Question about billing and length of stay

[FunnyDocMan1234]

Hospitals say that very long LOS critical care patients are damaging to finances. Most of these patients are still getting critical care time billed every day so how is that detrimental for ICU billing - what am I missing?

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[DrMetal]

Hospitals say that very long LOS critical care patients are damaging to finances. Most of these patients are still getting critical care time billed every day so how is that detrimental for ICU billing - what am I missing?

Who's paying for it? If the patient is uninsured and not involved in some other 3rd party (gov't) generosity program, then the hospital is eating the entire cost. Indeed that's costly. You can pop 'em out of the ICU once they no longer have CC needs (so the hospital can save some money), but they're bound to stay in the hospital for a while. Great example is the homeless patient in DKA, gap closes, pops out, goes to the floor, but then we can't dispo him (b/c the hospital refuses to dc to a shelter, especially if he's unwilling to go)

 

[CCM-MD]

“Medicare and certain private health insurance companies pay for hospitalizations of their beneficiaries using a diagnosis-related group (DRG) payment system.

When you've been admitted as an inpatient to a hospital, that hospital assigns a DRG when you're discharged, basing it on the care you needed during your hospital stay. The hospital gets paid a fixed amount for that DRG, regardless of how much money it actually spends treating you.

If a hospital can effectively treat you for less money than Medicare pays for your DRG, then the hospital makes money on that hospitalization. If the hospital spends more money caring for you than Medicare gives it for your DRG, then the hospital loses money on that hospitalization.”

 

[Nephro critical care]

A significant part of an intensivist salary comes from the hospital. Many of us especially those on nights would not make their salary from billing alone. Hospitals pay us this salary so that we can be efficient and have low ICU length of stays. In this way we are just like hospitalists who keep LOS low and thus help the hospitals save money. If we did not keep length of stay low the hospitals would not have any incentive to pay us our salary.

 

[chessknt]

A significant part of an intensivist salary comes from the hospital. Many of us especially those on nights would not make their salary from billing alone. Hospitals pay us this salary so that we can be efficient and have low ICU length of stays. In this way we are just like hospitalists who keep LOS low and thus help the hospitals save money. If we did not keep length of stay low the hospitals would not have any incentive to pay us our salary.

There is more to it than that. If the o:e mortality ratio gets too high and you flag for cms quality issues the hospital can get nailed. Same for vents and clabsi. A lot of moving parts and Los is just part of the asanine payment calculus.

 

[FunnyDocMan1234]

“Medicare and certain private health insurance companies pay for hospitalizations of their beneficiaries using a diagnosis-related group (DRG) payment system.

When you've been admitted as an inpatient to a hospital, that hospital assigns a DRG when you're discharged, basing it on the care you needed during your hospital stay. The hospital gets paid a fixed amount for that DRG, regardless of how much money it actually spends treating you.

If a hospital can effectively treat you for less money than Medicare pays for your DRG, then the hospital makes money on that hospitalization. If the hospital spends more money caring for you than Medicare gives it for your DRG, then the hospital loses money on that hospitalization.”

So for medicare and these companies is billing critical care time pointless because it's all one lump some payment anyway? Or does billing critical care time add some additional reimbursement on top of the DRG?

 

[CCM-MD]

So for medicare and these companies is billing critical care time pointless because it's all one lump some payment anyway? Or does billing critical care time add some additional reimbursement on top of the DRG?

Physician billing/coding is separate from facility billing/coding. If you’re private or have a wRVU component it obviously makes sense to bill critical care time when appropriate. If you are paid per shift, it probably won’t matter to you immediately but your employer is going to take a hit and you will ultimately feel the impact in some way.

 

[DeadCactus]

I would imagine there is also often an opportunity cost to consider. The bed housing a chronically critically ill patient is likely not generating as much revenue as the bed with an intensive post-op patient or the acutely critically ill patient requiring many procedures, consults, and diagnostic tests.

 

[end stage fibro]

all good points above. to add a little more detail if you're interested (i didn't look up the official codes but for the most part the examples are accurate)

As mentioned above, the hospital gets paid on a DRG, say sepsis. Many DRGs are individual, some are doublets or triplets, which means they have a MCC (major complication or comorbidity, these are diagnoses like acute CHF or respiratory failure or ATN) or CC (blood loss anemia, CKDIII or above). Sepsis is a triplet - so you can have sepsis (low bill), sepsis with blood loss anemia (middle), sepsis with respiratory failure (high). This is why you are getting all these queries to specify if the respiratory failure is acute, hypercapnic, acute on chronic, etc. Loss of specificity can impact losing an MCC and makes your sick af patient look not so bad. this does not impact clinical care but has massive ramifications on the bottom line and quality metrics.

you mentioned these patients are having critical care time billed. CC time may be the cream of the crop in medical billing but it is a rounding error compared to the figures we are talking about in DRGs. Here are some rough figures for sepsis due to finger osteo. expected pay was 15k. payor tried to deny the CC and said appropriate payment was more like 8k. that's a 7k difference over 1 line of text in your note. Also, as mentioned above, the hospital doesn't collect money from your professional fee billing. the caveat being if you are employed they might be recouping a small amount from your RVU. Nota bene, your RVU has 3 compnents - work, malpractice, and practice expense. if you are employed, the hospital is definitely keeping the last 2 and probably skimming a little from the first.

DRGs are also divided into surgical and medical. I believe all surgical DRGs pay higher than all medical DRGs. there is a special category of DRGs called PRE (you can google "major diagnostic category 0" for more info) that override all other DRGs- they include things like transplants and trachs. Traching a pt is the #1 moneymaker that an intensivist can offer the hospital by a long shot. really long. you can take a look at the DRG weights here. I dont know if there is a more up to date list.

Cases that are very short or long LOS compared to the expected DRG do not get paid by the DRG- they utilize trim points. a short trim point (pt discharged way faster than expected) is a per diem rate, usually the DRG payment divided by the GMLOS (which gives a daily rate that is multipled by the actual patient LOS). Long trim points are the DRG plus some other per diem, either the same daily rate as the short trim point or more likely some other contracted rate. trim points are rare though and usually don't pay as well compared to the DRG rates.

it is rare that uninsured patient's give zero payment. they usually end up getting some sore of federal emergency insurance post discharge and the hospital can recoup payment. the hospital can also write off massive amounts of care that help cushion the blow substantially. this is not to say your health system is flush with cash- 2022 hit many health care systems hard financially. As CMS wants to continue to save money, the reigns will only become tighter.

Readmission are a whole 'nother ball of wax that greatly affects payment

tl;dr: hospital gets a flat fee per patient no matter what happens. Discharge the patient (or trach them) ASAP . your billing has zero to minimal contribution overall.

 

[Lung_Doc_12]

all good points above. to add a little more detail if you're interested (i didn't look up the official codes but for the most part the examples are accurate)

As mentioned above, the hospital gets paid on a DRG, say sepsis. Many DRGs are individual, some are doublets or triplets, which means they have a MCC (major complication or comorbidity, these are diagnoses like acute CHF or respiratory failure or ATN) or CC (blood loss anemia, CKDIII or above). Sepsis is a triplet - so you can have sepsis (low bill), sepsis with blood loss anemia (middle), sepsis with respiratory failure (high). This is why you are getting all these queries to specify if the respiratory failure is acute, hypercapnic, acute on chronic, etc. Loss of specificity can impact losing an MCC and makes your sick af patient look not so bad. this does not impact clinical care but has massive ramifications on the bottom line and quality metrics.

you mentioned these patients are having critical care time billed. CC time may be the cream of the crop in medical billing but it is a rounding error compared to the figures we are talking about in DRGs. Here are some rough figures for sepsis due to finger osteo. expected pay was 15k. payor tried to deny the CC and said appropriate payment was more like 8k. that's a 7k difference over 1 line of text in your note. Also, as mentioned above, the hospital doesn't collect money from your professional fee billing. the caveat being if you are employed they might be recouping a small amount from your RVU. Nota bene, your RVU has 3 compnents - work, malpractice, and practice expense. if you are employed, the hospital is definitely keeping the last 2 and probably skimming a little from the first.

DRGs are also divided into surgical and medical. I believe all surgical DRGs pay higher than all medical DRGs. there is a special category of DRGs called PRE (you can google "major diagnostic category 0" for more info) that override all other DRGs- they include things like transplants and trachs. Traching a pt is the #1 moneymaker that an intensivist can offer the hospital by a long shot. really long. you can take a look at the DRG weights here. I dont know if there is a more up to date list.

Cases that are very short or long LOS compared to the expected DRG do not get paid by the DRG- they utilize trim points. a short trim point (pt discharged way faster than expected) is a per diem rate, usually the DRG payment divided by the GMLOS (which gives a daily rate that is multipled by the actual patient LOS). Long trim points are the DRG plus some other per diem, either the same daily rate as the short trim point or more likely some other contracted rate. trim points are rare though and usually don't pay as well compared to the DRG rates.

it is rare that uninsured patient's give zero payment. they usually end up getting some sore of federal emergency insurance post discharge and the hospital can recoup payment. the hospital can also write off massive amounts of care that help cushion the blow substantially. this is not to say your health system is flush with cash- 2022 hit many health care systems hard financially. As CMS wants to continue to save money, the reigns will only become tighter.

Readmission are a whole 'nother ball of wax that greatly affects payment

tl;dr: hospital gets a flat fee per patient no matter what happens. Discharge the patient (or trach them) ASAP . your billing has zero to minimal contribution overall.

This was an outstanding explanation. thank you so much for taking the time.

 

[bigdan]

Fantastic knowledge drop

Kudos

 

[lunaire]

End stage fibro's post is excellent on general medical billing. Here's a little extra on the surgical side (especially cardiac - my realm):

Surgical cases requiring hospitalization is basically paid a flat global fee. Consultants outside of the surgical service can be brought in and bill for their services, but the relative value of these billing is lower. Using a typical CABG for reference, wRVU/totalRVU = ~40/~65. Consider our critical care billing of 4.5/7 per day, and you would see why the hospital would prefer to have a shorter LOS and more surgical procedures done. Especially so if cases are being delayed or cancelled due to lack of inpatient/ICU beds, which is a very common problem.

From the surgeon's perspective, these patients are basically non-revenue generating, and potentially revenue losing... This is why there might be some political pressure for lower LOS.

Another 'interesting' model I've seen - Intermediate risk thoracic procedures in a hospital with good bed capacity, POD0 kept intubated overnight, consult CCM, hospitalist, pulmonary (because lung surgery?); POD1 bronched, extubated and transferred to floor, d/c home on POD2-3 in walking condition. This probably could've been a 1 day surgical ward postop stay, but the consultant billing is basically free revenue for the hospital. That hospital was solidly profitable.

In other words, the hospital don't necessarily care about LOS, unless they make more money with low LOS. You should be aware of what kind of hospital you work in.