Understanding UCR Inpatient Fees used on DRG's

July 1st, 2020 - Christine Woolstenhulme, QCC, QMCS, CPC, CMRS

Categories: Skilled Nursing Practice Management

Find-A-Code uses Usual, Customary, and Reasonable (UCR) fees to help determine the amount paid for a medical service based on a certain geographic area. This article will address the information and pricing for Hospital and Inpatient fees based on Diagnosis Related Groups (DRGs). The UCR fees and information come directly from a trusted data source, the Veterans Administration (VA). Understanding UCR fees used by the VA can be a complicated process but we have gathered information to help clarify how these fees are used and where they come from, including some of our customers' questions with answers from the VA.

VA Methodology

The VA Reasonable Charges methodology used by the VA to develop the charges are explained in 38 CFR 17.101(b): https://www.law.cornell.edu/cfr/text/38/17.101

The data sources used to develop the charges are shown in the link below under “Reasonable Charges Data Sources”:https://www.va.gov/communitycare/revenue_ops/payer_rates.asp.

FAQ's/Questions asked by Customers to the VA

Are the Ancillary charges in addition to the per diem rates? If the VA is basing the cost off MS-DRGs then are they following the LoS rules?

The VA utilizes Medpar (Medicare Provider Analysis and Review file) and Commercial data sources to establish 3 separate per-diem rates for Room and Board (R&B), ICU R&B, and Ancillary Services. We start with a per admit amount based on our data sources which are then converted to a per diem amount based on the Medpar LoS and Commercial LoS.

DRG 469 has 4.7 Geometric Mean LoS and 6 Arithmetic Mean LoS, so is the per diem based on per day or the DRG LoS 4.7?

We do not use CMS LoS to establish our per-diems. We utilize the LoS associated with our data sources to develop our per diem rate per MS-DRGs.

RE: the ancillary fees, is this only a onetime charge per stay? Based on the LoS (and not daily room and ancillary services)? We are using V3.26 Inpatient.

The Ancillary charge is a per-diem rate that is used on a per-day base, this is not a per admit charge.

Ancillary Services

Ancillary services are support services of other departments for care received while in the hospital, other than room and board, used to diagnose or treat a medical condition.

According to the VA these services include:

Audiology (hearing)
Blind and Vision Rehabilitation
Chiropractic Services
Dental
Diagnostic Laboratory
Nutrition and Food Service
Nuclear Medicine (imaging)
Occupational Therapy
Pharmacy
Physical Therapy
Prosthetics (artificial limbs, equipment, devices)
Radiology (x-rays and imaging)
Radiation Oncology (cancer care)
Recreation and Creative Arts Therapies (music, art, dance and drama)
Respiratory Therapy
Social Work (housing, discharge planning, family support)
Speech/Language Pathology (speech, language, voice, fluency, cognition, and swallowing)
Traumatic Brain Injury

Per-Diem

Per-Diems are a flat rate paid for the hospitalization or time the patient resides in an SNF, made on the basis of prospectively determined rates, and applied on a per discharge basis using DRGs with the exception of ancillary fees with is a daily per diem. DRGs are a fixed amount for a patient stay in a standard room, ICU, SNF, or partial hospitalization.

###

Questions, comments?

If you have questions or comments about this article please contact us. Comments that provide additional related information may be added here by our Editors.

Latest articles: (any category)

Artificial Intelligence in Healthcare - A Medical Coder's Perspective
December 26th, 2023 - Aimee Wilcox

We constantly hear how AI is creeping into every aspect of healthcare but what does that mean for medical coders and how can we better understand the language used in the codeset? Will AI take my place or will I learn with it and become an integral part of the process that uses AI to enhance my abilities?

Specialization: Your Advantage as a Medical Coding Contractor
December 22nd, 2023 - Find-A-Code

Medical coding contractors offer a valuable service to healthcare providers who would rather outsource coding and billing rather than handling things in-house. Some contractors are better than others, but there is one thing they all have in common: the need to present some sort of value proposition in order to land new clients. As a contractor, your value proposition is the advantage you offer. And that advantage is specialization.

ICD-10-CM Coding of Chronic Obstructive Pulmonary Disease (COPD)
December 19th, 2023 - Aimee Wilcox

Chronic respiratory disease is on the top 10 chronic disease list published by the National Institutes of Health (NIH). Although it is a chronic condition, it may be stable for some time and then suddenly become exacerbated and even impacted by another acute respiratory illness, such as bronchitis, RSV, or COVID-19. Understanding the nuances associated with the condition and how to properly assign ICD-10-CM codes is beneficial.

Changes to COVID-19 Vaccines Strike Again
December 12th, 2023 - Aimee Wilcox

According to the FDA, CDC, and other alphabet soup entities, the old COVID-19 vaccines are no longer able to treat the variants experienced today so new vaccines have been given the emergency use authorization to take the place of the old vaccines. No sooner was the updated 2024 CPT codebook published when 50 of the codes in it were deleted, some of which were being newly added for 2024.

Updated ICD-10-CM Codes for Appendicitis
November 14th, 2023 - Aimee Wilcox

With approximately 250,000 cases of acute appendicitis diagnosed annually in the United States, coding updates were made to ensure high-specificity coding could be achieved when reporting these diagnoses. While appendicitis almost equally affects both men and women, the type of appendicitis varies, as dose the risk of infection, sepsis, and perforation.

COVID Vaccine Coding Changes as of November 1, 2023
October 26th, 2023 - Wyn Staheli

COVID vaccine changes due to the end of the PHE as of November 1, 2023 are addressed in this article.

Medicare Guidance Changes for E/M Services
October 11th, 2023 - Wyn Staheli

2023 brought quite a few changes to Evaluation and management (E/M) services. The significant revisions as noted in the CPT codebook were welcome changes to bring other E/M services more in line with the changes that took place with Office or Other Outpatient Services a few years ago. As part of CMS’ Medicare Learning Network, the “Evaluation and Management Services Guide” publication was finally updated as of August 2023 to include the changes that took place in 2023. If you take a look at the new publication (see references below),....