold for late charges. If its not a certain amount, you dont bill because its not worth it.

Facilities that operate efficiently can limit their losses, but everyone will take a hit when the new rules become effective, Sipe says. However you try to control your late charges, youre going to lose some money. Any hospital that tells you they dont have a late charge problem, Id like to see how they handle it. I think its a matter of how close you manage it and address it, Sipe notes.

Edelberg advises that hospitals take advantage of the time before APCs are implemented to examine their system for capturing all elements of patient service and minimize late charges. This may mean that the bill drop needs to be extended for a day or two to allow [...]

- Published on 2000-05-01