A custom program can be developed for your
specific hospital situation. The main attributes that separate
the services of Abbey & Abbey, Consultants, Inc., are:
There is a heavy emphasis on training and education of personnel in order
for them to better perform their job functions,
for both effectiveness and efficiency is promoted,
Clients are given the tools
and methodologies to operate independently so
that ongoing consulting support is kept to a minimum.
Typical APC Integrity
The needs of hospitals and hospital systems
in the assessment and implementation of changes for APCs varies
widely so that a custom program is almost always required.
Below is delineated a set of tasks and activities that might
be typical for a mid-sized hospital. Programs for small, typically
rural, hospitals and programs for large hospitals, including
teaching hospitals, can be designed around these eleven program
areas along with appropriate training and infrastructure development.
Review of current financial reimbursement status
under APCs relative to projected reimbursement patterns.
Review current reimbursement patterns for cost
outliers and the process of ensuring that corridor payments
are being accurately made.
Review current status of operational flow of the
overall coding, billing and reimbursement system relative to
HCFA’s implementation of APCs,
Review and analysis of the hospital’s claims adjudication
tracking system (CATS) and the feedback loops that are in place
to resolve denial and/or under payment of APC claims.
Review and analysis of the use of the APC grouper
software relative to generation of information for management
and statistical reporting.
A brief coding and billing validation review of
selected outpatient charts.
An assessment of the effectiveness in the use
of modifiers for various types of claims.
An assessment of any problems associated with
implementation of HCFA’s Correct Coding Initiative (CCI).
An assessment of areas in which charges are not
being made and/or coding is not taking place that could enhance
revenue generation under APCs.
A brief review is made of the charge master and
the changes that were made to prepare for APC implementation.
Interviews are conducted with coding and billing
personnel to determine any problems relative to APCs.
Meetings with APC Taskforces in order to determine
the current strategies for resolving operational problems and
addressing reimbursement shortfalls.
A review of the compliance activities including
policy and procedure development and auditing activities development.
Meetings with selected department personnel to
review status and project plans both pre-implementation and
Review the organizational structuring of various
service areas under APCs for gaining proper reimbursement.
Review and assess provider-based status (PBS)
for both inpatient and outpatient operations of all types.
Identify problems areas and make recommendations
as to resolution,
Development of strategic initiatives that can
be taken, both short-term and long-term, that can enhance revenue
generation under APCs.
Education and training for various hospital personnel
will be provided as necessary.
APC Integrity Program
The following chart illustrates the eleven
Overall Coding, Billing And Reimbursement Assessment
This activity comprises an assessment of the
overall system from the encounter and registration of the patient
all the way through to the reconciliation of the bill/claims
relative to the payment. In the comprehensive assessment the
following are considered:
Overall Flowchart of the Flows – Information,
Patients, Manual and Computer-Based
Interfaces Between Departments and/or Computer
Documentation Systems and Methodologies
Timing and Efficiencies of Flows
Accuracy, Correctness and Effectiveness of Flows
Potential Compliance Concerns
The basic idea is to use this overall assessment
as a means of identifying where problems may exist within the
overall system. These particular problem areas can then be
further investigated and addressed.
Coding And Billing Validation
Correct coding and use of modifiers is the
ultimate key to successful reimbursement under APCs and it also
a significant source of compliance concerns. The audits and
reviews that are performed by the consultants at Abbey &
Abbey, Consultants, Inc., go beyond just the correctness of
coding and address the documentation to coding to billing process
since all three of these elements must be synchronized. Special
audits and routine auditing procedures are developed and auditing
systems implemented. The intent of these activities is to develop
a systematic approach to making certain that the coding is correctly
based on the documentation, that correct modifiers are in use,
that coding done through the Charge Master is indeed coming
out correctly and that quality UB-92s and associated HCFA-1500s
are being generated.
Charge Master Reviews
The Charge Master is a critical element for
correct coding and proper UB-92 generation. Many decisions
must be made concerning the architecture of the Charge Master
or the way that it is organized. Of particular concern under
APCs is the placement of CPT/HCPCS and associated modifiers
on the Charge Master itself (static coding) or to allow coding
to be performed outside the Charge Master (dynamic coding).
In some cases there may be a default code place in the Charge
Master that must then be overridden by coding staff. The way
in which the Charge master is set up and the way in which it
is used thus become of paramount importance. Additionally,
the Charge Master itself is a target of compliance concerns
especially in the outpatient areas. Thus, an ongoing review
process including both internal and external reviews must be
established to make certain that there is integrity in coding
and billing under APCs.
While there is a great concentration on making
certain that coding is correctly performed, the simple fact
is that the coding can be no better than the documentation that
has been developed. There are many different outpatient areas
even at the smallest hospital and thus there are different documentation
systems that are in place running the gamut from free-form handwritten
documentation on through highly sophisticated systems that provide
extensive templates to make certain that all of the necessary
information is being developed. A careful assessment must be
made of these systems and strategies for improvement should
The encounter/registration system should be
one of the simpler systems at a hospital, at least relative
to consistency and uniformity of the data gathered and the processes
performed. This is generally true in hospitals where there
are only a very few encounter locations. In many hospitals,
and particularly integrated systems, there may be dozens of
encounter locations. The ability to ensure consistent and accurate
gather of information and proper classification of patients
is a very real challenge. Given the fact that for many hospitals
the way a patient is classified can drive the specific flow
that the patient’s associated information will take. If mistakes
are made at the very beginning they can ripple out across the
coding, billing and reimbursement system and create havoc.
CATS – Claims Adjudication Tracking System
Reviewing each and every claim that is processed
through APCs or some other APG type payment system is critical.
Not only is it needed to make certain that proper reimbursement
is occurring; it is also necessary to identify any and all mistakes
that are being made relative to the coding billing and reimbursement
cycle. Hospitals have typically allowed claims transaction
personnel to make adjustments to claims without identifying
or resolving the fundamental problem that is creating the problem.
For APCs it is of extreme importance to have a routine system
whereby each claim is checked against the expected payment (via
the hospital’s APC grouper/pricer) versus the adjudicated payment
typically through the remittance advice (RA).
Even for small claims, this process needs to
take place so that problems can be identified and resolved at
any point in the overall CBR cycle all the way from the encounter/registration
on through the filing of the claim. Over time the number of
problem areas should diminish. However, as experience has shown
of the years these payment systems are constantly changes so
that a CATS will be necessary for the foreseeable future.
Keeping in mind that APCs represent the most
significant financial impact to hospitals since DRGs (and possibly
greater than the DRG impact!), it is vital that the various
financial aspects of APCs be monitored with great care. There
are many complex aspects embedded in APCs including a financial
transitional corridor to make certain that hospitals are not
unduly affected. Both long-term financial strategies and short
cash-flow considerations must be made and plans implemented
accordingly. Careful monitoring of financial information in
relation to clinic information such as severity and service
mix indexes must be made. Financial personnel must be heavily
involved in both the claims transactions processing and the
design of information system and associated databases. The
design of such APC financial systems is a critical element in
meeting the APC challenge.
The shift from inpatient services to outpatient
services continues. Additionally payment systems continue to
change with the movement from cost based systems to prospective
payment systems such as APCs and various forms of managed care
contracting. Some of the managed care contracts may in themselves
use a form of APCs. It is extremely difficult to proper manage
outpatient services without good, comprehensive data and information
about the patients and various outpatient services being provided.
APCs and other prospective payment systems
give us the opportunity to capture data at several different
levels and in varying degrees of detail. APCs and associated
APG payment systems allow the development of longitudinal
outpatient databases from which vital information can
be gleaned. The term ‘longitudinal’ simply means over time.
If you had a comprehensive database of all the outpatient services
provided by patient type over a five year period, how much could
that help you make better decisions about services, contracting
and financial planning? This is the area addressed in this
module of the APC Integrity Program(sm).
Specialized Training and Education Programs
With a payment system as complex as APCs a
full training program is an absolute necessity! Some of the
training can be done internally, some will need to be provided
externally either on-site or off-site. Setting up a program
that meets the needs of various personnel in multiple technical
areas is a real challenge. This is particularly true with reimbursement
levels coming down and training needs increasing. All types
of training including that available through the Internet and
through audio programs must all be considered.
APC Compliance Development and Enforcement.
As we have learned with DRGs, compliance is
a major issue whenever there are codes and choices to be made
in the way in which a given claim is filed. APCs has embedded
a significant number of compliance issues ranging from modifier
utilization on up to complex organizational situations. Sorting
out the various compliance or potential compliance issues is
a major task. This module in the APC Integrity Program(sm)
provides a comprehensive checklist of the various types of problems
that can occur, the rules and regulations that apply and prototype
policies and procedures to address the many issues.
A concern about the way in which to structure
services and the organizational process involves questions that
goes well beyond APCs. Today hospitals merge, have joint ventures,
open satellite operations and take other steps to better meet
the health care needs of the communities they serve. With the
implementation of APCs a whole new set of rules and regulations
affecting both outpatient and inpatient organizational structuring
were set into motion. Hospitals must take great care to proper
address the way they are organized.
The services in this module of the APC Integrity
Program(sm) are both reactive and also proactive.
The reactive portion of the services involves making certain
that current organizational structuring meets the various requirements
and reporting mandates. The proactive services involve planning
for future changes so that structuring can meet the rules and
regulations while providing enhanced healthcare services. As
such this module stands out from the others in that it is more
comprehensive and addresses issues that go beyond just APCs.
© 2000-2001 Abbey & Abbey, Consultants,
Inc. – Version 1.5 January, 2001