Inpatient Facility Coding & Compliance Alert

Look for higher payment but more packaging of services such as labs in 2014.

Facilities have seen a big pay boost for facility observation services in 2014, but the news isn’t all good: the increase is from common ED procedures being bundled into the observation payment. With the two midnight rule controversy directing more scrutiny to the observation or inpatient admission decision, you’ll want to brush up on all the current rules to be sure you are on the right side of payer audits.

The trend: CMS now reimburses hospitals for observation using an “extended assessment and management composite” APC when the service is provided in conjunction with another facility service, such a Type A or B ED visit, critical care, clinic visit, or a direct referral to observation.  This new composite APC is in line with other CMS efforts to increase the packaging of related services under the OPPS, says Caral Edelberg, CPC, CPMA, CAC, CCS-P, CHC, AHIMA Certified ICD-10 Instructor and President of Edelberg and Associates in Baton Rouge, LA.

You’ll Need Multiple Services to Support New EAM Composite APC for Observation 

You probably remember that historically when providers gave observation care in conjunction with a high level visit, critical care, or direct referral, and also an integral part of a patient’s extended encounter of care, Medicare paid for the entire care encounter through one of the two composite APCs (8002 and 8003). 

Beginning in 2014, observation is paid under a newly created composite APC entitled “Extended Assessment and Management (EAM) Composite” (APC 8009)  This composite provides payment for all qualifying extended assessment and management encounters rather than recognize the two existing level of EAM composite APCs.    

Translation: In order to qualify for EAM payment, billing must include the new clinic visit G-code (G0463), a Level 4 or 5 Type A ED visit code (99284-99285), a Level 5 Type B ED visit code (G0384), critical care (99291), as well as reporting observation per hour (G0378), or direct referral to observation (G0379), says Edelberg. 

Watch For Increased Packaging of Related ED Services Into Observation

A change in the 2014 OPPS brings an increase in packaging of interrelated services into a primary service. CMS has said it wants to make OPPS payments for all services paid under the OPPS more consistent with those of a prospective payment system and less like those of a per service fee schedule, which pays separately for each coded item. 

For 2014, CMS will package five categories of items or services:

1. Drugs, biologicals and radiopharmaceuticals that function as supplies when used in a diagnostic test or procedure.
2. Drugs and biologicals that function as supplies when used in a surgical procedure.
3. Certain diagnostic lab tests.
4. Certain procedures described as “add-on” codes.
5. Device removal procedures. 

What This Means to You

Most lab work typically ordered in EDs will be packaged and won’t be paid separately in 2014. In addition, many add-on codes will be packaged in 2014. 

Watch for these typical ED packaged add-on codes include 99292 (Critical care, each additional 30 minutes), 99145 and 99150 (Moderate sedation codes), debridement add-on codes, removal of nail plate add-on codes, and immunization add-on codes.

But not everything is bundled. Drug administration add-on codes are not packaged with facility observation. Injections and infusions are not packaged; however, infusion add-on codes 96368-concurrent infusion and 96376-IV push same drug, were packaged in 2013 and continue to be packaged in 2014, Edelberg explains