Physician Supervision in the Hospital Outpatient Setting

  By Kim Charland, BA, RHIT, CCS

For hospitals providing outpatient services, instructions from CMS (Center for Medicare and Medicaid Services) related to "physician supervision" continues to provide hospitals with questions on its meaning and interpretation and how it relates to the coverage of outpatient services.

Some of these questions include "what level of physician supervision is required in order for Medicare to cover services when they are furnished incident to the services of a physician?" And "does the level of physician supervision required depend on where the service is provided – on or off-campus?"

Medicare rules tell us that services furnished in a provider-based status department must be under the direct supervision of a physician and that the "direct supervision means the physician must be present and on the premises of the location and immediately available to furnish assistance and direction throughout the performance of the procedure" (42 CFR 410.27(f). CMS however stated in the April 7th, 2000 OPPS final rule, that to require direct supervision of hospital services furnished incident to a physician service to outpatients does not apply to services furnished in a department of a hospital that is located on the campus of that hospital because we would assume the physician supervision requirement is met on hospital premises because staff physicians would always be nearby within the hospital.

In the November 18th, 2009, OPPS Final Rule, CMS stated that they were concerned that there may have been a misunderstanding with the rule and that "services are provided under the direct supervision of physicians in the hospital setting and in all provider-based departments of the hospital, specifically both on-campus and off-campus departments of the hospital." This indicates that there is no distinction made between on and off-campus provider based departments.

What we also find however in the Medicare Benefit Policy Manual is that CMS updated the "incident to" instructions. CMS is now stating that "For services furnished at a department of the hospital which has provider-based status in relation to the hospital under 42 CFR 413.65, "direct supervision" means the physician must be present and on premises of the location (the provider-based department of the hospital) and immediately available to furnish assistance and direction throughout the performance of the procedure" (Medicare Benefit Policy Manual, Ch. 6, Sec. 20.5.1).

To tie this altogether, on the January 15th, 2009, Hospital Open Door Forum call, CMS clarified during that call that CMS now considers "incident to" coverage in a provider-based setting, requiring that a physician be present in the department when the services are furnished by non-physician staff regardless of whether the department is on or off the hospitals campus. Based upon this same call, there appears to be discrepancies in terminology used to describe what a department is and what space it encompasses so that hospitals can be sure they have physicians located in the appropriate areas.

In the July 20th, 2009, OPPS Proposed Rules, several current policies for the physician supervision of hospital outpatient services may be changed. It is important to note that in all cases the definition of supervision does not require the physician to be in the room.

First, non-physician practitioners (specifically physician assistants, nurse practitioners, certified nurse specialists, and certified nurse midwives) may directly supervise all hospital outpatient therapeutic services that they can personally perform within their state scope of practice and hospital granted privileges. Under current policy, only physicians may provide the direct supervision of these services.

Also, CMS has proposed a separate and new definition for on-campus hospital outpatient services. Specifically, "direct supervision" would mean that the physician or non-physician practitioner must be present in the hospital or on-campus provider-based department of the hospital and immediately available to furnish assistance and direction throughout the performance of the procedure. The current definition requires the physician to be present in the on-campus provider-based department.

For services furnished in an off-campus provider-based department, direct supervision would continue to mean that the physician or non-physician practitioner must be present in the provider-based department and immediately available to furnish assistance and direction throughout the performance of the procedure.

Stay tuned and be sure to read the 2010 OPPS Final Rule to see if these proposed rules are finalized or if due to any feedback provided in the comment period, additional changes are made to the final rule regarding the definition of physician supervision in the hospital outpatient setting.

Editor's Note: You can read the 2010 OPPS Proposed Rule E-book by clicking on this link under "Hot Resources" in either the CCH & MediRegs Audit and Revenue Resource Center or Coding and Revenue Resource Center, which are part of the new Coding Suite!

Medicare Provider-Based Entities (PBEs): Where Professional and Outpatient Hospital Coding Meet

   By Laurie Desjardins

In the August 1st 2002, Federal Register, Medicare defined how a facility may meet provider-based criteria for hospital-owned departments such as physician practices. Provider-based status may provide hospitals and their clinics additional Medicare/Medicaid dollars above the level that freestanding facilities would generally receive, if specific criteria are met (see Program Memorandum, Transmittal No. A-03-030, April 18, 2003.)

Once this criterion has been met, the "traditional" physician office ceases to exist and an outpatient department is created. This also requires the new entities to adopt and understand both the professional and facility billing and coding rules.

Let's first review some of the areas that the traditional physician practice may be unaware of: As an outpatient department of the hospital, PBEs must comply with the hospital. Hospitals are subject to Medicare's Conditions of Participation (CoPs) and agree to a Provider Agreement. This agreement defines the obligations that both the Hospital and Medicare will adhere to as a participating provider. All hospital departments must adhere to these rules and requirements.

PBE Operational Issues:

Public Awareness - PBEs must be held out to the public as part of the main provider. Signage and stationary are important. They should be easy to read and understand.

EMTALA (Emergency Medical Treatment and Active Labor Act) - Hospitals are required to treat life threatening emergencies regardless of the patient's ability to pay. On-campus PBEs are subject to the same EMTALA rules as all other hospital departments. While off-campus, PBEs perform the EMTALA requirements to the abilities of the facility's staff and available equipment.

Registration / Admission — PBEs must at every encounter (once per DOS):

• obtain signature authorizing billing to Medicare;
• obtain signature authorizing release of Medical Information;
• provide the notice of financial liability;
• complete the MSP questionnaire; and
• issue the Advanced Beneficiary Notice (ABN) when applicable.

Provider-Based Charging and Payments:

In the traditional office practice, reimbursement is based on the Medicare physician fee schedule with an office place of service (11). As a provider-based department of a hospital, all provider-based rules implemented on August 1, 2002, must be satisfied. One service generates two bills and two coinsurances and is reimbursed through an APC (Part A) and professional component (Part B) Medicare physician fee schedule with site of service reduction applied (place of service 22.) (Note: Critical Access Hospital Method II would report both the professional and facility services on a UB04.) The facility component includes costs for overhead (room charge), supplies, and auxiliary staff salaries, while the professional component is the "hands on" professional component.

As you may imagine, billing is a little different in a physician office. In the physician office we bundle all overhead expenses into the professional charge. If a service was performed incident-to, such as an injection of B12, nurse visit for education, etc., it is also reported under the physicians NPI and billed on the 1500.

PBEs billing would look very different; the services personally performed by the physician or NPP is reported on the 1500, such as the E/M visit. The ancillary services performed by the staff are reported on the UB04 with a 510 revenue code and the corresponding HCPCs code. The facility would report the overhead for the clinic portion of the physician visit using a coding matrix. Each hospital is responsible for developing and following a coding system for medical visits/facility fee by mapping hospital resource usage to E/M level codes. Per the Federal Register, Vol. 65, No. 68, dated April 7, 2000: "We would not expect to see a high degree of correlation between the code reported by the physician and that reported by the facility."

In a typical PBE coding scenario where the physician performs an E/M service (ie. Detailed History and Exam with Moderate complexity Medical Decision Making), orders a blood draw for elevated cholesterol, shaves a lesion on the back, and asks the nurse to give the patient a flu shot, the coding would look like this:

Form 1500:	99214-25
	11300 (no size documented so the smallest size gets coded)

UB-04:	99212-25 (based upon hospital matrix)
	11300
	36415
	G0008 administration of flu vaccine
	90658 Influenza virus vaccines
	(Note: The lab would also add the coding for the lab test.)

Be Aware:

"Incident-to" services do not apply in the facility setting so if the service is not personally performed by the physician or NPP, it may only be reported by the facility as long as it meets coverage requirements. NPP services must be billed under their own NPI.

Direct Supervision is required for therapeutic services, meaning a physician must be in the building and immediately available to assist if needed.

As you can see, provider-based entities not only hold the potential for enhanced reimbursement, they also have an opportunity to create a new type of coding professional - the outpatient coder. The outpatient coder requires knowledge of both professional coding and facility coding requirements.

Editor's Note: To view all HCPCS codes and the related revenue codes in the Coding Suite based on the UB-04 and other authoritative sources, such as CMS Transmittals, click on the "Related Revenue Codes" button at the top of every code book page within the HCPCS and CPT Code Book.

The Cutting Edge: Healthcare Coding, HIT, Quality Measurement and Reporting

  By Dr. Patrick Yoder

In the healthcare world the term "coding" typically conjures visions of critically ill patients or dollar signs, depending on which side of the clinical fence you sit on. However, new found interest in Healthcare Information Technology (HIT), driven by The American Recovery and Reinvestment Act of 2009 (ARRA), will not only revitalize healthcare, it will also reinvent "coding." Although the legacy that ties to charging and reimbursement will remain intact for the foreseeable future, the need for HIT Coding Specialists is on the rise. The demand for these HIT professionals will continue to increase as healthcare institutions more fully realize this specialized need.

Clinical vocabularies, terminologies or coding systems are structured lists of terms, which together with their definitions are designed to describe unambiguously the care and treatment of patients. There are numerous systems that contain these structured lists and these systems have been in development for quite some time (e.g. SNOMED CT, LOINIC, ICD-9, ICD-10, RxNorm). Ultimately, these controlled medical vocabularies serve as the conceptual framework for efficient communication of vital health information.

Associating controlled medical vocabularies to underlying health information data is a challenging task that Coding Specialists are uniquely equipped to tackle. The specialized knowledge gleaned through many years of documentation coding must be leveraged for successful transition to the electronic environment. Concept coding of HIT data is needed for many reasons including system interfacing, clinical decision support and quality measure data capture and reporting.

In 2008, the National Quality Forum's (NQF) Health Information Expert Panel (HITEP) began work on development of a standardized data set for quality measure reporting. In an effort to improve automation around quality measure reporting the group defined 35 data types including diagnosis, diagnostic study, laboratory study, intervention, medication and symptom. These data types may include subtypes which describe specific events (eg. medication administration, medication dispensed, medication refused) and rely on underlying concept coding as the basis for data reporting.

Using the CMS/TJC measure for administration of aspirin within 24 hours for patients presenting with acute MI, as an example, let's take a look at how the HITEP defined data types combined with underlying concept coding in the electronic medical record can efficiently calculate and deliver quality information to a data repository. A 56 year old male reports to the emergency department and is diagnosed with myocardial infarction (MI) at 12 pm. The ER physician orders aspirin immediately and it is administered 5 minutes later (12:05 pm). The concept codes included in this example are numerous but let's focus on two of them. The SNOMED condition code for MI is 22298006 and the RxNorm code for aspirin is 1191. Therefore, the example quality measure could be defined as follows.

Diagnosis="SNOMED 22298006" AND (medication administered="RxNorm 1191" 9/11/09 1205 — 9/11/09 1145) < 24 hours

The presenting patient easily meets the measure criteria but more importantly this information is easily generated from an EMR data and transmitted to another system. Note the value of the concept coding lies in the coding system's ability to represent textual clinical information (eg. myocardial infarction, MI, AMI or STEMI) with a single or hierarchical code or code set (SNOMED=22298006 or related code). Appropriate application of the code set allows for accurate and flexible clinical documentation and appropriate system to system communication.

Quality measure collection and reporting is one of many uses for conceptual coding and it is used here to highlight the needs driven by ARRA. President Obama has repeatedly expressed deep dedication to healthcare quality, promising incentives not only to those who deliver but also those who measure and report quality healthcare. Coding professionals will play an important and key role in the revitalization of our healthcare system, providing the infrastructure for information delivery and data collection.

Editor's Note: To read more about the ARRA changes to Medicare and Medicaid you can go to the CCH Medicare and Medicaid Guide Explanations and Annotations or purchase the new CCH e-Book "Health Provisions of the American Recovery and Reinvestment Act of 2009."

October 2009 update to the Medicare physician fee schedule

An update to the Medicare physician fee schedule payment file has been released by CMS and is to be implemented by October 1, 2009. The update includes the addition of the following codes to the physician fee schedule: G9141, G9142, and Q2024. To view these updates on the IC, go to the Search Code Sets tab in Coding Comply, select the Physician Fee code set, in the Refine Search box, de-select the Return active code effective as of: box, then select "Added" and "Modified" in the Filter Actions and in the Start Date field enter 10/01/2009.

Update to the list of CPT Category II Codes

The AMA has released a September 9, 2009 update to its CPT Category II codes, which are to become effective January 1, 2010. This latest update includes 13 new codes and 8 modifications. Some of these new codes are 1205F, 3038F, 3323F, 3650F, 4256F, and 4340F. Some of the modified codes are 3110F, 3111F, 4047F, and 4048F. To view these new codes and modifications to existing codes, go to the Search Code Sets tab in Coding Comply, select the CPT code set, in the Refine Search box, de-select the Return active codes effective as of: box, then select "Added," "Modified," and "Deleted" for Filter by Actions, in the Start Date enter 01/01/2010 and click Search.

August 2009 CPT® Assistant

"The CPT® Assistant newsletter for August 2009 has been released and is now reflected in CCH Coding Comply and the CCH & MediRegs Coding Suite."

Coding Brief: Peripheral Artery Assessment

CPT codes 93922, 93923, and 93924 are noninvasive physiologic peripheral arterial examinations. These examinations are performed when there are significant signs of upper or lower ischemia. The exam will help determine if there is need for an invasive therapeutic procedure. These three codes include the performance and supervision of studies using technology capable of producing a hard copy output record of study results that permits physician analysis and written interpretation. These studies do not involve imaging because they are performed using equipment that is separate from the duplex scanner. Modifier 50, Bilateral procedure, should not be appended to these codes since they describe bilateral procedures. If a unilateral procedure is performed then modifier 25, Reduced services, can be reported.

Evaluation and Management: New vs Established Patient, Decision Tree Explanation

The E/M Decision Tree was first made available in the 1999 CPT Assistant and has since been published in the CPT codebook beginning in 2007. The decision tree was updated in 2008 to help users decide how to classify E/M services as either a new or established patient. Not all E/M services require the use of the Decision Tree since they are not classified by new or established patients. The services that require new or established patient determinations are: office or other outpatient services (99201-99215), domiciliary, rest home (eg, boarding home), or custodial care services (99324-99337), home services (99341-99350), and preventive medicine services (99381-99397).

Reporting Cystourethroscopy

Through a question and answer format, information is provided on proper reporting of cystourethroscopy codes (52204, 52214, 52224, and 52234 - 52240). Specifically, there is much discussion on the number of times each cystourethroscopy code can be reported.

Destruction of Lesions: Benign, Premalignant, and Malignant

There are two groups of codes that discuss the destruction of lesions. Benign or premalignant lesions are reported with CPT codes 17000-17250 and destruction of malignant lesions can be reported with 17260-17286. Destruction of lesion codes include local anesthesia and might include the scraping of the lesion with a curette to remove unwanted growths or other tissues. The procedures covered by these destruction codes do not typically require closure. The premalignant lesion codes should be reported by the number of lesions treated, cutaneous vascular proliferative lesions (17106 - 17108) should be reported by the total square centimeters treated, and benign and malignant lesions should be reported by the number of lesions and anatomic location.

Coding Clarification: Percutaneous Tibial Nerve Stimulation (PTNS)

Clarification is being provided on the proper way to report PTNS. Currently there is no specific code for this procedure so it should be reported with CPT code 64999, Unlisted procedure, nervous system. When an unlisted procedure code is reported, supporting documentation should be submitted with the claim to provide a detailed account of the procedure.

Coding Clarification: Questions and Answers

An article by the CPT Editorial Panel answers questions posed to the panel regarding the subjects of evaluation and management: consultations, medicine: health and behavior assessment/intervention and vaccines, toxoids, and surgery: nervous system, musculoskeletal system, and eye and ocular adnexa. The responses answer multiple questions including: is it still appropriate for physicians to report codes from the Health and Behavior Assessment/Intervention (HBAI) series (codes 96150-96155), or should they use E/M codes, and, is the silicone intubation through the new nasolacrimal opening included in code 68720 or is there a different code for it, and can code 68815 possibly be used?

To view these articles via CCH Coding Comply, search from the Search Code Sets tab in Coding Comply for any of the codes listed above, view the Related Documents by clicking on the paper icon next to the code, then select the article. To view these articles on REX go to the CPT® Assistant Archives folder and in the Search field within this folder and enter "August 2009."

Fiscal Year 2010 Inpatient, Long Term Care Hospital, and Inpatient Psychiatric Facility Prospective Payment System Changes

Updates to the inpatient, long term care hospital (LTCH), and inpatient psychiatric (IPF) prospective payment systems were released and are effective for discharges on or after October 1, 2009. This release summarizes key rates for the IPPS and LTCH PPS in addition to updated cost of living adjustment values for Alaska and Hawaii and updates to the principal diagnosis codes within ICD-9-CM that are used to assign Medical Severity Diagnosis Related Groups (MS-DRGs) under the IPF PPS. Additionally, billing guidelines important to the Medicare Code Editor (MCE), which is used to aid in the effort to detect incorrect billing data, have also been updated. The MCE supports three main types of edits which provide the information necessary for proper MS-DRG assignment.

The first type of edit that the MCE reviews for are code edits. This is a review to determine if the proper ICD-9-CM diagnosis and procedure codes were used. When submitting an IPPS claim, an admitting diagnosis, a principal diagnosis, and up to eight other diagnosis codes can be reported in addition to no more than six procedure codes. If any of these codes are not found in the list of valid codes the claim will be returned to the provider. The system also reviews for the use of E-codes which are external cause codes and they describe the circumstances that caused the injury and not the actual injury itself. These codes can not be recorded as a principal diagnosis code. Beginning October 1, 2009, ICD-9-CM E-codes E876.5 - E876.7 will trigger a new, wrong procedure performed edit, and will not be assigned to a MS-DRG. The MCE also review for the following code edits:

• Duplicate principal diagnosis code - any secondary diagnosis code that is a duplicate of the primary diagnosis code is not acceptable since it could cause an incorrect assignment to a higher severity MS-DRG. The duplicate code will be deleted and the bill will still be processed.
• Age and Sex conflicts - the MCE will detect inconsistencies between a patient's age and the diagnosis codes reported along with discrepancies between diagnosis and procedure codes reported and a patient's sex. For example, a 78-year-old patient with an obstetrical delivery diagnosis would be flagged because the occurrence is clinically unlikely and a male patient with a cervical cancer diagnosis would also be flagged since the indicated diagnosis conflicts with the sex reported for that patient.
• Manifestation codes - this type of code describes the materialization of an underling disease, not the disease itself. This can not be used as a principal diagnosis and the bill will be sent back for adjustments to the hospital.
• Questionable admission - this covers diagnosis codes that are generally not significant enough to require admission to an acute care hospital. For example, a diagnosis of benign hypertension would raise the questionable admission flag within the MCE since it is not significant enough to justify admission.
• Unacceptable principal diagnosis - if a primary diagnosis code is reported and it only describes circumstances that influence a patient's status and is not a true current illness or injury (ie. V17.3, family history of Ischemic heart disease) the bill will be returned so the hospital can provide the proper diagnosis that describes the actual illness or injury of the patient.
• Open biopsy check - different MS-DRGs are assigned if a biopsy is determined to be open versus closed. Since open biopsies are less common, the fiscal intermediary/Medicare administrative contractor (FI/MAC) will review a sample of ten percent of the claims with open biopsy codes for a post payment review. The FI/MAC will adjust the bill if an open biopsy code is reported but the medical information provided indicates a closed biopsy was actually performed.
• Bilateral procedure - if a procedure is reported as a bilateral joint procedure when in fact a single joint procedure was performed and the principal diagnosis falls into major diagnostic category 8, the claim will be flagged and reviewed after the FI/MAC receives an operating room report from the hospital.

In addition to the above items, the MCE also reviews for invalid age (patient reported over 124 years), sex (sex code reported must be either 1 or 2), and invalid discharge status (discharge status must be reported according to the Form CMS-1450 conventions) within the code edits review.

The last two types of edits the MCE reviews for are coverage edits and clinical edits. The coverage edits will look at the type of patient and procedures performed to determine if the services are covered. Finally, clinical edits look at the consistency between the diagnosis codes and the procedures performed to determine if they are clinically reasonable before payment is made. Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1815, Sept. 9, 2009. This transmittal can be viewed on the IRN or IntelliConnect at ¶158,442 in the September 21, 2009, CCH Coding Comply What's New newsletter; or on Rex via the Coding Suite in the CMS Transmittals and MLN Matters Articles folder under the title "R1815CP Fiscal Year (FY) 2010 Inpatient Prospective Payment System (IPPS), Long Term Care Hospital (LTCH) PPS, and Inpatient Psychiatric Facility (IPF) PPS Changes."

2010 annual update of HCPCS codes for skilled nursing facility consolidated billing

The Common Working File (CWF) currently has edits in place for claims received for beneficiaries in a Part A covered skilled nursing facility (SNF) stay, as well as for beneficiaries in a non-covered stay. These edits allow only those services that are excluded from consolidated billing to be separately paid. Annual changes to HCPCS codes and the Medicare Physician Fee Schedule are used to revise CWF edits that will allow appropriate payments in accordance with SNF consolidated billing policy. This update is expected to be available the first week of December 2009. Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1814, Sept. 4, 2009. This transmittal can be viewed on the IRN or IntelliConnect at ¶158,436 in the September 14, 2009 CCH Coding Comply What's New newsletter; or on Rex via the Coding Suite in the CMS Transmittals and MLN Matters Articles folder under the title "R1814CP 2010 Annual Update of Healthcare Common Procedure Code System (HCPCS) Codes for Skilled Nursing Facility (SNF) Consolidated Billing (CB) Update."

Revised processing of osteoporosis drugs under the home health benefit

osteoporosis drugs if certain criteria are met. The three requirements for injectable osteoporosis drug coverage are:

• eligibility for coverage of home health services;
• physician certification that the individual sustained a bone fracture related to post-menopausal osteoporosis; and
• physician certification that the female patient is unable to learn the skills needed to self-administer the drug or is otherwise physically or mentally incapable of administering the drug, and that her family or caregivers are unable or unwilling to administer the drug.

The Medicare system is currently effective at enforcing the second and third criteria listed above but only partially enforces the first. The second and third criteria are enforced by edits requiring that the patient is female and that the diagnosis code 733.01 is present. This transmittal revises Medicare systems to fully enforce the first criterion for injectable osteoporosis drug coverage. This information applies to the HCPCS codes for osteoporosis drugs, which are: J0630, J3110, and J3490. Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1773, July 24, 2009. This transmittal can be viewed on the IRN or IntelliConnect at ¶158,244 in the August 3, 2009, CCH Coding Comply What's New newsletter; or on Rex via the Coding Suite in the CMS Transmittals and MLN Matters Articles folder under the titles "R1773CP Revised Processing of Osteoporosis Drugs Under the Home Health Benefit."

NOTE: To follow the MediRegs links above, you will be prompted to enter your username and password. If you cannot remember your user name or password go to: http://wk.mediregs.com/login_fs.html and the system will let you request a reminder.