Emergency Department Facility Coding and Billing

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1 Emergency Department Facility Coding and Billing The Basics of Facility Coding A Historical View of Hospital Coding and Reimbursement for ED Services E/M Visit Level Coding ED Procedure Coding Payment for IV Services Additional Ways to Help Your Hospital Optimize Its ED Revenue Putting It All Together: Optimize Revenue and Optimize Care

2 Pay Attention to Emergency Department Processes that Have Large Financial Impacts There is a greater than $100 payment difference between ED facility levels. Facility Level Approximate Payment $ $ $500 The accuracy of ED coding has a large financial impact.

3 The Basics of Facility Coding Most emergency department physicians are aware of the importance of documentation as it relates to physician coding and billing, such as documenting Medical Decision Making. There is another side to coding and billing, one that is not for the physician (otherwise known as the professional portion ) but is instead for the hospital or facility services. Hospitals code for their portion of emergency department services (room time, nurses, medications, supplies etc.) and send out their own bills, while the emergency department physician services are coded and billed separately. Emergency department coding is complex and hospitals sometimes struggle to consistently and accurately report the actual services that were provided, resulting in a revenue difference of as much as $20/visit or more. This newsletter will help you understand the world of hospital facility coding for emergency department services, and position you to be a valuable partner to your hospital in receiving its proper reimbursement. After all, your hospital s financial well-being is a key to having the resources your emergency department needs to deliver excellent patient care. A Historical View of Hospital Coding and Reimbursement for ED Services Hospitals, like physicians, code for both procedures and for Evaluation and Management services (E/M levels). As a brief history, for decades, hospitals were paid based on their charges, but this all changed with the introduction of a congressionally mandated Outpatient Prospective Payment System (OPPS), which CMS implemented in August of 2000 using Ambulatory Payment Classifications (APCs). Prior to APCs, hospitals had always been reimbursed for outpatient services on a cost reporting methodology higher costs resulted in higher reimbursement. Hospitals used to report costs, and then were paid a percentage of those costs. You can think of APCs as similar to inpatient DRGs. APCs represent a prospective defined payment for outpatient ED services much like DRGs, which also have a fixed payment. One big difference between DRGs and APCs is that DRG payments are based on diagnosis coding. With DRGs, the diagnosis that is assigned to the patient (e.g., a complicated pneumonia diagnosis) gets a fixed inpatient payment. Unlike DRGs, APCs are based on CPT procedure coding of the procedures that were performed for the patient, and there is a fixed payment for each specific CPT code. An important point that APCs and DRGs have in common is that, with few exceptions, additional payments are not provided outside of the diagnosis or CPT code submitted, so if the patient stays in the hospital for an extra day, the DRG inpatient payment stays the same and similarly, if the injected medication chosen is expensive, the APC outpatient payment for that injection CPT code does not change. 2

4 E/M Visit Level Coding Hospitals should report emergency department visit levels using CPT codes , and critical care codes 99291/ Despite years of discussion and review, CMS still has not developed national ED facility level guidelines, and as such, each facility should follow its own guidelines that are reproducible, consistently applied and reasonably relate to the hospital resources used. Understanding the ED leveling methodology at your hospital will enable you to optimize your documentation to ensure accurate facility level selection. You should be sure that your hospital has a set of guidelines that it follows, and that the increasing levels relate to the intensity of resources used. In the 2009 OPPS final rule, CMS states: we have advised hospitals that each hospital s internal guidelines that determine the levels of clinic and emergency department 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 OPPS final rule, page 706 In 2007, CMS expanded the number of facility level APCs from three to five, and created five corresponding payment levels which are still in use today. Facility Level Approximate Payment $ $ $ $ $ $690 For a free audit of your coding and billing, visit logixhealth.com or call

5 ED Procedure Coding Under APCs hospitals are reimbursed by reporting the CPT code for various procedures, such as tube placements, laceration repairs, drainage of abscesses and IV infusion and injections. The CPT codes that are reported lead to the APC assignment which then determines the actual reimbursement. APCs have a fee schedule based on the reported CPT codes, which is much like the physician fee schedule. Although hospitals may report medications and supplies, such as a laceration kit or NG tube, for many payers, including Medicare, no additional payments are made for these items. There are several hundred procedures performed in the emergency department, many of them very nuanced, and reporting the myriad of CPT codes can be especially difficult for hospital-based outpatient coders to master. ED facility coders need to be skilled in identifying and assigning appropriate CPT codes for all ED physician and nurse procedures. ED physicians and nurses should be sure to completely document any procedures performed. A specific high impact example is to be sure that the record clearly documents the duration of any infusion of medication or of IV fluids. IV hydration, infusions and injections are assigned codes based on their duration. For example, if 2 liters of IV fluid are given over 120 minutes, the time should be clearly documented because if the duration is not clear then the code for the second hour of hydration (96361), could not be assigned, with a resulting loss of approximately $35 in reimbursement. Nurses must document the timing of their medication and fluid administration in order to allow for appropriate revenue capture. The failure to capture just one hour of an IV medication infusion results in the loss of approximately $180 in reimbursement. Code Service Approximate Payment Hydration $ Hydration+ $ Infusion $ Infusion+ $ IM/SQ Injection $ IV Injection $ IV Injection+ $35 Payment for IV Services 4

6 Additional Ways to Help Your Hospital Optimize Its ED Revenue Choose Medications Wisely and Document Administration Times: Prior to 2000, hospitals were reimbursed based on their costs, and more expensive medications would result in additional payments. Under APCs there are opportunities for physicians to choose cost-effective and evidence-based approaches that provide excellent care while controlling additional expenses, such as antibiotic or anti-emetic selection. High Cost Ancillary Denials: Hospitals are facing increased pressure to meet insurance company medical necessity criteria in order to be reimbursed for imaging studies, such as CT scans. Physicians, hospital finance managers, and coders should develop a dialogue to understand the common high cost denials and reasons, and to bring this information back to the physician group. Consider having a physician attend the regular hospital ED revenue cycle meetings to understand the magnitude and trends of your department s denials, and to help educate the physicians and coders. Chargemaster Maintenance: Hospitals have to maintain and update their chargemasters (the set of codes that they use for billing) and be sure that each service maps to the correct code for that specific payer. There are frequent updates that must be made to the ED chargemaster. For instance, there were several code changes in the past few years regarding the reporting of radiology codes and also for the high-volume infusion and injection services. These are highly reimbursed procedures, and highlight the importance of proactively keeping current with all ED CPT chargemaster changes. Putting It All Together: Optimize Revenue and Optimize Care We are working in an environment where resources seem scarce, and service demands are high. Almost every emergency department could use additional nurses, techs, clerks, equipment and space, and hospital management often agrees, but it takes money to provide these additional resources. By helping to optimize your facility s emergency department coding, reimbursement, and financial performance, you will be in a strong position to advocate for increased resources for your department. With increased resources you will be better able to consistently provide high quality care, with streamlined throughput and high customer satisfaction. 5 For up-to-date industry news, visit us online at logixhealth.com.

7 LogixHealth s unsurpassed service stems from the fact that it was founded by physicians for their own practices. 6

8 LogixHealth, Inc. All Rights Reserved. The LogixHealth logo, and Making intelligence matter are registered trademarks of LogixHealth, Inc.

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