Every person who works with hospital bills know something about revenue codes. Many have at least a basic concept of what revenue codes are supposed to be; unfortunately that's about as far as it goes. Scarier yet, some people have only heard the term. It would seem that it's time someone addressed revenue codes in more detail, yet in simpler terms.

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Revenue codes are used to classify what you're billing for. They're used for variety of reasons including:

* Type of room a patient may be in

* Type of services that are being performed

* Type of service that might be performed

* Type of supplies or pharmaceuticals that might be given to a patient

Using Incorrect Codes

Because they can be complex, sometimes errors are made when using revenue codes. Sometimes incorrect revenue codes are used because of the perception of what's being performed versus what is actually going on. For example, revenue 510, which stands for clinic, is quite often used for services provided in a hospital setting because no one is quite sure how else to use it. At the same time, sometimes hospitals provide clinic services inside the hospital, which makes it valid to use. It's all in the designation.

Many times it's questionable whether the services being performed should be charged or not, but each facility has to determine that. Evaluation and management codes that are performed in different areas of the hospital (ex: pain management, maternity) are quite often coded with a 510, when it should be coded with a treatment room code instead, code 361.

Many insurance companies won't cover these services because they're being billed with service type 131 (outpatient hospital setting). Others have recommended that revenue code 361, treatment room, would be better to use in these instances, as it's more accurate than 510. However, sometimes hospitals can negotiate payment for specific types of services by using revenue codes as a determining factor, such as using revenue code 750 for endoscopic procedures instead of 360, general surgery.

Procedure Codes

There are revenue codes that need procedures codes, some that don't, and some that might or might not need them. Revenue codes from 00X to 24X don't require procedure codes because they denote inpatient room charges. Revenue codes after that concerning procedures always need a revenue code (ex: 300 to 319, 320 to 359 for radiology related services).

Supply revenue codes (27X) may or may not need them, but supplies are a different sort of animal. Some insurance companies such as Medicare may reimburse separately for certain supplies that are coded with a HCPCS code (codes beginning with a letter, followed by 4 numbers).

Some revenue codes aren't reimbursable by insurances such as Medicare unless the facility has a specific provider number for them, such as for revenue code 274 (prosthetics and orthotics). In this instance, the hospital has to have what's known as a DMEPOS number, which allows them to sell durable medical equipment. Any supply that could be considered as take-home, revenue code 273, will probably not be covered by many insurance companies.

There is a debate as to whether it's legitimate or not to classify these items under revenue code 271, non-sterile supply, in order to capture costs. Those in favor of it say that hospitals should be allowed to show these costs since they're not going to be reimbursed for them anyway. Those against it feel that it's an attempt to get around the billing regulations that say it's a non-covered hospital item and it allows them to bill patients for these items(I'm with this group). Not only could it constitute fraud, but it's unfair to self pay patients. Finance administrators need to make the decision on which way they go and have it documented. I always recommend to err on the side of caution and capture items like these under the cost of procedures.

Some can be classified with many different revenue codes. Endoscopic surgical procedures are one example. They can be billed using revenue code 360, 361, 450, 490 and 750. It depends upon location as to whether your facility bills one way because of contractual obligations or another way for classification purposes.

The flip side of the above is that there are certain revenue codes that shouldn't be coded with specific types of procedure codes. For instance, there are many interventional radiology services that radiology departments have coded with procedure codes under their revenue codes, when they belong under surgical codes instead. What should be coded is the radiology component of the surgical service instead. Hospitals are either undercharging or possibly looking like they're double billing for services provided.

There are times when you might expect to see a specific revenue codes when another one is used. For instance, if revenue code 370 (anesthesia) is used, many insurance companies expect to see a 710 (recovery room) revenue code with it. Certain procedures, such as cardiac catheterizations and certain CAT scans, are expected to have pharmaceutical and/or radiopharmaceutical charges along with them. It may not change the reimbursement a facility route will receive, but not having them could definitely delay payment or result in a lower than expected amount.

Professional Fee Codes

Finally, there are certain revenue codes that most insurance companies don't expect to see from hospitals, although your facility may have specific reasons for using them. The 96X to 98X range is for professional fees, and 99X are patient convenience items.

Sometimes hospitals are responsible for billing professional fees along with the hospital bill. Some hospitals charge patients for convenience items that they know insurance companies won't pay for, but don't separate it from other accounts receivable items. Most hospitals usually charge for some of these items in a different way or don't charge for them at all.

This is a quick look at some of the issues concerning revenue codes. Most of the time revenue codes are easy to deal with; sometimes they can be very complicated. It's best to know what you're up against so you can start a plan of action and documentation to protect your facility. There will be a follow up post to this one next week.