Hospital Billing and the UB-04
Chapter objectives
After completion of this chapter, the student should be able to:
1. Differentiate between physician office and hospital billing and coding.
2. Explain the modern hospital system.
3. Identify common types of healthcare facilities.
4. Discuss the legal and regulatory environment of today’s hospitals.
5. List common hospital payers and how to acquire their claims guidelines.
6. Describe the UB-04 and its relation to the National Uniform Billing Committee.
7. Discuss the structure and content of the hospital health record.
8. Outline the inpatient hospital/facility coding process.
9. Discuss outpatient hospital coding systems.
10. Summarize the hospital billing process.
11. Explain the HIPAA/hospital connection.
12. Provide a rationale for medical compliance.
Chapter terms
72-hour rule
accreditation
Accreditation Association for Ambulatory Health Care (AAAHC)
activities of daily living (ADLs)
acute care
acute care facility
acute condition
ambulatory payment classifications (APCs)
ambulatory surgery centers (ASCs)
benefit period
billing compliance
Blue Cross and Blue Shield member hospitals
case mix
charge description master
cost sharing
covered entity
Critical access hospital (CAH)
Defense Enrollment Eligibility Reporting System (DEERS)
diagnosis-related group (DRG)
electronic claims submission (ECS)
electronic medical record (EMR)
electronic remittance advice (ERA)
Emergency Medical Treatment and Labor Act (EMTLA)
emergency medical condition
exacerbation
form locators
for-profit hospitals
general hospital
governance
health information management (HIM)
hospice
hospital outpatient prospective payment system (HOPPS)
informed consent
intermediate care facilities
fiscal intermediaries
(The) Joint Commission
licensed independent practitioners
long-term care facilities
medical ethics
Medicare Severity-Adjusted (MS-DRG) System
multiaxial structure
National Committee for Quality Assurance (NCQA)
National Correct Coding Initiative (NCCI)
National Uniform Billing Committee (NUBC)
nonavailability statement (NAS)
outliers
palliative care
pass-throughs
per diems
pricing transparency
principal diagnosis
prospective payment system (PPS)
quality improvement organizations
registered health information technicians (RHITs)
respite care
skilled nursing facility (SNF)
subacute care unit
surrogate
swing bed
transaction set
UB-04
Utilization Review Accreditation Commission (URAC)
vertically integrated hospitals
Brittany Weston has been employed as a health insurance professional in a two-physician practice for 5 years. Two years ago, she began taking evening classes at Deerfield Community College to become a health information technician. After graduating from Deerfield’s accredited health information technician program, Brittany became eligible to take the registered health information technician (RHIT) examination. Passing this examination gives Brittany the right to use the credentials RHIT. Brittany is also required to obtain 20 continuing education hours every 2 years to maintain her credentials.
Brittany has now found new employment as an RHIT in the Health Information Management Department at Broadmoor Medical Center. One of the first things she learned during orientation at Broadmoor was the mission of the Health Information Management Department: total support of the facility’s optimal standards for quality care and services through provision of quality information. The functions of Broadmoor’s Health Information Management team support administrative processes, billing through classification systems, medical education, research through data gathering and analysis, utilization, risk and quality management programs, legal requirements, data security, and release of information to authorized users.
Brittany realizes that her job duties as an RHIT will be different from and perhaps more challenging than those in her former occupation. These duties include the following:
• Filing reports in health records, recording information in logs and files
• Retrieving health information records from filing system
• Providing information from health records after determining appropriateness of request
• Coordinating health information records procedures with other departments
Brittany is looking forward to her new career as an RHIT. She hopes to return to the classroom eventually and acquire the necessary credentials in Health Information Management, which would allow her career aspirations to grow.
Hospital versus physician office billing and coding
Everything that we have discussed so far in this textbook has applied to billing, coding, and insurance claims processing for physicians’ offices and clinics. This last chapter presents some basic information and guidelines for billing, coding, and patient services in inpatient hospital facilities and other hospital-based healthcare. This chapter does not present enough detailed information to enable you become a hospital biller and coder; that amount of information would fill an entire separate textbook. Instead, this chapter provides an overview of the basics. If you find this information interesting, you may want to further explore a career in hospital billing or health information management.
Modern hospital and health systems
The ideal modern hospital is a place where sick or injured individuals seek and receive care and, in the case of teaching hospitals, where clinical education is provided to the entire spectrum of healthcare professionals. Today’s hospital provides continuing education for practicing physicians and increasingly serves the function of an institution of higher learning for entire neighborhoods, communities, and regions. In addition to its educational role, the modern hospital conducts investigational studies and research in medical sciences.
The construction of today’s modern hospital is regulated by federal laws, state health department policies, city ordinances, the standards of private accrediting organizations such as The Joint Commission, and national and local codes (e.g., building, fire protection, sanitation). These requirements safeguard patients’ privacy and the safety and well-being of patients and staff. The popular ward concept of the mid-19th and early 20th centuries, in which multiple patients were housed in one common area, is no longer permissible. Today, hospitals have mainly semiprivate and private rooms. Although permissible in most states, four-bed rooms are the exception.
Beginning in the early 1990s, hospitals became part of the evolution toward vertically integrated hospitals (hospitals that provide all levels of healthcare) and other provider networks. It is predicted that inpatient care will gradually diminish with continued advances in medicine, and that hospitals, as we once knew them, are likely to continue downsizing. Simultaneously, ambulatory care in physicians’ offices and clinics will increase. The hospital, particularly in comparison with its earliest days, will play a different role in the future as part of an integrated collection of providers and sites of care. For more information on the history of hospitals, refer to Websites to Explore at the end of this chapter.
Emerging Issues
A goal of the entire healthcare system is to reduce costs and, at the same time, be more responsive to customers, a trendy designation being given to today’s healthcare consumers (i.e., patients). The elderly are the heaviest users of healthcare services, and the percentage of elderly individuals in the population is increasing significantly. Also affecting this scenario are the rapid advances in medical technology, often involving sophisticated techniques and equipment, that are making more diagnostic and treatment procedures available. Other emerging healthcare trends are as follows:
• Movement from hospital-based acute care to outpatient care
• Trend toward a more holistic, preventive, and continuous care of health and wellness
• The increasing introduction of highly sophisticated diagnostic and treatment technology
• A shift to computerized patient information, e.g. electronic health records (EHRs)
A link to the American Hospital Association (AHA) website, which provides the latest research and analysis of important and emerging trends in the hospital and healthcare field, can be found on the Evolve site.
When Brittany was going through her orientation, the presenter, the soon-to-be-retired health information manager, told the new recruits about the “ward system,” which existed in the large teaching hospital where she was first employed. There were two large wards on each floor—medical was on the third floor, surgical was on the fourth floor, and so forth. The ward on the west end of the third floor was Ward M3A; the ward on the east end was Ward M3B. Each of these wards was a large room with sometimes 30 beds. These beds were occupied by indigent or “state” patients, individuals who did not have insurance or the financial ability to pay for their healthcare. These patients wore dingy hospital gowns with their respective ward identification stenciled in large digits on the front so as to identify them if they wandered out of the ward.
Patients who had insurance or could pay for their care were housed on the second floor in private or semiprivate rooms and were attended by “staff” physicians. The patients in the wards were attended by medical students, interns, and residents who were overseen by staff physicians. The wards were not air-conditioned; they were crowded, malodorous, and noisy. Medical students acquired much of their medical education here, often at the expense of the patients.
The health information manager concluded, “Inpatient medical care as we know it today has improved 200-fold.”
Common healthcare facilities
The best-known type of healthcare facility is the general hospital, which is set up to handle care of many kinds of disease and injury. It may be a single building or a campus and typically has an emergency department to deal with immediate threats to health and the capacity to provide emergency medical services. A general hospital is usually the major healthcare facility in a region, with a large number of beds for intensive care and long-term care and specialized facilities for medical care, surgery, childbirth, and laboratories. Big cities may have several different hospitals of various sizes and facilities. Large hospitals are often called medical centers and usually conduct operations in virtually every field of modern medicine. Types of specialized hospitals include trauma centers; children’s hospitals; seniors’ hospitals; and hospitals for dealing with specific medical needs such as psychiatric problems, pulmonary diseases, orthopedic procedures, and other specialized areas of care.
Some hospitals are affiliated with universities for medical research and the training of medical personnel. In the United States, many facilities are for-profit hospitals, meaning that their monetary income must be greater than expenses, whereas elsewhere in the world, most hospitals are nonprofit. Many hospitals have volunteer programs in which individuals (usually students and senior citizens) provide various ancillary services.
A medical facility smaller than a hospital is typically referred to as a clinic and is often run by a government agency or a private partnership of physicians. Clinics generally provide only outpatient services.
Acute Care Facilities
An acute care facility is what most individuals usually think of as a “hospital,” although all services provided may not relate directly to an acute condition (condition in which a patient’s medical state has become unstable). This facility is equipped and staffed to respond immediately to a critical situation.
An acute care facility can be defined as a facility offering inpatient, overnight care, and services for observation, diagnosis, and active treatment of an individual with a medical, surgical, obstetric, chronic, or rehabilitative condition requiring the daily direction or supervision of a physician. Acute care involves assessing and treating sudden or unexpected injuries and illnesses. Acute healthcare settings provide emergency care, sophisticated diagnostic tools, and surgical interventions and can provide patient care 24 hours a day, 7 days a week, 365 days a year. The staff consists of nurses, doctors, technicians, therapists, and other ancillary staff who have roles in caring for and/or supporting the patient.
After a patient is discharged from the hospital, two different claims typically are generated—one from the hospital for institutional charges and the other from the physician for his or her professional services. As we learned in earlier chapters, physician service claims are submitted to the patient’s insurance carrier using an electronic claims submission process or the CMS-1500 paper form, if the provider qualifies. Hospital service claims are typically submitted electronically or by using a nationally recognized billing form called the UB-04 (short for uniform bill 2004), sometimes referred to as the CMS-1450 form.
Critical Access Hospitals
A critical access hospital (CAH) is one that is certified to receive cost-based reimbursement from Medicare. The Critical Access Hospital Program was created by the 1997 federal Balanced Budget Act as a safety net to guarantee Medicare beneficiaries access to healthcare services in rural areas. It was designed to allow more flexible staffing options required by the community, simplify billing methods, and create incentives to develop local integrated health delivery systems including acute, primary, emergency, and long-term care.
The reimbursement that a CAH receives is intended to improve financial performance, thereby reducing hospital closures. Each hospital must review its own situation to determine whether CAH status would be advantageous. CAHs are certified under a different set of Medicare Conditions of Participation (CoP) that are more flexible than those of acute care hospitals.
Ambulatory Surgery Centers
Ambulatory surgery centers (ASCs) are facilities where surgical procedures that do not require hospital admission are performed. They provide a cost-effective and convenient environment that may be less stressful than that offered by many hospitals. Particular ASCs may perform surgical procedures in a variety of specialties or dedicate their services to one specialty, such as eye care or orthopedic services.
An ASC treats only patients who already have seen a healthcare provider and who together have selected surgery as an appropriate treatment. All ASCs must have at least one dedicated operating room and the equipment needed to perform surgery safely and to ensure quality patient care. Physician offices and clinics that are not so equipped are not considered ASCs. Patients who elect to have surgery in an ASC arrive on the day of the procedure, undergo the procedure in a specially equipped operating room, and recover under the care of the nursing staff, all without a hospital admission.
ASCs are among the most highly regulated healthcare facilities in the United States. Medicare has certified more than 80% of these centers, and most states require ASCs to be licensed. These states also specify the criteria that ASCs must meet for licensure. States and Medicare survey ASCs regularly to verify that the established standards are being met. All accredited ASCs must meet specific standards that are evaluated during on-site inspections. In addition to state and federal inspections, many surgery centers go through a voluntary accreditation process conducted by peers. As a result, patients visiting an accredited ASC can be assured that the center provides the highest quality care.
Other Types of Healthcare Facilities
Many other types of healthcare facilities besides acute care hospitals and ASCs exist (Fig. 18-1). Following is a brief discussion of a few of the more familiar types.
Subacute Care Facilities
A subacute care facility is a comprehensive, highly specialized inpatient program designed for individuals who have experienced an acute event as a result of an illness, injury, or exacerbation (worsening) of a disease process. It specifies a level of maintenance care in which there is no urgent or life-threatening condition requiring medical treatment. Subacute care may consist of long-term ventilator care or other procedures provided on a routine basis either at home or by trained staff at an SNF. This type of care often is seen as a bridge between the hospital’s acute care units and facilities for patients who require ongoing medical care or who are still dependent on advanced medical technology.
In a subacute care facility, patients have the advantage of constant access to nursing care as they move toward recovery and return to their home, which acute care facilities typically do not provide. If the physician determines that recuperative care is required after an acute hospitalization, the patient may be transferred to a facility that specializes in subacute services; however, a stay in a subacute care facility is generally short term.
Skilled Nursing Facilities
An SNF is an institution or a distinct part of an institution that is licensed or approved under state or local law and is primarily engaged in providing skilled nursing care and related services as an SNF, extended care facility, or nursing care facility approved by The Joint Commission or the Bureau of Hospitals of the American Osteopathic Association (AOA), or otherwise determined by the health plan to meet the reasonable standards applied by any of these authorities.
Previously referred to as “nursing homes,” SNFs have evolved in the services they provide. They offer 24-hour skilled nursing care; rehabilitation services such as physical, speech, and occupational therapy; assistance with personal care activities such as eating, walking, toileting, and bathing; coordinated management of patient care; social services; and activities. Some SNFs offer specialized care programs for patients with Alzheimer’s disease or other illnesses or short-term respite care for frail or disabled individuals when family members require a rest from providing care in the home. Respite care services give individuals such as family members temporary relief from tasks associated with care-giving. A crucial element of an SNF is periodic reviews by the state or local department of social and health services.
Broadmoor Respite Services offers a wide range of services to caregivers who require temporary relief from their responsibilities. These services include companion services, personal care, household assistance, and skilled nursing care to meet specific needs of patients with disabilities, patients with chronic or terminal illnesses, and elderly patients. Broadmoor Respite Services provides overnight, weekend, and longer stays for individuals with Alzheimer’s disease or a related dementia so that a caregiver can have longer periods of time off. The facility provides meals, helps with activities of daily living, and provides therapeutic activities to fit the needs of residents in a safe, supervised environment.
Intermediate Care Facilities
Intermediate care facilities are designed for individuals with chronic conditions who are unable to live independently but who do not need constant intensive care. Intermediate care facilities provide supportive care and nursing supervision under medical direction 24 hours a day but do not provide continuous nursing care. They stress rehabilitation therapy that enables individuals to return to a home setting or to regain or retain as many functions of daily living as possible. A full range of medical, social, recreational and support services are also provided.
Long-Term Care Facilities
Long-term care facilities provide care for adults who are chronically ill or disabled and are no longer able to manage in independent living situations. Long-term care is the type of care that individuals may need when they no longer can perform activities of daily living (ADLs) by themselves, such as bathing, eating, and getting dressed. It also includes the kind of care an individual would need if he or she had a severe cognitive impairment such as Alzheimer’s disease.
When we think of long-term care, we often think of nursing homes. Long-term care can be received in a variety of settings, however, including an individual’s own home, assisted living facilities, adult day care centers, and hospice facilities. Long-term care does not refer to the medical care needed to get well from an illness or injury or to short-term rehabilitation from an accident or recuperation from surgery.
Hospice
Hospice is not a specific place; it is a facility or service that provides care for terminally ill patients and support to their families, either directly or on a consulting basis with the patient’s physician. Emphasis is on symptom control and support before and after death. Hospice attempts to meet each patient’s unique physical, emotional, social, and spiritual needs and the special needs of the patient’s family and close friends. The goals of hospice are to keep the patient as comfortable as possible by relieving pain and other discomforting symptoms, to prepare for a death that follows the wishes and needs of the patient, and to reassure the patient and loved ones by helping them understand and manage what is happening. This support assists patients and families through the process of facing, understanding, and accepting death.
Home Health Agencies
Home health agencies provide a wide range of healthcare services that can be given in the patient’s home. Home healthcare is usually less expensive and more convenient than, and can be just as effective as, care provided in a hospital or skilled nursing facility. In general, home healthcare includes part-time or intermittent skilled nursing care and other skilled care services, such as physical and/or occupational therapy and speech-language therapy services. Services may also include medical social services or assistance from a home health aide. A home healthcare agency typically coordinates the services ordered by the patient’s physician orders.
Legal and regulatory environment
State and federal governments, accrediting organizations, employers, and healthcare plans have developed methods for ensuring quality in managed care plan systems. As physicians and healthcare consumers have become more aware of the need for protection against excessive containment of managed care costs, many state governments have enacted laws designed to protect patients’ rights.
All acute care or general hospitals must be licensed by the particular state in which they are located to provide care within the minimum health and safety standards established by regulation and rule. The U.S. Department of Health and Human Services (HHS) enforces the standards by periodically conducting surveys of these facilities. Medicare pays for services provided by hospitals that voluntarily seek and are approved for certification by the Centers for Medicare and Medicaid Services (CMS). CMS contracts with HHS to evaluate compliance with the federal hospital regulations by periodically conducting surveys of these agencies.
A hospital may seek accreditation by nationally recognized accrediting agencies such as The Joint Commission or the AOA. Surveys conducted by The Joint Commission and AOA are based on guidelines developed by each of these organizations.
The federal Emergency Medical Treatment and Labor Act (EMTLA) was enacted by Congress as part of the Consolidated Omnibus Budget Reconciliation Act of 1985. This act states that member hospitals must respond to an individual’s emergency medical condition (defined as the onset of a health condition that requires immediate medical attention) by determining the nature of the condition. If an emergent condition exists, it must be treated to the best of the facility’s ability regardless of ability to pay. Patients can then be transferred as appropriate after the condition has been stabilized.
EMTLA applies to virtually all hospitals in the United States with the exception of the Shriners’ Hospitals for Children and many military hospitals. Its provisions apply to all patients—not just to Medicare beneficiaries.
After a fall from his bicycle on his way home from school, Bobby Thaddeus, an 8-year-old boy, complained of pain in his right arm. His mother, fearing his arm might be fractured, brought Bobby to Meadville Hospital’s emergency department. The emergency staff at Meadville refused to treat the child, advising Bobby’s mother to take him to their family practitioner for treatment. A spokesman at Meadville defended the hospital’s policy, stating that it was put in place to curb misuse of emergency department services. Nonemergencies overloaded staff and facilities with routine medical problems that could be handled as well elsewhere. When routine injuries and illnesses were brought to the emergency department, they cause delayed treatment of true emergencies. Do you agree with the hospital’s policy? Why or why not? Was Meadville violating the Emergency Medical Treatment and Active Labor Act in refusing to treat Bobby’s injury?
Accreditation
Accreditation is a voluntary process through which an organization is able to measure the quality of its services and performance against nationally recognized standards. It is the process by which a private or public agency evaluates and recognizes (certifies) an institution—in this case, hospitals—as fulfilling applicable standards. The Joint Commission evaluates whether hospitals, nursing homes, and managed care organizations meet certain specified requirements. The Accreditation Association for Ambulatory Health Care (AAAHC) and the National Committee for Quality Assurance (NCQA) assess and award compliance certifications to managed care organizations, including health maintenance organizations. Public agencies sometimes require accreditation by a private body as a condition of licensure, or they may accept accreditation as a substitute for their own inspection or certification programs. The next section discusses the more commonly known accreditation organizations.
The Joint Commission
The Joint Commission is a private organization created in 1951 to provide voluntary accreditation to hospitals. In 2002, the organization established its National Patient Safety Goals (NPSGs) program, to help accredited organizations address specific areas of concern in regard to patient safety. A panel of patient safety experts advises The Joint Commission on the development and updating of NPSGs. This panel, called the Patient Safety Advisory Group, is composed of nurses, physicians, pharmacists, risk managers, clinical engineers, and other professionals who have hands-on experience in addressing patient safety issues in a wide variety of healthcare settings.
National Committee for Quality Assurance
NCQA is an independent, nonprofit organization that performs quality-oriented accreditation reviews on health maintenance organizations and similar types of managed care plans. NCQA is governed by a board of directors that includes employers, consumer and labor representatives, health plan representatives, policymakers, and physicians. The purpose of NCQA is to evaluate plans and provide information that helps consumers and employers make informed decisions about purchasing health plan services. NCQA performs two distinct functions: One is the evaluation and accreditation of health plans; the other is measurement of performance.
The NCQA accreditation process involves a comprehensive review of health plan structure, policies, procedures, systems, and records. The review includes an analysis of plan documents and an on-site inspection visit by a team of expert reviewers. On the basis of the review, plans are accorded one of several possible accreditation levels: excellent, commendable, accredited, and provisional. Plans that do not meet standards are denied accreditation status.
Elena Sanchez, a 42-year-old woman, lived in a large metropolitan area with several large and small hospitals. After a visit to her physician for complications of diabetes, her physician advised her that she should be admitted to one of the local hospitals for some tests and possible surgery. Elena asked her friend Teresa, a health information professional, how she should choose which hospital to go to. She preferred the one located in her neighborhood, Seacrest Memorial. Teresa told Elena that Seacrest might not be the best choice because although it was handy, it was not accredited. Why might this fact be a concern for Elena?
Accreditation Association for Ambulatory Health Care
AAAHC was formed in 1979 to assist ambulatory healthcare organizations improve the quality of care provided to patients. The accreditation decision is based on assessment of an organization’s compliance with applicable standards and adherence to the policies and procedures of AAAHC. AAAHC expects substantial compliance with all applicable standards, which is assessed by at least one of the following means:
Utilization Review Accreditation Commission
The Utilization Review Accreditation Commission (URAC) is an independent, nonprofit organization. Its mission is to promote continuous improvement in the quality and efficiency of healthcare delivery by achieving a common understanding of excellence among purchasers, providers, and patients through the establishment of standards, programs of education and communication, and a process of accreditation. URAC is nationally recognized as a leader in quality improvement, reviewing and auditing a broad array of healthcare service functions and systems. Their accreditation activities cover health plans, preferred provider organizations, medical management systems, health technology services, healthcare centers, specialty care, workers’ compensation, medical websites, and HIPAA privacy and security compliance.
Professional Standards
Professional standards that govern U.S. hospitals typically are associated with an accrediting body such as The Joint Commission and differ from one organization to the next. The Joint Commission’s Medical Staff Standard MS.6.9 requires hospitals to define (e.g., in a policy) the process for supervision of residents by licensed independent practitioners with appropriate clinical privileges. A licensed independent practitioner is defined as “any individual permitted by law and by the organization to provide care and services without direction or supervision, within the scope of the individual’s license, and consistent with individually granted clinical privileges.”
The standard also requires the medical staff to ensure that each resident is supervised in his or her patient care responsibilities by a licensed independent practitioner who has been granted clinical privileges through the medical staff process. Finally, the rules require hospitals to identify in the medical staff rules, regulations, and policies which individuals may write patient care orders, the circumstances under which they may write such orders, and what entries must be countersigned by a supervising licensed independent practitioner.
Governance
Governance, in its widest sense, refers to how any organization is run. With reference to healthcare facilities, it involves all the processes, systems, and controls that are used to safeguard the welfare of patients and the integrity of the institution. The Joint Commission’s Revised Governance Standard GO.2 provides that, in addition to providing for the effective functioning of activities related to delivering quality patient care, performance improvement, risk management, medical staff credentialing, and financial management, the governing body must provide for the effective functioning of professional graduate medical education programs (e.g., by adopting policies and bylaw provisions).
Confidentiality and Privacy
Most hospital accrediting organizations, specifically The Joint Commission, include strategies for accrediting a hospital on privacy and confidentiality issues that parallel the demands of HIPAA compliance. It is important for hospital staff to understand and abide by HIPAA’s Privacy Standards, including such topics as
• who qualifies as “covered entities” under the Privacy Standards
• what type of information is protected
• what HIPAA’s restrictions are on the use and disclosure of PHI
• how the hospital follows the minimum necessary standard
• how the hospital implements patient rights created by the Privacy Standards
• what administrative requirements the Privacy Standards impose
• what the HIPAA preemption provisions are, and
• what penalties HHS can impose for failing to comply with the Privacy Standards.
A covered entity under HIPAA is a health plan, a healthcare clearinghouse, or a healthcare provider that transmits any health information in electronic form in connection with a transaction. The Privacy Rule requires a covered entity (in this case, the hospital) to make reasonable efforts to limit use of, disclosure of, and requests for PHI to the minimum necessary to accomplish the intended purpose. The minimum necessary standard is intended to make covered entities evaluate and enhance protections as needed to prevent unnecessary or inappropriate access to PHI. It is intended to reflect and be consistent with, not to override, professional judgment and standards.
The Privacy Rule is not intended to prohibit providers from talking to other providers and their patients. The following practices are considered to be permissible, if reasonable precautions are taken to minimize the chance of inadvertent disclosures to others who may be nearby (e.g., using lowered voices, talking apart):
HIPAA regulations state that hospitals are required by law to protect the privacy of health information that may reveal a patient’s identity (referred to as PHI) and to provide the patient with a written notice of privacy practice (NOPP) that describes the health information privacy practices of the hospital.
Elizabeth Cotter, a 74-year-old woman, underwent a serious operation after experiencing a cardiac episode. After the surgery was completed, a nurse came to the reception area where Mrs. Cotter’s family was waiting and informed them that although the procedure took longer than expected, Mrs. Cotter came through it okay and was in now in the recovery room. “You can see her as soon as she is transferred to her room, in about 30 minutes.” Has there been a breach of patient confidentiality here? Why or why not?
After Mrs. Cotter returned to her room, her next-door neighbor telephoned the nurses’ station to inquire as to her condition. The nurse informed the caller that although the procedure took longer than expected, and that it was “touch and go for a while,” the patient was back in her room now and was expected to make a full recovery. Has there been a breach of confidentiality here? Why or why not?
Fair Treatment of Patients
In Chapter 3, we learned about medical ethics, which are the moral principles that govern the practice of medicine by physicians and other healthcare practitioners. When dealing with patients or healthcare users, healthcare practitioners are governed by these ethical principles and the law. Breaches of ethical rules may result in disciplinary action by employers and professional staff. Breaches of the law may result in similar disciplinary action and criminal or civil legal action against the healthcare practitioners concerned. Basic principles of medical ethics are usually regarded as
• showing respect for patient autonomy,
• not inflicting harm on patients,
• contributing to the welfare of patients, and
Ethical principles require healthcare practitioners to become advocates for their patients. The principle of justice or fairness requires medical personnel to ensure that their patients enjoy the constitutional right to equal treatment and freedom from unfair discrimination. The principle of autonomy requires medical personnel to ensure that their patients’ constitutional and common law human rights to freedom and security of the individual are respected; this is safeguarded by the ethical and legal requirements of an informed consent. Respect of a patient’s right to freedom of religion, beliefs, and opinions is legally required in terms of the U.S. Constitution.
A patient’s right to privacy is safeguarded by the ethical and legal rules regarding confidentiality. The principle of not inflicting harm requires medical personnel to ensure that their patients’ constitutional human rights to dignity, life, emergency treatment, and an environment that is not harmful to health are upheld. The principle of contributing to the welfare of patients requires medical personnel to ensure that the constitutional imperative against medical malpractice and professional negligence is not allowed.
A breach of an ethical principle or of an ethical rule or regulation formally put into effect by a professional council may be used to establish medical malpractice or professional negligence, although the breach itself may not constitute a crime or civil wrong. For a civil wrong to be proved, it would have to be shown that the health professional’s conduct was also a breach of a legal obligation.
A hospital billing department is prevented from answering questions from advocates or family members who work on a patient’s behalf to help pay medical bills unless the patient has signed a written authorization directing billing department employees to do so.
If a physician or other healthcare practitioner negligently causes the death of a patient by breaching an ethical rule, he or she may face a criminal charge of culpable homicide or a civil action by the deceased’s dependents. Marcus Sherman, a 56-year-old man, saw Dr. Edmund Pithily because of rectal bleeding. Dr Pithily performed a limited sigmoidoscopy, the results of which were negative. The patient continued to have rectal bleeding but was repeatedly reassured by the physician that he was okay. Eighteen months later, after a 25-lb weight loss, Mr. Sherman was admitted to a hospital for evaluation. He was found to have colon cancer with metastases to the liver. Despite all efforts to combat the spread of the disease, Mr. Sherman died. The physicians who reviewed his medical record judged that proper diagnostic management might have discovered the cancer when it was still curable. They attributed the advanced disease to substandard medical care. The event was considered adverse and due to negligence.
Common hospital payers and their claims guidelines
The major payers of hospital costs are much the same as those of physicians’ offices and clinics. Government payers (Medicare, Medicaid, and TRICARE/CHAMPVA) typically have the largest share of claims, followed by Blue Cross and Blue Shield and managed care organizations. Other payers include private/commercial insurance companies, no-fault/liability insurance arrangements, and workers’ compensation. These shares differ, however, from state to state. As stated often throughout this text, it is paramount for the health insurance professional to learn and follow the specific guidelines of each individual payer. The following subsections briefly address these major payers. For more detailed information, refer to their specific corresponding chapters.
Medicare
Medicare hospital claims are processed by nongovernment organizations or agencies that contract to serve as fiscal agents between providers (hospitals, physicians, and other healthcare providers) and the federal government. These claims processors are commonly referred to as Medicare carriers, Medicare administrative contractors (MACs), or fiscal intermediaries (FIs). They apply Medicare coverage rules to determine the appropriateness and medical necessity of claims.
Medicare carriers (regional companies that oversee the administration and processing of Medicare policies and claims) process Part A claims (hospital insurance) for institutional services, including inpatient hospital services as well as those provided by SNFs, home healthcare agencies, and hospice. They also process hospital outpatient claims for Medicare Part B. Examples are Blue Cross and Blue Shield, Noridian, Palmetto, and other commercial insurance companies.
Carriers are required to process claims according to government regulations. Additionally, as regional companies, they have the authority to set local policies. A Medicare carrier reviews all Medicare claims and determines whether or not each claim qualifies for reimbursement. The carrier is then responsible for developing payment policies for the states in its area. Once these local medical review policies (also known as local coverage determinations) are established, the Medicare carrier evaluates each Medicare claim to ensure that the services provided are reasonable and necessary. Additionally, Medicare carriers are responsible for
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