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Tip: Stay aware of what's next on the horizon: APC groups

Patient Financial Services Weekly Advisor, March 11, 2005

Achieving a significant reduction in clinical denials is no small feat. But Mary Johnson, RN, BS, CPHQ, clinical denials program coordinator at Maine Medical Center in Portland, won't stop with reducing denials; her overarching goal is to bring in appropriate reimbursement across the board. To keep on top of it all, she's staying aware of Medicare's advisory panel on APC groups, which meets quarterly. The panel's five main goals include the following:

1. Creating a subcommittee to discuss the packaged codes that currently receive no additional payment.

Hospitals receive an extra payment if a patient has asthma, congestive heart failure (CHF), or chest pain. "Medicare tells us they should be admitted to observation if they have dehydration, for example, but there's no additional payment to the hospital," Johnson says. "We don't have packaged codes for that, and we would like to get additional payment for patients who are in observation."

2. Recommending that Medicare's Inpatient-Only list be eliminated.

"I believe the inpatient-only list is very confusing, and it's difficult to comply," Johnson says. "For instance, we had a patient with a thyroidectomy, which is outpatient. The physician used a sternal approach that was inpatient only, so Medicare denied the claim. It's something you don't know until after the [operating room] report was typed if they should be inpatient or outpatient."

3. Clarifying reimbursement when a patient is admitted as an inpatient and his or her status is subsequently changed to observation (CMS attempted to resolve this last year with condition code 44).

CMS now requires that you establish a patient's status (inpatient or outpatient) before discharge. In addition, when you classify patients as either outpatient or observation, you must give them an Advance Beneficiary Notice (ABN) to inform them that they will be liable for payment of noncovered services under Medicare Part B.

4. Recommending that the payment for observation services be expanded beyond the three clinical conditions of CHF, chest pain, and asthma to include all clinical conditions for which observation status is appropriate based on medical necessity.

5. Allowing observation hours to count toward the three-day requirement for admission to skilled nursing facility (SNF).

"This would be helpful because Medicare requires patients to be acute for three days before admission to a SNF," she says.

To learn more about Medicare's APC advisory group, click here.

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