The Documentation-Coding Connection

OPPS: The ED Challenge — Part II

Billing for ED procedures

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


In addition to E/M facility fees for the emergency department (ED), hospitals must report CPT-4 codes and HCPCS level II codes for all procedures and services to ensure accurate reimbursement from Medicare and many of the commercial payers.

Among the most commonly omitted CPT/HCPCS procedure codes that generate an additional APC payment are injections, infusions, laceration repair with and without tissue adhesive, insertion of NG tubes, wound care, etc. Other billable services common to the ED (to name only a few) are radiology, other diagnostic procedures, clinical diagnostic laboratory services, durable medical equipment (DME), 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 applicable coding guidelines that apply as of Aug. 1, 2000.

Revisions and corrections to the outpatient prospective payment system (OPPS) have been published in the Federal Register, Nov. 1, 2002, Transmittal A-02-129; Jan. 3, 2003 and Federal Register, Volume 68, No. 27, Feb. 10, 2003. Highlights from those regulations that impact ED reimbursement are as follows:

1. Pass-Through Drugs

In 2002, there were 236 pass-through drugs, and only 115 remain as of Jan. 1, 2003. Only high-cost drugs will be included in pass-throughs. Drugs that fell below the $150.00 median cost per line threshold were packaged into the procedure APC.

Continue billing the pass-through drugs under revenue code 636, but any drugs removed from the pass-through list should be changed back to revenue code 250 for billing.

Many of the pass-through drug APC payments went down as of Jan. 1, 2003, for example:

  • 2002 payment for TNK 50 mg (J3100) was $2,612.50, and the 2003 payment is $1,439.17.
  • 2002 payment for Reteplase 18.1 mg (J2993) was $1,306.25, and the 2003 payment is $659.96.

2. Drug Wastage

In the 2003 OPPS update published in the Nov. 1, 2002, Federal Register, the Centers for Medicare & Medicaid Services (CMS) stated: "We recognize that some drugs may be available only in packaged amounts that exceed the needs of an individual patient. Once the drug is reconstituted in the hospital’s pharmacy, it may have a limited shelf life. Since an individual patient may receive less than the fully reconstituted amount, we encourage hospitals to schedule patients in such a way that the hospital can use the drug most efficiently. However, if the hospital must discard the remainder of a vial after administering part of it to a Medicare patient, the provider may bill for the amount of drug discarded along with the amount administered."

Example 1: Drug X is available only in a 100-unit size. A hospital schedules three Medicare patients to receive drug X on the same day within the designated shelf life of the product. An appropriate hospital staff member administers 30 units to each patient.

The remaining 10 units are billed to Medicare on the account of the last patient. Therefore, 30 units are billed on behalf of the first patient seen and 30 units are billed on behalf of the second patient seen. Forty units are billed on behalf of the last patient seen because the hospital had to discard 10 units at that point.

Example 2: An appropriate hospital staff must administer 30 units of drug X to a Medicare patient, and it is not practical to schedule another patient who requires the same drug. For example, the hospital has only one patient who requires drug X, or the hospital sees the patient for the first time and did not know the patient’s condition. The hospital bills for 100 units on behalf of the patient, and Medicare pays for 100 units.

3. Self-Administered Drugs

CMS has clarified instructions for billing self-administered drugs in the 2003 OPPS Final Rule. CMS states on pages 66,767 and 66,776 of the Nov. 1, 2002, Federal Register that certain drugs are so integral to a treatment or procedure that the treatment or procedure could not be performed without them. Because such drugs are so clearly an integral component part of the procedure or treatment, they are packaged as supplies under the OPPS into the APC for the procedure or treatment. Consequently, payment for them is included in the APC payment for the procedure or treatment of which they are an integral part.

In the 2002 OPPS proposed rule (August 2002), CMS provided some illustrations of situations in which drugs are considered to be supplies. For example, sedatives administered to patients while they are in the pre-operative area being prepared for a procedure are supplies that are integral to being able to perform the procedure. Similarly, Mydriatic drops instilled into the eye to dilate the pupils, anti-inflammatory drops, antibiotic ointments, and ocular hypotensives that are administered to the patient immediately before, during, or immediately following an ophthalmic procedure are considered an integral part of the procedure without which the procedure could not be performed. The costs of these items are packaged into and reflected within the OPPS payment rate for the procedure. Antibiotic ointments such as bacitracin, placed on a wound or surgical incision at the completion of a procedure is another example.

4. Pass-Through Devices

Don’t bill devices with C-codes after Jan. 1, 2003. As of that date, ninety-five (95) of the pass-through devices will be deleted, and if the C-code is billed on a claim, it will be returned unpaid (RTP).

If the claim is returned, you will be able to refile the claim without the C-code attached. To avoid the problem completely, leave the C-code off the claim starting Jan. 1, 2003. For claims prior to Jan. 1, 2003, you can continue to bill these C-codes and there are 78 other C-codes that will remain payable in 2003.

If possible, use a cutoff date when your Charge Master would not allow these codes to append to the bill. The costs for these devices should be completely rolled into other APCs in 2003. CMS instructs facilities to continue to report the charges for the devices under the appropriate revenue center code, which could influence your outlier and corridor payments.

5. New Codes for Direct Admits to Observation

Hospitals may bill for patients who are "direct admissions" to observation. A direct admission occurs when a physician in the community refers a patient to the hospital for observation, bypassing the clinic or ED. Effective for services furnished on or after Jan. 1, 2003, hospitals may bill for patients directly admitted for observation services using one of the following HCPCS codes:

G0263: Direct admission of patient with diagnosis of congestive heart failure, chest pain or asthma for observation services that meet all criteria for G0244.

G0264: Initial nursing assessment of patient directly admitted to observation with diagnosis other than congestive heart failure, chest pain, or asthma or patient directly admitted to observation with diagnosis of congestive heart failure, chest pain, or asthma when the observation stay does not meet all criteria for G0244.

The determination of whether use of G0263 is appropriate will be made after reviewing all diagnoses submitted on the claim (e.g., admission, principal, and secondary diagnoses).

Code G0263 must be billed with G0244. Although code G0263 is treated as a packaged service and will not generate a payment under OPPS, the code will be recognized as taking the place of a visit or critical care code in meeting the observation criteria for patients directly admitted to observation.

Code G0264 should not be billed with G0244. G0264 is assigned to APC 0600 and is paid the same amount as a low-level clinic visit. This code provides a way to recognize and pay for the initial nursing assessment and any packaged observation services attributable to patients that are directly admitted to observation but whose observation services do not meet the criteria necessary to qualify for a separate observation payment.

6. Infusion Therapy in Observation Status

Effective Jan. 1, 2003, HCPCS code G0258, Intra-venous infusion(s) during separately payable observation stay, per observation stay (must be reported with G0244), is deleted from the OPPS. Hospitals should bill for infusion therapy provided during a separately payable observation stay (HCPCS code G0244) using Q0081, infusion therapy other than chemotherapy. As with G0258, Q0081 may be reported for infusions started in the ED, clinic or observation area, so long as the infusion continues during the observation stay. An edit has been installed in the Outpatient Code Editor (OCE) to allow payment, effective for services furnished on or after April 1, 2002, for HCPCS code G0244 when billed with Q0081, subject to all other conditions for payment having been met.


Many hospitals still are not capturing all the billable procedures and services performed in the ED and charging them separately from the ED evaluation and management code.

Hospitals should build their ED chargemaster with all billable procedures along with the corresponding CPT-4/HCPCS level II codes. It is important for HIM coders to realize that when the OPPS was implemented that their range of CPT codes increased from just the 10000-69979 to other billable procedures such as injections (90782-90788), infusion therapy (Q0081), CPR (92950), immunization administration (90471), and many other codes out of the normal range they are used to coding.

In our experience, facilities can manage the coding and billing requirements for the ED APC reimbursement methodology more effectively by assigning a coder or coders to the ED. Then, give them responsibility for review of the total ED chart to capture all documented, billable services and perform final review of the ED codes billed on each claim using an APC pricer software system. The software will help identify any edits or other billing errors prior to final billing. The coder should not rely on the acuity form or ED charge sheet alone to code procedures performed in the ED. With their workstation located in the ED, they can readily access staff for documentation improvement needed to code and bill completely and accurately.

The OPPS is a very complex system, which requires much research and review of guidelines, program memorandums, transmittals, and keeping up with local Part A newsletters from the fiscal intermediary.

Consequently, the keys to accurate coding and billing are education and communication. To be successful, facilities benefit from generosity in their education budget for coders and patient care staff. Coders and patient care staff can learn through teleconferences, reference materials, on-line education, and reputable consulting firms that provide in-house education and training.