Medical billing and coding are integral to the revenue cycle of any healthcare organization, with the process broadly categorized into two key areas: inpatient coding and outpatient coding.
For aspiring medical coders, grasping the distinctions between these two specialties is crucial. Choosing a focus early in their career can streamline their training and education, allowing them to dedicate more time to mastering the field that aligns with their interests and career goals.
But what exactly are inpatient coding and outpatient coding, and how do they differ? Let’s break it down.
What Is Inpatient Coding?
Inpatient coding assigns code for those medical services that have been availed through multiple visits. Those services include procedures and diagnoses provided during that entire stay. They usually include the supplies used and the days spent in the healthcare organization.
What Is Outpatient Coding?
Outpatient coding assigns codes for a single visit as the relevant medical services are executed fairly quickly. Those codes are also primarily assigned to the signs and symptoms of patients instead of their diseases.
Differences Between Inpatient and Outpatient Medical Coding
| Aspect | Inpatient Coding | Outpatient Coding |
|---|---|---|
| Diagnosis Coding | Codes can be assigned for unconfirmed diagnoses documented during the patient’s stay. | Only confirmed diagnoses can be coded. Signs and symptoms are often coded when no diagnosis is confirmed. |
| Terminology | Uses the term “principal diagnosis”, which refers to the condition leading to the hospital admission. | Uses the term “first-listed diagnosis”, describing the primary reason for the patient’s visit. |
| Payment Systems | Operates under the Inpatient Prospective Payment System (IPPS) and Diagnosis-Related Groups (DRGs). | Follows the Outpatient Prospective Payment System (OPPS) and the Ambulatory Payment Classification (APC) system. |
| Data Standards | Uses the Uniform Hospital Discharge Data Set (UHDDS) definition of principal diagnosis. Requires Present on Admission (POA) indicators for each diagnosis code. | Does not use UHDDS definitions or POA indicators. |
| Scope of Coding | Covers longer, more complex coding scenarios due to extended hospital stays and comprehensive care. | Focuses on shorter, simpler encounters like office visits or same-day procedures. |
Most healthcare organizations implement inpatient and outpatient coding as two distinct processes. Both of them have a range of differences in terms of medical codes, patient duration, reimbursement, and many more healthcare functions.
1. Medical Codes
Inpatient and outpatient coding involve different categories of medical codes and methods for reporting healthcare procedures and treatments.
For inpatient coding, you must refer to the ICD-10-PCS and ICD-10-CM manuals. The ICD-10-PCS manual is exclusively used for coding inpatient procedures and cannot be applied to common outpatient procedures such as instructional sessions or lab tests.
Outpatient coding, on the other hand, relies primarily on the ICD-10-CM manual, which incorporates HCPCS and CPT codes. These codes are specifically designed for outpatient treatments and supplies, allowing accurate documentation and assignment of medical codes.
2. Patient Duration
The duration of stay for patients varies depending on the complexity of care and provider credentialing. Inpatient coding applies to patients admitted for an extended period, involving detailed documentation of all procedures and treatments throughout hospitalization.
Additionally, inpatient coding includes Present-on-Admission (POA) reporting, which identifies conditions present at the time of admission versus those that developed during the stay. While inpatient coding is based on the total number of visits, outpatient coding is applicable only for stays under 24 hours.
3. Reimbursement Claims
Reimbursement claims differ for inpatient and outpatient coding based on the two parts of Medicare.
- Inpatient services fall under Medicare Part A, while
- Outpatient services are covered under Medicare Part B.
Medicare has specific guidelines to regulate claims and monitor patient copays. Inpatient coding assigns codes to reimbursement claims based on insurance eligibility and nursing facilities. Outpatient claims generally cover diagnostic tests, preventative care, and practitioner visits, ensuring appropriate compensation for healthcare services.
4. Patient Symptoms
The approach to coding patient symptoms varies between inpatient and outpatient settings.
- Inpatient coding does not assign codes to initial diagnoses unless a definitive diagnosis is absent, in which case potential conditions and symptoms can be coded.
- Outpatient coding, however, only assigns codes for confirmed medical services based on the diagnosis.
For outpatient cases, diagnoses are classified into categories such as suspected, probable, ruled out, differential, and questionable cases.
5. Patient Complications
Complications that arise during treatment are handled differently based on the timing and severity.
- Inpatient coding applies when complications occur post-surgery or require extended stays. Principal diagnoses must be assigned in such cases.
- Outpatient coding, on the other hand, is used for unique complications where treatments have uncertain outcomes. Additional inpatient codes can also be assigned if necessary.
6. Principal Diagnosis
Principal diagnoses are exclusive to inpatient coding and do not apply to outpatient services.
- Inpatient coding provides principal diagnoses for long-term treatments, ensuring resource allocation and reimbursement claims are addressed effectively.
- For outpatient coding, no principal diagnosis is determined on the first visit since these codes only represent the immediate medical services provided.
Similarities Between Inpatient and Outpatient Coding
The implementations of inpatient and outpatient coding have some common factors as well, even though they are distinct processes. They are similar in terms of their compliance, resource allocation, coding technique, and many other factors.
1. Compliance
Healthcare organizations must adhere to the code of ethics established by AHIMA. This code serves as a universal framework, incorporating both primary and secondary guidelines for various medical services. It is essential to align both inpatient and outpatient operations with these ethical standards.
2. Resource Allocation
Inpatient and outpatient coding share similarities in resource allocation. Healthcare organizations typically manage and utilize their resources uniformly for both coding processes.
The American Hospital Association (AHA) Coding Clinic sets industry guidelines to ensure this consistency. These guidelines must be followed unless superseded by updated standards, ensuring uniformity in coding and reporting treatments across inpatient and outpatient services.
3. Coding Technique
Both inpatient and outpatient coding utilize a similar technique for assigning codes to medical procedures. The process begins with a thorough review of patient healthcare documentation.
This review ensures accurate and complete code assignment. If necessary documentation is unavailable, coding must pause until the missing details are retrieved. This approach helps maintain accurate medical records and facilitates communication with healthcare providers.
4. Information Retrieval
The process of retrieving information for inpatient and outpatient coding is comparable. Both methods systematically gather patient data to accurately document diagnoses and treatments.
Using complex documentation, they assign medical codes that reflect patient conditions and the corresponding treatments, ensuring precision in reporting.
5. Types of Codes
Inpatient and outpatient coding often utilize the same types of codes for medical billing. These include alphanumeric codes (a combination of letters and numbers) and numeric codes (numbers only).
Both types of codes are applied to various healthcare services and can be used interchangeably to distinguish between inpatient and outpatient processes.
The Bottom Line
This blog sheds light on all the ins and outs of inpatient and outpatient coding in medical billing. We comprehensively covered the main differences and similarities between both processes and exhibited their role in the billing operations of healthcare organizations.
Our medical billing experts are qualified enough to accurately manage your inpatient and outpatient coding services. Join us today and elevate the quality of the medical bills generated by your healthcare organization.
Frequently Asked Questions (FAQs)
What is the difference between outpatient and inpatient coding?
The difference between outpatient and inpatient coding lies in their diagnoses, as inpatient coding assigns codes for uncertain diagnoses as well. In contrast, outpatient coding requires a confirmation for all diagnoses before assigning codes.
What are the coding codes for inpatients?
Inpatients can have different coding codes like 99221-99223, which corresponds to the observation care in hospitals. Hospital inpatients are identified with the 99231-99233 code, whereas discharge services can be linked with 99234-99236.
What is outpatient coding?
Outpatient coding is a process in which patients can be given a diagnosis after just one hospital visit. It is different to inpatient coding in this aspect, which can report diagnoses even for a prolonged duration of stay.
What is the medical billing code for outpatients?
The medical billing code for outpatients is 99201-99205. This code corresponds to the clinical examinations, patient histories, and decision-making of healthcare organizations.
What is the purpose of inpatient coding?
Inpatient coding is a process in which healthcare organizations can report the diagnoses of their patients for a prolonged duration of stay. The diagnoses can include appropriate treatments for the signs and symptoms experienced by those patients.
