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CMS Reimbursement

Medicare and Medicaid Reimbursement Methodologies

TermDefinition
allowable/ limiting charge maximum fee a physician/provider may charge
All-Patient diagnosis related group (AP-DRG) DRG system adapted for use by third-party payers to reimburse hospitals for inpatient care provided to non-Medicare beneficiaries (i.e. BCBS, commercial health plans, TRICARE); DRG assignment is based on intensity of resources.
All-Patient Refined diagnosis related group (APR-DRG) adopted by Medicare in 2008 to reimburse hospitals for inpatient care provided to Medicare beneficiaries;expands original DRG system(based on intensity of resources)to add subclassifications to each DRG including; severity of illness and risk of mortality
ambulatory surgical center (ASC) state licensed, Medicare-certified supplier (not provider) of surgical healthcare services that must accept assignment on Medicare claims
ambulatory surgical center payment rate predetermined amount for which ASC services are reimbursed, at 80% after adjustment for regional wage variations
balance billing billing beneficiarfies for amounts not reimbursed by payers (not including copayments and coinsurance amounts); this practice is prohibited by Medicare regulations
case mix the types and categories of patients treated by a healthcare facility or provider
chargemaster (charge description master-CDM) term hospitals use to describe a patient encounter form
CMS program transmittal communicate new or changed policies and / or procedures that are being incorporated into a specific CMS Internet-only program manual
CMS Quarterly Provider Update (QPU) conversion factor an online CMS publication that contains information about regulations and major policies currently under development, regulations and major policies completed or cancelled and new or revised manual instructions
Diagnostic and Statistical Manual (DSM) classifies mental health disorders and is based on ICD; published by the American Psychiatric Association
disproportionate share hospital (DSH)adjustment policy in which hospitals that treat a high percentage of low-income patients receive increased Medicare payments
durable medical equipment, prosthetics/ orthotics,a nd supplies (DMEPOS)fee schedule defined by Medicare as equipment that can withstand repeated use, is primarily used to serve a medical purpose, is used in the patient's home, and would not be used in the absence of illness or injury
employer group health plan (EGHP) contributed to by an employer or employee pay -all plan; provides coverage to employees and dependents without regard to the enrollee's employment status (ie., full-time, part-time, or retired)
ESRD composite payment rate system grouper software bundles end-stage renal disease drugs and related laboratory tests with the composite rate payments, resulting in one reimbursement amount paid for ESRD services provided to patients
health insurance prospective payment system (HIPPS) code set five-digit alphanumeric codes that represent case-mix groups about which payment determinations are made for the HH PPS
Home Assessment Validation and Entry (HAVEN) data entry software used to collect OASIS assessment data for transmission to state databases
home health resource groups (HHRGs) classifies patients into one or 80 groups which range in severity level according to three domains: clinical , functional, and service utilization
incident to Medicare regulation which permitted billing Medicare under the physician's billing number for ancillary personnel services when those services were "incident to" a service performed by a physician
indirect medical education (IME) adjustment aproved teaching hospitals receive increased Medicare payments, which are adjusted depending on the ratio of residents-to-beds (to calculate operating costs) and residents-to-averge daily census (to calculate capitol costs)
inpatient prospective payment system (IPPS) system in which Medicare reimburses hospitals for inpatient hospital services according to a predetermined rate for each discharge
IPPS 3-day payment window/ IPPS 72-hour rule requires that outpatient preadmission services provided by a hospital for a period of up to three days prior to a patient's inpatient admission be covered by IPPS DRG payment for diagnostic and tx services when the in-pt dx code matches preadmission dx
large group health plan proveded by an employer that has 100 or more employees or a multi-employer plan in which at least one employer has 100 or more full- or part-time employees
limiting charge maximum fee a physician may charge
long-term (acute) care hospital prospective payment system (LTCHPPS) classifies patients according to long term (acute) care DRGs, in which are based on patients' clinical characteristics and expected resource needs; replaced the reasonable cost-based payment system.
major diagnostic category (MDC) organizes diagnosis-related groups (DRG's) into mutually exclusive categories, which are loosely based on body systems
Medicare physician fee schedule (MPFS) payment system that reimburses providers for services and procedures by classifying services according to relative value units (RVUs); aka Resource-Based Relative Value Scale
Medicare severity diagnosis-related groups (MS-DRGs) improves recognition of severity of illness and resource consumption and reduce cost variation among DRGs
Medicare Summary Notice (MSN) notifies Medicare beneficiaries of actions taken on claims; previously called an Explanation of Medicare Benefits or EOMB
Outcomes and Assessment Information Set (OASIS) group of data elements that represent core items of a comprehensive assessment for an adult home care patient and form the basis for measuring patient outcomes for purposes of outcome-based quality improvement
outlier hospitals that treat unusually costly cases receive increased Medicare payments; the additional payment is designed to protect hospitals from large financial losses due to unusually expensive cases
outpatient encounter includes all outpatient procedures and services(same day surgery, x-rays, laboratory tests, and so on)provided during one day to the same patient
relative value units (RVU) payment components consisting of physician work, practice expense, and malpractice expense
Resident Assessment Validation and Entry (RAVEN) data entry system used to enter MDS data about SNF patients and transmit those assessments in CMS-standard format to individual state databases
retrospective reasonable cost system reimbursement system in which hospitals report actual charges for inpatient care to payers after discharge of the patient from the hospital
revenue code 4 digit codes that indicate location or type of service provided to an institutional patient; reported in FL 42 of UB-04
revenue cycle management process facilities and providers use to ensure financial viability
risk of mortality (ROM) likelihood of dying
severity of illness (SOI) extent of physiological decompensation or organ system loss of function
site of service differential reduction of payment when office-based services are performed in a facility, such as a hospital or outpatient setting, because the doctor did not provide supplies, utilities, or the costs of running the facility
wage index adjusts payments to account for geographic variations in hospitals' labor costs
Created by: tina.reynolds