DRG Coding Advisor: OPPS: The emergency department challenge

ED facility fees cause confusion

By Deborah K. Hale, CCS, President
Kathy Dean, CPC, CPC-H, Emergency Department Consultant
Administrative Consultant Service, Inc.
Shawnee, OK

The Outpatient Prospective Payment System (OPPS) implemented on Aug. 1, 2000, was a significant turning point for hospitals, moving them from a cost-based reimbursement to a CPT-4 and HCPCS level II line item prospective payment methodology, referred to as Ambulatory Payment Classifications (APCs). Each APC has a pre-established prospective payment amount associated with it. The hospital can earn profits if costs are lower than the payment rate or face losses if costs are higher than the payments. Since that day, hospitals have struggled to understand the confusing and frequently changing OPPS guidelines for hospital outpatient departments.

The emergency department (ED) tops the list of challenges for most hospitals. This department generates a large percentage of outpatient revenues and also has complex coding and billing guidelines for facility fees. Frequently, numerous ancillary services are provided during the ED visit.

Before the implementation of OPPS, many facilities reported all clinic and emergency visits at the lowest level of service (such as CPT codes 99211, 99201, and 99281) simply to minimize administrative burden. For example, chargemasters might include only one level of service. Because the correct HCPCS code did not influence payment, there was little incentive to report the level of service correctly.

This situation changed with the implementation of OPPS, which requires correct reporting of services using HCPCS codes as a prerequisite to payment.

Beginning Aug. 1, 2000, the Centers for Medicare & Medicaid Services (CMS) instructed hospitals to use all CPT evaluation and management (E/M) codes to report clinic and ED visits. CMS told hospitals to develop their own mapping system or internal set of guidelines to report services represented by these codes. The only requirements were that the ED services be both medically necessary and documented, and that the mapping should reasonably reflect the intensity of the hospital’s resources consumed.

Hospitals have struggled to create their own acuity systems. Initially, there were no specific guidelines for what could or could not be included in determining the E/M level, and hospitals did not have historical data to assess the impact of their mapping system.

Emergency department visits are charged by levels of service based on the acuity level of the patient and the intensity of supplies and services provided. Hospitals are to build six charges based on acuity and intensity of service using CPT codes 99281-99285 and 99291 for critical care. These codes were defined to reflect the activities of physicians. It is generally agreed, however, that they do not describe well the range and mix of services that facilities provide to clinic and emergency patients (for example, ongoing nursing care, preparation for diagnostic tests, and patient education).

Some hospitals are reluctant to use the critical care code (99291) because of the CPT definition. Remember, that definition does not apply to the ED facility. While a physician can bill both critical care codes based on time, a single code (99291) will suffice for the entire critical care facility visit regardless of the time factor.

The most recent instruction was published in the Federal Register on Nov. 1, 2002 (66,793-66,794), for OPPS Final Rule for 2003. It reads as follows: "We [CMS] do not believe that facilities and physicians would be expected to bill similar levels of service for the same encounter. The resources used by a facility for a visit may be quite different from the resources used by a physician for the same visit. Facilities should code a level of service based on facility resource consumption, not physician resource consumption. This includes situations where patients may see a physician only briefly, or not at all."

CMS also stated that if hospitals set up these guidelines (mapping systems) and follow them, they would be in compliance with OPPS coding requirements for the visits.

An additional requirement added by CMS was that the distribution of E/M codes should result in a normal bell curve. If a facility is using an accurate emergency department acuity form to report the six levels of service, a bell curve should be the result when the code distribution is represented in a graph. To assess the appropriateness of your hospital’s E/M mapping system for facility ED visits, display the frequency of billing for each E/M code in a graph format.

CMS used 2002 OPPS claims data (as published in the Federal Register, Nov. 1, 2002) to determine that well over 50% of ED visits were considered "multiple procedure claims" because the claim included services such as diagnostic tests (for example, electrocardiographs and X-rays) or therapeutic interventions (for example, intravenous infusions). The distribution of all emergency services was in a bell-shaped curve with a slight left shift because there were more claims for CPT codes 99281 and 99282 than for CPT codes 99284 and 99285. This pattern of coding is significantly different from physician billing for emergency services, which is skewed and peaks at CPT code 99284.

Furthermore, CMS announced that the agency will review the issue. CMS plans to set national guidelines for coding clinic and emergency visits. In the proposed rule published Aug. 24, 2001 (66 Fed Reg 44,672), CMS asked for public comments regarding national guidelines for hospital coding of emergency and clinic visits. These comments were compiled and presented at the January 2002 APC Panel meeting. CMS was unable to make a final decision based on the comments submitted and has now announced a plan to finalize uniform national facility coding guidelines in the proposed rule for the 2004 OPPS.

CMS has proposed to replace CPT Visit Codes with 10 new G codes for OPPS payment purposes for implementation no earlier than January 2004. CMS also plans to establish separate documentation guidelines for emergency visits and clinic visits to help facilities understand the difference between physician coding rules and facility coding rules, which hospitals have struggled with since the beginning of OPPS.

Emergency department procedure codes

In addition to E/M facility fees, hospitals must report CPT-4 codes and HCPCS level II codes for all procedures and services provided in the outpatient department setting in order to receive accurate reimbursement from Medicare.

CPT and HCPCS codes are required for reporting all of the following outpatient services to ensure additional payment for invasive procedures: radiology, other diagnostic procedures, clinical diagnostic laboratory services, durable medical equipment, orthotic-prosthetic devices, take-home surgical dressings, therapies, preventive services, and immunosuppressive drugs identified in the Medicare Hospital Manual, section 422. The Medicare Hospital Manual, transmittal 747, revised the coding guidelines that apply as of Aug. 1, 2000.

What to do now:

  • Review the Nov. 1, 2002, OPPS final rule (67 Fed Reg 66,717-67,046).
  • Create a report showing the number of E/M levels provided over a 12-month period. Develop a graph to show current rate of billing for each of the E/M facility codes (99281-99285 and 99291) and determine whether it displays a normal bell curve.
  • Evaluate your current ED acuity system and determine whether your existing system meets CMS requirements to reflect intervention and resource consumption. Make sure separately billable procedures and services are not used to determine the E/M level of care.
  • Review a sampling of ED records using your current acuity system guidelines to ensure you are able to produce the same E/M level as the coder.
  • Create a charge sheet for the ED to report procedures that are performed separately, e.g., injections, infusions, CPR, intubation, wound repairs, fracture treatment, burn care, etc.
  • Keep the hospital’s chargemaster up to date and have current chargemaster meetings to help with this process.
  • Provide for an external audit of ED claims to get an outside perspective.