Inpatient and Outpatient Differences
Did you ever wonder why outpatient or inpatient procedures had different codes? Or better yet, why did you enter one door if you came for outpatient care and another for inpatient, but performed the same therapy once inside the building? Outpatient and inpatient care are billed differently and have distinct legal requirements for licensure and regulatory compliance. Therefore, even though the therapists, physicians, and care received are very similar, the decisions made must incorporate an additional component of the Standards of Practice for that form of service delivery.
Ambulatory Supply Use Is Easier to Predict
In the healthcare world, ambulatory patients (i.e., patients who “walk in” for services from their home) require fewer resources than patients admitted to the hospital. Ambulatory patients enlist the aid of healthcare providers for a specific purpose and for a limited time. Therefore, their visit is cost-contained. The number of people and material resources needed is predictable and consistent, making it easy to budget and plan for future purchases. Rarely do ambulatory services experience unexpected crises that wipe out budgets, except for those in Infectious Disease Specialties. (Remember COVID)
Inpatient Supply Needs Fluctuate
Inpatient care, on the other hand, fluctuates seasonally, is influenced by community events, must be able to flex up or down with a moment’s notice, often coordinates care with other facilities in the event of a disaster, and oversees management of patients with a medical staff that is either under their direct supervision (a closed medical staff) or one in which they have no direct say over their treatment protocols (open medical staff). The Department of Health licenses hospitals to have a certain number of beds. That license states they can have no more than that number of patients, but they don’t have to have that many beds open. Many hospitals ask for more than they initially want to open so they can expand as business picks up.
Certificate of Need Requests
When a hospital wants to offer a service to the community, such as cardiac care, it must first submit a Certificate of Need request explaining why the community needs the service. The reason this is required is to prevent Richmond from becoming saturated with a single type of medical care. Once approved, the hospital must staff the beds 24/7/52 with trained, competent employees in accordance with standards of care established by healthcare professional guidelines. As you can see, the cost of personnel alone is significantly higher for inpatient facilities than for outpatient facilities.
Standards of Practice
The same is true regarding differences in treatment protocols for ambulatory and hospital patients. Did you know that almost all medical conditions are treated essentially the same by all doctors? Within medical specialties, research groups have gathered data to determine the best treatment protocols for the most common ailments in their fields. These groups do not dictate treatments. They make recommendations and provide “if this”…” then” guidelines that help others in the field make choices based on a variety of symptoms and data points. In the medical profession, these guidelines are referred to as a Standard of Practice.
Patient Treat Flexibility
Doctors are not required to treat patients strictly in accordance with the Standards of Practice guidelines. The guidelines allow considerable flexibility and exceptions because patients rarely follow a prewritten script, as in a play. However, if a doctor really goes far off-script and rewrites the play, then his actions may be considered a violation of Standards of Practice. If he takes a chance on a hunch and it works out okay for his patient, then “no harm, no foul.” Usually, situations that go off script are not reported because everyone is happy with the outcome. However, if he takes a chance and it causes harm to the patient, the HCP will likely face an investigation by the Board of Health Professionals and could lose their license. Not following the Standards of Practice is a big deal.
Classifying a patient correctly as ambulatory or hospital is important for Standards of Practice review because ambulatory standards do not require the immediate testing protocols completed at the hospital. Ambulatory makes the referral, and the hospital performs the testing. They consult together, but make decisions separately.
Outpatient Billing Practices
Outpatient services bill for the service received and charge per event. For example, each time you receive physical therapy, you pay for the therapy received (use of equipment and facilities) and the services (skills, knowledge, and experience) of the physical therapist. In addition, the intensity of services provided is reflected in the charges submitted. Monitoring a patient’s heart rhythm every fifteen minutes for signs of a heart attack requires greater vigilance than a fifteen-minute follow-up appointment with no evidence of complications. Therefore, billing for ambulatory visits is simple. One bill for the treatment and one for the professional interaction.
Hospital Billing
Hospital billing, on the other hand, is very complicated.
When a patient enters a hospital, they stay for a few days, and the hospital becomes their temporary home. The facility provides meals, linens, personal safety, electricity, plumbing, heating/AC, clean rooms, infection prevention, vehicle storage, entertainment, healthcare providers with a multitude of skills and expertise around the clock providing for their care and recovery, infrastructure stability, administrative personnel to manage all the forementioned, staff who move people, things, and waste here, there, and everywhere, people who take blood, give blood, take pictures, give medicines, exercise, teach, and listen to them, if necessary they operate on them, save their lives with an emergency response and a lot more that I have not mentioned.
All Departments Get Paid from the Same Bill
Since most departments provide services, they want to share the revenue generated from care. How do you divide the proceeds from one hospital bill among all the various departments? How do you decide the portions per department? Consider the building to be a large pie. Each department inside the building is a piece of that pie. Every time the patient interacts with a department, the size of that department’s slice of the pie increases. Each touch makes it bigger. At the end of the admission, a giant pie with hundreds of slices of varying widths sits there, representing the bill. However, some “touches” are also counted more often than others. An ICU visit, for example, counts as multiple visits. As you can see, hospital billing is very complex.
At the end of the admission, a minimum of two bills “drop” (though often more drop), one for hospital room, board, and treatments, and the other for professional charges.
Less Than 30-day Re-Admission
Inpatients cannot have outpatient procedures performed while hospitalized. Wait for discharge. Insurance companies’ reason is that if you were well enough to be discharged, you were well enough to remain discharged, and they often refuse to continue to pay your bills thereafter. If it’s essential for a reason that you attempt to get an outpatient procedure performed, get reauthorization for both the procedure and readmission, if possible, to decrease the difficulties of coming back.
Home Health, Another Type of Service
In this section, I’ve described the differences between inpatient and outpatient services. There is another category of healthcare services that some confuse with outpatient care: home health. Outpatient and home health are not the same. To receive home health services, the patient must be unable to leave their home except for emergencies and/or urgent care needs, and/or face undue hardship if leaving home is necessary.
