Inpatient and Outpatient Coding in Medical Billing

Inpatient or outpatient – unsure which best suits your needs? Deciding between inpatient and outpatient care can be confusing. In medical billing terms, inpatient care means you stay in the hospital overnight or longer, while outpatient care is when you go home the same day you receive treatment.

ByadminonSeptember 14, 2023

This blog explores the differences between inpatient and outpatient coding in medical billing. You’ll learn about the unique medical codes used for each type of visit, why they’re important, and how they impact your healthcare experience.

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What Is Inpatient Coding?

Inpatient coding assigns code for those medical services that have been availed through multiple visits. Those services include diagnoses  and treatment provided during that entire stay. They usually include the supplies used and the days spent in the hospital or clinic.

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 Outpatient and Inpatient Coding

Most healthcare providers 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.

medical billing

  • Medical Codes

You have to consider the ICD-10-PCS and ICD-10-CM manuals to assign codes for your medical billing services. The ICD-10-PCS manual is used by healthcare providers for their inpatient coding. You cannot consult with it for common procedures like instructional sessions and lab tests.

Moreover, you can execute outpatient coding based on the ICD-10-CM manual, as it mostly includes HCPCS and CPT codes. These codes are specifically applied to outpatient supplies and treatments. Therefore, you can accurately assign medical codes through their documentation.

  • Patient Duration

The duration of stay for patients with different provider credentials is longer for inpatient coding as it is more complex. It covers an extended period of time and reports a complete description of the healthcare diagnoses and treatments available to inpatients. 

Furthermore, inpatient coding also fulfills the key requirement of executing present-on-admission (POA) reporting for the entire period of hospitalization. This reporting facilitates you by providing a list of conditions applicable for specific times of inpatient admission.

  • Reimbursement Claims

There are two parts of Medicare, and your reimbursement claims lie in any one of them based on outpatient and inpatient medical coding software. Your inpatient services come under Part A, and the outpatient ones fall in Part B.

Medicare has specific regulations set in place that manage your reimbursement claims. They also monitor the copays that have to be paid by your patients. Inpatient coding assigns codes for the reimbursement claims based on insurance eligibility verification and nursing facilities.

  • Patient Symptoms

The implementation of inpatient and outpatient coding can also vary based on the signs and symptoms experienced by patients. You should not assign medical codes to initial diagnosis according to the regulations of the inpatient coding practice. 

However, you can add potential conditions and symptoms based on inpatient coding if a definitive diagnosis is absent. In addition, you can execute outpatient coding for the patients who remain undiagnosed even after they are discharged.

  • Patient Complications

Your patients can experience different types of complications during treatment depending on their time of origin. You must assign inpatient codes to your healthcare services if the relevant patients experience complications after their surgery.

In such scenarios, you have to give principal diagnosis for complications due to their time of origin. Furthermore, healthcare providers must also implement inpatient coding if those complications warrant an extra duration of stay for their patients.

  • Principal Diagnosis

There is no concept of principal diagnosis in outpatient coding. You cannot diagnose such patients on their first visit as they have availed of the medical services represented with outpatient codes.

On the other hand, you can give principal diagnoses to your inpatient operations as they utilize resources over a long period of time. You can also utilize this extended period to determine whether your reimbursement claims are appropriately fulfilled.

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.

  • Compliance

healthcare providers must fully comply with the code of ethics set by AHIMA. It is a universal combination of all primary and secondary guidelines for common medical coding services. You must tune your inpatient and outpatient operations according to that code of ethics.

By doing this, you can make sure that your medical billing services, whether for patients staying in the hospital or those coming for a visit, are given in a way that protects patient privacy. This keeps records accurate and maintains the highest level of honesty and professionalism.

  • Resource Allocation

Inpatient and outpatient coding are also similar in terms of their resource allocation. Healthcare providers usually manage and utilize their resources the same way for both processes. The industry guidelines established by the American Hospital Association Coding Clinic bind them to ensure this practice. 

You must follow those guidelines until new ones are introduced that are able to supersede them. These guidelines facilitate you to similarly code and report your healthcare treatments and procedures through inpatient and outpatient coding.

  • Coding Technique

You can also execute a similar technique to assign inpatient and outpatient codes to your medical procedures. It initially involves a comprehensive review of the documentation that contains healthcare records of your patients.

This review enables you to assign accurate and complete codes to your inpatient and outpatient services. You must pause medical coding If you are unable to find the documents that contain details about code assignment.

  • Information Retrieval

The method of retrieving information in outpatient and inpatient coding is also similar. You can report information about your patients in the same way so that the diagnoses of your healthcare procedures can be accurately determined.

Both of them systematically assign medical codes with the usage of complex documentation. You can describe the medical conditions of your patients along with appropriate responses to them in the form of treatments.

  • Types of Codes

You can use the same types of codes to implement both processes in medical billing metrics. Inpatient and outpatient coding require alphanumeric or numeric types of codes that can be applied to most healthcare services.

Alphanumeric codes include alphabets and numerals, and numeric codes only contain numerals. You can also use any of them to distinguish between your outpatient and inpatient coding processes.

How Does Coding For Inpatient Differ From Outpatient Coding?

Inpatient coding is for patients who stay in the hospital overnight or longer. When medical billing and coding terms, you focus on the reason they need to stay in the hospital. These types of medical billing systems look at the big picture of a patient’s care, including all the tests, treatments, and services they get during their stay.

Outpatient coding is for patients who visit the hospital for services but don’t stay overnight. This coding is about each specific visit or treatment. For outpatient coding, you record every test, check-up, or procedure as its own thing because each visit is considered separate.

Additionally, you can also familiarize yourself with key medical billing terms.

Are Cpt Codes Used for Inpatient Or Outpatient?

CPT codes are used for outpatient coding. When you go to the doctor or have a treatment without staying in the hospital overnight, the services you get are recorded using CPT codes. These medical billing codes tell your insurance company what kind of care you received, so it knows how to pay for it.

Outpatient CPT codes

    • Cpt Code 99201-99215: These codes are used for evaluation and management services provided in the outpatient setting.
    • Cpt Code 10040-19999: These codes are used for surgical procedures performed in the outpatient setting.
    • Cpt Code 90250-99549: These codes are used for other medical services and procedures performed in the outpatient setting.

Inpatient coding does not use CPT codes. Instead, when you stay in the hospital for one night or more, your care is recorded with a different system called ICD codes. These codes cover your whole stay and all the care you get while you’re in the hospital.

Inpatient ICD Codes

  • Cpt Code 99221-99223: These codes are used for initial inpatient or observation care services.
  • Cpt Code 99231-99233: These codes are used for subsequent inpatient or observation care services.
  • Cpt Code 99234-99236: These codes are used for hospital inpatient or observation care services, including admission and discharge services.
  • Cpt Code 99238-99239: These codes are used for hospital inpatient or observation discharge services.

Inpatient Vs Outpatient Coding Guidelines

The differences between inpatient and outpatient coding is key to handling medical billing glossary correctly. Let’s explore the essentials, so you stay informed and make accurate coding decisions.

  • Setting and Duration

For inpatient coding, you’re dealing with patients who stay in the hospital for at least one night. These stays can last for days or weeks, depending on how severe the patient’s condition is. In outpatient coding, patients receive care like check-up or minor testing but don’t stay overnight. They come in, get their treatment, and leave the same day.

  • Coding Systems

Inpatient coding uses a system that captures the main reason a patient is hospitalized, any procedures done during the stay, and if conditions were present at admission. It’s detailed to show everything that was diagnosed during a hospital stay.

Outpatient coding focuses on the reason a patient visited and any procedures they received. There’s no need to note if conditions were present at admission because the visit is short.

  • Inpatient

When coding for an inpatient, start with the primary diagnosis; this is the main reason for the hospital stay. Next, include any procedures the patient underwent. Also, mark if conditions were already present when the patient was admitted, known as POA.

  • Outpatient:

For outpatient coding, note the diagnosis or reason for the visit. Also, include any procedures done. Unlike inpatient coding, you don’t need to worry about POA indicators because the visit is brief, and patients go home the same day.

Inpatient Claims Vs Outpatient Claims

Now, let’s talk about how healthcare uses different types of insurance claims for inpatient and outpatient services.

  • What is an inpatient claim?

An inpatient claim is what hospitals use when you stay overnight. It covers all the care you get while you’re in the hospital. This claim helps the hospital get paid for letting you stay and for all the treatments and tests you might need.

  • What is an outpatient claim?

An outpatient claim is used when you get medical care but don’t stay in the hospital overnight. Things like doctor’s visits, blood tests, or x-rays need outpatient claims. This way, the healthcare providers ask your insurance company to pay for the services you received.

  • Why are inpatient claims important for healthcare?

Inpatient claims are important for healthcare because they make sure hospitals have the resources to take care of people who need to stay for treatment. These insurance claims help hospitals manage the cost of providing 24/7 care, including the use of rooms, equipment, and staff.

  • Why are outpatient claims important for healthcare?

Outpatient claims are important for healthcare because they support the costs of running clinics and doctor’s offices. You can make sure that healthcare providers can keep providing care that doesn’t require an overnight stay, like check-ups and minor procedures. This helps keep the healthcare system running smoothly for everyday needs.

Inpatient Coding Features And Characteristics

Medical billing coding can be complex, but understanding the key differences is crucial. Let’s break down inpatient coding into simple, easy-to-understand features and characteristics.

  • Length of stay

In inpatient coding, the patient stays in the hospital for at least one night. The coders focus on the patient’s entire stay, from when they check in to when they leave. This helps doctors and nurses know the patient’s story and how to best care for them.

  • Complexity of Care

Inpatient care usually involves more serious conditions that need close monitoring and treatment. The coding reflects this complexity, covering all the services, tests, and treatments the patient receives. This ensures the hospital can provide everything the patient needs for their health treatment.

  • Coding System Used

For inpatient coding, a system called ICD-10-CM (for diagnosing) and ICD-10-PCS (for procedures) is used. This helps in accurately describing the patient’s condition and the care they received. It’s like a detailed system that hospitals use to communicate about patient care.

Do We Need Different Codes For Inpatient And Outpatient Visits?

Yes, we need different codes for inpatient and outpatient visits because the type of care and services provided vary greatly between these two settings.

1. Inpatient Coding

Inpatient coding uses ICD-10-CM for diagnoses and ICD-10-PCS for procedures. This is because when you stay in the hospital overnight or longer, the care is more complex. The codes help track all the treatments and tests you get during your stay. Think of these codes as a detailed diary of your hospital visit.

2. Outpatient Coding

Outpatient coding also uses ICD-10-CM for diagnoses, but it uses CPT (current procedural terminology) codes for procedures instead. This is for visits when you don’t stay overnight in a hospital, like seeing your doctor or getting a minor procedure. Moreover, The medical codes are like a summary, noting your visit and any services you received.

The Bottom Line

Inpatient and outpatient coding is key when the healthcare services are recorded and billed. These codes help make sure doctors, hospitals, and insurance companies all speak the same language when it comes to your care. 

CloudRCM stands out as the top choice for managing these coding needs. Choose CloudRCM today for reliable and efficient inpatient and outpatient coding services.

Frequently Asked Questions (FAQs)

  • What is the difference between inpatient and outpatient coding? 

Inpatient coding is for when you stay in the hospital overnight or longer. Outpatient coding is for visits where you go home the same day. The main difference is how long you stay in the hospital and the codes used to describe your care.

  • What is the CPT coding for inpatient? 

CPT coding is not typically used for inpatient care. Instead, inpatient procedures are coded using ICD-10-PCS codes. These codes help hospitals describe the procedures you have during a longer stay.

  • What is the difference between outpatient and inpatient? 

Outpatient means you get medical care but do not stay overnight in a hospital. Inpatient care means you stay in the hospital for one night or more. The key difference is how long you need to be in the hospital for your care.

  • What is an inpatient coder? 

An inpatient coder is someone who uses special codes to record the care you get when you stay in the hospital overnight. They make sure every treatment, test, and procedure is correctly listed for your stay.

  • Is PCS coding inpatient or outpatient? 

PCS coding, or ICD-10-PCS coding, is used for inpatient procedures. This means it is used when you have treatments or surgeries that require you to stay in the hospital overnight or longer.

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