Healthcare Fraud Shield’s Latest Article: Facility Claims – So much data to analyze, so little time!

8 Feb
When analyzing claims data, most of the Fraud, Waste and Abuse (FWA) community would likely agree that it is easier to review professional claims data versus facility data.  Facility data can present many obstacles and also contains a variety of fields that are often overlooked in analysis. 


Let’s start with the obstacles:

  • Payment for out of network vs in network facilities can vary
  • Payment guidelines for facilities can vary within a payer
  • Payment guidelines for facilities can vary from state to state
  • Complicated contracts for in network facilities
Some facilities get paid by the Diagnosis Related Group (DRG), some by percent of charges, some by per diems, and then other plan specific contracts.  This variety can lead to confusion among investigators, analysts, auditors as well as the facilities.

Data elements:

It is typical to include in analysis common fields such as DRG, Admitting Diagnosis, Primary Diagnosis, and Revenue Codes.     There are several other fields that are often overlooked such as Type of Bill, Condition Codes, Present on Admission, Admission Date, Discharge Date and so much more. 

What is Type of Bill and why is it important?
According to CMS, Type of Bill is a “four-digit alphanumeric code [that] gives three specific pieces of information after a leading zero…. The second digit identifies the type of facility. The third classifies the type of care. The fourth indicates the sequence of this bill in this particular episode of care. It is referred to as a ‘frequency’ code”. [1]  For example, a Type of Bill that starts with the number 1 (ignoring the leading zero), represents that the type of facility is a hospital as opposed to a clinic, skilled nursing facility and more.  The next digit typically provides information as to whether or not the member is inpatient, outpatient or can be used for Clinics (although there are handful of other identifiers).  Finally, the last digit provides a several values relating to admissions, type of claim and more.

One example of the importance of using Type of Bill in analysis is to determine when patients are admitted, review the rate of admissions and to review readmissions.  Many facility contracts contain clauses that prohibit reimbursement for readmissions within a certain timeframe from a discharge if the readmission is for the same type of episode.    It is important to become familiar with not only the structure of this field (as well as the other fields noted above) and the values, but also your respective organizations process for payment to these facilities. 


Using a tool such as PostShieldTM can help simplify some of the analysis surrounding Facility Claims.  For more information or if  you have any questions or comments, please contact us at


[1] CMS
Quick Hits for Identifying Pharmacy and Medical Schemes on May 23rd, 2017 at 2:00 PM EST


Kenneth Cole, III, AHFI, CFE, CPC
Maria Seedorff, DC, AHFI, CPC
Kathleen Shaker, RN, BSN, CPC, CPC-H, AHFI
Karen Weintraub, MA, CPC-P, CPMA, AHFI
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