NOTE: Should you have landed here as a result of a search ...File... · • Useof a bed for...

96
NOTE: Should you have landed here as a result of a search engine (or other) link, be advised that these files contain material that is copyrighted by the American Medical Association. You are forbidden to download the files unless you read, agree to, and abide by the provisions of the copyright statement. Read the copyright statement now and you will be linked back to here.

Transcript of NOTE: Should you have landed here as a result of a search ...File... · • Useof a bed for...

NOTE Should you have landed here as a result of a search engine (or other) link be advised that these files contain material that is copyrighted by the American Medical Association You are forbidden to download the files unless you read agree to and abide by the provisions of the copyright statement Read the copyright statement now and you will be linked back to here

Level of Care

Palmetto GBA

Inpatient or

Outpatient Observation

Provider Outreach and Education

Objective bull Provide billing and documentation guidance for Medicare Part A providers

bull Increase knowledge of Observation requirements

bull Improve understanding of the impact of medically reviewed claims

bull Assist in remaining compliant with Medicare Program

Agenda bull Observation = Outpatient Status

bull Inpatient Status

bull Observation versus Inpatient Status

bull Scenarios

bull National Paid Claims Error Rate

The information provided in this handout is current as of 11062012 Any changes or new information superseding this information will be provided in

articles and publication dates after 11062012 posted at wwwPalmettoGBAcom

OutpatientObservation

Observation Services Defined

bull Use of a bed for physician periodic monitoring and active monitoring by hospitals nursing or other ancillary staff bull For patient care which are reasonable and necessary to evaluate an outpatients condition or determine need for an inpatient admission

Observation Services bull Must be patient specific

bull Intended for short term

bull Generally does not exceed 24 hours

bull Greater than 48 hours would be seen rare and exceptional cases

bull Outpatient services

Observation Services

bull Observation only medically necessary when bull Patientrsquos current condition requires outpatient hospital services

OR

bull Therersquos a significant risk of deterioration in the immediate future

Observation Services

bull Medical Necessity and Proper Setting bull Considerations to determine appropriate setting for care based on patient needs bull Can treatment be provided on an outpatient basis or home health basis or at home

bull Are these alternatives more economical and effective than inpatient care

bull Does the patientrsquos physical condition and familysocial support system allow them access to care option

Observation Services bull Physicianrsquos order required and order must be part of medical record bull Order should clearly define what service is being requested

bull Clearly differentiate observation from an order for an inpatient admission bull Admit as inpatient or place in observation

bull Condition requires outpatient hospital services bull Observation services for convenience of patient or others are not medically necessary

Verbal Orders

bull Code of Federal Regulations (CFR) 48223 (c) (2) (i) Verbal Orders bull To be used infrequently

bull Used only to meet the care needs of patient when it is impossible or impractical for ordering physician to write an order

bull Not to be used for convenience of the ordering physician

Verbal Orders ndash Policy amp Procedures bull Hospitals are expected to develop appropriate policies and procedures bull Describe limitations or prohibitions on use

bull Provide a mechanism to ensure validityauthenticity of physician issuing a verbal order

bull List elements required for inclusion in the process

bull Describe situations that verbal orders may be used

bull Define types of personnel who may issue and receive verbal orders

bull Establish protocols for clear and effective communication and authentication of verbal orders

Verbal Orders ndash Communication amp Documentation bull Clearly communicate

bull Immediately document medical record which is to be signed by individual receiving order

bull Verbal orders should be recorded directly onto order sheet or into electronic health record

bull A read‐back verification practice to be implemented for every verbal order

Communication

bull An outpatient patient status for observation services will have an impact on beneficiaryrsquos benefits if transfer to another setting bull Such as a Skilled Nursing Facility (SNF)

bull Explain to beneficiary outpatient services were rendered and would not meet the technical requirement for a SNF inpatient admission

Observation Services BillingRequirements bull Type of Bill 13X

bull Appropriateapplicable coding bull Ancillary revenue codes

bull Healthcare Common Procedural Code System (HCPCS)

bull Current Procedure Terminology (CPT) codes

bull Diagnosis codes

Hospital Observation BillingRequirements bull When outpatient observation services span more than 1 calendar day bull All of the hours for entire period of observation must be included on a single line

bull Only one date of service is reported bull Report the date Observation care began

Hospital Observation BillingRequirements

Revenue Code Description

0762 Observation

Only revenue code 0762 should be reported when billing observation services

Hospital Observation Codes

bull G0378 ndashHospital Observation Services Per Hour

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Level of Care

Palmetto GBA

Inpatient or

Outpatient Observation

Provider Outreach and Education

Objective bull Provide billing and documentation guidance for Medicare Part A providers

bull Increase knowledge of Observation requirements

bull Improve understanding of the impact of medically reviewed claims

bull Assist in remaining compliant with Medicare Program

Agenda bull Observation = Outpatient Status

bull Inpatient Status

bull Observation versus Inpatient Status

bull Scenarios

bull National Paid Claims Error Rate

The information provided in this handout is current as of 11062012 Any changes or new information superseding this information will be provided in

articles and publication dates after 11062012 posted at wwwPalmettoGBAcom

OutpatientObservation

Observation Services Defined

bull Use of a bed for physician periodic monitoring and active monitoring by hospitals nursing or other ancillary staff bull For patient care which are reasonable and necessary to evaluate an outpatients condition or determine need for an inpatient admission

Observation Services bull Must be patient specific

bull Intended for short term

bull Generally does not exceed 24 hours

bull Greater than 48 hours would be seen rare and exceptional cases

bull Outpatient services

Observation Services

bull Observation only medically necessary when bull Patientrsquos current condition requires outpatient hospital services

OR

bull Therersquos a significant risk of deterioration in the immediate future

Observation Services

bull Medical Necessity and Proper Setting bull Considerations to determine appropriate setting for care based on patient needs bull Can treatment be provided on an outpatient basis or home health basis or at home

bull Are these alternatives more economical and effective than inpatient care

bull Does the patientrsquos physical condition and familysocial support system allow them access to care option

Observation Services bull Physicianrsquos order required and order must be part of medical record bull Order should clearly define what service is being requested

bull Clearly differentiate observation from an order for an inpatient admission bull Admit as inpatient or place in observation

bull Condition requires outpatient hospital services bull Observation services for convenience of patient or others are not medically necessary

Verbal Orders

bull Code of Federal Regulations (CFR) 48223 (c) (2) (i) Verbal Orders bull To be used infrequently

bull Used only to meet the care needs of patient when it is impossible or impractical for ordering physician to write an order

bull Not to be used for convenience of the ordering physician

Verbal Orders ndash Policy amp Procedures bull Hospitals are expected to develop appropriate policies and procedures bull Describe limitations or prohibitions on use

bull Provide a mechanism to ensure validityauthenticity of physician issuing a verbal order

bull List elements required for inclusion in the process

bull Describe situations that verbal orders may be used

bull Define types of personnel who may issue and receive verbal orders

bull Establish protocols for clear and effective communication and authentication of verbal orders

Verbal Orders ndash Communication amp Documentation bull Clearly communicate

bull Immediately document medical record which is to be signed by individual receiving order

bull Verbal orders should be recorded directly onto order sheet or into electronic health record

bull A read‐back verification practice to be implemented for every verbal order

Communication

bull An outpatient patient status for observation services will have an impact on beneficiaryrsquos benefits if transfer to another setting bull Such as a Skilled Nursing Facility (SNF)

bull Explain to beneficiary outpatient services were rendered and would not meet the technical requirement for a SNF inpatient admission

Observation Services BillingRequirements bull Type of Bill 13X

bull Appropriateapplicable coding bull Ancillary revenue codes

bull Healthcare Common Procedural Code System (HCPCS)

bull Current Procedure Terminology (CPT) codes

bull Diagnosis codes

Hospital Observation BillingRequirements bull When outpatient observation services span more than 1 calendar day bull All of the hours for entire period of observation must be included on a single line

bull Only one date of service is reported bull Report the date Observation care began

Hospital Observation BillingRequirements

Revenue Code Description

0762 Observation

Only revenue code 0762 should be reported when billing observation services

Hospital Observation Codes

bull G0378 ndashHospital Observation Services Per Hour

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Objective bull Provide billing and documentation guidance for Medicare Part A providers

bull Increase knowledge of Observation requirements

bull Improve understanding of the impact of medically reviewed claims

bull Assist in remaining compliant with Medicare Program

Agenda bull Observation = Outpatient Status

bull Inpatient Status

bull Observation versus Inpatient Status

bull Scenarios

bull National Paid Claims Error Rate

The information provided in this handout is current as of 11062012 Any changes or new information superseding this information will be provided in

articles and publication dates after 11062012 posted at wwwPalmettoGBAcom

OutpatientObservation

Observation Services Defined

bull Use of a bed for physician periodic monitoring and active monitoring by hospitals nursing or other ancillary staff bull For patient care which are reasonable and necessary to evaluate an outpatients condition or determine need for an inpatient admission

Observation Services bull Must be patient specific

bull Intended for short term

bull Generally does not exceed 24 hours

bull Greater than 48 hours would be seen rare and exceptional cases

bull Outpatient services

Observation Services

bull Observation only medically necessary when bull Patientrsquos current condition requires outpatient hospital services

OR

bull Therersquos a significant risk of deterioration in the immediate future

Observation Services

bull Medical Necessity and Proper Setting bull Considerations to determine appropriate setting for care based on patient needs bull Can treatment be provided on an outpatient basis or home health basis or at home

bull Are these alternatives more economical and effective than inpatient care

bull Does the patientrsquos physical condition and familysocial support system allow them access to care option

Observation Services bull Physicianrsquos order required and order must be part of medical record bull Order should clearly define what service is being requested

bull Clearly differentiate observation from an order for an inpatient admission bull Admit as inpatient or place in observation

bull Condition requires outpatient hospital services bull Observation services for convenience of patient or others are not medically necessary

Verbal Orders

bull Code of Federal Regulations (CFR) 48223 (c) (2) (i) Verbal Orders bull To be used infrequently

bull Used only to meet the care needs of patient when it is impossible or impractical for ordering physician to write an order

bull Not to be used for convenience of the ordering physician

Verbal Orders ndash Policy amp Procedures bull Hospitals are expected to develop appropriate policies and procedures bull Describe limitations or prohibitions on use

bull Provide a mechanism to ensure validityauthenticity of physician issuing a verbal order

bull List elements required for inclusion in the process

bull Describe situations that verbal orders may be used

bull Define types of personnel who may issue and receive verbal orders

bull Establish protocols for clear and effective communication and authentication of verbal orders

Verbal Orders ndash Communication amp Documentation bull Clearly communicate

bull Immediately document medical record which is to be signed by individual receiving order

bull Verbal orders should be recorded directly onto order sheet or into electronic health record

bull A read‐back verification practice to be implemented for every verbal order

Communication

bull An outpatient patient status for observation services will have an impact on beneficiaryrsquos benefits if transfer to another setting bull Such as a Skilled Nursing Facility (SNF)

bull Explain to beneficiary outpatient services were rendered and would not meet the technical requirement for a SNF inpatient admission

Observation Services BillingRequirements bull Type of Bill 13X

bull Appropriateapplicable coding bull Ancillary revenue codes

bull Healthcare Common Procedural Code System (HCPCS)

bull Current Procedure Terminology (CPT) codes

bull Diagnosis codes

Hospital Observation BillingRequirements bull When outpatient observation services span more than 1 calendar day bull All of the hours for entire period of observation must be included on a single line

bull Only one date of service is reported bull Report the date Observation care began

Hospital Observation BillingRequirements

Revenue Code Description

0762 Observation

Only revenue code 0762 should be reported when billing observation services

Hospital Observation Codes

bull G0378 ndashHospital Observation Services Per Hour

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Agenda bull Observation = Outpatient Status

bull Inpatient Status

bull Observation versus Inpatient Status

bull Scenarios

bull National Paid Claims Error Rate

The information provided in this handout is current as of 11062012 Any changes or new information superseding this information will be provided in

articles and publication dates after 11062012 posted at wwwPalmettoGBAcom

OutpatientObservation

Observation Services Defined

bull Use of a bed for physician periodic monitoring and active monitoring by hospitals nursing or other ancillary staff bull For patient care which are reasonable and necessary to evaluate an outpatients condition or determine need for an inpatient admission

Observation Services bull Must be patient specific

bull Intended for short term

bull Generally does not exceed 24 hours

bull Greater than 48 hours would be seen rare and exceptional cases

bull Outpatient services

Observation Services

bull Observation only medically necessary when bull Patientrsquos current condition requires outpatient hospital services

OR

bull Therersquos a significant risk of deterioration in the immediate future

Observation Services

bull Medical Necessity and Proper Setting bull Considerations to determine appropriate setting for care based on patient needs bull Can treatment be provided on an outpatient basis or home health basis or at home

bull Are these alternatives more economical and effective than inpatient care

bull Does the patientrsquos physical condition and familysocial support system allow them access to care option

Observation Services bull Physicianrsquos order required and order must be part of medical record bull Order should clearly define what service is being requested

bull Clearly differentiate observation from an order for an inpatient admission bull Admit as inpatient or place in observation

bull Condition requires outpatient hospital services bull Observation services for convenience of patient or others are not medically necessary

Verbal Orders

bull Code of Federal Regulations (CFR) 48223 (c) (2) (i) Verbal Orders bull To be used infrequently

bull Used only to meet the care needs of patient when it is impossible or impractical for ordering physician to write an order

bull Not to be used for convenience of the ordering physician

Verbal Orders ndash Policy amp Procedures bull Hospitals are expected to develop appropriate policies and procedures bull Describe limitations or prohibitions on use

bull Provide a mechanism to ensure validityauthenticity of physician issuing a verbal order

bull List elements required for inclusion in the process

bull Describe situations that verbal orders may be used

bull Define types of personnel who may issue and receive verbal orders

bull Establish protocols for clear and effective communication and authentication of verbal orders

Verbal Orders ndash Communication amp Documentation bull Clearly communicate

bull Immediately document medical record which is to be signed by individual receiving order

bull Verbal orders should be recorded directly onto order sheet or into electronic health record

bull A read‐back verification practice to be implemented for every verbal order

Communication

bull An outpatient patient status for observation services will have an impact on beneficiaryrsquos benefits if transfer to another setting bull Such as a Skilled Nursing Facility (SNF)

bull Explain to beneficiary outpatient services were rendered and would not meet the technical requirement for a SNF inpatient admission

Observation Services BillingRequirements bull Type of Bill 13X

bull Appropriateapplicable coding bull Ancillary revenue codes

bull Healthcare Common Procedural Code System (HCPCS)

bull Current Procedure Terminology (CPT) codes

bull Diagnosis codes

Hospital Observation BillingRequirements bull When outpatient observation services span more than 1 calendar day bull All of the hours for entire period of observation must be included on a single line

bull Only one date of service is reported bull Report the date Observation care began

Hospital Observation BillingRequirements

Revenue Code Description

0762 Observation

Only revenue code 0762 should be reported when billing observation services

Hospital Observation Codes

bull G0378 ndashHospital Observation Services Per Hour

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

OutpatientObservation

Observation Services Defined

bull Use of a bed for physician periodic monitoring and active monitoring by hospitals nursing or other ancillary staff bull For patient care which are reasonable and necessary to evaluate an outpatients condition or determine need for an inpatient admission

Observation Services bull Must be patient specific

bull Intended for short term

bull Generally does not exceed 24 hours

bull Greater than 48 hours would be seen rare and exceptional cases

bull Outpatient services

Observation Services

bull Observation only medically necessary when bull Patientrsquos current condition requires outpatient hospital services

OR

bull Therersquos a significant risk of deterioration in the immediate future

Observation Services

bull Medical Necessity and Proper Setting bull Considerations to determine appropriate setting for care based on patient needs bull Can treatment be provided on an outpatient basis or home health basis or at home

bull Are these alternatives more economical and effective than inpatient care

bull Does the patientrsquos physical condition and familysocial support system allow them access to care option

Observation Services bull Physicianrsquos order required and order must be part of medical record bull Order should clearly define what service is being requested

bull Clearly differentiate observation from an order for an inpatient admission bull Admit as inpatient or place in observation

bull Condition requires outpatient hospital services bull Observation services for convenience of patient or others are not medically necessary

Verbal Orders

bull Code of Federal Regulations (CFR) 48223 (c) (2) (i) Verbal Orders bull To be used infrequently

bull Used only to meet the care needs of patient when it is impossible or impractical for ordering physician to write an order

bull Not to be used for convenience of the ordering physician

Verbal Orders ndash Policy amp Procedures bull Hospitals are expected to develop appropriate policies and procedures bull Describe limitations or prohibitions on use

bull Provide a mechanism to ensure validityauthenticity of physician issuing a verbal order

bull List elements required for inclusion in the process

bull Describe situations that verbal orders may be used

bull Define types of personnel who may issue and receive verbal orders

bull Establish protocols for clear and effective communication and authentication of verbal orders

Verbal Orders ndash Communication amp Documentation bull Clearly communicate

bull Immediately document medical record which is to be signed by individual receiving order

bull Verbal orders should be recorded directly onto order sheet or into electronic health record

bull A read‐back verification practice to be implemented for every verbal order

Communication

bull An outpatient patient status for observation services will have an impact on beneficiaryrsquos benefits if transfer to another setting bull Such as a Skilled Nursing Facility (SNF)

bull Explain to beneficiary outpatient services were rendered and would not meet the technical requirement for a SNF inpatient admission

Observation Services BillingRequirements bull Type of Bill 13X

bull Appropriateapplicable coding bull Ancillary revenue codes

bull Healthcare Common Procedural Code System (HCPCS)

bull Current Procedure Terminology (CPT) codes

bull Diagnosis codes

Hospital Observation BillingRequirements bull When outpatient observation services span more than 1 calendar day bull All of the hours for entire period of observation must be included on a single line

bull Only one date of service is reported bull Report the date Observation care began

Hospital Observation BillingRequirements

Revenue Code Description

0762 Observation

Only revenue code 0762 should be reported when billing observation services

Hospital Observation Codes

bull G0378 ndashHospital Observation Services Per Hour

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Observation Services Defined

bull Use of a bed for physician periodic monitoring and active monitoring by hospitals nursing or other ancillary staff bull For patient care which are reasonable and necessary to evaluate an outpatients condition or determine need for an inpatient admission

Observation Services bull Must be patient specific

bull Intended for short term

bull Generally does not exceed 24 hours

bull Greater than 48 hours would be seen rare and exceptional cases

bull Outpatient services

Observation Services

bull Observation only medically necessary when bull Patientrsquos current condition requires outpatient hospital services

OR

bull Therersquos a significant risk of deterioration in the immediate future

Observation Services

bull Medical Necessity and Proper Setting bull Considerations to determine appropriate setting for care based on patient needs bull Can treatment be provided on an outpatient basis or home health basis or at home

bull Are these alternatives more economical and effective than inpatient care

bull Does the patientrsquos physical condition and familysocial support system allow them access to care option

Observation Services bull Physicianrsquos order required and order must be part of medical record bull Order should clearly define what service is being requested

bull Clearly differentiate observation from an order for an inpatient admission bull Admit as inpatient or place in observation

bull Condition requires outpatient hospital services bull Observation services for convenience of patient or others are not medically necessary

Verbal Orders

bull Code of Federal Regulations (CFR) 48223 (c) (2) (i) Verbal Orders bull To be used infrequently

bull Used only to meet the care needs of patient when it is impossible or impractical for ordering physician to write an order

bull Not to be used for convenience of the ordering physician

Verbal Orders ndash Policy amp Procedures bull Hospitals are expected to develop appropriate policies and procedures bull Describe limitations or prohibitions on use

bull Provide a mechanism to ensure validityauthenticity of physician issuing a verbal order

bull List elements required for inclusion in the process

bull Describe situations that verbal orders may be used

bull Define types of personnel who may issue and receive verbal orders

bull Establish protocols for clear and effective communication and authentication of verbal orders

Verbal Orders ndash Communication amp Documentation bull Clearly communicate

bull Immediately document medical record which is to be signed by individual receiving order

bull Verbal orders should be recorded directly onto order sheet or into electronic health record

bull A read‐back verification practice to be implemented for every verbal order

Communication

bull An outpatient patient status for observation services will have an impact on beneficiaryrsquos benefits if transfer to another setting bull Such as a Skilled Nursing Facility (SNF)

bull Explain to beneficiary outpatient services were rendered and would not meet the technical requirement for a SNF inpatient admission

Observation Services BillingRequirements bull Type of Bill 13X

bull Appropriateapplicable coding bull Ancillary revenue codes

bull Healthcare Common Procedural Code System (HCPCS)

bull Current Procedure Terminology (CPT) codes

bull Diagnosis codes

Hospital Observation BillingRequirements bull When outpatient observation services span more than 1 calendar day bull All of the hours for entire period of observation must be included on a single line

bull Only one date of service is reported bull Report the date Observation care began

Hospital Observation BillingRequirements

Revenue Code Description

0762 Observation

Only revenue code 0762 should be reported when billing observation services

Hospital Observation Codes

bull G0378 ndashHospital Observation Services Per Hour

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Observation Services bull Must be patient specific

bull Intended for short term

bull Generally does not exceed 24 hours

bull Greater than 48 hours would be seen rare and exceptional cases

bull Outpatient services

Observation Services

bull Observation only medically necessary when bull Patientrsquos current condition requires outpatient hospital services

OR

bull Therersquos a significant risk of deterioration in the immediate future

Observation Services

bull Medical Necessity and Proper Setting bull Considerations to determine appropriate setting for care based on patient needs bull Can treatment be provided on an outpatient basis or home health basis or at home

bull Are these alternatives more economical and effective than inpatient care

bull Does the patientrsquos physical condition and familysocial support system allow them access to care option

Observation Services bull Physicianrsquos order required and order must be part of medical record bull Order should clearly define what service is being requested

bull Clearly differentiate observation from an order for an inpatient admission bull Admit as inpatient or place in observation

bull Condition requires outpatient hospital services bull Observation services for convenience of patient or others are not medically necessary

Verbal Orders

bull Code of Federal Regulations (CFR) 48223 (c) (2) (i) Verbal Orders bull To be used infrequently

bull Used only to meet the care needs of patient when it is impossible or impractical for ordering physician to write an order

bull Not to be used for convenience of the ordering physician

Verbal Orders ndash Policy amp Procedures bull Hospitals are expected to develop appropriate policies and procedures bull Describe limitations or prohibitions on use

bull Provide a mechanism to ensure validityauthenticity of physician issuing a verbal order

bull List elements required for inclusion in the process

bull Describe situations that verbal orders may be used

bull Define types of personnel who may issue and receive verbal orders

bull Establish protocols for clear and effective communication and authentication of verbal orders

Verbal Orders ndash Communication amp Documentation bull Clearly communicate

bull Immediately document medical record which is to be signed by individual receiving order

bull Verbal orders should be recorded directly onto order sheet or into electronic health record

bull A read‐back verification practice to be implemented for every verbal order

Communication

bull An outpatient patient status for observation services will have an impact on beneficiaryrsquos benefits if transfer to another setting bull Such as a Skilled Nursing Facility (SNF)

bull Explain to beneficiary outpatient services were rendered and would not meet the technical requirement for a SNF inpatient admission

Observation Services BillingRequirements bull Type of Bill 13X

bull Appropriateapplicable coding bull Ancillary revenue codes

bull Healthcare Common Procedural Code System (HCPCS)

bull Current Procedure Terminology (CPT) codes

bull Diagnosis codes

Hospital Observation BillingRequirements bull When outpatient observation services span more than 1 calendar day bull All of the hours for entire period of observation must be included on a single line

bull Only one date of service is reported bull Report the date Observation care began

Hospital Observation BillingRequirements

Revenue Code Description

0762 Observation

Only revenue code 0762 should be reported when billing observation services

Hospital Observation Codes

bull G0378 ndashHospital Observation Services Per Hour

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Observation Services

bull Observation only medically necessary when bull Patientrsquos current condition requires outpatient hospital services

OR

bull Therersquos a significant risk of deterioration in the immediate future

Observation Services

bull Medical Necessity and Proper Setting bull Considerations to determine appropriate setting for care based on patient needs bull Can treatment be provided on an outpatient basis or home health basis or at home

bull Are these alternatives more economical and effective than inpatient care

bull Does the patientrsquos physical condition and familysocial support system allow them access to care option

Observation Services bull Physicianrsquos order required and order must be part of medical record bull Order should clearly define what service is being requested

bull Clearly differentiate observation from an order for an inpatient admission bull Admit as inpatient or place in observation

bull Condition requires outpatient hospital services bull Observation services for convenience of patient or others are not medically necessary

Verbal Orders

bull Code of Federal Regulations (CFR) 48223 (c) (2) (i) Verbal Orders bull To be used infrequently

bull Used only to meet the care needs of patient when it is impossible or impractical for ordering physician to write an order

bull Not to be used for convenience of the ordering physician

Verbal Orders ndash Policy amp Procedures bull Hospitals are expected to develop appropriate policies and procedures bull Describe limitations or prohibitions on use

bull Provide a mechanism to ensure validityauthenticity of physician issuing a verbal order

bull List elements required for inclusion in the process

bull Describe situations that verbal orders may be used

bull Define types of personnel who may issue and receive verbal orders

bull Establish protocols for clear and effective communication and authentication of verbal orders

Verbal Orders ndash Communication amp Documentation bull Clearly communicate

bull Immediately document medical record which is to be signed by individual receiving order

bull Verbal orders should be recorded directly onto order sheet or into electronic health record

bull A read‐back verification practice to be implemented for every verbal order

Communication

bull An outpatient patient status for observation services will have an impact on beneficiaryrsquos benefits if transfer to another setting bull Such as a Skilled Nursing Facility (SNF)

bull Explain to beneficiary outpatient services were rendered and would not meet the technical requirement for a SNF inpatient admission

Observation Services BillingRequirements bull Type of Bill 13X

bull Appropriateapplicable coding bull Ancillary revenue codes

bull Healthcare Common Procedural Code System (HCPCS)

bull Current Procedure Terminology (CPT) codes

bull Diagnosis codes

Hospital Observation BillingRequirements bull When outpatient observation services span more than 1 calendar day bull All of the hours for entire period of observation must be included on a single line

bull Only one date of service is reported bull Report the date Observation care began

Hospital Observation BillingRequirements

Revenue Code Description

0762 Observation

Only revenue code 0762 should be reported when billing observation services

Hospital Observation Codes

bull G0378 ndashHospital Observation Services Per Hour

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Observation Services

bull Medical Necessity and Proper Setting bull Considerations to determine appropriate setting for care based on patient needs bull Can treatment be provided on an outpatient basis or home health basis or at home

bull Are these alternatives more economical and effective than inpatient care

bull Does the patientrsquos physical condition and familysocial support system allow them access to care option

Observation Services bull Physicianrsquos order required and order must be part of medical record bull Order should clearly define what service is being requested

bull Clearly differentiate observation from an order for an inpatient admission bull Admit as inpatient or place in observation

bull Condition requires outpatient hospital services bull Observation services for convenience of patient or others are not medically necessary

Verbal Orders

bull Code of Federal Regulations (CFR) 48223 (c) (2) (i) Verbal Orders bull To be used infrequently

bull Used only to meet the care needs of patient when it is impossible or impractical for ordering physician to write an order

bull Not to be used for convenience of the ordering physician

Verbal Orders ndash Policy amp Procedures bull Hospitals are expected to develop appropriate policies and procedures bull Describe limitations or prohibitions on use

bull Provide a mechanism to ensure validityauthenticity of physician issuing a verbal order

bull List elements required for inclusion in the process

bull Describe situations that verbal orders may be used

bull Define types of personnel who may issue and receive verbal orders

bull Establish protocols for clear and effective communication and authentication of verbal orders

Verbal Orders ndash Communication amp Documentation bull Clearly communicate

bull Immediately document medical record which is to be signed by individual receiving order

bull Verbal orders should be recorded directly onto order sheet or into electronic health record

bull A read‐back verification practice to be implemented for every verbal order

Communication

bull An outpatient patient status for observation services will have an impact on beneficiaryrsquos benefits if transfer to another setting bull Such as a Skilled Nursing Facility (SNF)

bull Explain to beneficiary outpatient services were rendered and would not meet the technical requirement for a SNF inpatient admission

Observation Services BillingRequirements bull Type of Bill 13X

bull Appropriateapplicable coding bull Ancillary revenue codes

bull Healthcare Common Procedural Code System (HCPCS)

bull Current Procedure Terminology (CPT) codes

bull Diagnosis codes

Hospital Observation BillingRequirements bull When outpatient observation services span more than 1 calendar day bull All of the hours for entire period of observation must be included on a single line

bull Only one date of service is reported bull Report the date Observation care began

Hospital Observation BillingRequirements

Revenue Code Description

0762 Observation

Only revenue code 0762 should be reported when billing observation services

Hospital Observation Codes

bull G0378 ndashHospital Observation Services Per Hour

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Observation Services bull Physicianrsquos order required and order must be part of medical record bull Order should clearly define what service is being requested

bull Clearly differentiate observation from an order for an inpatient admission bull Admit as inpatient or place in observation

bull Condition requires outpatient hospital services bull Observation services for convenience of patient or others are not medically necessary

Verbal Orders

bull Code of Federal Regulations (CFR) 48223 (c) (2) (i) Verbal Orders bull To be used infrequently

bull Used only to meet the care needs of patient when it is impossible or impractical for ordering physician to write an order

bull Not to be used for convenience of the ordering physician

Verbal Orders ndash Policy amp Procedures bull Hospitals are expected to develop appropriate policies and procedures bull Describe limitations or prohibitions on use

bull Provide a mechanism to ensure validityauthenticity of physician issuing a verbal order

bull List elements required for inclusion in the process

bull Describe situations that verbal orders may be used

bull Define types of personnel who may issue and receive verbal orders

bull Establish protocols for clear and effective communication and authentication of verbal orders

Verbal Orders ndash Communication amp Documentation bull Clearly communicate

bull Immediately document medical record which is to be signed by individual receiving order

bull Verbal orders should be recorded directly onto order sheet or into electronic health record

bull A read‐back verification practice to be implemented for every verbal order

Communication

bull An outpatient patient status for observation services will have an impact on beneficiaryrsquos benefits if transfer to another setting bull Such as a Skilled Nursing Facility (SNF)

bull Explain to beneficiary outpatient services were rendered and would not meet the technical requirement for a SNF inpatient admission

Observation Services BillingRequirements bull Type of Bill 13X

bull Appropriateapplicable coding bull Ancillary revenue codes

bull Healthcare Common Procedural Code System (HCPCS)

bull Current Procedure Terminology (CPT) codes

bull Diagnosis codes

Hospital Observation BillingRequirements bull When outpatient observation services span more than 1 calendar day bull All of the hours for entire period of observation must be included on a single line

bull Only one date of service is reported bull Report the date Observation care began

Hospital Observation BillingRequirements

Revenue Code Description

0762 Observation

Only revenue code 0762 should be reported when billing observation services

Hospital Observation Codes

bull G0378 ndashHospital Observation Services Per Hour

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Verbal Orders

bull Code of Federal Regulations (CFR) 48223 (c) (2) (i) Verbal Orders bull To be used infrequently

bull Used only to meet the care needs of patient when it is impossible or impractical for ordering physician to write an order

bull Not to be used for convenience of the ordering physician

Verbal Orders ndash Policy amp Procedures bull Hospitals are expected to develop appropriate policies and procedures bull Describe limitations or prohibitions on use

bull Provide a mechanism to ensure validityauthenticity of physician issuing a verbal order

bull List elements required for inclusion in the process

bull Describe situations that verbal orders may be used

bull Define types of personnel who may issue and receive verbal orders

bull Establish protocols for clear and effective communication and authentication of verbal orders

Verbal Orders ndash Communication amp Documentation bull Clearly communicate

bull Immediately document medical record which is to be signed by individual receiving order

bull Verbal orders should be recorded directly onto order sheet or into electronic health record

bull A read‐back verification practice to be implemented for every verbal order

Communication

bull An outpatient patient status for observation services will have an impact on beneficiaryrsquos benefits if transfer to another setting bull Such as a Skilled Nursing Facility (SNF)

bull Explain to beneficiary outpatient services were rendered and would not meet the technical requirement for a SNF inpatient admission

Observation Services BillingRequirements bull Type of Bill 13X

bull Appropriateapplicable coding bull Ancillary revenue codes

bull Healthcare Common Procedural Code System (HCPCS)

bull Current Procedure Terminology (CPT) codes

bull Diagnosis codes

Hospital Observation BillingRequirements bull When outpatient observation services span more than 1 calendar day bull All of the hours for entire period of observation must be included on a single line

bull Only one date of service is reported bull Report the date Observation care began

Hospital Observation BillingRequirements

Revenue Code Description

0762 Observation

Only revenue code 0762 should be reported when billing observation services

Hospital Observation Codes

bull G0378 ndashHospital Observation Services Per Hour

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Verbal Orders ndash Policy amp Procedures bull Hospitals are expected to develop appropriate policies and procedures bull Describe limitations or prohibitions on use

bull Provide a mechanism to ensure validityauthenticity of physician issuing a verbal order

bull List elements required for inclusion in the process

bull Describe situations that verbal orders may be used

bull Define types of personnel who may issue and receive verbal orders

bull Establish protocols for clear and effective communication and authentication of verbal orders

Verbal Orders ndash Communication amp Documentation bull Clearly communicate

bull Immediately document medical record which is to be signed by individual receiving order

bull Verbal orders should be recorded directly onto order sheet or into electronic health record

bull A read‐back verification practice to be implemented for every verbal order

Communication

bull An outpatient patient status for observation services will have an impact on beneficiaryrsquos benefits if transfer to another setting bull Such as a Skilled Nursing Facility (SNF)

bull Explain to beneficiary outpatient services were rendered and would not meet the technical requirement for a SNF inpatient admission

Observation Services BillingRequirements bull Type of Bill 13X

bull Appropriateapplicable coding bull Ancillary revenue codes

bull Healthcare Common Procedural Code System (HCPCS)

bull Current Procedure Terminology (CPT) codes

bull Diagnosis codes

Hospital Observation BillingRequirements bull When outpatient observation services span more than 1 calendar day bull All of the hours for entire period of observation must be included on a single line

bull Only one date of service is reported bull Report the date Observation care began

Hospital Observation BillingRequirements

Revenue Code Description

0762 Observation

Only revenue code 0762 should be reported when billing observation services

Hospital Observation Codes

bull G0378 ndashHospital Observation Services Per Hour

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Verbal Orders ndash Communication amp Documentation bull Clearly communicate

bull Immediately document medical record which is to be signed by individual receiving order

bull Verbal orders should be recorded directly onto order sheet or into electronic health record

bull A read‐back verification practice to be implemented for every verbal order

Communication

bull An outpatient patient status for observation services will have an impact on beneficiaryrsquos benefits if transfer to another setting bull Such as a Skilled Nursing Facility (SNF)

bull Explain to beneficiary outpatient services were rendered and would not meet the technical requirement for a SNF inpatient admission

Observation Services BillingRequirements bull Type of Bill 13X

bull Appropriateapplicable coding bull Ancillary revenue codes

bull Healthcare Common Procedural Code System (HCPCS)

bull Current Procedure Terminology (CPT) codes

bull Diagnosis codes

Hospital Observation BillingRequirements bull When outpatient observation services span more than 1 calendar day bull All of the hours for entire period of observation must be included on a single line

bull Only one date of service is reported bull Report the date Observation care began

Hospital Observation BillingRequirements

Revenue Code Description

0762 Observation

Only revenue code 0762 should be reported when billing observation services

Hospital Observation Codes

bull G0378 ndashHospital Observation Services Per Hour

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Communication

bull An outpatient patient status for observation services will have an impact on beneficiaryrsquos benefits if transfer to another setting bull Such as a Skilled Nursing Facility (SNF)

bull Explain to beneficiary outpatient services were rendered and would not meet the technical requirement for a SNF inpatient admission

Observation Services BillingRequirements bull Type of Bill 13X

bull Appropriateapplicable coding bull Ancillary revenue codes

bull Healthcare Common Procedural Code System (HCPCS)

bull Current Procedure Terminology (CPT) codes

bull Diagnosis codes

Hospital Observation BillingRequirements bull When outpatient observation services span more than 1 calendar day bull All of the hours for entire period of observation must be included on a single line

bull Only one date of service is reported bull Report the date Observation care began

Hospital Observation BillingRequirements

Revenue Code Description

0762 Observation

Only revenue code 0762 should be reported when billing observation services

Hospital Observation Codes

bull G0378 ndashHospital Observation Services Per Hour

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Observation Services BillingRequirements bull Type of Bill 13X

bull Appropriateapplicable coding bull Ancillary revenue codes

bull Healthcare Common Procedural Code System (HCPCS)

bull Current Procedure Terminology (CPT) codes

bull Diagnosis codes

Hospital Observation BillingRequirements bull When outpatient observation services span more than 1 calendar day bull All of the hours for entire period of observation must be included on a single line

bull Only one date of service is reported bull Report the date Observation care began

Hospital Observation BillingRequirements

Revenue Code Description

0762 Observation

Only revenue code 0762 should be reported when billing observation services

Hospital Observation Codes

bull G0378 ndashHospital Observation Services Per Hour

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Hospital Observation BillingRequirements bull When outpatient observation services span more than 1 calendar day bull All of the hours for entire period of observation must be included on a single line

bull Only one date of service is reported bull Report the date Observation care began

Hospital Observation BillingRequirements

Revenue Code Description

0762 Observation

Only revenue code 0762 should be reported when billing observation services

Hospital Observation Codes

bull G0378 ndashHospital Observation Services Per Hour

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Hospital Observation BillingRequirements

Revenue Code Description

0762 Observation

Only revenue code 0762 should be reported when billing observation services

Hospital Observation Codes

bull G0378 ndashHospital Observation Services Per Hour

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Hospital Observation Codes

bull G0378 ndashHospital Observation Services Per Hour

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Hospital Observation CodeG0379

bull G0379 ndashDirect (Referral) Admission of Patient for Hospital Observation Services bull Only report when applicable

bull When patient is referred directly to observation care after being seen by a physician in community bull Without an associated ER visit hospital outpatient clinic visit or critical care service on day of initiation of observation

bull Clock time begins when patient placed in observation bull This must be documented in the medical record

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Hospital Observation TimeRequirements bull Observation time must be documented in medical record

bull Begins at clock time documented coincides with time observation services are initiated in accordance to physicianrsquos order

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Hospital Observation TimeRequirements bull Nursersquos patient assessment prior to physician order is not counted towards observation time

bull Hospitals should round to nearest hour

bull Units of service billed must equal number of hours patient is in observation status

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Hospital Observation TimeRequirements continued bull Observation time ends when all clinical or medical interventions have been completed including follow up care furnished by hospital staff and

bull After a physician has ordered patient to be discharged or admitted as an inpatient bull Number of units reported with G0378 must equal or exceed 8 hours to receive separate payment

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Hospital Observation TimeRequirements continued

bull Observation less than 8 hours must be documented in medical record and are packaged into Ambulatory Payment Classification (APC) for Outpatient Prospective Payment System (OPPS) providers

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Timing for DiagnosticServices

bull Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure or service

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Rounding Observation TimeExample 1

bull No active monitoring carve out bull Order to place in Observation documented 1020 am

bull Order to discharge home at 945 pm

bull 11 hours 25 minutes in Observation

bull Total units to bill 11

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Rounding Observation TimeExample 2

bull Active monitoring carved out bull Order to place in Observation documented at 1220 am

bull Order to admit as inpatient at 1145 am bull 11 hrs 25 min in Observation

bull 1 hr 40 min at diagnostic test bull Time carved out of Observation units

bull 9 hrs 45 min total time spent in Observation

bull Total units to bill 10

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Observation Services BillingRequirements bull One of these services must be reported with same date of service or day before date reported for observation bull Type A or B emergency department visit CPT codes 99284 or 99285 or HCPCS code G0384 or

bull A clinic visit (CPT code 99205 or 99215) or

bull Critical care (CPT code 99291) or

bull Direct referral for observation care reported with G0379 must be reported on same date of service as the date reported for observation services

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Inpatient Status

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Inpatient Services Defined

bull An inpatient is a person who has been admitted to a hospital for bed occupancy for the purposes of receiving inpatient hospital services

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Inpatient Admission bull Term ldquoadmitrdquo

bull Observation or Inpatient

bull Inpatient admission are based on

bull Severity of illness bull Intensity of services

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Payment Window

bull Payment window includes all outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to the inpatient stay bull On date of inpatient admission or bull Three days immediately preceding the date of admission

bull Unless ldquothe hospital demonstrates that such services are not related to such admissionrdquo

bull Statute does not change billing of diagnostic services

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Payment Window

bull Hospitals are able to bill correctly for admission‐related outpatient non‐diagnostic services without modifying dates on the inpatient claim bull Bundle services on inpatient hospital claim

bull ICD‐9‐CM procedure code dates for non‐diagnostic services will be allowed

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Payment Window CodingRequirement

bull Change Request (CR) 7142 Clarification of Payment Window for Outpatient Services Treated as Inpatient Services bull Effective June 25 2010 bull Implementation date April 4 2011

bull Outpatient Services unrelated to inpatient admission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Inpatient versusOutpatient

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Inpatient Changed toOutpatient Policy bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospital must ensure all UR requirements are fulfilled

bull UR committee consists of two or more physicians carries out UR function

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Inpatient Changed toOutpatient Policy

bull Determination that an admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of the patient either concurs with the determination or fails to present their view when afforded opportunity or

bull Two members of the UR committee in all other cases

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Inpatient Changed toOutpatient Policy

bull UR committee must consult with physician responsible for patientrsquos care and allow them to present their views before making the determination

bull If UR committee determines admission is not medically necessary bull Committee must give written notification no later than 2 days after determination to the hospital patient and practitioner responsible for the care of the patient

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Disagreement of the Changein Status

bull Attending physicians does not concur with UR decision bull If two physician members of UR determine patientrsquos stay is not medically necessary their decision becomes final

bull In no case may a non‐physician make a final determination that a patientrsquos stay is not medically necessary or appropriate

bull httpwwwcmsgovmanualsDownloadssom107ap _a_hospitalspdf

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Inpatient Changed toOutpatient Policy bull It is the hospital UR committee that changes the beneficiaryrsquos status from inpatient to outpatient bull Physician concurrence is required

bull Two physician members of UR committee in all other instances

bull Hospital may not change a patient status from inpatient to outpatient without UR committee involvement

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Use of Condition Code 44 Policy

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with Utilization Review (UR) committeersquos decision and

bull Physicianrsquos concurrence is documented in the patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient is still in treatment

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Utilization Review

bull Reporting Condition Code (CC) 44 should become rare

bull CC 44 is not a substitute for adequate staffing or continued education of hospital existing policies and admission protocols bull Review of medical necessity admissions and continued stays

bull Review of admissions may be performed before at or after hospital admission

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Frequently Asked Question

bull How should the hospital report Observation services when the patients status is changed from inpatient to outpatient using Condition Code 44

bull May the hospital report Observation services from the beginning of the hospital outpatient encounter

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Frequently Asked Question ‐Answer bull CMS Answer Identification 9973

bull httpsquestionscmshhsgovappanswersdetaila _id9973kwObservation

bull When Condition Code 44 is appropriately used bull Hospital reports on outpatient bill services that were orderedprovided to patient for entire patient encounter

bull Reporting of individual HCPCS codes on an outpatient claim must be consistent with all applicable instructions and CMS guidance

bull Observation cannot be ordered retroactively

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Medical Record bull Entries in the medical record cannot be expunged or deleted and must be retained in their original form

bull All orders and entries related to the inpatient admission must be retained in the record in their original form

bull If a patientrsquos status changes in accordance with requirements for use of Condition Code 44 ‐ change must be fully documented in medical record

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Medical Records bull Must be complete with orders

bull Who What When

bull Note when the change was made

bull Note the care that was furnished

bull Include the participants in making the decision to change the patientrsquos status

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Condition Code 44 Billing bull Entire episode of care should be treated as if inpatient admission never occurred

bull Medically necessary Part B services should be billed as an outpatient episode of care bull Type of Bill (TOB) 13x or 85x bull Condition Code 44 bull Report all other applicable data elements

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Condition Code 44 Billing bull Billing for services prior to observation order in Condition Code 44 situations bull Hospital encounter prior to physicianrsquos order for Observation

bull May not report HCPCS code G0378 bull Include charges on outpatient claim for cost of all hospital resources utilized in patientrsquos care during entire encounter

bull Revenue code 0762 without coding on outpatient claim

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Condition Code 44 Billing Example

bull Patient is admitted as inpatient and receives 12 hours of care bull Hospital Utilization Review (UR) changes status from inpatient to outpatient

bull Physician orders Observation services for additional 24 hours before patient is sent home

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Condition Code 44 Billing

Revenue Code

CodeModifier Date of Service

Units Charges

0762 7112 12 $50000

0762 G0378 7212 24 $100000

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Physician Changes PatientStatus

bull Can a hospital change a patients status using Condition Code 44 when a physician changes patients status without Utilization Review (UR) committee involvement bull No the determination to change a patientrsquos status must be made by the UR committee with physician concurrence

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Condition Code Policy 44 NotMet bull Decision to change patient status from Inpatient admission to Outpatient status was after patient discharged

bull No beneficiary liability due to patient was not notified of financial liabilities prior to discharge

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Condition Code Policy 44 NotMet Billing

bull Submit a 11X Type of Bill (TOB) bull Or adjust 11X TOB making a 117 TOB

bull Then submit 12x TOB for covered Part B services furnished to the inpatient

bull Part A 11X TOB must process before 12X TOB

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Filing the Inpatient No PayClaim bull Report days as covered on claim page one

bull Report Occurrence Span Code 77

bull Dates must equal from and through date of no payment claim

bull Report charges as non‐covered on claim page 2

bull Add a brief clear and concise explanation for filing a no payment claim

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

References

bull CMS Change Request (CR) 3444

httpwwwcmsgovtransmittalsdownloads R299CPpdf

bull Medicare Learning Network Matters Article SE0622

httpwwwcmsgovMLNMattersArticlesdow nloadsSE0622pdf

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

References CMS IOM 100‐04 Medicare Claims Processing Manual

bull General Billing Instructions Chapter 1 Section 503 httpwwwcmsgovmanualsdownloadsclm104c01pdf

bull Inpatient Hospital Billing Chapter 3 Section 104 and Section 403

httpwwwcmsgovmanualsdownloadsclm104c03pdf

bull Financial Liability Protection Chapter 30 httpwwwcmsgovmanualsdownloadsclm104c30pdf

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

References Palmetto GBA Web Site Articles

bull Ancillary Services Hospital Part A httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~Hospitals~8 CKTNX5473openampnavmenu=7C7C

bull Not Medically Necessary Inpatient Admissions and Provider Liable Billing Requirements

httpwwwpalmettogbacompalmettoprovidersnsfDocsCat Providers~Jurisdiction20120Part20A~Articles~General~7R XNU91083openampnavmenu=7C7C

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Case Studies and Billing Scenarios

Inpatient or Outpatient

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Medicare Coverage Review

bull Two patient statuses at a hospital

bull Outpatient bull Observation is a service not a status

bull Inpatient bull ldquoAdmitrdquo refers to an inpatient admission

bull Communication between staff patients and patient advocates is expected

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Admission Considerations

bull Patientrsquos medical history bull Severity of signs and symptomsbull Current medical needs bull Intensity of services bull Facilities and services

available bull Severity of illness

bull Hospital by‐laws and bull Medical predictability

admission policies bull Need for diagnostic

bull Relative appropriateness studies

bull Availability of diagnostic procedures

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Coverage Considerations

Medicare Covered

bull Hospital services while waiting SNF placement

bull Care as a result of complications of a type ldquoTrdquo procedure bull Same day surgical procedure

Medicare Non‐Covered Services

bull Short stay inpatient admissions

bull Delayed discharge

bull Inconvenience to the patient or family member

Note Admissions are not covered or non-covered solely on length of time patient actually spends in the hospital

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Inpatient or Outpatient bull Any care must be medically necessary Social Security Act 1862 (a)(1)(a) bull Physician Order Dates and Signatures

bull Lack of inpatient admission medical necessity does not equate to outpatient observation bull Outpatient observation services must be medically necessary

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Definition References

bull Definition of Inpatient

bull CMS Publication 100‐02 Medicare Benefit Policy Manual Chapter 1 Section 10

bull Definition of Observation

bull CMS Publication 100‐2 Medicare Benefit Policy Manual Chapter 6 Section 206

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Screening ToolsGuidelines bull CMS does not require or endorse any particular brand of screening guidelines bull Payment is not based on ldquopassrdquo or ldquofailrdquo when screening tools are utilized bull ie Milliman InterQual

bull Reviewer must apply clinical review judgment in the determination of the medical necessity of an inpatient stay bull Based on the medical documentation submitted

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Hospital Billing Scenarios

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Scenario 1 Emergency Room (ER)

bull Day One ‐ Patient presents to ER and attending physician writes an inpatient admission order

bull Day Two ‐ Utilization Review (UR) determines that inpatient admission is not medically necessary and observation is more appropriate bull Attending physician is presented with UR committeersquos concerns and agrees

bull Attending physician writes an order for observation

How is time prior to Observation order captured on the claim

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Condition Code 44 Guidelines

bull Decision to change patient status is prior to discharge and while still a patient

bull No inpatient claim has been submitted

bull Physician concurs with UR committeersquos decision bull Physicianrsquos concurrence must be documented in patientrsquos medical record bull Physicians must be educated on importance of working with UR Committee while patient still in treatment

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Billing Prior to Order for Observationin CC 44 Situations bull Hospital encounter prior to physicianrsquos order for Observation bull May not report Healthcare Common Procedure Coding System (HCPCS) code G0378

bull Include charges on outpatient claim for cost of all hospital resources utilized in the care of the patient during the entire encounter bull Uncoded line with revenue code 0762 on outpatient claim

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Billing Prior to Order for Observationin CC 44 Situations bull Report Type of Bill 13x or 85x

bull Two lines with revenue code 0762 required bull Time before order for Observation is written is reported and un‐coded

bull Time after order for Observation is written is reported as coded

Revenue Code Code Date of Service Units Charges

0762 112012 12 60000

0762 G0378 122012 24 120000

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Scenario 2 Admit ‐ Reverse to Outpatient ‐ Admit bull Day One ‐ patient presents to ER and is admitted as inpatient

bull Day Two ‐ UR reviews case and determines observation is more appropriate bull Attending physician is presented with UR committee concerns and agrees

bull Day Four ‐ patient is readmitted as an inpatient

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

3 or 1 Day Payment WindowOutpatient Services Treated as Inpatient bull All outpatient diagnostic services and non‐diagnostic services ldquorelatedrdquo to inpatient stay bull On the date of inpatient admission or bull 3 days immediately preceding the date of admission bull Statute does not change the billing of diagnosticservices

bull Outpatient Services unrelated to inpatientadmission bull Add Condition Code 51 attest unrelated outpatient non‐diagnostic service

bull Change Request (CR) 7142httpwwwcmsgovtransmittalsdownloadsR796OTNpdf

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Payment Window for OutpatientServices Treated as Inpatient Services

bull Publication 100‐04 Chapter 4 Section 1012 and Chapter 1 Section 5032 bull Updated from CR 7672 January 2012 bull Update of the Hospital OPPS

bull Clarification bull No Part A coverage for the inpatient stay bull Services prior to admission may be separately billed to Part B as outpatient services

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Payment Window and WhollyOwnedOperated Entities

bull CR 7502 Transmittal 2373 bull Services rendered on or after January 1 2012 bull For claims received on or after July 1 2012 bull Patient seen in a wholly owned or operated physician practice is admitted as inpatient within 3 days (1 day for non‐IPPS hospitals)

bull 3 day payment window will apply to diagnostic and non‐diagnostic services clinically related to admission regardless of diagnosis

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Scenario 2 Timing

bull July 26 ‐ Admitted inpatient order 830 pm

bull July 27 ‐ Reversed inpatient admission to outpatient 830 am bull Condition code 44 criteria met bull An observation order was written at 1000 am bull Patient remained in observation from July 27 at 1000 am until July 29 at 100 am

bull July 29 ‐ Admitted inpatient order 200 am

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Scenario 2 Admit Reverse toOutpatient Admit bull Does the Condition Code 44 Policy apply

bull What is the admission date bull Publication 100‐02 Chapter 3 Section 403 ldquohellipthe day on which the patient is formally admitted as an inpatient is counted as the first inpatient dayrdquo

bull Medicare does not permit retroactive orders or the inference of physician orders

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Scenario 3 PhysicianChanged Patient Status bull Patient presents to ER and attending physician decides to admit the patient as an inpatient

bull While patient is still in the ER attending physician changes patientrsquos status to outpatient and writes order for observation

bull Utilization Review (UR) committee is not consulted

Is this a situation when CC 44 can be billed

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Scenario 3 Inpatient Changed toOutpatient Policy

bull Hospital Conditions of Participation require hospitals to have a utilization review (UR) plan bull Hospitals must ensure all UR requirements fulfilled

bull UR committee consists of two or more physicians to carry out UR function

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Scenario 3 Inpatient Changed toOutpatient Policy

bull Determination that admission or continued stay is not medically necessary must be made by bull One member of UR committee if physician responsible for care of patient either concurs with determination or fails to present their view when afforded opportunity

OR bull Two members of the UR committee in all other cases

bull Condition Code 44 does not apply

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Scenario 3 Conclusion

bull Is this a situation when the Condition Code 44 can be billed

bull No ‐ Determination to change a patientrsquos status must be made by UR Committee with physician concurrence

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Scenario 3 Considerations

bull Inpatient‐Only services not paid under OPPS

bull Services identified as Status Indicator ldquoCrdquo

bull Refer to Addendum B for Status Indicator

bull Refer to Addendum E for inpatient‐only list

bull All other services ‐ If outpatient = not paid

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Inpatient‐Only Exception 1

bull Defined in CPT to be a separate procedure

bull Other services contain procedure that can be paid outpatient with Status Indicator ldquoTrdquo

bull Same date as inpatient‐only

bull Payment made for separate procedure and remaining payable outpatient services

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Inpatient‐Only Exception 2

bull Patient ceases to breath before admission or transfer to another hospital

bull Report procedure with modifier ndashCA

bull Only on one procedure

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Inpatient‐Only Impact toPayment Window

bull Inpatient‐only procedures rendered to anoutpatient on date of admission or duringpayment window are not paid bull Submit a no pay claim Type of Bill (TOB) 110

bull In relation to exceptions two claims required bull Covered servicesprocedures on TOB 11x (withexception of 110)

bull Non‐covered servicesprocedures on TOB 110 bull Both covered and non covered claims must have a matching Statement Covers Period

bull Effective 07‐01‐11

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Scenario 4 Admission with Outpatient Services

bull On Saturday (081312) patient presents to ER with a headache is evaluated and sent home with medication as needed

bull On Sunday (081412) patient returns to ER again with a headache but also has shortness of breath and chest pain bull Patient is placed in observation and diagnostic tests are ordered

bull On Monday (081512) patientrsquos condition worsens and is admitted as an inpatient

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Scenario 4 Admission with Outpatient Services

bull Would statement fromthrough dates begin with date services were rendered on Saturday

OR

bull Sunday when patient began observation services

OR

bull Monday when the patient was actually admitted

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Scenario 4 Admission with Outpatient Services

bull Is admit date reported as Saturday when patient presented to ER

OR

bull Sunday when observation services began

OR

bull Monday when patient was admitted as inpatient

Can an outpatient claim be submitted

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Special Edition (SE) 1117

Correct Provider Billing of Admission Date and Statement Covers Period

bull National Uniform Billing Committee (NUBC) definitions bull Admission date = Date patient admitted as inpatient

bull Statement covers period = Identifies span of service dates reported on claim bull Pub 100‐04 Chapter 1 Section 80322

bull Pub 100‐04 Chapter 25 Section 751

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Scenario 5 Patient On Dialysis

bull Patient presents to ER for an unrelated medical emergency and order is written to place in observation bull While in observation patient misses regularly scheduled dialysis treatment

bull Patient subsequently receives dialysis treatment concurrent to observation services

Is this carved out as active monitoring time

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Scenario 5 BillingUnscheduled Dialysis

bull End Stage Renal Dialysis (ESRD) requires active monitoring bull While in observation this time is carved out

bull Report HCPCS G0257 ‐ Unscheduled or emergency dialysis treatment for an ESRD patient in a hospital outpatient department that is not certified as an ESRD facility

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Scenario 5 Special Servicesfor Outpatient Billing bull Routine dialysis treatments not paid under OPPS

bull Payment for unscheduled dialysis is limited to bull Emergency Room and missed routine treatment

bull Emergency dialysis to avoid inpatient admission

bull Following or in connection with dialysis related procedures

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Rate Review National Paid Claim Error

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Outpatient Observation

bull National Paid Claim Error Rate indicates concern regarding one‐day inpatient admissions amp outpatient observation services bull Errors indicate observation would have sufficed

bull Nationally accounts for $15 billion in claims payment errors for the November 2011 report

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

National Paid Claim Error Rate bull National Claim Paid Error Rate

bull 78 = $241 Billion

bull Impacts all providers submitting Fee for Service claims bull Limited random claim sample bull Record requests must be received within 30 days from the initial CERT letter

bull Right to Appeal Yes

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

National Paid Claim Error Rate ndash Common Errors bull Insufficient Documentation

bull Documentation did not contain a valid physicianrsquos signature

bull Documentation did not support services billed

bull Documentation did not contain a valid physician order

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

National Paid Claim Error Rate ndash Common Errors

bull Medical Necessity bull Lab andor diagnostic services did not contain a physicianrsquos order or valid requisition form in the documentation

bull Physician signature was not legible

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

National Paid Claim Error Rate ndash Common Errors

bull Incorrect coding bull Lab services billed incorrectly

bull Incorrect number of unitsservices submitted on claim

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom

Thank You For more Self Paced

Learning go to Learning ampEducation on our website at wwwpalmettogbacom