Medicare Compliance & Reimbursement

Not all licensed freestanding EDs are created equal.

With state and individual payer guidelines defining reimbursement for freestanding emergency departments, you’ll need to be wary when coding for facilities that are not physically located on a hospital campus. Brush up on your regulatory know-how to improve your coding accuracy.

The basics: The term “freestanding emergency department” (FSED) defines a facility that provides on-demand emergency medical care in a setting that is geographically removed from a hospital. The American Hospital Association recently announced there are over 400 free standing emergency departments in the United States, and that number is expected to grow significantly.

Such facilities may operate 24 hours per day, or in select geographic areas on a more limited schedule, and may or may not receive patients by ambulance.

The clincher: However, each FSED “must comply with state licensing and certification requirements which may vary from one state to another,” says Caral Edelberg, CPC, CPMA, CAC, CCS-P, CHC, President of Edelberg Compliance Associates in Baton Rouge, LA.

Both state and individual payer guidelines may govern how these facilities are designated and, thus how services are billed.

CMS factor: Medicare has its own requirements for how a freestanding “emergency center” can be designated as a true emergency department and urgent care centers are defined in a completely separate category with different coding requirements.

FSEC vs. HOPD? Know These Distinctions

There are two common types of free standing EDs and the rules may be different depending on the type for which you are coding.

The first consideration is whether the facility is a hospital outpatient department (HOPD), considered an extension of the main hospital campus or system, or whether it is a Free Standing Emergency Center (FSEC), meaning it is privately owned and not affiliated with a particular hospital, explains Edelberg. The FSEC may have arrangements for transfers, admissions and access to the medical staff of a nearby facility, she notes.

CoP factor: Provider-based off-site HOPDs must demonstrate compliance with the hospital Conditions of Participation (CoPs). They must also be in compliance with the provider-based regulations referenced at 42 CFR 413.65. In most cases, the freestanding ED will be owned and operated by a Medicare-participating hospital as a provider-based ED, Edelberg explains.

24/7 factor: Most state and federal regulations dictate that free standing EDs be open 24 hours/day, 7 days/week though there are some exceptions. The CPT® definition states, “An emergency department is defined as an organized hospital-based facility for the provision of unscheduled episodic services to patients who present for immediate medical attention. The facility must be available 24 hours a day,” Edelberg explains.

The regulatory standards that govern whether or not provider-based EDs and so-called “emergency services hospitals” meet the CMS Condition of Participation determine how the freestanding ED qualifies for participation in Medicare.

All HOPD type hospital-affiliated FSEDs are regulated and licensed in the same way their parent facilities are regulated and licensed.

Privately-held FSECs and urgent care centers are similarly regulated in many states with additional rules aimed at the protection of the public from being misled by limiting the use of the terms “emergency” or “urgent” in facility names and/or promotional materials if all the requirements are not met, adds Edelberg.

Discern State Law and Medicare Policy Differences for Privately Owned FSECs

In some states, individual physicians own and operate their own FSECs. While licensed independent FSECs are entitled to report the 9928X ED E/M code series for billing purposes, Medicare may prohibit their use outside the hospital-based ED setting.

Some physician-owned FSECs bill Medicare patients with office visit codes (99201-99215) in order to comply with Medicare requirements. In choosing this alternative, the new and established patient rules are in effect and add an additional “wrinkle” to billing for these emergency services.

Payer challenge: Most private payers oppose the use of the 9928X code series outside of the hospital ED setting, but lack the legal authority of the government, coupled with contracting and local market force issues.

Both hospital and physician-owned FSECs typically charge a facility fee comparable to that charged in a hospital-based ED, unlike less robustly resourced urgent care centers that utilize the physician office/outpatient clinic E/M codes (99201-99215).

Is it Really an ED or is it Urgent Care?

Not all free standing EDs are created equal. Names and signage can be confusing as to whether the place of service is hospital owned and operated, with full integration into the main campus system and medical staff or an independent privately-owned facility that may or may not have those arrangements, clarifies Edelberg.

Assigning place of service: If the facility is licensed as an emergency department, use place of service 23 (Emergency room — hospital) and the ED E/M codes to report physician services.

If it is not licensed as an ED, use place of service code 20 (Urgent care), defined as a location, distinct from a hospital emergency room, an office, or a clinic, whose purpose is to diagnosis and treat illness or injury for unscheduled, ambulatory patients seeking immediate medical attention.

In an urgent care setting you should use the appropriate office or other outpatient code.

Don’t forget that you would have to use established patient codes for returning patients in an urgent care center, warns Edelberg.