How Your Neighbor’s Cost Report Can Cost Your Medical Billing

If you thought your IPPS (inpatient prospective payment system) has nothing to do with medical billing and reimbursement, then think again. Not only will your 2003 IPPS effect your own medical billing, but now your neighbor’s IPPS will effect your 2007 reimbursement as well.

The Centers for Medicare & Medicaid Services announced that they will use the 2003 hospital medical billing index data to figure the 2007 payments. That means that if you were not completely accurate with your IPPS, then your reimbursements in 2007 will be skewed. CMS also announced that they will only calculate one wage per state for hospitals outside of the core-based statistical areas. This means that if your medical billing data is completely accurate, but the hospital down the road underestimated costs, then your 2007 payments may be reduced.

This very medical billing issue is currently happening at Condell Medical Center. This Illinois hospital overstated total hours of work by 14,488 and understated salary wage by $216,917. A lower estimated hourly wage is what occurs when this happens. Fortunately Medicare did an audit on the IPPS and Condell will be redoing their 2003 IPPS for future medical billing reimbursement. This time they will not be negatively affected, but more then likely there will be other hospitals that will slip through the cracks and ruin medical billing reimbursements for everyone else.

IPPS may not have been a big deal before, but times are changing. It is imperative to keep accurate financial and medical billing records for the future success of your hospital and the bottom line. It is bad enough when you negatively affect your own medical billing, but now your negligence can negatively effect your neighbor. Don’t let your medical billing errors hurt the rest of your industry.

View all Articles by: Melissa Clark, CCS-P