ED Coding and Reimbursement Alert

From billing to observation facts, find out how to respond.

“I stayed overnight in the hospital, so why am I not covered under Part A Medicare? I recently met my deductible”

Every ED has heard this question from patients who are angry about facing unexpected charges after leaving the emergency department, but this and other queries can be easily rectified by providing patients with information upfront, and having well-thought-out answers when they come back to you with queries.

With the new year upon us, it’s a great time to create a new playbook for how you to respond to common patient concerns. Consider the following as you create your 2021 patient response plan.

‘Why Is Medicare Saying I’m Not Covered for My Hospital Stay?’

This question comes up in situations when patients have Part A Medicare but not Part B, and they believe that Part A covers visits throughout the entire hospital, including the ED and the observation unit. However, when they get a bill indicating that they weren’t seen under a Part A stay, this can be confusing.

The ED and the observation unit are considered outpatient status, and are therefore covered under Part B rather than Part A. You must alert patients of this fact under the Medicare Outpatient Observation Notice (MOON) rule, which requires you to notify the patient both in writing and verbally that they are in observation care under a Part B stay and not Part A.

The MOON notice will alert the patient that their copayments and deductibles might be different than what they’d pay under a Part A stay. However, even if your patient signs the notice and verbally tells you that they understand the situation, that may change when they receive the bill.

Here’s how to respond: “I understand your confusion, and unfortunately the emergency department is covered under Part B Medicare, not Part A,” you can tell the patient. You should then ask, “Do you have an insurance plan that covers your doctor visits in doctor’s offices? If so, that’s the plan that will cover your ED stay, rather than your Part A insurance. It’s definitely a source of confusion for a lot of patients, since the hospital probably sent you a bill also, indicating that some of your testing or supplies were covered under Part A. However, the physician’s work diagnosing and treating you is not subject to Part A Medicare.”

If the patient questions you further, you can say, “We shared a form with you when you came to the ED that explained this in greater detail. I’m happy to send that over if you’d like. If you don’t have insurance that will cover the ED visit, we can talk to you about setting up a payment plan.” Then send the patient the MOON notice that they signed. This sometimes takes care of the issue, once they realize that they signed this at the time of the visit.

“Keep in mind that even if the patient was admitted as a formal inpatient, they could have some costs, including their part A deductible (particularly in the beginning of the calendar year), which for 2021 is $1,484,” states Michael Granovsky MD, CPC, FACEP, president of LogixHealth.

‘We Left Before Seeing the Doctor, So How Can You Charge Me?’

This scenario happens in many emergency departments: A patient comes in, is triaged, and receives diagnostic testing, such as a chest X-ray or an EKG, depending on their presenting symptoms, but leaves without ever having been seen by a physician. In such circumstances, the patients may receive bills for these services, which can surprise them since they may think leaving before seeing the doctor means the visit wasn’t billable.

In reality, although you can’t bill for the physician’s ED visit in the form of an E/M service or other code, you can report the diagnostic tests on the facility side, as well as the ED physician’s work interpreting any tests or X-rays performed.

Background: Hospital outpatient therapeutic services and supplies (including visits) must be furnished incident to a physician or nonphysician practitioner. Facility ED E/M services won’t typically be paid if the patient encounter did not meet the incident to requirement (the patient would need to be seen by an ED physician or non-physician practitioner). Since diagnostic services do not need to meet the requirements for incident-to services, they may be reported, even if the patient were to leave without being seen by the physician.

Background: According to section 20.5.3 of the Medicare Benefit Policy Manual 100-02, “Starting January 1, 2020, CMS requires, as the minimum level of supervision, general supervision by an appropriate physician or non-physician practitioner in the provision of all therapeutic services to hospital outpatients, including CAH outpatients. ‘General supervision’ … the procedure or service is furnished under the physician’s overall direction and control, but the physician’s presence is not required during the performance of the procedure. CMS may assign certain hospital outpatient therapeutic services either direct supervision or personal supervision. When such assignment is made, ‘direct supervision’ means … the physician must be immediately available to furnish assistance and direction throughout the performance of the procedure. It does not mean that the physician must be present in the room when the procedure is performed. ‘Personal supervision’ means … the physician must be in attendance in the room during the performance of the service or procedure.”

Know this nuance: The long-held tenet that incident-to services don’t apply in the ED setting is correct, but keep in mind that those circumstances relate to provider’s billing for hospital-provided resources, such as a nurse placing a Foley catheter. An ED physician could not bill for a nurse-placed Foley in the ED setting, but if it were in an office where the physician was directly responsible for the overhead and staffing costs, the incident-to rules would allow the MD to bill for the service. It is the hospital that is billing incident to the physician’s order for services being provided.

Services and supplies critical: Policies for hospital services incident to physicians’ services rendered to outpatients differ in some respects from policies that pertain to incident-to services furnished in office and physician-directed clinic settings. To be covered as incident-to physicians’ services, the services and supplies must be furnished by the hospital or CAH or under arrangement made by the hospital or CAH. The services and supplies must be furnished as an integral, although incidental, part of the physician or nonphysician practitioner’s professional service in the course of treatment of an illness or injury.

Understanding this nuance gives you the tools you need to respond to the patient’s question. You can explain that although the patient did not see the doctor and you are, therefore, not charging them for a physician encounter, they did undergo diagnostic tests, and those must be paid.

Here’s how to respond: “It’s true you didn’t see the physician face to face, and we aren’t billing you for any face-to-face services. However, the doctor did interpret your (insert diagnostic test name) and we’re billing you for that service.”

‘Why Aren’t the Medications I Took in Observation Care Covered?’

If the patient isn’t enrolled in a Medicare Part D or other prescription drug plan, they will likely have to pay for some drugs they received during the observation stay, particularly oral medications, because Part B doesn’t pay for the cost of self-administered drugs. Each MAC has a list of “usually self-administered” drugs so that if this becomes a recurring problem you can set your policies in advance, states Granovsky.

This is also addressed in the MOON statement noted above.

However, just because the MOON addresses it doesn’t mean you won’t hear from patients who are puzzled about bills they receive for medications they took orally in the observation unit.

Here’s how to respond: “Any medications that you took orally during the ED stay would be covered under your pharmacy insurance program. This could be a Medicare Part D plan or a prescription program under another insurer. Do you know if you have insurance that covers your prescription medications?”

If the patient does not have prescription insurance and continues to be confused, you can remind them of the MOON report that they signed, as noted in Question 1, above. Offer to send it to them and instruct them to call you with any follow-up questions once they review it.

‘Why Are You Billing Me? I Already Paid the Hospital’

For many patients, it’s very confusing to receive multiple bills after an ED stay, which may include invoices from the hospital itself as well as from your ED group. To explain this to patients, let them know that every hospital visit involves both physician and hospital resources. Although the hospital and the provider may use the same language to describe each charge, their bills are for separate services. Whereas the ED group’s bill reflects the provider’s work evaluating and managing the patient’s condition and overseeing all tests ordered, the hospital bill is for things like equipment, procedures, supplies, and technical interpretations.

Here’s how to respond: “It’s definitely confusing, and we understand your frustration. It’s likely that you paid hospital charges, such as the bed, the supplies, and the work of hospital staff members, but our physicians are part of a separate group and therefore they send separate bills for their services. You’ll see that duplicate services aren’t billed on both the hospital invoice and our invoice – instead, we bill you just for the work our physicians performed, whereas the hospital is billing you for separate services.”

If the patient remains confused, you can let them know that your ED’s services are covered under private insurance and Part B, and offer to help them figure out whether they have any plans that cover the stay. The more you can work with them to help alleviate confusion, the better your outcomes will be.