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Editor’s note: Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc., is the author of this week’s note from the instructor.
After CMS issued Transmittal 1803, we have continued to receive questions on the correct way to bill for outpatient services when Condition Code 44 criteria have been met. The next chapter of the story involves determining if and when observation begins.
Click over to the MedicareMentor Blog to read more.
By Judith Kares, an regulatory specialist for HCPro, Inc.
On August 28, CMS issued Medicare Claims Processing Manual (MCPM) transmittal 1803, which is the October 2009 update to the Outpatient Prospective Payment System (OPPS). CMS included minor revisions to those sections of Chapter 1 of the MCPM that relate to condition code 44.
As you will recall, condition code 44 is used when a patient’s initial inpatient status is successfully changed to outpatient for purposes of billing and payment. This generally occurs when case management and other utilization review personnel were not available (weekends and holidays) at the time that the admission decision was made, and it is later determined that the patient does not meet Medicare’s inpatient guidelines. Condition code 44 is reported on the subsequent outpatient (013X) type of bill that is submitted to recover the services provided in the inpatient setting.
A. No. My understanding is as follows. When you are able to successfully change the patient's status from inpatient to outpatient, using condition code 44, services provided in the inpatient setting are covered and payable on the same terms and conditions as if they had been provided in the outpatient setting. Because the hospital did not meet the observation order requirement, however, it may not convert that period of inpatient care to observation. Therefore, there should be no separate line item reported on the subsequent outpatient claim for observation services. All of the ancillary services, however, would generally be billable, subject to outpatient coverage and payment provisions.
By Debbie Mackaman, RHIA, CHCO, regulatory specialist for HCPro, Inc.
In a May 12 post, clarification was given regarding a “non-patient” and reference laboratory testing. Continuing with this discussion, Critical access hospitals (CAH) also received good news in Transmittal 1729 to the Claims Processing Manual, dated May 8, 2009. Under Section 148 of MIPPA (Medicare Improvements for Patients and Providers Act), a CAH will be paid 101% of reasonable cost for outpatient clinical diagnostic laboratory tests for those patients who are not physically present in the CAH at the time the specimen is collected. These patients are referred to as “non-patients” since only a specimen is received for the date of service. Prior to this transmittal, all hospitals providing laboratory services to “non-patients” were instructed to bill on Type of Bill (TOB) 14X which triggered reimbursement under the Clinical Laboratory Fee Schedule.
To read more, click over to the MedicareMentor Blog.
In addition, Kimberly Anderwood Hoy, JD, CPC, regulatory specialist at HCPro, Inc., has posted a response regarding condition code 44 and observation services.
By Kimberly Anderwood Hoy, JD, CPC, regulatory specialist at HCPro, Inc
We have received many questions on the articles we have published on the counting of hours of observation in cases where condition code 44 is used to convert an inpatient to an outpatient after UR review. A couple weeks ago I wrote about this issue following contact by a National Government Services representative, encouraging providers to contact their local MAC for more information.
I recently received some further clarification from National Government Services and wanted to update you. As you know, I’ve advised that hospitals should not be counting the time between the inpatient order and the change to outpatient status as observation – rather, I said, the observation time should begin with the change in status to outpatient when the observation order is written (assuming the appropriate level of care).
To view NGS' clarification, click over to the MedicareMentor Blog.
Use a change-of-status form to ensure compliance when reporting condition code 44
A change-of-status form will help ensure that a hospital meets all of the criteria for reporting condition code 44, says Judith Kares, JD, CPC, regulatory specialist at HCPro, Inc., in Marblehead, MA. The form should include the following:
- A statement about the hospital’s decision to change the patient’s status from inpatient to outpatient, including appropriate rationale
- Information about how this decision will affect the patient medically and financially
- Documentation that the hospital informed the patient’s physician of the status change and asked him or her to offer input
- A place for two required signatures, one from a utilization review (UR) committee member and the other from the patient’s attending physician or an additional UR committee member
Keep the original form in the patient’s medical record and provide copies to the patient and his or her physician, Kares says. Keep a third copy in the UR committee records.
Editor’s note: This article was adapted from the June issue of Briefings on Coding Compliance Strategies.
By Kimberly Anderwood Hoy, HCPro's director of Medicare and compliance
I’d like to turn my attention to the manual changes related to condition code 44, as promised. Overall, the changes were designed to incorporate discussion and FAQs that were previously published in MLN Matters Article SE0622. In this respect, the changes to the manual have very few surprises. Almost everything added came directly from SE0622 and nothing added was really anything new. With that said, however, I do think that hospital case managers and anyone involved in condition code 44 cases or billing for cases with changed status should review the changes carefully to be sure they follow all the guidance provided.
One of the disappointing things about the changes is that they did not address the issue of whether the period of time from the inpatient order up to the time the patient is changed to outpatient and the observation order is written can be billed as observation time. The language stating that the entire episode of care should be billed as outpatient remains unchanged and nothing was added to clarify it. However, if we carefully consider the other changes made to the observation sections, I think we can discern that CMS does not mean for these hours of care to be billed as observation.
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