Observation Coding and Billing

How do you get paid? Observation Coding and Billing Michael Ross MD FACEP President, Society of Chest Pain Centers Medical Director, Chest Pain Center and Observation Medicine Associate Professor, Department of Emergency Medicine Emory University School of Medicine Atlanta, t Georgia

Objective: Learn coding and billing issues for observation services 1. Professional (CPT) coding and billing CPT and CMS issues Professional compliance issues 2. Hospital (APC) coding and billing CMS [Note: Private contract (ie BCBS) issues will not be covered (too many to consider)]

My Observation Background CPT history same day codes BC/BSM history CMS - APC Advisory Panel, Visit and Observation Subcommittee Lesson always go by written policy rather than second hand interpretation

Professional Coding and Billing 1. CPT issues 2. CMS issues 3. Observation compliance issues

CPT: Observation Services... used to report the evaluation and management services provided to patients designated / admitted as observation status in a hospital. It is not necessary that the patient be located in an observation area designated by the hospital. If such an area exists in a hospital (as a separate unit in the hospital, in the ED, etc), these are the codes to be utilized...

CPT: Observation Care Discharge Services Observation care discharge of a patient from observation status... [Note status vs hospital, covered when admitted to another service.]... includes final examination of the patient, discussion of the hospital stay, instructions for continuing care, and preparation of discharge records. [Note for same day discharge, use 99234-6 codes.]

CPT: Observation Initial Care When observation status is initiated in the course of an encounter in another site of service (eg, hospital ED, physician's office, nursing facility) all evaluation and management services provided by the supervising physician in conjunction with initiating observation status are considered part of the initial observation care when performed on the same date. The observation care level of service reported by the supervising physician should include the services related to initiating observation status provided in the other sites of service as well as in the observation setting. E/M services on the same date provided in sites that are related to initiating observation status should not be reported separately. [Note ladder analogy : Clinic or Emergency E/M services Observation E/M services Inpatient t E/M services] Observation replaces Emergency E/M for initial evaluation

CPT rule: A physician can not bill two E/M codes on the same calendar day So what happens if a patient has both So what happens if a patient has both initial observation care AND observation discharge care on the same day? This violates the same day rule. The solution is...

CPT: Observation or Inpatient Care Services (including admission and discharge services) The following codes are used to report observation or inpatient hospital care services provided to patients admitted and discharged on the same date of service. [Note same rules as above apply (other E/M codes, status, unit, etc)]

CPT Overview: Emergency Services 5 EMERGENCY CPT CODES: 99281-99285 Independent of time of day or length of stay No separate payment for the work of discharging a patient Observation and Inpatient CPT codes recognize the work of discharging a patient Discharge work is over and above the work of the initial H&P (or initial evaluation and management) Initial evaluation and management (or H&P ) documentation requirements and payment levels are similar for emergency, observation, and inpatient CPT codes.

CPT Overview: Observation Services 7 OBSERVATION CPT CODES: Two day case: 99218-20 Initial day of observation care 99217 - Observation care discharge day management One day case: 99234-36 Observation or inpatient t hospital care, for the evaluation and management of a patient including admission and discharge on the same date: These codes basically combine discharge (99217) and initial observation care (99218-20) into one code (99234-36) for cases which come and go on the same day.

Two scenarios 1 vs 2 days ONE DAY SCENARIO: ED Obs D/C 12A One day combo codes (initial E/M + d/c) 99234, 35, 36 12A TWO DAY SCENARIO: ED Obs D/C Initial E/M 99218, 19, 20 12A Obs discharge code - 99217

EMERGENCY & OBSERVATION CPT CODES: Required Documentation * 2010 Service CPT Total History Physical M.D.M. RVUs Emergency level 1 99281 PF PF S 0.58 Emergency level 2 99282 EPF EPF L 1.12 Emergency level 3 99283 EPF EPF M 1.71 Emergency level 4 99284 D D M 3.21 Emergency level 5 99285 C C H 4.74 Observation Discharge 99217 + + + 1.88 Observation level 1 99218 D or C D or C S or L 1.77 Observation level 2 99219 C C M 2.93 Observation level 3 99220 C C H 4.1 Same day Obs / dschg 1 99234 D or C D or C S or L 3.59 Same day Obs / dschg 2 99235 C C M 4.71 Same day Obs / dschg 3 99236 C C H 5.84

Two Physician Billing scenarios: Scenario 1. Same physician i / group observation replaces emergency The observation code is billed instead of the emergency code Incrementally added work of observation is covered by the observation discharge codes You do not need to repeat the initial H&P For example a possible scenario: Emergency level of care Observation level of care : Observation Care covers Observation Care all on the (Not billed) (Billed) two days** same day* 99283 1 99218 + 99217 99234 99284 2 99219 + 99217 99235 99285 3 99220 + 99217 99236

Two billing scenarios: Scenario 2. Initial Emergency and Observation are Different Physicians Two different H/Ps done (emergency and observation plus discharge) by two different physicians. What is a Physician? What is a Physician? Same group (ie tax ID code) Same specialty (Recognized specialty code)

Medicare Claims Processing Manual Chapter 12 - Physicians/Nonphysician Practitioners Table of Contents (Rev. 2044, 09-03-10) 30.6.5 - Physicians in Group Practice (Rev. 1, 10-01-03) Physicians in the same group practice who are in the same specialty must bill and be paid as though h they were a single physician. i If more than one evaluation and management (face-to-face) service is provided on the same day to the same patient by the same physician or more than one physician in the same specialty in the same group, only one evaluation and management service may be reported unless the evaluation and management services are for unrelated problems. Instead of billing separately, the physicians should select a level of service representative of the combined visits and submit the appropriate code for that t level. l Physicians in the same group practice but who are in different specialties may bill and be paid without regard to their membership in the same group.

Appendix B CMS Provider Specialty Table Edited to Include Only Physicians, Physician Assistants and Nurse Practitioners for GEM Project Physician Grouping TIN Selection and Patient Attribution (1) (2) Provider Specialty Codes Flagged for Patient Attribution for GEM Primary Care Provider Specialty Codes including Physicians, Physician Assistants and Nurse Practitioners for Physician Grouping TIN Selection 01 = General practice 08 = Family practice 11 = Internal medicine 16 = Obstetrics/gynecology 38 = Geriatric i medicine i 70 = Multi-specialty clinic or group practice 84 = Preventive medicine Specialty Attribution for Specific Measures 02 = General surgery 03 = Allergy/immunology 04 = Otolaryngology 05 = Anesthesiology 93 = Emergency medicine 94 = Interventional radiology 98 = Gynecologist/oncologist 99 = Unknown Physician Specialty * 06 = Cardiology Source: Medicare Part B Reference Manual: Appendix D CMS Provider Specialty Codes

Observation care is a well-defined set of specific, clinically appropriate services, which include ongoing short term treatment, assessment, and reassessment, that are furnished while a decision is being made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital. [Note defining feature is to determine the need for inpatient admission] In only rare and exceptional cases do reasonable and necessary outpatient observation services span more than 48 hours.

... physician present and personally performed the services What about physician extenders? Do they qualify as the physician who is present and personally performed the services?

Observation documentation: Document emergency H&P Must include family history: 3/3 instead of 2/3 for personal/family/social history Order observation of the patient (observation doc) Document ongoing care in progress notes Document time in observation (may be electronic stamps) At the end, document a discharge summary: A final examination Clinical course in the unit results, decision making, diagnosis, etc. Preparation of discharge (or admit) records Instructions for continuing care

CPT Observation billing issues: Scenario 1: You must use the observation codes, instead of emergency codes, if you provide both services. Same physician -means anyphysician in the same specialty / same group. You may not have the first ED physician bill an emergency E&M and the second emergency physician bill an observation E&M if they are

CPT Observation billing issues: Family history is required or down-coding will occur (unique to observation and inpatient E/M codes, not emergency). Midlevel may do. When does the clock start for emergency physicians billing observation (scenario 1)? Interpretation: The clock starts at triage because emergency and observation services are bundled into one CPT code, and malpractice expense / risk begins at triage. Same day code LOS issues: 8 hour minimum 99234-6 paid if LOS>8hr. If < 8 hr, then use 99218-20 without a discharge code.

Hospital Billing Observation Services CMS and APCs history and how they work What is an observation patient what is an inpatient? Current issues

CMS definition of observation 3663. OUTPATIENT OBSERVATION SERVICES Same as for physician (above):... to determine the need for a possible admission as an inpatient...... covered only when provided by order of a physician or individual authorized to order outpatient tests... Observation services exceeding 48 hours will be denied.... Must be under the care of a physician...

CMS observation payment history: 1999 - present Pre-2000 Hourly billing using Revenue code 762 Problems with prolonged stays and inappropriate post-op p use of observation 2000 (OPPS / APC) Observation packaged (not paid separately) Powerful disincentive to use observation Powerful disincentive to use observation, utilization dropped

CMS observation payment history: cont... 2002 Observation unpackaged for 3 conditions Chest Pain, Asthma, CHF with multiple criteria required 2005 Multiple criteria restrictions lifted 2007 Condition restriction lifted, and folded into a composite APC with ED or clinic visit APC Is this history clear?

Facility / APC billing How does APC billing work? Separate APCs for: Tests Stress test, chest x-ray Certain drugs VISITS ED, Clinic, Critical Care, and Observation visits Unlike a DRG where all services are paid under the same umbrella (including ED/observation preceding admission).

2007: Observation APC billing APC 0339 (~30%) - Observation was Un-bundled. Payment was in addition to ED payment for: Chest pain Asthma CHF All other conditions (~70%) - were bundled d Payment was included in ED visit payment

2008 Hospital Financial impact of 100 Medicare Patients (APC 8003) ED level 5 (with obs) (n=100) Obs - CP, Asthma, CHF (n=30) Obs - All others (n=70) TOTAL (Emeg + Obs) 2007 Pymt 2007 Total $ Proposed Pymt* Proposed Total $ 2008 Pymt** 2008 Total $ $325 $32, 500 $348 $34,800 *0 *0 $442 $13,260 0 0 $639 $19,170 $0 $0 0 0 $639 $44,730 $45,760 $34,800 $63,900 * All ED level 5s would be paid at this rate, including non-observation cases ** ED level l 5s that t are not admitted d for observation are paid $315

Extended Assessment and Management Composite APC 1. Observation Time a. Observation time must be documented in the medical record. b. A beneficiary's time in observation (and hospital billing) begins with the beneficiary's admission to an observation bed. c. A beneficiary's time in observation (and hospital billing) ends when all clinical or medical interventions have been completed, including follow-up care furnished by hospital staff and physicians that may take place after a physician i has ordered d the patient t be released or admitted as an inpatient. d. The number of units reported with HCPCS code G0378 must equal or exceed 8 hours.

APCs 8003 and 8002 2. Additional Hospital Services - a. The claim for observation services must include one of the following services in addition to the reported observation services... on the same day or the day before the date reported for observation: For APC 8003: An emergency department visit (CPT code 99284 or 99285) or A clinic visit (CPT code 99205 or 99215); or Critical care (CPT code 99291); or For APC 8002: Direct admission to observation reported with HCPCS code G0379, must be reported on the same date of service as the date reported for observation services. b. No procedure with a T'' status indicator can be reported on the same day or day before observation care is provided. [note T status indicates major procedures, such as endoscopy, heart cath, etc. This solves the post op observation issues.]

APCs 8003 and 8002, cont. 3. Physician Evaluation a. The beneficiary i must tbe in the care of a physician i during the period of observation, as documented in the medical record by admission, discharge, and other appropriate progress notes that t are timed, written, and signed by the physician. b. The medical record must include documentation that the physician explicitly assessed patient risk to determine that the beneficiary would benefit from observation care.

How does this all come together? Claims processing and the CMS Outpatient Claims Editing (OCE) software p g p g ( ) http://www3.cms.gov/outpatientcodeedit/

How are observation / inpatient cases defined??? Interqual v.s. Hospital Manual

What is interqual? Provides screening criteria for patients who are admitted as an inpatient. McKesson is a service subscribed to by payers and hospitals for this purpose. NOT intended to supersede physician judgement How is it used? Large book full of complicated information Nurse screens admission If criteria - provides information to physician for his/her consideration Clarification or changes in IP status may be made based upon this information

How are observation or inpatient cases defined??? Hospital Manual Chapter II - Coverage of Hospital Services 210. COVERED INPATIENT HOSPITAL SERVICES Page 21.3/Rev. 525, 01-89 An inpatient is a person who has been admitted to a hospital for bed occupancy for purposes of receiving inpatient hospital services. Generally a person is considered an inpatient if formally admitted as an inpatient with the expectation that he will remain at least overnight and occupy a bed even though it later develops that he can be discharged or transferred to another hospital and does not actually use a hospital bed overnight. [ Note The Hospital Manual definition is the ultimate [ p CMS authority it trumps interqual]

Hospital Manual Chapter II - Coverage of Hospital Services 210. COVERED INPATIENT HOSPITAL SERVICES Page 21.3/Rev. 525, 01-89 The physician or other practitioner responsible for a patient's care at the hospital is also responsible for deciding whether the patient should be admitted as an inpatient. The physician should use a 24-hour period as a benchmark, i.e., he or she should order admission for patients who are expected to need hospital care for 24 hours or more, and treat other patients on an outpatient basis. However, the decision to admit a patient is a complex medical judgment which can be made only after the physician has considered a number of factors, including the patient's medical history and current medical needs, the types of facilities available to inpatients and to outpatients, the hospital's bylaws and admissions policies, and the relative appropriateness of treatment in each setting.

Hospital Manual Chapter II - Coverage of Hospital Services 210. COVERED INPATIENT HOSPITAL SERVICES Page 21.3/Rev. 525, 01-89 Factors to be considered when making the decision to admit include such things as: The severity of the signs and symptoms exhibited by the patient: The medical predictability of something adverse happening to the patient: The need for diagnostic studies that appropriately are outpatient services (i.e., their performance does not ordinarily require the patient to remain at the hospital for 24 hours or more) to assist in assessing whether the patient should be admitted; and The availability of diagnostic procedures at the time when and y g p at the location where the patient presents.

Hospital Manual Chapter II - Coverage of Hospital Services 210. COVERED INPATIENT HOSPITAL SERVICES Page 21.3/Rev. 525, 01-89 Admissions of particular patients are not covered or noncovered solely on the basis of the length of time the patient actually spends in the hospital.

What about inpatients who don t meet inpatient criteria? The Use of Condition Code 44 In some instances, a physician may order a beneficiary to be admitted to an inpatient bed, but upon subsequent review, it is determined that an inpatient level of care does not meet the hospital s admission criteria. The National Uniform Billing Committee (NUBC) issued Condition Code 44, effective April 1, 2004, to identify cases when this occurs.

Condition code 44... The definition of Condition Code 44 is as follows: Condition Code 44 Inpatient admission changed to outpatient... provided all of the following conditions are met: The change in patient status from inpatient to outpatient is made prior to discharge or release, while the beneficiary is still a patient of the hospital; The hospital has not submitted a claim to Medicare for the inpatient admission; A physician concurs with the utilization review committee s decision; and The physician s concurrence is documented in the patient s medical record.

Problems with interqual Not intuitive to most physicians It is not clear how well it has been tested or validated for observation patients May be partially driving shifts in inappropriate overutilization of observation in the elderly

Rising volumes of claims Shift to outpatient setting, interqual, RAC, expanded dx. 5yr rise in % patients >48 hours (3% to 7%) Setting driven IP vs EDOU Eating into 3-day SNF qualifying time Setting driven IP vs EDOU Confusing billing rules 4 major changes over 10 years - much improved.

An observation unit is effective for the elderly 74% are safely discharged in 15.8 hours Ross et al. Ann Emerg Med. May 2003;41(5) Chest Pain 800 Dehydration Asthma 600 Reason For Observation Back Pain Abdominal Pain Cellulitis Syncope Pyelonephritis COPD Vertigo CHF Count 400 200 0 6 12 18 24 30 36 Atrial Fibrillation 0.0.5 1.0 1.5 2.0 Unadjusted Odds Ratio for Admission 2.5 3.0 All Patients Mean (<65) = 14.4 hr Mean (>65) = 15.8 hr Difference (95%CI) = 1.4 (1.24-1.59)

GA Medicaid: Observation LOS <24hr

CMS policy links http://www.cms.hhs.gov/manuals/downloads/clm104c04.pdf http://www.cms.hhs.gov/mlnmattersarticles/downloads/se0622.pdf http://www.cms.hhs.gov/mlnmattersarticles/downloads/se0622.pdf http://www.cms.hhs.gov/transmittals/downloads/r299cp.pdf http://www.cms.hhs.gov/transmittals/downloads/r1745cp.pdf p// / / / p http://www.cms.hhs.gov/manuals/downloads/clm104c04.pdf