What are the differences between inpatient and outpatient revenue cycle management?

2 Coding and documentation

The second difference between inpatient and outpatient RCM is the way the services are coded and documented. Inpatient coding uses the International Classification of Diseases (ICD) system, which assigns a diagnosis-related group (DRG) to each patient based on their condition and treatment. Outpatient coding uses the Current Procedural Terminology (CPT) system, which assigns a code to each service or procedure performed. Inpatient documentation is more comprehensive and detailed, as it covers the entire episode of care and the patient's progress. Outpatient documentation is more focused on the specific service or procedure and the patient's chief complaint.

3 Billing and reimbursement

The third difference between inpatient and outpatient RCM is the way the services are billed and reimbursed. Inpatient billing is based on the DRG assigned to the patient, which determines a fixed payment amount regardless of the actual cost or length of stay. Outpatient billing is based on the CPT codes assigned to each service or procedure, which determine a fee-for-service payment amount based on the type and complexity of the service. Inpatient reimbursement is usually higher than outpatient reimbursement, as it covers more overhead costs and resources. Outpatient reimbursement is usually lower than inpatient reimbursement, as it reflects the lower cost and risk of the service.

4 Denials and collections

The fourth difference between inpatient and outpatient RCM is the way the services are subject to denials and collections. Denials are claims that are rejected or reduced by the payer, either due to errors, inconsistencies, or lack of authorization. Collections are efforts to recover the unpaid or underpaid amounts from the payer or the patient. Inpatient denials are more likely to occur due to coding or documentation errors, as the DRG system is more complex and requires more accuracy. Outpatient denials are more likely to occur due to authorization or eligibility issues, as the CPT system is more dynamic and requires more verification. Inpatient collections are more challenging than outpatient collections, as the amounts are larger and the patients are more likely to have financial difficulties. Outpatient collections are easier than inpatient collections, as the amounts are smaller and the patients are more likely to pay at the time of service.

5 Staffing and training

The fifth difference between inpatient and outpatient RCM is the way the staff are organized and trained. Inpatient RCM requires more specialized and experienced staff, as the coding, billing, and reimbursement processes are more complicated and regulated. Outpatient RCM requires more general and flexible staff, as the coding, billing, and reimbursement processes are more varied and changing. Inpatient RCM staff need more training and education, as they have to keep up with the latest updates and guidelines for the DRG system. Outpatient RCM staff need more communication and coordination, as they have to work with different departments and providers for the CPT system.

6 Technology and automation

The sixth difference between inpatient and outpatient RCM is the way the technology and automation are used and implemented. Inpatient RCM relies more on technology and automation, as the DRG system is more standardized and data-driven. Outpatient RCM relies more on human intervention and judgment, as the CPT system is more customized and service-based. Inpatient RCM technology and automation are more advanced and integrated, as they have to handle more complex and voluminous data and transactions. Outpatient RCM technology and automation are more basic and fragmented, as they have to accommodate more diverse and dynamic data and transactions.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?