HIMS 5620 (Chapter 5/Exam 1)

CMS issues information and updates about its Federal Payment Systems in the ______

Federal Register

What is the Federal Register

-The official journal of the US government

-Provides government info about payment systems , legal notices, reports, etc.

-Published every federal business day

What are the 3 stages of annual prospective payment updates?

(Figure 5.1)

1. Notice of Proposed Rule Making (NPRM)

2.Comment Period

3.Final Rule

A form that collects info about institutional providers to make proper determination of amounts payable under its provisions in various PPSs is called a ______

cost report

What types of institutional providers are required to submit cost reports?

-Hospital

-Skilled nursing facility

-Renal facility

-Hospice

-Home health agency

-Health clinics, including rural health clinics

-Community mental health centers

-Federal qualified health centers

______ and _____ are NOT required to submit cost reports.

Physicians and Ambulatory Surgical Centers

Cost reports are submitted to _______

Medicare administrative contractors (MACs)

Medicare Administrative Contractor (MAC)

a contracting authority that administers Medicare Part A and Part B by processing and managing claims.

Cost reports must be submitted to the proper MAC within ______ months of the end of the facility's ____ year.

5, fiscal

T/F A cost report must use an approved software vendor

True

Cost reports are submitted on an ______ basis

annual

What type of data is submitted in a cost report?

-facility characteristics

-utilization data

-cost and charges by cost center

-Medicare settlement data

-financial statement data.

Cost report data is maintained in Medicare's __________.

Health Provider Cost Reporting Information System (HCRIS).

T/F Cost report data can be used for research with limitations imposed by CMS

True

Value Based Purchasing (VBP) links _____ and _____.

quality and reimbursement

CMS has three broad categories of VBP programs which include:

-Paying for reporting

-Paying for performance

-Paying for value

According to Table 5.1, Most types of facilities experience a ______% reduction to the conversion factor when they fail to participate in the pay for reporting program

2%

What 4 components make up a Medicare Payment System?

-reimbursement methodology

-classification system

-provisions and adjustments

-value based purchasing

In this class, Medicare Hospital Acute Impatient Services Payment System will be referred to as _______.

IPPS

IPPS is a prospective payment system (PPS) that uses a _______ methodology for reimbursement.

case-rate

The rate year for IPPS is ________ through _________, which is the same as the federal fiscal year(FY).

Oct 1 through September 30

Medicare severity diagnosis-related group (MS-DRG) system takes into consideration the role that a hospital's composition of patients plays in influencing _______.

costs

______ measures the amount of resources required to treat a patient.

Resource intensity

The resource intensity of a classification group, such as an MS-DRG, is represented by the __________

relative weight (RW)

T/F A RW is an assigned weight that reflects the relative resource consumption associated with a payment group. Therefore, each MS-DRG is assigned a RW that is intended to represent the resource intensity of the clinical group. It is also used to determine the payment level for the group.

True

Case-mix index (CMI) is a _________

weighted average of the sum of the RWs of all patients treated during a specified time.

T/F case mix is defined in many ways, based on healthcare perspective.

True

How is case-mix index defined from the clinician/physician's perspective?

severity of illness (SOI), risk for mortality, prognosis, treatment difficulty, or need for intervention. This viewpoint uses sickness as a proxy for resource consumption.

How is case-mix index defined from the MS-DRG perspective?

case-mix complexity is a direct measure of the resource consumption and, therefore, the cost of providing care.

A high case mix in the MS-DRG system means patients are consuming more resources, so the cost of care is higher.

T/F MS-DRGs allow the IPPS to be a ______ system.

This means that there is one payment per admission and all treatment costs are packaged into that payment amount.

Therefore, there is only one MS-DRG assigned per encounter and the reimbursement rate covers all services provided during the patient admission.

fully packaged

Facilities must accept _____ or _____ based on the predetermined reimbursement amount for the assigned MS-DRG.

profit or loss

The case-rate prospective payment concept drives facilities to practice cost management to mitigate _______.

financial loss

The MS-DRG classification system is hierarchical in design. The highest level in the hierarchy is ________

major diagnostic categories (MDCs)

major diagnostic categories (MDCs) represent the ________ treated by medicine

body systems

How many MDCs are there?

25

The second level in the hierarchy divides each MDC group into _______ and _______ sections.

surgical, medical

The third and final level in the hierarchy divides the surgical or medical sections of the 25 MDC groups into _______.

individual MS-DRGs

the components for each MS-DRG are:

-title

-geometric mean length of stay (GMLOS)

-arithmetic mean length of stay (AMLOS)

- RW

- ICD-10-CM or ICD-10-PCS

arithmetic mean length of stay (AMLOS)

the sum of all lengths of stay (LOSs) in a set of cases divided by the number of cases.

geometric mean length of stay (GMLOS)

the nth root of a series of n LOSs.

For example, if there are five LOS data points, multiply the LOS data points together, and then take the 5th root of the product.

T/F The GMLOS is less influenced by large outliers (cases in payment systems with unusually long LOSs or exceptionally high costs) than the AMLOS and, therefore, is a good measure of the center of the distribution.

True

the extent of physiological decompensation or organ system loss of function

Severity of Illness (SOI)

MS-DRGs use ______ and ________ to show severity of illness differentiation.

complication, comorbidity

complication

a medical condition that arises during the hospital stay that prolongs the LOS at least one day in approximately 75 percent of the cases

comorbidity

A comorbidity is a pre-existing condition that, because of its presence with a specific diagnosis, causes an increase in LOS by at least one day in approximately 75 percent of the cases

The MS-DRG system groups secondary conditions into three categories. What are the three categories?

-Complications and comorbidities (CCs)

-Major complications and comorbidities (MCCs)

-Conditions that are NOT a complication or a comorbidity (non-CC/MCC).

secondary conditions that have a major or extensive SOI and impact on resource use.

Major complications and comorbidities (MCCs)

are secondary conditions that have a moderate SOI and impact on resource use.

Complications and comorbidities (CCs)

secondary conditions that have a minor SOI and impact on resource use

Conditions that are NOT a complication or a comorbidity (non-CC/MCCs)

A __________ is a group of MS-DRGs that have the same base set of principal diagnoses with or without operating room (OR) procedures, which are divided into levels to represent SOI.

MS-DRG family

T/F There may be one, two, or three SOI levels in an MS-DRG family.

True

Base payment rate

Rate per discharge for operating and capital-related components for an acute-care hospital.

CC/MCC exclusion list

Set of principal diagnosis codes that is closely related to a CC or MCC code that takes away the refinement power of the CC or MCC code for an encounter.

Diagnosis codes that when reported as a secondary diagnosis have the potential to impact the MS-DRG assignment by increasing the MS-DRG severity up one level. _______ codes represent an increase in resource intensity for the admission

Complication and comorbidity (CC)

Computer programs that assign patients to classification groups are generically called __________

Groupers

Diagnosis codes that when reported as a secondary diagnosis have the potential to impact the MS-DRG assignment by increasing the MS-DRG severity up one or two levels. _________ codes represent the highest level of resource intensity.

Major complication and comorbidity (MCC)

Highest level in hierarchical structure of the federal inpatient prospective payment system.

Major diagnostic category (MDC)

Medicare refinement to the diagnosis related group (DRG) classification system, which allows for payment to be more closely aligned with resource intensity

Medicare severity diagnosis-related group (MS-DRG)

A group of M S-D R Gs that have the same base set of principal diagnoseswith or without operating room procedures, which are divided into levels torepresent severity of illness. There may be one, two, or three severity ofillness levels in an MS-DRG family.

MS-DRG family

Reason established after study to be chiefly responsible for occasioning the admission of the patient to the hospital for care.

Principal diagnosis

Assigned weight that reflects the relative resource consumption associated with a payment classification or group. Higher payments are associated with higher relative weights

Relative weight (RW)

T/F Groupers have internal logic, or an algorithm, that assigns the patient/clients/residents to groups.

True

It is very important for _______ professionals to understand the grouper algorithms. They must be proficient with the MS-DRG assignment steps in order to help others understand why certain admissions are assigned to particular MS-DRGs

HIM

How many steps are there to assign MS-DRGs?

4

What are the 4 steps to assigning an MS-DRG?

1. Pre MDC Assignment

2. Major Diagnostic Category Determination

3. Medical/Surgical Determination

4. Refinement

__________ provides the layout and information for how all MS-DRGs are grouped(determined).

MS-DRG Definitions Manual

MDCs are groupings based on _______ or another category.

body systems

Step 1: Pre-MDC Assignment

a ________ is used to assign the MS-DRG. (NOT the principal diagnosis or principal diagnosis/procedure combination).

specific procedure

Step 2: Major Diagnostic Category Determination

The ________ diagnosis is used to place the admission into one of the 25 MDCs.

principal

principal diagnosis

the reason established after study to be chiefly responsible for occasioning the admission of the patient to the hospital for care.

Step 2: Major Diagnostic Category Determination

Appendix _____ of the M S-D R G Definitions Manual provides the linkage between the diagnosis code and the corresponding MDC.

B

Step 3: Medical/Surgical Determination

It must be determined if an ________ procedure was performed.

Operating Room (OR)

Step 3: Medical/Surgical Determination.

The MS-DRG Definitions Manual identifies which procedures are valid/nonvalid OR procedures. Additionally, many ICD-10-PCS codebooks provide a flag or indicator for procedure codes that qualify as valid/nonvalid OR procedures. Minor procedures and testing are not qualifying procedures.

If a qualifying OR procedure was NOT performed, the case is assigned a ________

medical status.

Step 3: Medical/Surgical Determination.

Appendix ______ of the MS-DRG Definitions Manual lists "OR" procedures. Some are not performed in the OR, for example, stem cell or bone marrow transplants.

E

Step 4: Refinement

Refinement questions are used to isolate the correct MS-DRG. The most common refinement questions relate to the presence of a ________ secondary diagnosis.

CC/MCC secondary diagnosis.

Examples of refinement questions:

-Is an MCC present?

-Is a CC present?

-Did the patient have an acute myocardial infarction, heart failure, or shock?

-Did the patient coma last less than or greater than one hour?

-Was the procedure performed for a neoplasm?

-What is the patient's sex?

-What is the patient's discharge status code (alive or expired)?

At some point a clinician or other health professional may ask you why an admission is not grouping to with a CC/MCC MS-DRG when there is a CC or MCC condition listed as a secondary diagnosis on the claim. Most likely the answer relates to

The CC/MCC Exclusion lists

When the CC or MCC diagnosis code is closely related to the principal diagnosis, it is placed on an exclusion list.

This takes away the power of the CC or MCC code to allow the admission to group to a higher weighted MS-DRG.

How do you know the if the CC/MCC is on an exclusion list?

MS-DRG Definitions Manual, Appendix C

What is the basic reimbursement rate?

MS-DRG Relative Weight RW x Hospital Base Rate = Reimbursement

high-cost outlier admissions, new medical services and technologies adjustment, and transfer cases are examples of _______

Payment System Provisions

High Cost Outlier

-Actual costs for the case exceed threshold

-Additional reimbursement amount is paid

-However, reimbursement will never be greater than cost for these admissions

-For individual admissions

New Medical Services and Technologies

-CMS' approach to ensuring that new technologies are available to Medicare beneficiaries

-Add-on additional reimbursement

-For individual admissions

Transfer Cases

-Patient is transferred from one facility to another

-P A C T - post acute care transfer policy

-Reduces reimbursement amount because patient did not stay the full average LO S

-For individual admissions

Wage indexes, cost of living (COLA), disproportionate share hospital, and Indirect Medical Education (IME) are examples of __________.

adjustments

Wage Index

Labor related share

Wages, salaries, benefits, professional fees, etc.

Non-labor share

The labor related share is adjusted for the hospital's geographic location

All admissions are adjusted

Cost of Living (COLA)

-Reflects the change int he consumer price index

-Only applicable for hospitals in Alaska and Hawaii

-All admissions are adjusted

Disproportionate Share Hospital

-Hospital status for those facilities that have a high percentage of low-income patients.

-Additional payment is made to offset the financial hardship by providing treatment for patients who are unable to pay for the services rendered

-All admissions are adjusted Indirect Medical Education (IME)

-Hospitals that have residents in an approved graduate medical education program

- Offset the increased cost of care associated with educating new physicians and clinicians

-All admissions are adjusted

Indirect Medical Education (IME)

-Hospitals that have residents in an approved graduate medical education program

-Offset the increased cost of care associated with educating new physicians and clinicians

- All admissions are adjusted

What is the wage index adjustment formula?

(Labor portion % x wage index for facility x MS-DRG amount) + (Non labor portion % x MS-DRG amount)

Labor portion %

If wage index is >1 then percent = ________

If wage index is

68.3%

62%

Non labor portion %

If wage index is >1 then percent =

If wage index is

31.7%

38%

Labor and Non labor portions are updated _____

each year

CMS releases a base rate each year in the ________

final rule (Federal Register)

That base rate is adjusted based on

-Adjustments such as wage indexes, cost of living (COLA), disproportionate share hospital, and Indirect Medical Education (IME)

Also, any adjustments based on value based purchasing (quality) programs is applied to the base rate

The result of adjustments made to the base rate is _______.

the fully loaded or fully adjusted hospital specific base rate

REMEMBER the fully loaded hospital specific base rate DOES NOT include the _______

-provisions

-i.e. (high-cost outlier admissions, new medical services and technologies adjustment, and transfer cases)

-provisions apply to INDIVIDUAL admissions

Condition that developed during the hospital admission

Hospital acquired condition (HAC)

Indicator that identifies if the condition or disease was present before the admission or developed during the hospital admission

Present on admission indicator

What are the 5 POA indicators?

Y, N, U, W, Unreported

What does POA indicator "Y" mean?

Yes, present at the time of admission