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HCA Coding Methods Invigorate Profits. This is Bad?

Philip Betbeze, for HealthLeaders Media, August 31, 2012

Many hospitals are putting case managers in the ER. Some of it is an answer to the RACs because they have picked up on medical necessity of admission to the hospital. Closer internal scrutiny of coding and the clinical processes surrounding it is all about appropriate admission, Birg says, because the hospital may not get paid if an admission is later judged to be medically unnecessary.

Indeed, much of HCA's recent profit gains, according to the Times story, revolve around its careful management of inpatient billing, specifically surrounding the reduction of costs in the ER, as well as careful triage of patients who, in HCA clinicians' determination, do not need emergency care and who can safely be sent to a less expensive care site.

It's undisputed that many uninsured patients use the most expensive area of care—the emergency room—as a de facto doctor's office, because they feel they have no other option. HCA will not treat those patients now unless they agree to pay in advance. My guess is that practically none of these patients elect to go that route when presented with the choice.

But in terms of profits, apparently, such measures amount to small potatoes compared with the changes in coding and billing that the company has encouraged. 

Birg estimates that by using its documentation improvement programs, hospitals and health systems are "typically seeing a 3%-8% increase in their case mix. That can mean anywhere from a $1 million to $7 million annually."

Learning about the restrictions and what actually you're not getting paid for and putting processes in place to assist you so that at least you're getting the credit you deserve is smart business. If you don't do it, payers are happy to not pay you, says Birg.

It's up to you how far you're willing to push that envelope.


Philip Betbeze is senior leadership editor with HealthLeaders Media.
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