Inpatient Payment Structure: A Case Study

The current paper examines the Disproportionate Share Hospital Payment Reduction CMS 2367F rule which was effective on November 18, 2013. The Disproportionate Share Hospital Payment Reduction CMS 2367F is Federal Legislation that was implemented due to the Affordable Care Act. The rule was initially proposed by the Centers for Medicare & Medicaid Services (CMS), HHS on May 13, 2013. The proposed rule was to implement the provision of the Affordable Care Act that reduces Medicaid Disproportionate Share Hospital (DSH) allotments.

This exercise point out some very important factors with regard to health care cost.  nursing homes and other health care delivery systems are faced with significant shortfalls in reimbursement for various reasons.  Medicare reimbursement often does not cover the full extent of treatment of individuals.  McPike (2008) notes that, “The insurance and hospital industries released a study today showing that underpayment by Medicare and Medicaid costs consumers and employers $88 billion more a year for health care as providers attempt to make up the difference.” Today with continue cutbacks in medicare reimbursement this number is significantly higher.  In an attempt to reclaim these losses, both self pay and privately insured patients are charge

The International Classification of Diseases, Tenth Revision (ICD-10) has been in development since 1983 to replace the outdated Ninth Revision (ICD-9) that has been in use in the U.S. for over 35 years (Giannangelo, 2015). Due to the Health Insurance Portability and Accountability Act (HIPAA) Administrative Simplification regulation published in 2009, the Clinical Modification (ICD-10-CM) will replace ICD-9-CM Volumes 1 and 2, and the Procedure Coding System (ICD-10-PCS) will replace ICD-9-CM Volume 3 for all HIPAA transactions effective October 2015 (Giannangelo, 2015). These new code sets accommodate new procedures and diagnoses and allow for greater specificity in clinical documentation (Centers for Medicare & Medicaid Services [CMS],

The United States implemented the current version (ICD-9) in 1979. ICD-10- CM is the mandated code set for diagnoses under the HIPAA Electronic Health Care Transactions and Code Sets standard starting on October 1, 2014. While most countries moved to ICD-10 several years ago, the United States is just now transitioning into ICD-10 and has to be compliant by October 1, 2015. ICD has been revised a number of times since the coding system was first developed more than a hundred years ago.

The U.S. lags behind in implementing ICD-10 coding because of other healthcare concerns within our healthcare system. I believe that with the passing of the Affordable Care Act and the changes that it brought about, the major focus for healthcare providers was how to survive and adjust to the changes. From a government stand point, the main focus was getting the Act passed and working out all of the bugs within the system used for consumers to sign up for insurance. Due to this ICD-10 was kind of tabled for a later date. This was good for those providers that had not begun to update their systems.

Besides, the financial incentives for hospitals and physicians that belong to ACOs, Jaffery & Golden 2013, asked and then answered the question “why would providers join this program? One reason is to prepare for the future”. Fee-for-service reimbursement, which has been how hospitals get paid for their services rely solely on the volume of patient seen without taking into consideration the quality of care provided. Payers today, such as government, commercial insurers, employers, and individual consumers are now requesting on value -based-payment, which consist of delivering the highest level of care at a lower cost. The volume based system even though the traditional way of how payments are made is not a viable long-term option (Jaffery and Golden, 2013, p.98).

Switching ICD-9 to ICD-10-CM is going to make a huge difference in the medical field! The switch to ICD-10-CM will help with cost reductions, improve quality of care for patients and update the healthcare data the way it should be. One of the major impacts of the switch would be that ICD-10-CM has 65,000 new codes that ICD-9 didn’t have. Having that many more codes means that the detail in each code will be extremely precise and there would be no question on a person diagnosis. The codes are mainly to classify a disease or someones’ major health problem. With ICD-10-CM new codes, they can become precise enough to identify diseases and produces that we were not able to in ICD-9. This is an awesome, huge step in the medical field!

The difference between theses two medical coding systems that medical practices rely on being financial stability.ICD-9 contains approximately 13,000 codes and ICD-10 will contain a totally 68,000 available codes. The ICD-10 structure code is greatly expanded and the new codes are capable of reporting data in much greater specific. When the CMS mandated the changes to be effective in 2014. The data ICD-10 codes contain is expected to improve the efficiency of healthcare reimbursement and reduce charges of fraud and abuse. The ICD-10 billing will involve an all encompassing alphanumeric systemization. The ICD-10 diagnosis code will always be a letter then numbers. The ICD-10CM/PCS has two consisted parts, ICD-10-CM diagnosed classification system developed by the centers for disease control and prevention for use in all U.S. health care treatment settings. Diagnosis coding under this system uses 3-7 alpha and numeric digit and full code titles. ICD-9-cm is very much the same. ICD-10-PCS procedure classification system developed by the centers for Medicare and Medicaid services CMS for use in the U.S. for inpatient hospital setting only. The new procedure coding system uses 7 alpha or numerical digits while the ICD-9-cm coding system uses 3or4 numbers that's the

In 1978, the World Health Organization published ICD-9. It was later modified by the US Public Health Service so that it could service the needs of American hospitals. This modification was named International Classification of Diseases, Ninth Edition, Clinical Modification (ICD-9-CM). As of October 1, 2015, ICD-9-CM was replaced with ICD-10-CM. ICD-10-CM was considered an upgrade from ICD-9-CM because it was more specific and contained many more codes than its predecessor. Most of the categories contained in ICD-9-CM were completely full with no room for expansion. ICD-10-CM goes into a lot more detail than ICD-9-CM. ICD-10 has been upgraded to contain up to seven digits as opposed to the four to five that were associated with ICD-9.

The real problem as pertains to the reimbursement of managed care organizations is that these managed care has had an effect on slowing the rates of growth concerning the costs of hospitals and specialist physicians. For both the hospitals and practitioners, the sources of revenue have been shifted with over 20 percent of the charges being paid from the pocket, others coming from third parties who demand for complex accounting of the charges, lack a pre-authorization process and they can review in a retrospective manner and deny the reimbursement (Furrow et al., 2013). The

As of October 1, 2015, all healthcare providers will be required to stop using ICD-9 and start using ICD-10. Switching over to the more in depth system of ICD-10 will require adjustments from large healthcare providers, like hospitals, as well as small practices run by doctors in order to successfully adapt. Some will have to adjust more than others. While hospitals are bigger and more complex, they will have an easier time adjusting to ICD-10 than small practices, which are operated by a single physician or a group of physicians.

To present a health care reform, one must first find out what can be improved within a health care organization. For financial reforms, there is normally a focus on rebuilding an existing budget or making cuts so that funs can be put toward a new project. As for America’s current health care system, there is a desperate need to insure more citizens. The Affordable Care Act of 2010 has created a starting point for our health care system from which can progress. More patients with preexisting conditions are now able to obtain insurance thanks to the policy within the ACA of 2010. The focus now is reimbursement for physicians. One financial operating change that should be made to America’s current health care system is the reimbursement rate to physicians. According to the lecture

What Importance might there be to the United States using the same reporting system?(ICD-10 ) as the rest of the world?. If the United States did not adopt this system how might this system impact the world?. The importance for ICD-10 is to track the codes for patients procedures, making sure you have those right codes identified for the insurance company. Because you must know the codes for that patients procedure. Otherwise you could messed up something by law .The Code are used to inform medical schemes about the conditions of the members were treated for. ICD-10 stands for International classification of diseases related to health problems. The ICD-10 translates the written description of medical, and health information. The information

The proposal for bundled payments (CCJR) will force hospitals and other health care facilities to change and adapt. The proposal would include medical severity diagnostic-related groups which would help calculate targeted prices for each severity group and each hospital separately. Several controversial components would be included in the proposal. Mandatory participation is one of the key requirements to the proposal. Another controversial component to the CCJR program is that hospitals would be exclusively responsible for the bundled payment program and any financial excess. However, these controversial components are key features to ensuring the proposal’s success which will help patients and providers in the future. Another reason the CCJR proposal will force hospitals to adapt is that the hospitals would be financially accountable for the quality of care. If the hospitals fail to meet three specifically designed protocols for quality, the hospital(s) would be ineligible for savings

The increase in individuals acquiring health insurance, due to the Affordable Care Act, causes an increased demand for physicians and physician services (ProCon.org, 2015). As a result of these increases, hospital systems are being face with what is now their biggest challenge, financial burden. The number one financial burden is medical reimbursement. However, stemming from the burden of medical reimbursement, several other challenges are brought forth, such as operating costs and the increased costs for staff, supplies, etc (Ache.org, 2016). Leaders within the hospital setting are having to adjust certain aspects of their operating system in order to keep their hospital systems afloat.