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Health Care Accounts Receivable
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In the health care industry, the timely and accurate generation of a health care bill is critical in obtaining proper reimbursement. However, the endeavor can be quite complex, due in part to the large number of standards mandated by a variety of local, state, and federal government agencies in addition to private insurance carriers. In more recent years, stricter laws interpreting fraud have been enacted that can make errors in billing financially painful for the health care provider. To implement effective billing processes, accounts receivable personnel need a thorough understanding of the process, without which an effective billing system and appropriate reimbursement may prove elusive. Extensive education and training is needed on an ongoing basis to become proficient in the intricacies of health care billing and reimbursement, but the place to begin is with the basics.
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The list of weighted diagnosis groupings provides one major component to the calculation of Medicare Inpatient Prospective Payment System (IPPS) payments. The weight for all MS-DRGs has been statistically standardized across severity levels, average costs, average length of stay from nationwide data, thus allowing the MS-DRG weight table to be used by all inpatient hospitals. The weight used in calculations for a specific DRG is the same from every hospital.
The second major component to calculating Medicare IPPS payments is the hospital specific payment rate. Using statistical data from prior years, surveys, yearly hospital-provided cost reports, and wage data from government agencies, CMS creates hospital-specific rates. In the simplest context, this hospital-specific rate is multiplied by the appropriate DRG weight and the result is the base IPPS payment or reimbursement.
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Diagnosis Related Groups or DRGs are the elements in a health care billing classification system that groups medical diagnoses related by their resource consumption and typical hospital length of stay. They are used to determine reimbursement by insurers. DRGs provide numerical shorthand for documenting and billing hospital care.
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Managing accounts receivables in the health care industry is considerably more complicated than other industries. Consider the true story of a doctor who had $30,000 in receivables he could not collect. The insurance company continued to deny his patients for their diabetes care. On a whim, he went to a local seminar to learn more about medical billing and learned that his AR staff was not using an updated code for diabetes when sending out the bill.
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Thursday, May 23 2013
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