The South Central Kansas Medical Center (SCKMC) Board of Trustees heard a report during its Aug. 25 meeting from Michele Hand, of TruBridge, that outlined potential growth in compensation for the financially troubled hospital.
TruBridge is a firm that SKCMC has utilized for help with billing services since February 2015.
Hand and her co-workers have been training local doctors in medical coding — the designations used by Medicare and Medicaid to define the treatment received by a patient.
In theory, the codes should tell exactly what happened to a patient while he or she was receiving care.
The codes also determine how much the medical facility is reimbursed for that treatment.
TruBridge has reviewed 27 charts from the last two to three weeks to determine if there was any additional billing potential.
Of the 27 charts examined by TruBridge, 10 had coding that was missed and affected potential billing.
Those 10 charts, when coded correctly, could bring $24,041 of additional revenue for SCKMC.
The hospital will be able to rebill those accounts, which will affect the resulting Medicare and Medicaid payments, but only for the last three months.
CFO Holly Harper estimated that an increase of $800,000 should be able to be billed each year due to fixing coding issues.
How medical coding works
The process of medical billing begins with the treatment administered to the patient.
Once the patient is discharged, the doctor must complete a chart attached to the patient’s account, including dictation of notes and initial coding. The coding then is sent to TruBridge, which checks the coding.
The example given by Hand follows:
Patient X is admitted to the hospital with pneumonia. This ailment was correctly documented and coded.
However, Patient X also has an issue associated with chronic obstructive pulmonary disease (COPD), which was not coded.
Neither was the heart failure that resulted from the COPD episode.
Each of these ailments is assigned a numeric value. For example, in Patient X’s case, it would be:
- pneumonia = 0.2
- COPD = 0.7
- heart failure = 0.5
The number the patient receives in connection to his or her ailments ultimately decides how long the patient can be in the hospital, as well as the dollar amount paid to that hospital for services rendered.
The formula is fairly simple.
The hospital has a base pay rate — Hand said SKCMC’s number is higher than $5,000, but did not give a specific number.
To determine the amount the hospital can be billed, the numbers for the individual ailments are added together, then multiplied by the base pay rate.
Patient X originally was coded for 0.2 x $5,000, which would have made compensation $1,000.
However, when coded correctly, the formula looks like this: (0.2 + 0.7 + 0.5) x $5,000.
The total for the correctly coded formula is $7,000 — $6,000 more than the hospital otherwise would have received in reimbursement.
That kind of money can add up quickly, as SCKMC is learning.