Replacement Rules

Replacement rules are used to create new claim lines that replace existing claim lines on one claim.

This functionality can be used in (a.o.) the following scenarios:

• Diminishing Rate Pricing: if certain services are spread across different claim lines within a claim but need to be priced in blocks together (e.g. observation), the concerned claim lines should be rolled up into one new claim line. This is because a diminishing rate reimbursement method executes per claim line and therefore needs all units and/or charges on one claim line. Otherwise every concerned claim line would hit the diminishing rate independently and each claim line would hit the higher priced first block.

• In health insurance for DRG pricing: after being grouped the DRG can be set in a dynamic field on the claim header. A new claim line with the DRG on it must then be created for the purpose of pricing it and calculate benefits on it. That claim line needs to replace all other claim lines on the claim, as such preventing these to be priced or receive benefits themselves.

Example 1: Diminishing Rate Pricing

Consider the following diminishing rate:

• Observation hours should be paid in blocks

• The first 4 hours are paid $ 100 per hour

• After that, additional hours up to 8 hours total are paid $ 80 per hour

• After that, any additional hours are paid $ 50 per hour

Consider the following claim regarding observation services:

Claim header:

Claim Code	Person	Provider	Total Claimed Amount	Total Allowed Amount
1234	John Doe	South Shore Hospital	$ 5,400

Claim lines:

Sequence	Code	Price Input Date	Procedure	Procedure 2	Claimed Nr of Units	Claimed Amount	Allowed Amount
1	0100	01/01/2013	REV 0760	CPT 99213	6	$ 600
2	0200	02/01/2013	REV 0762	CPT 99213	20	$ 2,000
3	0300	02/01/2013	REV 0760	CPT 99213	4	$ 400
4	0400	03/01/2013	REV 0760	CPT 99213	20	$ 2,000
5	0500	03/01/2013	REV 0760	CPT 99213	4	$ 400

Without using a replacement rule to roll up the claim lines, this could be the outcome of pricing:

Claim header:

Claim Code	Person	Provider	Total Claimed Amount	Total Allowed Amount
1234	John Doe	South Shore Hospital	$ 5,400	$ 4,240

Claim lines:

Sequence	Code	Price Input Date	Procedure	Procedure 2	Claimed Nr of Units	Claimed Amount	Allowed Amount
1	0100	01/01/2013	REV 0760	CPT 99213	6	$ 600	4x100 + 2x80 = $ 560
2	0200	02/01/2013	REV 0762	CPT 99213	20	$ 2,000	4x100 + 8x80 + 8x50 = $ 1,440
3	0300	02/01/2013	REV 0760	CPT 99213	4	$ 400	4x100 = $ 400
4	0400	03/01/2013	REV 0760	CPT 99213	20	$ 2,000	4x100 + 8x80 + 8x50 = $ 1,440
5	0500	03/01/2013	REV 0760	CPT 99213	4	$ 400	4x100 = $ 400

This is not the desired outcome. Claim lines 2 and 3 both hit the first highest paid block of the diminishing rate, even though they share the same service date. This is also the case for claim lines 4 and 5.

This can be solved by using a replacement rule to roll up these claim lines into one claim line. Consider the following replacement rule to this end:

Code	Description	Procedure Condition	Field Value Function	Per Price Date?	Replace Single Line?
OBS_REPL	Roll up observation hours	(In) REV 0760 - REV 0762		Yes	No

With this replacement rule, the outcome of pricing would be:

Claim header:

Claim Code	Person	Provider	Total Claimed Amount	Total Allowed Amount
1234	John Doe	South Shore Hospital	$ 5,400	$ 3,840

Claim lines:

Sequence	Code	Price Input Date	Procedure	Procedure 2	Claimed Nr of Units	Claimed Amount	Allowed Amount	Replaced?
1	0100	01/01/2013	REV 0760	CPT 99213	6	$ 600	4x100 + 2x80 = $ 560	No
2	0200	02/01/2013	REV 0762	CPT 99213	20	$ 2,000	$ 0	Yes
3	0300	02/01/2013	REV 0760	CPT 99213	4	$ 400	$ 0	Yes
4	0400	03/01/2013	REV 0760	CPT 99213	20	$ 2,000	$ 0	Yes
5	0500	03/01/2013	REV 0760	CPT 99213	4	$ 400	$ 0	Yes
6 (new)	1	02/01/2013	REV 0762	CPT 99213	24	$ 2,400	4x100 + 8x80 + 12x50 = $ 1,640	No
7 (new)	2	03/01/2013	REV 0760	CPT 99213	24	$ 2,400	4x100 + 8x80 + 12x50 = $ 1,640	No

Notes:

• By virtue of the replacement, the total allowed amount is reduced from $ 4,240 to $ 3,840

• The replacement is partitioned by price input date ("Per Price Date?" = Yes), meaning that a separate replacement is executed per price input date:

  • 02/01/2013: Claim line 6 is added by the replacement rule to replace claim lines 2 and 3.

  • 03/01/2013: Claim line 7 is added by the replacement rule to replace claim lines 4 and 5.

• The replacement rule is not executed for claim line 1 because the replacement rule is configured to only execute replacements that replace multiple lines ("Replace Single Line?" = "No"). The evaluation set of price input date 01/01/2013 contains only one applicable claim line, so it is not replaced.

• As the replacement rule does not reference a field value function, the replacement claim lines are created with default field values:

  • Line 6 is created with the same procedures and price input date as claim line 2 (the claim line with the lowest sequence number in the replacement evaluation set of 02/01/2013). Per default it sums the claimed amount and number of units of the claim lines it replaces. The claim line code is defaulted to the first available numeric code: 1.

  • Line 6 is created with the same procedures and price input date as claim line 4 (the claim line with the lowest sequence number in the replacement evaluation set of 03/01/2013). Per default it sums the claimed amount and number of units of the claim lines it replaces. The claim line code is defaulted to the first available numeric code: 2.

  • The allowed amounts of the replacement claim lines are not set. This means that the provider pricing clause quantifier - if specified - is ignored.

• Claimed amounts of replaced lines are not included in the calculation of the total claimed amount

Example 2: DRG Pricing

Consider the following claim with a DRG in a dynamic field on the claim header: This DRG should be priced at $ 20,500, which was determined by the DRG grouper and also stored in a dynamic field.

Claim header:

Claim Code	Person	Provider	Total Claimed Amount	Total Allowed Amount	DRG	DRG Price
1234	John Doe	South Shore Hospital	$ 21,000		652 - Kidney Transplant	$ 20,500

Claim lines:

Sequence	Code	Price Input Date	Procedure	Claimed Nr of Units	Claimed Amount	Allowed Amount
1	0100	01/01/2013	REV 123	1	$ 1,000
2	0200	02/01/2013	REV 246	2	$ 18,000
3	0300	03/01/2013	REV 987	1	$ 2,000

In order to prevent these claim lines to be priced and receive benefits, the following replacement rule is set up:

Code	Description	Procedure Group	Other Condition	Field Value Function	Per Price Date?	Replace Single Line?
DRG_REPL	Create replacement DRG claim line	(In) KIDNEY TRANSP. REV CODES	DRG ON HEADER	DRG	No	Yes

With this replacement rule, the outcome of pricing could be:

Claim header:

Claim Code	Person	Provider	Total Claimed Amount	Total Allowed Amount	DRG	DRG Price
1234	John Doe	South Shore Hospital	$ 21,000	$ 20,500	652 - Kidney Transplant	$ 20,500

Claim lines:

Sequence	Code	Price Input Date	Procedure	Claimed Nr of Units	Claimed Amount	Allowed Amount	Replaced?
1	0100	01/01/2013	REV 123	1	$ 1,000	$ 0	Yes
2	0200	02/01/2013	REV 246	2	$ 18,000	$ 0	Yes
3	0300	03/01/2013	REV 987	1	$ 2,000	$ 0	Yes
4 (new)	0400	03/01/2013	DRG 652	1	$ 21,000	$ 20,500	No

Notes:

• Claim line 4 is added by the replacement rule to replace claim lines 1, 2 and 3.

• The replacement rule executes one replacement; it is not partitioned by price input date (because "Per Price Date?" = No).

• The configuration "Replace Single Line?" has no effect in this example. Because it is set to 'Yes' it would ensure that even for a claim with one claim line, the DRG replacement would execute (however unthinkable that situation may be in reality).

• The replacement rule references a field value function that overrides default field values of claim line 4:

  • Claim line code is set to 0400 (instead of to the first available numeric code which would be 1)

  • Price Input Date is set to 03/01/3013 (instead of to the price input date of the replaced claim line with the lowest sequence number in the evaluation set which would be 01/01/2013)

  • Procedure is set to DRG 652 (instead of to the procedure of the replaced claim line with the lowest sequence number in the evaluation set which would be REV 123).

  • The claimed number of units is set to 1 (instead of to the sum of claimed numbers of units of all replaced claim lines which would be 4).

  • The allowed amount of $ 20,500 is copied onto the claim line. This in effect will mean that the pricing step 'Select and apply Reimbursement Method' is bypassed for that claim line.

• This example assumes the quantifier in the provider pricing clause was either not specified or set at 100%. Otherwise, after executing the field value function, the allowed amount of $ 20,500 would have been automatically in/deflated per the percentage specified in the quantifier.

• Claimed amounts of replaced lines are not included in the calculation of the total claimed amount

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