Introduction
Billing and coding rules are standards, practices, and strategies healthcare providers use to reimburse. The job of health care providers is to execute transactions according to the rules to avoid unnecessary costs, preserve financial capacity and make a pleasing appearance (Recycle Intelligence, 2021). Billing is aimed at determining reimbursement amount, and coding refers to the entire process from enrollment to reimbursement. For processes to be balanced and stable, following rules is essential. There are many rules currently in use by medical organizations. This paper will examine the critical differences between the rules and determine their impact on the reimbursement process.
Different Billing and Coding Regulations
Quite a few organizations write rules and integrate them into medical organizations. Among them is the Center for Medicare and Medicaid Services (CMS), which is in the business of writing procedure and cost matching plans. CMS will only pay the patient’s bill if the procedure/diagnosis/treatment is warranted according to their guidelines. The Office of Inspector General (OIG) is the Office of Program Oversight that evaluates the rules of CMS, individual payers, and other organizations. The OIG focuses on federal compliance review procedures. Individual payers are insurance companies that may provide coverage to a small number of people. Usually have their billing processing policies and their rates for individual plans.
Legislation used for billing and coding is at the federal level. The Health Insurance Portability and Accountability Act (HIPAA) protects confidential patient information. It is necessary to properly code diagnoses and patient information that can be shared with insurance companies for billing purposes (Recycle Intelligence, 2021). Sections III-V govern cost accounting principles, the health plan, and insurance policies. Unlike the other acts, HIPAA primarily seeks to preserve confidentiality through the IBC system. Since 2009, all HIPAA-covered entities must use ICD-10 for coding (CMS, 2021b). The standards by which transactions must be conducted have been updated to version 5010.
Another coding set is the Current Procedural Terminology (CPT), which describes medical procedures accurately. It provides administrative and financial consistency between providers and insurance companies (Recycle Intelligence, 2021). It has been used to develop the Common Healthcare Procedure Coding System (HCPCS), which is necessary to ensure standardization. The American Medical Association (AMA) holds the CRT rights, requiring organizations to pay for the three-section coding. HCPCS is a publicly available resource that HIPAA must use.
Impact of the Regulations on Reimbursement to the Medical Organization
It is worth beginning with a discussion of the potential negative impact of the rules on reimbursement. Different coding rules (IBC, CPT, and HCPCS) can create incompletely understood and objective relationships between providers and payers. It results in losses in transferring financial and analytical data that could have been used to provide reimbursement. Unfortunately, there can be the problem of lengthy processing and disrupted transfer processes because the coding is not entirely consistent. Different coding systems force one to look for more automated billing systems.
Now we should discuss the positive impact, primarily due to the presence of a proven effect on savings and efficiency. It has been noted that coding systems allow for the formation of standards of care, improving the speed and quality of service delivery. The use of codes is necessary for forming a unified logistics chain, allowing the transfer of information without losses for the provider and payer. In addition, HIPAA provides for dispute resolution issues, allowing providers to avoid costs in case of patient misconduct. Along with it comes the No Surprises Act, which establishes procedures for notifying the provider of a service (Recycle Intelligence, 2021). It allows the provider to avoid costs for services that are not covered by the patient’s insurance and thus withholds from operations that the patient is unwilling to pay for.
Impact of Prospective Payment Systems
Prospective Payment Systems (PPS) is a new reimbursement system that allows payment of a prearranged amount based on Medicare insurance. CMS approved payment rates for outpatient services for hospitals and surgery centers on November 2, 2021 (CMS, 2021a). It will create transparency in billing for services provided and standardize reimbursement processes. PPSs target specific services (e.g., heart or liver transplants), allowing control over expensive surgeries (Harrington, 2019b). Different PPSs target specific categories of patients: for example, Home Health PPSs assist individuals who wish to be homebound (Harrington, 2019a). PPSs are developed based on payment status indicators, allowing standardization of care processes and making them easier to implement.
With PPSs, providers are expected to be able to control the pricing of services. A predetermined amount of a service or surgery will allow organizations to represent possible treatments and allocate resources more intelligently (Harrington, 2019b). PPSs are a proven reimbursement tool, so regulating regulations will keep the organization out of penalty fees (CMS, 2021a). PPS will also likely be able to provide processes to verify compliance with standards and relevance based on proven practices. It means that PPS will keep staff and administration from using unnecessary or harmful resources for a particular operation.
Conclusion
Thus, reimbursement and coding systems are governed by HIPAA regulations and the various IBC, SRT, and HCPCS coding systems. Through them, providers can control the cost of the resources and surgeries that need to be provided to the patient. Although the multiplicity of coding systems can cause confusion and lengthen reimbursement periods, automated systems and PPS allow for economic benefits. Coding makes it easier to provide services and differentiate them according to code, making reimbursement processes efficient and fast.
References
CMS. (2021b2). Statute and regulations.
Harrington, M. K. (2019a). Hospital outpatient prospective payment system. In Health Care Finance and the Mechanics of Insurance and Reimbursement (2nd ed.). Jones & Bartlett Learning: 141-156.
Harrington, M. K. (2019b). Medicare prospective payment systems. In Health Care Finance and the Mechanics of Insurance and Reimbursement (2nd ed.). Jones & Bartlett Learning: 117-140.
Recycle Intelligence. (2022). Exploring the fundamentals of medical billing and coding.