CIC CIC Revenue Cycle and Case Mix Management 1 — Questions and Answers
Question 1: What is Case Mix Index (CMI) and how is it calculated for a hospital?
- Total charges divided by total admissions
- The sum of all MS-DRG relative weights divided by the total number of Medicare discharges (Correct answer)
- The average length of stay across all patients
- Total reimbursement received divided by total beds
Correct answer: The sum of all MS-DRG relative weights divided by the total number of Medicare discharges
CMI is calculated by summing the relative weights of all MS-DRGs for Medicare discharges and dividing by the total number of discharges, reflecting patient complexity.
Question 2: Under the Medicare Inpatient Prospective Payment System (IPPS), how are hospitals primarily paid for inpatient services?
- Per diem (daily rate) based on actual services
- A flat per-discharge amount based on the assigned MS-DRG (Correct answer)
- Fee-for-service for each procedure performed
- Based on the total itemized bill submitted
Correct answer: A flat per-discharge amount based on the assigned MS-DRG
Under IPPS, Medicare pays hospitals a predetermined, fixed amount per discharge based on the MS-DRG assigned to the patient, regardless of actual costs incurred.
Question 3: A hospital's CMI drops significantly after a coding audit. What is the most likely explanation?
- The hospital treated fewer patients
- Secondary diagnoses (CCs/MCCs) were previously being overcoded or captured without sufficient documentation (Correct answer)
- The hospital reduced its number of surgeons
- Insurance payer mix changed to more Medicare
Correct answer: Secondary diagnoses (CCs/MCCs) were previously being overcoded or captured without sufficient documentation
A drop in CMI after an audit typically indicates that secondary diagnoses were previously being assigned without adequate clinical documentation to support CC or MCC status.
Question 4: What is a 'charge capture' problem in the revenue cycle?
- When patients are charged twice for the same service
- When services provided are not billed due to missing or incorrect documentation (Correct answer)
- When insurance companies deny all claims
- When hospital chargemasters are updated annually
Correct answer: When services provided are not billed due to missing or incorrect documentation
Charge capture failures occur when services rendered to patients are not documented or billed appropriately, resulting in lost revenue for the hospital.
Question 5: Which federal agency oversees the Medicare IPPS and sets MS-DRG relative weights annually?
- The Joint Commission (TJC)
- Centers for Medicare & Medicaid Services (CMS) (Correct answer)
- American Health Information Management Association (AHIMA)
- Office of the Inspector General (OIG)
Correct answer: Centers for Medicare & Medicaid Services (CMS)
CMS is responsible for administering the Medicare program, updating MS-DRG groupings and relative weights annually through the IPPS final rule.
Question 6: What is the purpose of the Medicare Code Editor (MCE) in the claims processing workflow?
- To process physician fee schedule claims
- To identify invalid, inconsistent, or questionable ICD-10-CM/PCS code combinations on inpatient claims (Correct answer)
- To approve all inpatient admissions
- To calculate hospital length of stay benchmarks
Correct answer: To identify invalid, inconsistent, or questionable ICD-10-CM/PCS code combinations on inpatient claims
The MCE is a software tool that screens inpatient claims for coding errors, invalid code combinations, and edits that could trigger claim rejection or additional review.
CIC CIC Revenue Cycle and Case Mix Management 1
What is Case Mix Index (CMI) and how is it calculated for a hospital?