First, let’s start with question #1. Discuss this question based on your own opinion and this first scenario. First meaningful post made within the first 3 days in the module:Scenario: The Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS) currently leads the fight against waste, fraud, and abuse by health care industry providers. You are a Compliance Officer in a health care organization and responsible for preventing abuse, fraud, and waste.Based on what you’ve learned so far in this course:What would you do if you discovered your employees were throwing away supplies that were normally to be cleaned, sterilized, and reused? What would be your systematic action plan to resolve the issues in your answers?Based on what you’ve learned so far in this course:Based on what you have learned in your research and readings, let’s discuss the following scenario. Begin this part of the discussion no later than Wednesday.Scenario: You are managing a private multi-physicians group and two of the physicians want to change X for a new ambulatory surgical procedure while the two other physicians want to charge Y for the same procedure. They call you in to break the tie. However, when you question the four of them about how they decided on X or Y, they only shrug their shoulders, saying they chose X or Y, arbitrarily.As the manager, what information about pricing services would you share with the physicians?How would you help them make an informed decision about the pricing of this new procedure?Based on the reading, Acute Care Hospital Inpatient Prospective Payment System (Links to an external site.), reflect on what you think is the single most important factor of Prospective Payment Systems and why?You will likely find significant diversity in one another’s responses. Reflect with one another on your choices and why you think your choices in PPS [abbrev code: Prospective Payment System] factors may have differed.The first question allows you to consider what you have learned to date and any of your experiences in a health care organization or another workplace to get started. Use APA 6 formatting for any citations. Remember that the week will go by very quickly, so start early! Please do not attach any files to the discussion threads.NOTES:Reimbursements are a strategic factor in determining the current and future revenue for health care organizations. In health care finance, we as managers need to understand the structure of Prospective Payment Systems (PPS). It is important to maintain financial consistency and budgeting in health care financial reporting to its stakeholders, regardless of the type or location of the facility. As you will learn, PPS plays an important role in the organization’s revenue, not only to forecast revenue, or prepare budgets, but also to set fees for procedures and services. This module will explore diagnosis-related groups (DRG), Current Procedural Terminology (CPT) codes, International Statistical Classifications of Diseases (ICD), and the significance of the Healthcare Common Procedure Coding System (HCPCS) on fees and costs of health care.Prospective Payment SystemsA Prospective Payment System (PPS) is a method of reimbursement in which a Medicare payment is disbursed per a predetermined, fixed amount. The payment amount for a service is established based on the classification system of that service (for example, diagnosis-related groups (DRG’s) for inpatient hospital services). The CMS uses separate PPS’s for reimbursement to acute inpatient hospitals, home health agencies, hospice, hospital outpatient, inpatient psychiatric facilities, inpatient rehabilitation facilities, long-term care hospitals, and skilled nursing facilities. Payments are calculated based on an established rate determined by CMS. In addition, there are often capitated payment agreements. In a capitated agreement, the physician agrees to accept a flat dollar amount, or fee, per patient, regardless of the services rendered to the patient; indeed, at times, a patient will need no services at all for a covered period.Insurance companies and other third party payers can each negotiate payment reimbursements for each provider of service. The resulting contracts can vary greatly. One of the key responsibilities of a health care manager is to understand the multiple payment systems from which the organization receives reimbursement. Let’s look now at Diagnosis-Related Groups, perhaps one of the most familiar of the PPS’s to many of you.Diagnostic-Related GroupsThe major hospital classification system of services, diagnosis-related groups (DRG’s), is an example of a prospective payment service for inpatient hospital services. DRGs, established in 1982, determine how much Medicare pays the hospital for each ‘bundle of services.’ At each visit or episode of care, a DRG code is assigned. Patients within each DRG category are clinically similar; for example, one category that is inclusive of all diabetics or of children under age 19 is expected to use the same level of hospital resources. Thus, a flat fixed dollar amount is paid based on a particular DRG for diagnosis related bundled services for a patient’s entire visit. DRG’s may be further grouped into Major Diagnostic Categories (MDCs) for a wider base of included services. MDCs are formed by dividing all possible principal diagnoses (from ICD-9-CM) into 25 select diagnosis areas. DRG’s can change annually, based on geographically locations, which is similar to CPT codes that reimburse based on particular location. Therefore, it is a complex reimbursement system that controls reimbursements and increases admissions; however, the system works and continues to keep reimbursements to hospitals reasonable.DRGs are also standard practice for many non-hospital reimbursements. An example would be home health care services. CMS uses separate fee schedules to hospital outpatient, hospice outpatient, home health agencies, acute inpatient hospitals, inpatient psychiatric facilities, long-term care hospitals, skilled nursing facilities, and inpatient rehabilitation facilities. Current Procedural Terminology CodingThe American Medical Association (AMA) through the CPT Editorial Panel maintains Current Procedural Terminology (CPT) codes. The CPT code set, copyrighted and protected by the AMA, designates medical, surgical, and diagnostic services. The intent is to communicate consistent information about medical services and procedures among physicians, coders, accreditation organizations, patients, and payers for administrative, financial, and analytical purposes.The Healthcare Common Procedure Coding SystemThe Healthcare Common Procedure Coding System (HCPCS) provides a standardized coding system for describing specific procedures or services provided in health care. This coding became necessary for Medicare, Medicaid and other third party payers (Insurance companies, etc.) to ensure that all claims were consistent. The codes were initially voluntary until mandated though the enactment of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) for transactions involving health care information.There are many types of payers, as we have seen in prior modules. There are also some variations in coding as well. Coding personnel have been recognized with qualified certification and experts; therefore, based on how it can become complex, coders are educated to determine whether to use the CPT or the HCPCS codes when coding services or procedures. It is also important for managers to understand how, why, and when to look up codes when necessary, even when a majority is completed by the coding or billing staff. Here are several tips:Coders should also know the best codes are CPT codes when there is a Level 1 procedure or service code.When using Level II codes, if the CPT and HCPCS Level II codes have practically the same descriptions for a procedure or service, it is best to use the CPT code.If the descriptions are not the same, the coder knows best to use the HCPCS Level II code.Countless HCPCS Level II codes describe the supplies in detail, rather than what coders will find in the CPT coding manual.In addition, HCPCS codes with the letter J include the most used codes specific for drugs and biological services. So they are the same, yet different. CMS can add, change, and delete HCPCS codes quarterly, so they need to be checked accordingly. CMS publishes updates and newsletters that are the priority of a manager when responsible for the coding and billing responsibilities in any organization.International Statistical Classification of DiseasesICD stands for International Statistical Classifications of Diseases. ICD codes are alphanumeric codes predetermined and assigned to almost every diagnosis. A code assigned to each diagnosis means that each diagnosis a patient is given, the description of symptoms, or the cause of death of the patient, has a numeric designation that goes with it. This international classification ensures that every medical professional in the United States and other parts of the world will understand the diagnosis the same way by providing consistency in the coding of a diagnosis. Currently, providers and payers are using the ICD-9 code sets for coding and reimbursement purposes.In 2014, ICD-10 code sets replaced ICD-9 code sets. This had profound implications for health care providers and managers, as the codes changed significantly. Each code had to be checked and converted from ICD-9 to ICD-10, and medical billing software required complex updates by the organization. However, these changes improved the precision with which codes were assigned. During the change and afterwards, managers needed an understanding of the coding system and the relationships to DRGs to successfully complete the transition at the organizational level. Government authorities use ICD codes for many purposes beyond reimbursement, such as tracking diseases, particularly epidemics, or causes of death. For example, the ICD allows epidemiologists to track influenza, both variants commonly seen in the US and newly emerging diseases such as avian flu. The ICD allows authorities to identify and measure the effectiveness of public awareness and certain educational materials. Therefore, using a common coding practice assists health care not only for reimbursement purposes, but also for many other important public health factors.Compliance in Financial ReportingCompliance is an important factor in health care financial reporting, pricing, and billing. Ensuring compliance is the responsibility of health care managers. The Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS), established in 1976, has been at the forefront of efforts to fight fraud, waste, and abuse in Medicare, Medicaid and more than 300 other Health and Human Services programs. The OIG investigates providers suspected of misconduct and may exclude providers found guilty from accessing reimbursement. The OIG publicly identifies providers that have been excluded from the programs based on past fraud or abuse of federal health care programs. OIG’s distributes a List of Excluded Individuals or Entities (LEIE), which provides valuable information to the health care industry, patients, and the public. Individuals or entities that are currently excluded from participation in Medicare, Medicaid, and all other Federal health care programs are available through an online searchable database (Links to an external site.). As you can see, the cost of noncompliance is quite high.Individuals and entities who been excluded may be reinstated after taking actions to become compliant and possibly to repay any reimbursements gained through unethical conduct. The names of those who are reinstated are removed from the database; therefore, the database is kept current.The OIG has many educational publications available for guidance with compliance programs. You will have an opportunity to explore these areas further through your readings this week.

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