Due to the complexity and differentiation of these two hospital settings, inpatient and outpatient billing and coding require separate processes. Likewise, a provider receives accurate reimbursements when the billing and coding staff submit clean claims. A provider can outsource medical billing and coding services to submit clean claims and receive accurate reimbursements. This blog comprehensively explains inpatient vs outpatient coding.
An inpatient is a patient that a provider admits to the hospital for various reasons like observation, tests, surgeries, etc, for more than 24 hours. For instance, a patient undergoes surgery and stays in the hospital for more than 1 day to recover. Conversely, a patient staying in the hospital for less than or equal to 24 hours is called an outpatient. For example, a patient visits the provider for a routine checkup and leaves the hospital after a short time.
For Medicare and many payers, inpatient status is based on a formal admission order and the clinical expectation that the patient will require medically necessary hospital care spanning at least two midnights, while outpatient status means the patient has not been formally admitted as an inpatient, even if they stay overnight for observation or minor procedures.
Different codes are needed to bill the payer for inpatient and outpatient services. So, let’s understand inpatient vs outpatient coding.
Inpatient coding is more complex than outpatient coding. Inpatient coding requires comprehensive details of the procedure. The patient’s extended hospital stays and present on admission (POA) need specific codes to file the claim. Present on Admission (POA) refers to the patient’s initial condition, for which a provider recommends hospitalization for recovery. Similarly, it is crucial to explain the patient’s POA condition and the complications that arise with time during their stay. Details of everyday needs require extensive reporting to receive accurate reimbursements. Therefore, inpatient coding is complex.
Formally, POA status indicates whether a diagnosis was present at the time the inpatient admission order was written, which affects how certain hospital-acquired conditions and complications are evaluated for payment and quality reporting.
Maintain accuracy when filing the claim with the payer. Errors lead to claim denials and lost revenue. So, avoid these common mistakes during claim processing for both inpatient and outpatient patients.
An Advanced Beneficiary Notice (ABN) is a notification that Medicare provides regarding the coverage and non-covered services under insurance. Furthermore, ABN in medical billing is only for outpatient services. It tells the patients about the out-of-pocket payments. For example, a patient takes a blood test that isn’t medically necessary. The patient signs ABN, acknowledging the out-of-pocket payment.
Under Medicare rules, the ABN is primarily used for certain Part B (outpatient) services when they are expected to be non-covered, with limited Part A exceptions such as hospice, home health, and Religious Nonmedical Health Care Institutions.
ERA in medical billing is an electronic bill describing the services and their payments. It is both for inpatient and outpatient services. So, both patient types receive ERA electronically.
An outpatient setting means the patient doesn’t need to stay in the hospital for days. Conversely, the inpatient needs to stay in the hospital for more than 24 hours. More precisely, inpatient status requires a formal admission order and an expected need for at least two midnights of hospital care, while outpatient services are provided without a formal inpatient admission, including emergency, observation, and same-day surgery encounters.
Yes, inpatient and outpatient services have different codes due to different settings. Both settings use ICD-10-CM for diagnoses, but inpatient facility procedures are reported with ICD-10-PCS, whereas outpatient and professional services use CPT and HCPCS for procedures and services.
A provider gives extensive services to the inpatients. Every service needs billing to receive reimbursements. Therefore, inpatient requires more complex coding than outpatient. In addition, inpatient coding must account for multiple diagnoses, POA indicators, comorbidities, complications, and detailed procedure coding over an entire stay, which increases documentation and coding complexity compared to most outpatient encounters.
