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Inpatient procedure billed as outpatient

Patient Financial Services Weekly Advisor, August 9, 2007

Q: We recently billed incision of the heart sac (33025) as an outpatient procedure. Medicare denied this claim on the grounds that this procedure is an inpatient-only procedure. What is the best way to handle this?

A: Procedures designated as inpatient only are not reimbursed under the Medicare Outpatient Prospective Payment System (OPPS). Because an inpatient only designated procedure does not have an Ambulatory Payment Classification (APC) group, it will only be paid when the patient is an inpatient at the time the procedure was performed.

The following are some of the reasons these procedures were identified by OPPS as inpatient only:

• The invasive nature of the procedure
• The need for at least 24 hours of postoperative recovery time or monitoring before the patient can be safely discharged
• The underlying physical condition of the patient who would require the surgery

To receive payment for such a procedure, an inpatient order should be present in the medical record (making the patient an inpatient) prior to performing the procedure. The integral component is the status of the patient when the procedure is performed, not where it was performed.

We recommend that facilities have systems in place to ensure that patients are admitted to the appropriate patient status, i.e. identifying those procedures designated as inpatient only procedures. Basically, a patient should be admitted as an inpatient before an inpatient only procedure is performed to receive reimbursement for performing the procedure.

The other alternative is for those scheduled procedures, the procedure be reviewed for the possibility of inpatient-only status during the scheduling phase of the encounter and if identified, the patient be notified that they are responsible and have them complete an ABN. The patient then assumes responsibility if they choose to proceed and can be billed. However, this can only occur if the ABN is signed prior to the service.

We recommend that in this instance, the only action that should be taken is that the claim be written off.

Thanks to Maggie Mac, CMM, CPC, CMSCS, CCP, ICCE and Rachel Leeds, RHIA, CCS-P, of Pershing Yoakley & Associates, which has offices in Knoxville, TN, Atlanta, Clearwater, FL and Charlotte, NC, for answering today's question.

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