Earthshaking proposal from CMS may change how ED visits are billed
ED Coding Update
This quarterly column is written by Caral Edelberg, CPC, CPMA, CAC, CCS-P, CHC,President of Edelberg Compliance Associates,Baton Rouge, LA.
For calendar year (CY) 2014, CMS is proposing a dramatic modification in how hospital outpatient and clinic visits will be billed and paid. Since the 2000 implementation of outpatient prospective payment system (OPPS), the health care community has not been able to reach consensus on a single set of guidelines to define ED and clinic visits. Thus, CMS has proposed to stop recognizing five levels of clinical and ED visits and assign one alphanumeric Level II HCPCS code which will combine all levels of service in one composite code. There would be one code to define type A ED visits, one to define type B ED visits, and one for clinic visits, which combines both new and established services.
Why, at this time in the evolution of OPPS, would CMS propose such a groundbreaking change? First, they believe this proposal would remove any incentives the hospital might have to provide medically unnecessary services or expand additional and unnecessary resources to achieve a higher level of visit payment under OPPS. Second, they believe it is time to consider ways to reduce the administrative burden that Medicare payment policies have placed on hospitals while maintaining the ability to calculate accurate payment rates.
To that end, they believe that replacing the 20 HCPCS codes currently used to bill these outpatient services with one code each reduces the complexities of billing for hospitals. No longer will hospitals be required to develop and apply their internal guidelines to differentiate among five levels of services for each ED and clinic visit. This proposal will allow CMS to utilize a large set of claims billed by hospitals with varying guidelines and spectrums of complexities for rate setting.
Finally, and probably most significantly, CMS intends to remove any incentive for "upcoding" by collapsing all visits into one composite level. It seems interesting, however, that CMS has repeatedly indicated that the acuity distribution across the nation’s hospitals was appropriate and specific to the type and location, e.g., teaching hospital, urban, community, etc.
Perhaps the larger question relates to how CMS will determine the payment amount for each of the levels. As of this proposed rule, CMS intends to use CY 2012 claims data to develop the 2014 payment rates based on the total mean cost of levels 1-5 for each of the three proposed composite codes. CMS will publish the proposed payment amount as soon as review of the 2012 claims data is complete.
Interestingly, CMS has not discussed how hospitals will charge for their services. A number of approaches are possible from hospital "averaging" of all E/M charges from composite data on the past year to continuing to calculate charges based on CPT E/M level associated charges then billing with the new HCPCS code. Of course, other payers should continue to accept individual charges for the existing E/M codes unless a transition to this methodology occurs. However, as this is a proposed CMS rule, much work is yet to be done before the final rule and directive is formulated.
Table 1 illustrates how these proposed codes will evolve from the current CPT E/M service codes.
|Table 1: Proposed CPT E/M Service Codes|
|Visit Tpe||CY 2014||Proposed CY 2014|
|HCPCS Code||APC||HCPCS Code||APC|
|TYPE A ED VISIT||99281||0609||GXXXA||0635|
|TYPE B ED VISIT||G0380||0626||GXXXB||0636|
Changes were proposed for payment for observation/extended assessment for an entire care encounter through proposed new EAM Composite APC 8009 when observation care is provided in conjunction with a visit, critical care, or direct referral. CMS will no longer recognize APC 8002 and APC 8003, currently used to pay for extended assessment claims. They will recognize the ED or clinic visit through the proposed HCPCS codes that will bundle all ED and clinic levels.
It remains unclear whether or not the new observation/extended assessment payment bundle will include infusions and injections, but it will include type "T" procedures. By estimating the cost for all observation services and pre-observation services, CMS is proposing to assign a cost amount of $1,357 for the observation/ED or clinic visit. More detail should be available following the requisite comment period.
Critical care would remain much the same with package payment of ancillary services and no significant modification to the language or description of critical care services. Hospitals would still be expected to report critical care consistent with CPT guidance unless instructed otherwise by CMS, particularly with regard to bundled services as listed in CPT. CMS would implement claims processing edits that conditionally package payment for the ancillary services that are reported on the same date of service as critical care services in order to avoid overpayment for these services that are bundled into the critical care package. This includes a wide range of ancillary services such as EKGs, chest X-rays, and pulse oximetry.
As with any "average" rate calculation, there will be winners and losers. The winners will be hospitals with low acuity that will reap the benefits of a payment system using data from higher acuity hospitals or hospitals that used a more accurate coding process. Losers will be those hospitals with high acuity, thus higher charges, which might now be paid lower rates.
Regardless of what methodology CMS finally agrees upon, it will still be important for hospitals to internally track ED acuity with their current criteria. This acuity criterion has many uses in addition to billing. One of this criterion’s many uses is that it forms the foundation of acuity and productivity analysis for staffing, acuity by provider types, documentation assessment, acuity distribution by date and time, diagnosis by acuity level, etc. Hospitals and vendors will have to think outside the box as it relates to what uses the CPT E/M coding system provides for numerous data management systems and agree on the value of this data for managing other services and resources in the ED.