Health Information Management

Tip: Set rates that reflect intent of new codes

APCs Insider, January 27, 2012

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CMS expects hospital charges to reflect the relative resources that are required to provide a particular service. Therefore, someone at each hospital must understand new and replaced code changes, determine the intent of the new codes, and work with the appropriate individuals to develop an accurate charge.

Inputting a code in the chargemaster and calling it a day isn’t enough because new codes often represent new combinations even if they don't always represent new services.
If a new code is similar to an existing service, determine how similar (or dissimilar) it is with respect to time, resources, billing units, dosage, and other factors, and then move forward to develop the charge.

Increasingly more new codes represent a combination of existing codes and services. For example, in 2011, the AMA introduced three new combination codes for CT of the abdomen and pelvis. The codes were new, but they did not represent new services; instead they combined two existing services into single codes.

In this example, if the individual who updates the chargemaster simply replaces the old single-service code with a new combination code without reviewing and changing the dollar charge associated with the new code the hospital will continue to bill as if it rendered only a single service, even though the new code represents two services.

The tip is adapted from “Reevaluate charge setting in light of 2012 OPPS final rule” in the January issue of Briefings on APCs.

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