Not knowing the basics about different coding guidelines can keep your healthcare practice away from realizing its deserved profitability, leading to strained cash flow and inefficient operations.
Understanding inpatient and outpatient coding is integral to ensuring accurate billing for rendered care services and getting higher and timely reimbursements. Thus, in this guide, we will discuss both types of coding in detail, along with their examples, differences, and similarities.
So, without further ado, let’s get started!
What is Inpatient Coding?
Inpatient coding focuses on reporting services or procedures performed on inpatients. Inpatients are individuals admitted to the healthcare facility under a physician’s order for more than 24 hours.
Besides, hospital stays are usually lengthy for patients, leading to complicated and detailed documentation and coding workflow.
Inpatient Coding Examples
Here are some examples of inpatient coding:
Scenario # 1 – Major Joint Replacement with Multiple Comorbidity Conditions (MCC)
This DRG 446 covers a major joint replacement, such as a hip replacement, with other complicated health conditions requiring a longer hospital stay. As a result, the healthcare facility will be reimbursed a fixed payment based on the complexity.
Scenario # 2 – Appendectomy with Peritonitis
The patient will have a longer hospital stay due to high severity and inflammation of the abdominal lining. Therefore, the coder will report a CPT code for appendectomy along with others, covering the management of peritonitis.
What is Outpatient Coding?
Outpatient coding focuses on reporting services or procedures performed in a single encounter, with a care duration of 24 hours or less. Outpatients visit the healthcare facility for a few hours or even stay overnight but are not formally admitted.
Since these patient encounters are short, outpatient coding is typically simpler than inpatient coding.
Outpatient Coding Examples
Discussed below are a few scenarios of outpatient coding:
Scenario # 1 – New Patient Encounter with Established Diagnosis
A simple example of outpatient coding is when a new patient visits the physician’s office with an established diagnosis, such as high blood pressure. Here, the specific CPT code describing this type of encounter will be used for reimbursement.
Scenario # 2 – Flu Shot Administration
Another example of outpatient coding will be to report a CPT code for administrating the flu vaccine that does not require admitting the patient.
Key Difference Between Inpatient and Outpatient Coding
In this section, we will discuss the key differences between inpatient and outpatient coding:
Coding System
Codes used are different in inpatient and outpatient coding. ICD-10-PCS and ICD-10-CM coding standards are used for inpatient coding. The ICD-10-PCS coding system does not include lab tests, educational sessions, and common procedures not unique to the inpatient hospital setting.
Contrarily, HCPCS or CPT and ICD-10-CM diagnostic coding systems covering supplies and services rendered in the outpatient setting are used in outpatient coding. Besides, documentation is an integral part of using appropriate HCPCS and CPT codes.
Length of Stay
Regarding inpatient and outpatient coding, the length of stay also plays a role. The inpatient coding covers the entire extent of a patient’s stay at a hospital facility and the services rendered during that period.
Besides, it requires a present-on-admission (POA) report, i.e., the patient’s conditions at the admission time. This POA report enables providers to distinguish between the patient’s condition at the time of admission and the conditions or complications they develop during their stay at the healthcare facility.
Contrarily, outpatient coding depends on the patient’s encounter or visit to the physician’s office. The patient receives treatment but remains at the healthcare facility for less than 24 hours.
Symptoms and Signs
Symptoms and signs are another differentiating factor in inpatient and outpatient coding. They are generally not coded as part of the primary diagnosis in inpatient settings.
However, if a provider’s documentation does not include a definitive patient diagnosis, the coders may add suspected conditions, signs, and symptoms. Moreover, if the diagnosis remains uncertain at discharge, the coder should report the condition as it is.
Contrarily, many procedures lack a definitive patient diagnosis in the outpatient setting. Thus, coders should avoid reporting a diagnosis code unless it is confirmed through lab tests. There are several ways to describe uncertain diagnosis, such as differential, rule out, suspected, probable, and suspected.
Besides, the coding professionals are allowed to report the encounter to the highest certainty level based on abnormal test results, symptoms, or signs during the visit to an outpatient setting.
But there’s a catch! Before code assignment, coders must communicate with the physician for any additional information or test results that may provide a definitive diagnosis.
Reimbursement
Inpatient services are covered under Medicare Part A or hospital insurance, while outpatient services fall under Medicare Part B. Thus, the reimbursement varies for outpatient and inpatient billing. Besides, various regulations and guidelines govern the copay and reimbursements for the rendered services for both types of patients.
Furthermore, inpatient coding is done according to the Medicare Severity-Diagnosis Related Groups (MS-DRGs), which classify patients based on the hospital stay duration, treatment, and diagnosis. Several variables impact the DRG assignment, including the patient’s gender and age, principal and secondary diagnosis, complications and comorbidities, surgical procedures, and discharge status.
Conversely, outpatient services are reimbursed based on insurance contracted rates or physician fees and cover expenses such as preventative care, patient encounters, diagnostic tests, and other outpatient care.
Similarities Between Inpatient and Outpatient Coding
Where the inpatient and outpatient coding have their differences, there are also some similarities that you should be aware of to avoid making errors.
- Both inpatient and outpatient coding comply with AHIMA’s code of ethics.
- Both types of encounter utilize the ICD-10-CM coding guidelines to report the patient diagnosis.
- Inpatient and outpatient coding follow the official coding guidelines as specified by AHIMA.
- Moreover, both types of codings emphasize the accuracy of diagnosis or procedure codes and the completeness of documentation for timely reimbursements.
- Coders must follow the specific payer guidelines regardless of outpatient and inpatient billing.
Bottom Line
Inpatient and outpatient coding are parts of the medical billing process. While inpatient coding transcribes the procedures performed on hospitalized patients, outpatient coding records the encounters with visiting patients.
The two are different in terms of their coding systems, length of hospital stay, signs and symptoms, and reimbursements. However, when it comes to compliance with AHIMA’s code of ethics, following ICD-10-CM coding guidelines, and ensuring coding accuracy and complete documentation, they are one and the same.
We hope that this guide will help you overcome the billing and coding challenges associated with outpatient visits and inpatient stays. However, if you still struggle, you can get professional medical coding services from a reputable billing company, like MediBill MD.
