Tricare Philippines Newsletter 12012
How to File a Claim for the Inpatient Professional Fee Portion of a Hospitalization Part I
Because of the complexity involved with preparing the inpatient professional fees we will break the discussion into two parts. Part I will address none surgical care while Part II will address surgical care. However claims involving inpatient surgical procedures will have to apply the processes discussed here as well.
The U.S. medical industry uses a system of detailed listings of procedures with unique codes, known as Current Procedural Terminology (CPT) codes, which are individually costed for reimbursement. The system was developed by the American Medical Association and adopted by Medicare and private insurance as the standard for filing claims in the U.S. and is complex and growing more complex each year. Currently there are around 8,800 individual codes, each representing a procedure that is billable; in some cases the current policy requires that the provider group or what they call “Bundle” two or more codes together under one code for billing purposes. By 2014 the number of individual codes and procedures are expected to dramatically increase with the implementation of CPT-5. No other country in the world uses this system. A few industrial nations have adopted similar but less complex, methods for billing of medical care. However much of the world, and in particular third world countries, simply provide a bill that indicates “Professional Fees”, “Professional Services” or something similar.
The TRICARE Management Activity (TMA) requires the claims contractor to take claims and code the procedures using the CPT coding system while processing the claim so they can input the procedures into the TMA database. With the exception of the Philippines and Panama this is not a problem because outside these two countries the claims contractor is authorized to pay “Billed Charges”. What that means is whatever amount is included on the bill is paid as long as there is a legitimate bill and receipt. If the bill reflects Professional Fees and an amount for inpatient professional fees the claims contractor will code the entire cost to something like “99232 Subsequent Hospital Care” and charge the entire fee against that code. If the amount of the bill is $300 or $4,000 it all is charged against that code and approved for payment.
But because TMA decided to implement a Champus Maximum Allowable Charge (CMAC) table in the Philippines and use the U.S. system of detailed procedures and coding, if the claims contractor does the same thing with a similar bill from the Philippines, most of the billed amount would be disallowed as over the allowable charge. That’s because CPT code 99232 carries a CMAC rate of $36.43. So if the billed amount is $300 or $4,000 they will only allow $36.43 and then pay 75% of that. This happens because the two systems are not compatible although TMA continues to believe that all county’s medical industry practices follow the U.S. standards of billing.
Below is a quote from a recent response to a congressional inquiry where we tried to address this very issue. It clearly shows that TMA expects local providers to learn the complex U.S. billing system of detailed procedures and to breakout their global fee across these procedures IAW the CMAC TMA built for the Philippines. That would mean that local providers would have to be familiar with close to 9,000 separate and distinct procedures, as defined for the U.S. only, before they could do this. Since TRICARE beneficiaries represent only about 0.01% of the local patient population, it is unlikely any health care providers will feel compelled to do this. For anyone that has asked a provider to do this, they clearly know it will not happen and even if they tried to identify procedures they will not understand the detailed breakout used in the U.S. nor will they have any idea how to distribute the charge across them.
“TRICARE beneficiaries who submit a claim for reimbursement to the TRICARE Overseas Claims Processor are required to complete the claim form DD 2642, Patient's Request for Medical Payment, and attach the following information that is normally provided by the provider on his or her letterhead:
- Doctor's or provider's name/address (the one that actually provided the care). If there is more than one provider on the bill, circle his or her name.
- Date of each service.
- Place of each service.
- Description of each surgical or medical service or supply furnished.
- Charge for each service and,
- The diagnosis should be included on the bill.”
As we get further into what has to be done it will become clear that what TMA demands is not feasible and clearly shows they have no understanding of how medical industries in other countries operate. A review of the 2009 claims data showed that only 6% of the billed amount, of all beneficiary filed claims for inpatient professional fees, was approved as within the CMAC which clearly demonstrates their concept of what is required and who will provide it is flawed.
The Four Step Process to Itemizing a Non-Surgical Claim for Inpatient Professional Fees
The first step is to determine what U.S. procedures are included in your typical non-surgical inpatient professional global fee. You will have at least one provider who is your primary provider for the episode of care. On rare occasions, where there are multiple issues that span multiple body systems, you may have two primary providers. In either case these rules will apply to both.
The primary provider(s) will generally visit you at least once each day. In some cases they may have a resident that stands in for them but these visits should be considered the same as visits from the primary provider since the local medical industry holds your physician responsible for what they do. The U.S. system dictates three kinds of visits that are attributed to a primary provider and which are used to determine how much they are paid for your care. They are “Initial Hospital Visit”, “Subsequent Hospital Visit” and “Discharge Visit”. So if you were in the hospital for 5 days you would list them as shown in the example table below.
You may also have one or more consultants that your primary physician request evaluate you for a condition that is in their specialty area. Generally these providers will see you twice, once to examine you and order any necessary tests and once to relay their findings to you; if the second visit doesn’t occur don’t list it. The U.S. dictates two kinds of visits that are attributable to a consultant. They are “Inpatient Consult, New/Established Patient Visit” and “Subsequent Hospital Visit”.
TMA requires that the claim also include individual charges for each procedure. Local providers are not aware that many of the actions they accomplish are considered separate acts or procedures that have to be identified in the unique U.S. medical billing system and most do not see their visits as individual billing acts. Also, because they bill using the common global billing method, they are unable to provide any reasonable breakout of their global bill across the individual procedures because that is never done in the Philippines. In addition, since TMA uses a CMAC that mirrors varying percentages of the U.S. CMAC, any breakout they might provide is unlikely to reflect U.S. billings at the individual procedure level. The end result would be that some of the individual procedures may be priced at well below the CMAC rates while others maybe well over which would inappropriately result in underpayment of the total claim.
So to properly determine how the global bill should be distributed across the individual procedures the CPT code for each procedure must be determined so the appropriate CMAC rates can be determined. The issue for the average beneficiary is that the medical coding process is very complex and requires extensive training to be able to code procedures.[i] Fortunately for basic non-surgical inpatient professional claims only a group of codes known as Evaluation and Management (E&M) codes are required more than 90% of the time.[ii]
Based on our experience Wisconsin Physician Services almost always pays these at an intermediate level. So the table below reflects the CPT codes the average beneficiary can use to assign to the procedures.
Once you have determined the appropriate CPT code to assign to each procedure you then need to determine the CMAC rates that apply to the codes listed for your claim. To do this one has to access the TMA web page that provides these rates.[iii] Once you access the appropriate web page there are multiple steps you have to take before you can start the process. See Steps to Access the Philippine CMAC.
Go to Philippine CMAC to start accessing the Philippine CMAC. This is the results of a search for the four CPT codes above.
Once you determine the actual CMAC rates you can then determine how much of the global bill can be allocated to each procedure. The good news is that currently these rates are adequate to cover the normal amount of the global bills for non-surgical admissions. That may change in the future since TMA does not make adjustments for Philippine inflation or decreases in exchange rates which have reduced the value of the CMAC rates by close to 30% to date.
Determine the exchange rate on the day of discharge from the hospital. Go to Historical Rate Tables and follow the instructions on the web page. Once you follow the instructions look down the resultant web page and select the Philippine peso rate under the “Units per USD” column. In our example above it is PHP 44.1499999744. For our purposes we want to round it off to two decimal places, or PHP 44.15. Because the rate WPS uses, based on their contract with TMA, comes from CITI Bank you will have to reduce the rate by 2% which approximates their profit for making the exchange. The easiest way to do this is to multiply the rounded rate by 0.98.
For our example from above we will assume a global fee of PHP 8,000 for the primary physician and PHP 2,500 for the consultant. Use these to calculate the dollar equivalent so you can decide how to split the global fee across the procedures, then round them off. In this example they would be rounded to $185 and $58.
Once you have the dollar equivalent of the actual peso charges use the CMAC rates you previously looked up to determine how to distribute the global charge against each of the procedures. Then reverse the process and convert the individual procedure dollar charges back to pesos using the previously obtained exchange rate. In most cases the total pesos will not exactly match the original global bill amount due to rounding. So create an additional column and make minor adjustments to these calculated peso amounts so the total matches the actual global amount. If a procedure is listed more than once insure the amount allocated to the procedure is the same for each instance for the same provider. It may be different from one provider to another however. Repeat the process for each provider. The tables below show the outcome of each of these steps.
Now use the final individual peso charges to create tables/lists as shown below. Place them in your narrative and be sure to include the provider’s full name and address above each table/list. See our Newsletter, Basic Claim Filing Rules for the Philippines, for basic guidance on how to prepare a narrative.
See, Sample Narrative, for an example of how the itemized lists are incorporated.
For those interested, we prepared an Excel spreadsheet, with the formulas imbedded that can be used to do these calculations. It can be opened and then saved on your computer by clicking on Link to Professional Fees Claim Worksheet.
Learn More about CPT Codes
For those that wish to become more familiar with U.S. medical coding, the following links are provided.
Overview of CPT codes
E/M University Offers a free basic Evaluation and Management codes (E/M) coding course.
Table of Contents for E/M Tutorial Area of interest for inpatient professional fees is items 15, 16 and 17.
AMA Coding Online Offers the ability to look up CPT codes for free by entering a key word or phrase.
The next newsletter will address the specific issues involved with preparing a claim for a hospitalization where the professional fees include surgical procedures and an anesthesiologist. This will be followed by a newsletter that addresses the issues involved in preparing a claim for a group of laboratory tests that are billed under a global bill with a description of “Executive Panel B” or something similar.
Previous Newsletters can be accessed by going to U.S. Military Retirees of the Philippines Group TRICARE Newsletter Archive.
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[i] The CMAC lookup process, which TMA provides on their web page, requires the individual enter the appropriate CPT code. Coders that perform this for physicians and hospitals in the U.S. have a 2 or 4 year degree in medical coding.
[ii] E&M codes are groups of codes that describe various levels of Initial Hospital Visits, Subsequent Hospital Visits, Discharge Visits, Inpatient Consult, New/Established Patient Visits. Each level carries the same description but the CPT code reflects increasing complexity and time involved in the visit. Initial Hospital Visits and Subsequent Hospital Visits each have three levels. Discharge Visits have two while Inpatient Consult, New/Established Patient Visits have five.
[iii] From time to time, when Medicare updates their fee schedule, TMA makes adjustments to the Philippine CMAC. It is best to look up the rates as soon as possible after treatment. If the care was provided some time in the past the current rates may not reflect the rates at the time of care. The older rates are available from the TMA website for download and can be used in these cases.