Veteran's Administration Hospital Improves Billing Practices
by LaRoy Brooks,
RRA
Chief, Health Information Management
Veterans' Administration Medical Center
Cheyenne, Wyoming
Dramatic changes have taken place in the Veterans' Administration (VA) system over the last several years and one of these is a strong emphasis on the use of Diagnostic Related Groups (DRGs) and Ambulatory Patient Groups (APGs) in billing, an emphasis that probably is even greater than in the private sector. As these changes took place, the Cheyenne VA medical center found, like many private sector hospitals, that its existing manual billing systems were unable to consistently produce an accurate, complete DRG code summary. The result was that reimbursements were frequently less than the proper amount. Recently, the Cheyenne VA Medical Center has increased the accuracy and timeliness of billing by implementing In-Patient and Ambulatory coding software that costs only $599 per month.
The VA, which has long been one of the largest medical systems in the world, has in recent years become one of the most competitive as well. One of the main driving forces is its medical care cost recovery (MCCR) program whose goal is to maximize the recovery of funds due VA for the provision of health care services to veterans, dependents and others using the VA system. Legislation has authorized the VA system to submit claims to and recover payments from veterans' third party health insurance carriers for treatment of non-service-connected conditions; recover co-payments from certain veterans for treatment of non-service-connected conditions; and recover co-payments for medications from certain veterans for treatment of non-service-connected conditions.
Impact on deficit
The goals of the MCRR program are to make the VA more self efficient,
increasing the VA's medical care budget and improving service to the VA's
customers œ America's veterans. MCCR's recoveries grew from $23 million
in fiscal year 1987 to $564 million in fiscal year 1996. The recoveries
made from insurance carriers and co-payments were deposited directly into
the U.S. Treasury to reduce the budget deficit after the VA deducts its
operating costs. MCCR's success translates into increased benefits to
the VA's customers œ the VA's medical care budget is increased dollar
for dollar for the projected level of MCCR recoveries. The net result
is that the VA is able to give veterans faster and better medical care
provided by Federal employees who are now better trained, better informed
and better equipped with the tools they need to provide veterans the service
they deserve.
The MCCR program is based on the same DRG and APG coding systems that the private sector uses for billing inpatient stays and outpatient visits, respectively. When the Cheyenne VA center first began using these coding systems, it found that in many cases reimbursements for medical treatment were lower than what was appropriate under the existing regulations. For example, assume that a patient enters a VA center for hernia repair. While this person is at the medical center, doctors discover that the person is also suffering from chronic obstructive pulmonary disease (COPD) and congestive heart failure (CHF). These conditions naturally make it considerably more difficult and expensive to treat the patient for the original disorder and these costs are reflected in the DRG system as a secondary diagnosis. But, in many cases, doctors do not list the complicating conditions on the discharge summary. Coding is a very tedious job which means that when coders get tired they are prone to settle for the first available diagnosis without considering complicating conditions. Coders also sometimes transpose digits or make other mistakes. The result was that reimbursements were frequently lower than they should have been and mistakes contributed to delays.
Computerizing coding
In an effort to overcome these problems, the Cheyenne VA center investigated
computerizing the coding process. A request for proposal was prepared
that included rule-based In-Patient & Ambulatory coding, encoder,
medical dictionary, clinical pharmacology and anatomy. The idea was that
purchasing an integrated system from a single company would save time
by only making it necessary for coders to learn a single user interface
and would also avoid the need for frequent program switches. The first
bids that came in were disappointing from the standpoint that they were
in the neighborhood of $15,000 per year. As the smallest VA medical center,
the Cheyenne VA had a very tight budget for the project. They purchased
the Clinical Coding Expert
which includes an Encoder, advanced clinical edits, rule-based
expert edits, APG/Calculator, and related accessories for only $599 per
month from IRP Systems, Woburn, Massachusetts.
When the new software was installed, Cheyenne VA managers discovered that it greatly simplified the coding process. The identification process begins by selecting diagnostic terms from the record and entering them into the encoding system. The process continues through a hierarchical series of menus until the user zeroes in on the precise diagnosis. The software lists possible alternative coding assignments that assist the coder in reviewing records to see if a secondary diagnosis exists or even if perhaps the original secondary diagnosis could be the principal diagnosis. Once they reach the proper diagnoses, the coder pushes a hot key and the computer provides the proper DRG. This system guides the coder to select a more precise diagnosis as substantiated by the medical record documentation.
Complex APG coding
The new software also accurately handles complex APG coding for outpatient
visits. Coders look at visit necessity by three categories œ a significant
procedure or therapy, a medical visit or an ancillary test or procedure.
Under the APG system ICD-9 diagnosis codes drive the assignment of a medical
APG while CPT-4 procedure codes drive procedural and ancillary APGs. Unlike
the inpatient DRG based payment system, more than one payment code will
be assigned to a patient visit. The APG/Calculator computes up to 13 APGs,
displaying titles and weights, for each CPT-4 code entered. The grouper
software examines which APGs are relevant and assigns a relative weight.
Payment depends on how the various groups of APGs occur together on the
case.
The Cheyenne VA runs Clinical Coding Expert on a single personal computer that is in use almost the entire day. The new system has nearly eliminated coding errors and ensures that reimbursements accurately reflect the medical services provided by the Cheyenne VA. It's important to note the physician has the final say over the coding and that every change suggested by the coder has to receive the physician's approval. This application represents, in miniature, the dramatic changes that are taking place in the VA medical system. For example, the VA is developing what, when it is finished, will be the largest patient information system in the world that will track treatment of vets throughout the country in a single database. The ability to quickly and accurate code medical treatment is an important factor in generating the funding that is helping the VA system improve to meet veterans' needs of the 21st century.