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Emergency Department Revenue Cycle Management

William Malm, MD, for HealthLeaders Media, March 3, 2008
Editor's note: This is a primer on maintaining compliance and ensuring accurate reimbursement in 2008. This is the first of two parts.

Emergency department revenue cycle management has never been more critical than in 2008. With the advent of evaluation and management visit guidelines in the 2008 OPPS final rule, composite APCs for observation services, new HCPCS and revenue codes for trauma activation, and CMS' recent clarification of critical care services, coding, billing, and coverage requirements continue to escalate. The skills of physicians, nurses, case managers, HIM, chargemaster staff members, and compliance staff members come into play for optimal revenue cycle management in the ED.

Revenue cycle managers in 2008 should focus on several critical areas in the ED, as well as observation patients and ED patients admitted to the hospital. Key concerns for each section are:

ED Incident-to coverage
Every revenue cycle manager needs to understand that coverage comes first, and the ED is no exception. "Incident-to" requirements apply to hospital outpatient services. You can find these requirements in 42 CFR 410.27 and in Chapter 6, Section 20.4.1, of the Medicare Benefit Policy Manual.

Any service provided in the ED must meet the following four salient requirements for coverage under the Medicare program:

  1. The service must be furnished by a hospital
  2. Services must be furnished "on a physician's order"
  3. Services must be furnished under the supervision of a physician
  4. There must be ongoing physician involvement in the care of the patient
These requirements are often confused during ED visits. In short, the patient must receive face-to-face physician care in order for the service to be covered.

There has been significant discussion regarding how or whether a hospital can bill for the expenditure of facility resources when a patient leaves the emergency service area without seeing a physician. Arguably, these visits do not meet Medicare incident-to coverage guidelines and therefore are noncovered services. Examples of these types of visits are triage-only and patients who leave prior to treatment.

Coding and charging for ED visits
In 2007, CMS divided ED visits into two types: Type A and Type B. Medicare defines a Type A ED as one that is available to provide services 24 hours per day, seven days per week (this requirement is also listed in the CPT Manual), and which also meets one or both of the following requirements related to the Emergency Medical Treatment and Active Labor Act definition of a dedicated ED:

  1. It is licensed by the state in which it is located under the applicable state law as an ER or ED
  2. It is held out to the public as a place that provides care for emergency medical conditions on an urgent basis without requiring a previously scheduled appointment
A Type B ED is identical to a Type A in that it also must meet the EMTALA requirements and DED definitions. The difference is that a Type B ED is not open 24 hours per day, seven days per week. Therefore, the key determinant is the time at which the facility department is scheduled to be open.

You can find further information about the definitions of Type A vs. Type B EDs in the 2007 OPPS final rule (Federal Register, Vol. 71, No. 226, pp. 68127-68145). You can also find additional clarification in the FAQ section of the CMS Web site.

CMS created five new HCPCS codes to bill Type B ED visits: G0380-G0384 (G0380 is a level one visit, and G0384 is a level five visit). Type A ED visits continue to be represented by CPT codes 99281-99285.

Under the OPPS, CMS has directed facilities since 2000 to develop and consistently apply an E/M methodology that accurately reflects the resources expended by the facility. During that time, several organizations, such as the American College of Emergency Physicians, the American Health Information Management Association, and the American Hospital Association, have created templates and guidelines to move forward in the creation of a national-level determination methodology.

However, CMS in the 2008 OPPS final rule stated that it does not believe that a single, national E/M model is appropriate at this time. CMS did say it feels that hospitals have achieved this requirement with their own internally developed systems. CMS continues to explore the potential for national guidelines; in the meantime, it listed 11 E/M criteria that hospitals should follow. The coding guidelines should:

  1. Follow the intent of the CPT code descriptor in that the guidelines should be designed to reasonably relate the intensity of hospital resources to the different levels of effort represented by the code
  2. Be based on hospital facility resources and not on physician resources
  3. Be clear to facilitate accurate payments and be usable for compliance purposes and audits
  4. Meet the Health Insurance Portability and Accountability Act requirements
  5. Only require documentation that is clinically necessary for patient care
  6. Not facilitate upcoding or gaming
  7. Be written or recorded, well-documented, and provide the basis for selection of a specific code
  8. Be applied consistently across patients in the clinic or ED to which they apply
  9. Not change with great frequency
  10. Be readily available for financial intermediary (or, if applicable, Medicare administrator contractor) review
  11. Result in coding decisions that could be verified by other hospital staff, as well as outside sources
The tone of this message clearly indicates the potential for future E/M audits by FIs or Medicare administrator contractors. Additionally, the message gives guidance that the facility should audit the coding assignment of the level of care (e.g., CPT codes 99281-99285). It further states that the coding guidelines should not require additional effort in regard to documentation but should be consistently applied and not facilitate gaming or upcoding.

Many facilities still lack well-written guidelines. The result is that frequently within the same department, personnel do not consistently apply the guidelines. This results in inaccurate code assignments. Revenue cycle management committees should review these 11 points to ensure that their ED level assignments comply with these guidelines.


William Malm is practice director of revenue cycle management at HCPro, Inc. the parent company of HealthLeaders Media, in Marblehead, MA. He may be reached at revenuecyclemanagement@hcpro.com.
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