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The use of billing data in quality improvement.

Total quality management, continuous quality improvement, and related processes have been adopted as management edicts if not management religions in many hospitals. These approaches require management as well as employees to strive for constant improvement in all phases of patient care in order to exceed customer expectations. This philosophy, over the long run, will create loyal customers, increase market share, and yield higher profits for the organization. From physicians' experience as well as from the industrial model, it is well-known that good quality and good process are inextricably linked.

Process of Care--The Next Frontier

Public examination of patient outcomes over the past 5 years was accomplished for the most part through analyses of comparative mortality rates. Mortality was one measure that most practitioners could agree upon. Outcomes of care, and by extension quality, were measured by comparing mortality rates and expected mortality rates among hospitals. Subsequent attempts at outcome measurement have been patient satisfaction surveys, functional status measures, and other instruments aimed at determining what impact, if any, the health care system has had on the lives of the individuals it serves.

The method of collecting this information has been relatively expensive. For inpatients, obtaining uniform information on patient outcomes during the hospitalization requires some form of chart review. Charts may be reviewed for specific indicators, such as infections, complaints, or other disease-specific events. Charts are also the source of admission severity data for severity-of-illness indexes. For postdischarge information, letter or phone surveys are sometimes used to gather information about patients' conditions and satisfaction with hospital services.

The typical method of obtaining information about a specific inpatient is to review a chart and obtain several pieces of information. Typically, a hospital may repeat this process several times: for severity scoring, risk management, quality assurance, medical record coding, infection control, and the like. According to statistics compiled at the Commission on Professional and Hospital Activities (CPHA), the average amount of unique information obtained for its Professional Activity Study (PAS) is 3.5 ICD-9-CM diagnosis codes and 2.5 ICD-9-CM procedures codes per patient. If the average medical records department can code 6 charts per hour, this means that the productivity of this process is about 36 pieces of data per hour.

With this level of productivity, it is virtually impossible to obtain meaningful or complete information on the process of patient care. The specific drugs given, the order in which they are given, laboratory tests, even nursing supplies cannot be captured cost-effectively using this approach, because the number of people required to abstract the information would increase dramatically.

Figure 1, right, illustrates the inputs, files, and outputs of a typical hospital billing system. A billing system is transaction-driven, in that each service rendered to the patient generates data that are priced and summarized for billing purposes. All of the transactions are defined in the Charge Description Master File (CDM), which maintains the unique charge code, description, and price of all the services provided by the hospital. According to CPHA statistics, a typical bill will contain 150 transactions, which are collected as a by-product of charge collection and billing. These transactions become an electronic record of the services rendered, the specific process of care provided to the patient. It is this record that is most valuable in quality improvement initiatives for describing, monitoring, and improving the process.

This information is already used by hospitals for DRG reporting and for monitoring the relative costliness of the care provided by physicians. Many physicians are suspicious of the information generated from billing systems,] because bills are often inaccurate and do not represent the true costs of providing services: for example, aspirin is marked up several times and other services do not adequately recover costs. These are often justifiable criticisms, but it does not detract from the fact that the bills should reflect the process of care. In the cases that they are inaccurate, this usually reflects a systemwide problem within the hospital.

There are several specific steps that the physician manager can take in improving the accuracy of billing data that will benefit administration, the total quality management efforts of the hospital, and the individual practicing physician who desires feedback on his or her practice.

Improved Definitions of Services

The key to the bills is the Charge Description Master file. Figure 2, page 24, illustrates a sample section of a CDM. This particular CDM identifies specific drug name, doses, routes of administration, etc. Figure 3, page 24, illustrates a different type of CDM in which some of the information about drugs is missing, e.g., route of administration, dosage forms and strength. It is impossible to perform a drug utilization evaluation with billing data if individual drugs and their doses are not identified through the billing system. The physician manager should have some influence over the level of specificity in the hospital billing system if those data are to be used to monitor physician consumption of resources.

Capture of Time of Provision

of Service

Many billing systems or data collection systems do not allow recording of patient services until the patient is discharged. For example, a pharmacy
 Figure 2. Specific Charge Description Master File
Charge Code Description Price
 1147022 Benztropine 2mg tal $1.43
 1131213 Fluphenazine 10mg tab 1.91
 1127623 Calcium carbonate 250mg 1.66
 1176252 KCL 20meq IV soln 7.99
 1134190 Warfarin 1mg tab 1.62
 1194803 Reparin 100 u syringe 11.38
 1155448 Dextrose 5% Liter 24.25
 Figure 3. Nonspecific Charge Description Master File
Charge Code Description Price
 1147022 Benztropine $1.43
 1131213 Fluphenazine tab 1.91
 1127623 Calcium tab 1.66
 1176252 KCL 7.99
 1134190 Anticoagulants tab 1.62
 1194803 Heparin 11.38
 1155448 D5W bag 24.25

may maintain a ledger card on which all of the drugs sent to the patient during the stay are recorded. At time of discharge, the card is sent to data processing, which records the total number of drugs and their prices. The day and time a drug is administered is not captured. Other charge capture systems, such as unit dose systems, record the date of administration as well as the drug. This allows more specific identification of when drugs are given, what drugs are given concurrently, and so on. The same problem can be found in the laboratory, the operating room, and most of the other ancillary service areas of the hospital.

Reformatting Bills for Medical

Management Purposes

Figure 4, page 25, illustrates the bill for a 67-year-old female admitted for a hip fracture. The patient had a partial hip implant on the first day and was discharged to a nursing home after a 7-day stay. The only recorded diagnoses were fracture of neck of femur and urinary incontinence.

Figure 4 is typical of how this information is formatted for insurance claims. It is arranged in ascending order by day of stay, starting with the day of admission. It includes the hospital charge code, a description of the item or service provided, the quantity of services provided (e.g., number of pills), and the total charge for the service There is a wealth of information on the process of care at the hospital, although it is difficult to see what happened to the patient from one day to the next. For example, it is difficult to see that the patient had several Prothrombin time tests before warfarin therapy was initiated on January 16.

Figure 5, page 26 illustrates a different way of formatting the same information; rather than showing the chronology of the patient bill vertically, it is displayed horizontally. Certain information, such as the hospital charge code and the charge for each service, has been eliminated. The quantities by day are illustrated so that all patient care activities for a given day can be viewed vertically. This allows the physician to see at a glance specific therapies that are provided concurrently as well as opportunities for improving the care and the management of the patient. For example, the information as displayed may raise the following issues:

A. The patient received Prothrombin tests starting on the first day, but warfarin therapy was not begun until day 3. Were those extra tests necessary, or was warfarin therapy simply started later than it should have been?

B. The patient had an aerobic culture on day 5. Was there a suspicion that there was an infection? The patient also had co-trimoxazole, an antibiotic used to treat urinary tract infection, on days 3 and 4. Could this be a postoperative urinary tract infection?

C. The patient, although having hip surgery, has minimal analgesics, namely 2 acetaminophen tablets. Was this sufficient?

D. Why was the recovery room time billed on day 0, but the surgery and anesthesia time billed on day 3? The usage of the anesthetic agents (thiopental and fentanyl) indicates that the surgery probably took place on the first day. This may indicate a bottleneck in the operating room in getting charges to the billing office. At the same time, why were there 132 minutes of operating room time, and only 90 minutes of anesthesia time? Was the anesthesiologist late? Was this lost revenue for the hospital?

E. The patient received 4 grams of Cefazolin on the day of the surgery and none subsequently. Is that sufficient for the prevention of infection? Is the concurrent use of bacitracin and polymyxin part of the antibiotic regimen? How do other hospitals prevent infections for hip implants?
Figure 4. "Vertical" Patient Bill
Code Date Description Qty. Charge
1103382 13-Jan Miscellaneous drugs 1 $ 7.50
1106721 13-Jan Bacitracin 1 11.33
1110638 13-Jan NaCl w/electrolytes 1 25.10
1111064 13-Jan Glycopyrrolate 200m 2 16.08
1117683 13-Jan Fentanyl 500 mcg 1 9.30
1127623 13-Jan Calcium carb 250mg 1 1.66
1131213 13-Jan Fluphenazine 10mg 1 1.91
1133708 13-Jan D5W W/NaCL 1000ml 1 25.22
1143445 13-Jan Polymyxin 500,000un 1 12.21
1143489 13-Jan Thiopental 500mg 1 10.45
1147022 13-Jan Benztropine 2mg 1 1.43
1149266 13-Jan Other skel musc rel 1 8.25
1167482 13-Jan Ringer lactated 100 1 25.34
1172297 13-Jan Cefazolin 1g 4 43.44
1176252 13-Jan KCL 20meq 3 16.12
1188099 13-Jan Dextrose 50ml 4 72.48
1287684 13-Jan EKG 1 35.00
1331299 13-Jan ER physician 1 48.00
1338950 13-Jan ER service 5 145.95
1463500 13-Jan Crossmatch 2 59.30
1464046 13-Jan APTT 1 23.70
1464427 13-Jan Chem 7 1 51.00
1467979 13-Jan Surg Path Gross 2 29.70
1471605 13-Jan CBC 1 35.15
1480633 13-Jan Pro Time 1 20.15
1493391 13-Jan Type Screen 1 49.75
2041388 13-Jan Med Surg day 1 340.00
2509067 13-Jan Recovery room (min) 90 140.00
3523410 13-Jan Chest P&A Xray 1 49.40
3525488 13-Jan Hip Xray 2 197.70
1124753 14-Jan Psyllium 225g 1 4.40
1126723 14-Jan Calcium carb 250 mg 1 1.66
1131213 14-Jan Fluphenazine 10 mg 1 1.91
1147022 14-Jan Benztropine 2 mg 1 1.43
1167482 14-Jan Ringer lactated 100 3 76.02
1176252 14-Jan KCL 20meq 3 23.97
1418647 14-Jan Hemoglobin 1 17.80
1480633 14-Jan Pro Time 1 20.15
2041388 14-Jan Med Sug day 1 340.00
3073607 14-Jan Other RT 1 35.00
3250876 14-Jan Bandages 1 3.70
1127623 15-Jan Calcium carb 250mg 1 1.66
1131213 15-Jan Fluphenazine 10mg 1 1.91
1147022 15-Jan Benztropine 2mg 1 1.43
1167482 15-Jan Ringer Lactated 100 1 25.34
1176252 15-Jan KCL 20meq 1 7.99
1418667 15-Jan Hemoglobin 1 17.80
1480633 15-Jan Pro Time 1 20.15
1496629 15-Jan Potassium 1 22.55
2041388 15-Jan Med Surg day 1 340.00
2678443 15-Jan Gait training 1.3 28.90
3034972 15-Jan Oxygen 1 3.00
3034972 15-Jan Oxygen 1 2.00
3241647 15-Jan Admission kit 1 3.20
1105983 16-Jan Co-Trimoxazole 160mg 2 5.00
1106981 16-Jan Acetaminophen 80mg 1 0.12
1127623 16-Jan Calcium carb 250mg 1 1.66
1131213 16-Jan Fluphenazine 10mg 1 1.91
1134190 16-Jan Warfarin 1 1.62
1147022 16-Jan Benztropine 2mg 1 1.43
1155668 16-Jan Dextrose 1L 2 48.50
1194803 16-Jan Heparin 100units 1 11.38
1418647 16-Jan Hemoglobin 1 17.80
1480633 16-Jan Pro Time 1 20.15
2041388 16-Jan Med Surg day 1 340.00
2506842 16-Jan OR time (minutes) 132 729.00
2507135 16-Jan Anesthesia (minutes) 90 228.50
2577826 16-Jan Other anesthesia 1 16.00
2678443 16-Jan Gait training 2.6 57.80
3087444 16-Jan Oximetry 1 12.00
3206609 16-Jan Procedure tray 2 84.00
3208072 16-Jan Prosthesis 1 757.30
3219299 16-Jan Catheter 6 92.00
1105983 17-Jan Co-Trimoxazole 160mg 2 5.00
1127623 17-Jan Calcium carb 250mg 1 1.66
1131213 17-Jan Fluphenazine 10mg 1 1.91
1134190 17-Jan Warfarin 1 1.62
1147022 17-Jan Benztropine 2mg 1 1.43
1194803 17-Jan Heparin 100units 1 11.38
1480633 17-Jan Pro Time 1 20.15
2041388 17-Jan Med Surg day 1 340.00
2678443 17-Jan Gait training 2.6 57.80
1127623 18-Jan Calcium carb 250mg 1 1.66
1131213 18-Jan Fluphenazine 10mg 1 1.91
1134190 18-Jan Warfarin 1 1.62
1147022 18-Jan Benztropine 2mg 1 1.43
1464047 18-Jan Aerobic culture 1 35.55
1480633 18-Jan Pro Time 1 20.15
2041388 18-Jan Med Surg day 1 340.00
2653726 18-Jan OT evaluation 3 70.45
2678443 18-Jan Gait training 2.6 57.80
1124753 19-Jan Psyllium 225g 1 4.40
1127623 19-Jan Calcium carb 250mg 1 1.66
1131213 19-Jan Fluphenazine 10mg 1 1.91
1134190 19-Jan Warfarin 1 1.62
1147022 19-Jan Benztropine 2mg 1 1.43
1194803 19-Jan Heparin 100units 1 11.38
1480633 19-Jan Pro Time 1 20.15
2041388 19-Jan Med Surg day 1 340.00
2678443 19-Jan Gait training 2.6 57.80
3250876 19-Jan Bandages 2 8.00
1106981 20-Jan Acetaminophen 80mg 1 0.12
1127623 20-Jan Calcium carb 250mg 1 1.66
1131213 20-Jan Fluphenazine 10mg 1 1.91
1134190 20-Jan Warfarin 1 1.62
1147022 20-Jan Benztropine 2mg 1 1.43
1480633 20-Jan Pro Time 1 20.15


F. Finally, the patient is receiving both fluphenazine, an antipsychotic agent, and benztropine, a drug used to treat Parkinson's disease as well as extrapyramidal reactions to phenothiazines, of which fluphenazine is one. Were there some diagnoses that were not recorded in the medical record? Was the benztropine used to treat reactions to the fluphenazine? Because these drugs are used concurrently during the stay, it is possible that the patient was admitted with these drugs. Did the concurrent use of these drugs have something to so with her hip fracture?

It is also important to note that certain items, such as the price of services, are emphasized in the billing form because they are important to the financial officers of the hospital. Other items, such as specific services provided to patients and when they receive them, are more important to physicians, because they better describe the process of care. Note also that the information has been grouped by clinical categories. For example, drugs are grouped together, but, more important, antibiotics, blood modifiers, and central nervous system drugs are also grouped together to facilitate understanding of the clinical management of the patient. Creating case summaries such as that in figure 5 allows easier interpretation of the information by clinicians, nurses, administrators, and physician managers who are looking for ways to improve the process of care. An extremely important by-product of this form is improvement in the quality of the bills that will result as the clinical case summaries are scrutinized and corrected by physicians responsible for the cases.

It should also be recognized that the bill as illustrated does not provide a complete picture of the patient. Clinical information such as severity, vital signs, and other clinical aspects of the patient are not obtainable through the bill. However, it is often possible to make inferences on patient condition based on the services provided, e.g., the patient above probably had some sort of psychological or mental problem, because she was receiving an antipsychotic medication.


It is important to realize that billing data are often "owned" by the financial managers of the hospital, who often are reluctant to allow physicians access to such sensitive information. The challenge is to convince them that billing information, in the right format with the appropriate level of detail, can not only assist in quality improvement processes, but also improve the quality of the bills sent to insurers. By the same token, any quality improvement process involves a commitment to improving the process of care on a case-by-case, service-by-service basis.

Stanley Mendenhall was a Senior Analyst with the Commission on Professional and Hospital Activities, Ann Arbor, Mich., when this article was written. He now is President of Mendenhall Associates, Inc., a consulting firm in Ann Arbor.
COPYRIGHT 1991 American College of Physician Executives
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:patient care
Author:Mendenhall, Stanley
Publication:Physician Executive
Date:Nov 1, 1991
Previous Article:Legal aspects of economic credentialing.
Next Article:Reducing hospital lengths of stay.

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