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Hospital Patient Financial Services

Description of Coding and DRG Assignment

nsforming the verbal description of disease, injuries and procedures into numerical codes. Every patient encounter will be assigned these numerical codes based on the review of the provider’s documentation. Therefore all diagnostic or procedural statements should be accurate , specific, complete and descriptive of the patient’s condition. Accurate documentation results in accurate coding which is essential to reflect the severity of illness, complexity of care provided and consumption of resources.

These codes are utilized and reported both internally and externally. Codes and the data generated from coding are used internally for reimbursement, strategic and fiscal planning, clinical research, assessment of quality, physician profiling and other clinical and administrative purposes.

These same codes and data generated from coding are reported externally to various public and private agencies, such as Medicare/ Medicaid, Texas Medical Foundation, Census Bureau, State and Local Health Departments as well as many national ranking or benchmarking institutions including but not limited to Leap Frog Group, University Healthsystem Consortium, Hospital Compare, Healthgrades and others.

All codes are assigned by highly skilled and trained individuals nationally certified to perform Coding. Code assignment is dictated by the Rules and Guidelines established and updated annually by the Federal Government. Not adhering to these guidelines for documentation and coding constitutes fraud and is subject to prosecution.

A few of these guidelines/definitions that are important for you to be familiar with are listed below:

All Diagnosis that affect the current patient encounter must documented and coded. This requirement includes conditions that coexist at the time of admission or develop subsequently and affect the treatment received and/or the length of stay. Diagnoses that relate to an earlier admission, but which have no bearing on the current admission are to be excluded from coding. Diagnosis that are suspected and are treated empirically or cannot be ruled-out are to be included as diagnostic statements in the patient’s record and coded accordingly. Signs, symptoms and observations should be documented as a diagnosis whenever possible to provide adequate substantiation of coding for severity of illness and risk of mortality.

All diagnostic statements should be accurate , specific, complete and descriptive of the patient’s condition.

Principal Diagnosis:
The condition which, after study, was the reason for the admission to the hospital. This term applies to inpatients only.
Secondary Diagnosis:
Any conditions that affect patient care in terms of requiring: Clinical Evaluation, Therapeutic Treatment, Diagnostic Procedures, Extended the Length of Stay or increased nursing care and/ or Monitoring should be documented and coded.

Significant Procedure : A significant procedure is one that carries an operative or anesthetic risk or requires highly trained personnel or special equipment. All significant procedures are to be documented in the patient record. (see Procedure&Operative Notes)

DRGs

Codes are sequenced into Diagnoses Related Groups (or DRGs) to determine reimbursement from third party payers. DRGs are determined by the principal procedure, or the principal diagnosis if no procedure exists, and the presence of other conditions.

DRGs group patients with similar resource consumption, severity of illness and length of stay into payment groups.

DRGs are used for determining reimbursement and as an indicator for other types of reporting such as budgeting, physician profiling, clinical outcomes, case mix calculation and clinical research.

Description of Outpatient Hospital Coding

Coding is transforming the verbal description of disease, injuries and procedures into numerical codes. Every patient encounter will be assigned these numerical codes based on the review of the provider’s documentation. Therefore all diagnostic or procedural statements should be accurate , specific, complete and descriptive of the patient’s condition. Accurate documentation results in accurate coding which is essential to reflect the severity of illness, complexity of care provided and consumption of resources

These codes are utilized and reported both internally and externally. Codes and the data generated from coding are used internally for reimbursement, strategic and fiscal planning, clinical research, assessment of quality, physician profiling and other clinical and administrative purposes.

All codes are assigned by highly skilled and trained individuals nationally certified to perform Coding. Code assignment is dictated by the Rules and Guidelines established and updated annually by the Federal Government. Not adhering to these guidelines for documentation and coding constitutes fraud and is subject to criminal prosecution.

  • Hospital Outpatient coders code the following services:
  • Day Surgery that are not admitted to inpatient
  • Observation encounters not changed to a full admit
  • Labor&Delivery Triage
  • PT/OT services
  • Outpatient Lab that requires a diagnostic code for reimbursement