Christina Jud

HPA 14

Chapter 3 Questions

3.6 Briefly describe the coding systems for diseases (diagnoses) and procedures.
Coding systems for diseases are used among hospitals in order to identify the diagnosis of a
patient. In addition, it is also used for signs, symptoms, and other causes of injury. These codes
are used internationally which is beneficial because they serve as a universal code that can be
interpreted by anyone. These codes are between 3 and 7 characters, with the first 3 relating to
the category of the disease. Any characters following deal more with the patient’s condition and
if anything needs to be specified.

Procedure codes are used in order to distinguish medical, surgical, and diagnostic procedures
from each other. They are frequently looked at and modified to fit the current trends in the
medical world. With this coding system, there are ten codes that pertain to physician office
visits. Five of these codes are reserved for new patients, while the other five are for existing
patients. These codes differ by the involvedness of the patient’s visit.

3.7 How does Medicare reimburse hospitals for inpatient stays?

For acute hospitals, there is a something called the inpatient prospective payment system. This
system states that one payment for an inpatient stay will cover the daily routine, any special care,
as well as ancillary services. The payment amount is based on the DRG of the patient. There are
groups as well as subgroups that need to be taken into consideration. These groups are divided
based on the complexity and severity of the patient’s condition. The hospitals are reimbursed on
a case by case basis because each patient is different in what they require in order to be treated.

3.8 How does Medicare reimburse physician services?

Medicare reimburses physician services by using the reasonable charge concept. This concept is
defined as the lowest of the actual charge for the service that was performed, the customary
charge of the physician, or the existing charge for that service in the community. However, in
1992, Medicare made a change in how it reimburses physicians. Now, it is based on an RVRBS
system. This type of system is based on physician work, practice expense, and malpractice
insurance. This reimbursement amount increases the more complicated the treatment for the
patient is.

3.9 What are the key features of the ACA?

One key feature of the ACA is that it protects people from insurers if something happens in
terms of their health. In addition, the ACA has banned lifetime limits, and is moving towards
banning annual limits that are on most health plans. Overall, the ACA helps Americans to have
access to health insurance. It aims to decrease the cost of healthcare while increasing its quality.

Problem: Assume that Jessie De Leon, who pays 40% in Federal and State income taxes
plans to contribute $100,000 to not-for-profit Hempstead Community Hospital. Without
the contribution his tax bill is $500,000. What would be his tax bill if he makes the
contribution?

.40 x 100,000= 40,000

$500,000 - $40,000 = $460,000

His tax bill would be $460,000