HCFA may change the way it groups E/M charges

ICD-9 diagnosis codes may be dropped

If you’re confused or have concerns about the Health Care Financing Administration’s (HCFA) proposal regarding the handling of medical ambulatory payment classifications (APCs) codes, you’re not alone. In fact, HCFA may propose a different scheme in the final rule that will be out this year, says Dean Farley, PhD, vice president of health care policy and analysis for HSS in Hamden, CT.

HSS specializes in the development and use of information and software systems for managing coding, reimbursement, and compliance for the health care industry. "There has been some discussion between HCFA and Congress on the issue of the medical APCs," Farley says.

He thinks HCFA has now made the decision not to use ICD-9 diagnosis codes to group evaluation and management (E/M) services into APCs. Instead, in the final rule, HCFA may adopt a system that is based solely on the E/M codes. "There is some concern about the quality of the diagnostic information on the bill and some confusion about what goes into that field. I think that there also is concern that the information in the current HCFA claims database isn’t going to allow them to develop a clinically coherent set of weights."

Under the current system, hospitals are only required to use a single E/M code when they bill for the E/M. This code, 99201, indicates a low-level clinic visit. "As long as you have a 99201 on your bill, you can charge HCFA for the evaluation and management service regardless of the level of the service," Farley says.

The HCFA proposal for medical APCs, as published in the Federal Register, takes the E/M codes and divides them into six categories: three levels of emergency department visits and three levels of clinic visits. In addition, the ICD-9 diagnosis code that is listed on the bill as the reason for the visit is supposed to be assigned to one of 20 major diagnosis categories (MDCs), he explains.

The APC that would be assigned under the proposal would be a combination of the medical visit portion — one of the six categories and the MDC to which the diagnosis was assigned. "HCFA proposed 120 medical APCs plus one critical care APC," Farley says.

In addition, if providers continue to bill with the 99201 code, according to the proposed rule, they would only get the low-level clinic visit for one of those 20 MDCs, Farley says. "There would be no way to generate additional revenue because the evaluation and management service was actually higher than you had recorded on the bill."