ED Coding and Reimbursement Alert

ED Facility Levels Don’t Collapse, But More Facility Payment Bundling Will Occur In 2015

The 2015 Hospital Outpatient Prospective Payment System (OPPS)  Final Rule was published in the Federal Register on November 10, 2014 and govern services provided beginning with January 1, 2015. 

Although many of the key ED facility issues remain mostly unchanged, there are still developing policies that could significantly impact your future coding policies. Read on for the key changes relevant to emergency departments.

Cashing in: The 2015 average payment update to hospital outpatient departments (including EDs) will increase roughly 2.2 percent. This is a more significant increase than 2014’s 1.7 percent increase. 2015 expenditures under OPPS are projected to be $56.1 billion, says Michael A. Granovsky MD, FACEP, CPC, President of Logixhealth, a national ED coding and billing company. The conversion factor for 2015 will be $74.144, compared with the 2014 factor of $72.672. Hospitals failing to satisfy the quality reporting requirements will continue asin prior years to be penalized, with a 2% reduction in their conversion factor to $72.661. 

Stay the Course on ED Facility Level Payments with Similar Codes Levels Form Last Year 

For the past several years, each CPT® code for ED E/M services (99281-99285) corresponded to an APC code - five for Type A EDs (open 24/7 daily) and five for Type B EDs (open less than full time).  This will not change in 2015. 

While in 2014 CMS did collapse the outpatient clinic codes into a single level, the five distinct ED levels remained reportable and this continues for 2015.  For 2015, hospitals will use the single HCPCS code, G0463, to report Medicare clinic visits, and for Type A ED visits, will report CPT® codes in the range 99281-99285.

Type B ED visits will continue to be reported with G0380 – G0384, according to CMS. The agency states, “Because a national set of hospital-specific codes and guidelines do not currently exist, we have advised hospitals that each hospital’s internal guidelines that determine the levels of clinic and ED visits to be reported should follow the intent of the CPT® code descriptors, in that the guidelines should be designed to reasonably relate the intensity of hospital resources to the different levels of effort represented by the codes.” 

This guidance is consistent with the originally-published guiding principles for reporting of outpatient services provided in the OPPS 2008 Final Rule, says Granovsky. CMS has overall softened its pursuit of national ED facility level guidelines, stating that there was significant variation in resources between sites and no single set of guidelines with unified stake holder support to warrant a change, he adds.

Packaging Continues For Critical Care, But Look For A Payment Increase

Code 99291 will continue to be utilized to report facility critical care services. CMS, in 2015 will continue the policy of packaging for most associated critical care services including those listed in the CPT® definition of critical care such as: pulse oximetry, transcutaneous pacing, chest X rays, and many vascular access procedures. For 2015 critical care will reimburse $656.69, says Granovsky. For those facilities meeting the requirements to report trauma activation, for which CMS requires critical care services, the reimbursement in 2015 will be $888.97, he adds.

Look For A Two Percent Increase In The Observation EAM Composite Payment 

Recap Of Observation Rules: In the 2015 OPPS Rule CMS stated, “Beginning in CY 2014, we allowed services identified by the new single clinic visit (HCPCS code G0463), a Level 4 or 5 Type A ED visit (CPT® code 99284 or 99285), a Level 5 Type B ED visit (HCPCS code G0384), or critical care (CPT® code 99291) provided by a hospital in conjunction with observation services of substantial duration (8 or more hours, provided the observation was not furnished on the same day as surgery or post-operatively) to qualify for payment through the Extended Assessment and Management (EAM)  composite APC 8009.” The observation HCPCS code, G0378, will continue to be reported by providers for 2015 and the 2015 EAM composite APC 8009 will be reimbursed at $1,234.22, Granovsky explains.

The Two Midnight Rule Stays, Note Changes in Physician Certification for Admissions

You’ll want to remember that physician certification is one of the key conditions required for the hospital to receive CMS reimbursement for an admission CMS, says Granovsky.  In previous rule making, CMS has required a physician certification for the vast majority of inpatient stays. There has previously been an exception for inpatient psychiatric services. In the 2015 proposed rule, CMS forecasted the possibility of significantly loosening the physician certification requirements which carried through to the OPPS Final Rule, he adds. 

CMS stated in the Final Rule:

“Therefore, we are finalizing the policy as proposed in the CY 2015 OPPS/ASC proposed rule, which limits the requirement for physician certification to long-stay (20 days or longer) and outlier cases.”

What That Means For You: For 2015, CMS is dropping this requirement for most hospital admissions. Certification will be required for admissions with a prolonged length of stay (20 days or longer) and costly outlier admissions. Of note, the certification must be completed no later than 20 days into the inpatient stay. Keep in mind that an admission order is still required. CMS believes that the medical necessity for most inpatient stays can be determined by the admission order, progress notes, and other notes in the medical record. The admission order is still a key requirement and in fact part of some RAC reviews warns Granovsky.

Watch For Increased Packaging Of Lower Cost Ancillary Services 

CMS tips their hand regarding the potential expansion of the packaging concept with future rule-making, stating: “The initial set of services packaged under this ancillary service policy are the services assigned to APCs having an APC geometric mean cost (prior to application of status indicator Q1) of less than or equal to $100. This $100 geometric mean cost limit for the APC is part of the methodology of establishing an initial set of conditionally packaged ancillary service APCs, and is not meant to represent a threshold above which a given ancillary service will not be packaged, but as a basis for selecting an initial set of APCs that will likely be updated and expanded in future years.”

For example, services packaged into the ED E/M facility levels include most plain x-rays, certain ultra sounds, and many smaller procedures such as simple lacerations, says Granovsky.  

What this means for EDs: Emergency physicians may need to be more aware of these changes if the increases in ED E/M visit payment updates do not offset the revenue from the now bundled ancillaries, Granovsky explains. (See chart). 

Hospital Expansion To Outpatient Departments Prompts New Facility “PO” Modifier 

In the 2015 OPPS proposed rule, CMS discussed a significant change to the way visits are reported in off- campus provider based departments such as provider-based clinics or satellite urgent care settings. 

Background: CMS has become concerned that with the increasingly common purchase of physician practices, that both beneficiaries and the CMS trust fund are being faced with significantly increased expenses. CMS is interested in gathering data on off-campus provider based departments and proposed a HCPCS modifier be appended to every code for a service furnished in a hospital’s off-campus provider-based department on both the CMS-1500 claim form for physicians’ services and the UB-04 form (CMS Form 1450) for hospital outpatient services. 

PO debuts: In the 2015 final rule, CMS stated that the PO modifier will be appended to services provided at an off- campus provider-based department and will be voluntary for 2015 with a mandatory reporting effective date of Jan. 1, 2016. 

For physician claims CMS will be retiring the POS 22 (outpatient hospital) and replacing it with 2 new POS codes. The POS replacement site of service codes will be available after July 15, 2015. However, once they are available, CMS will require the new codes on professional claims states Granovsky.

This 2-digit modifier will be added to the HCPCS annual file as of January 1, 2015, with the label “PO,” with both a long descriptor (Services, procedures and/or surgeries furnished at off-campus provider-based outpatient departments) and a short descriptor (Serv/proc off-campus pbd). 

Don’t Worry About Using PO in the ED 

CMS is clear that it does not intend for hospitals to report the new modifier for services furnished in an emergency department that is provider-based to a hospital, because there is already a POS code for the emergency department, POS 23. So, the new off-campus provider based department code would not apply to hospital emergency department services, says Granovsky.