Corporate Compliance

Note from the instructor: Review of hospital non-partial hospitalization outpatient mental health services

Medicare Insider, February 3, 2015

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This week’s note from the instructor is written by Judith L. Kares, JD,regulatory specialist for HCPro.  
In preparation for a custom Medicare Boot Camp-Hospital version course, I had an opportunity to review the Medicare rules relating to hospital outpatient and inpatient mental health services (alternatively referred to as “psychiatric services”). This week we will focus on non-partial hospitalization outpatient services. In future issues, we will turn our attention to partial hospitalization outpatient services and inpatient psychiatric services. In particular, we will review the Medicare rules relating to coverage, coding, billing and payment for these services.
In order to be covered, outpatient psychiatric services must be both incident to a physician’s services and reasonable and necessary and must meet the following additional requirements: 
  • The services must be provided under an individualized treatment plan, unless only a few brief services are furnished. The treatment plan should be established by a physician and include the type, amount, frequency and duration of services, the diagnoses being treated and the anticipated goals of treatment. 
  • The services must be supervised and periodically evaluated by a physician to determine the progress toward treatment goals.
  • The services must be for diagnostic study or must be reasonably expected to improve the patient’s condition (designed to reduce or control the patient’s psychiatric symptoms so as to prevent relapse or hospitalization and improve or maintain the patient’s level of functioning).
As long as the patient continues to show improvement in accordance with his/her individualized treatment plan, and the frequency of services is within accepted norms of medical practice, there is no limit on the length of time services may be covered.
Coding and billing
There is considerable guidance on the coding and billing of outpatient and inpatient psychiatric services included in the relevant sections of the American Medical Association’s 2015 CPT Manual (the CPT Manual) and the 2015 HCPCS Level II Manual. HCPCS codes identifying psychiatric services are primarily included in the 90,000 series of CPT codes and in the HCPCS Level II “G” codes. In particular, the CPT Manual provides significant guidance with respect to the selection of specific codes to be reported, when certain combinations of codes may or may not be reported together, when certain codes should be used in lieu of other codes, etc.
In addition to the CPT and HCPCS Level II Manuals, the January 2015 update of the Integrated Outpatient Code Editor (IOCE) Specifications, Attachment A, (IOCE Specs) provides additional guidance, including Appendix C-b (Mental Health Logic) which describes the claims flow and billing process for non-partial hospitalization outpatient mental health services. In particular, the IOCE Specs warn hospitals to avoid the following pitfalls:
  • If HCPCS code G0129 for occupational therapy as a component of a partial hospitalization program is billed on a non-partial hospitalization claim, the claim will be returned to the provider. 
  • If HCPCS code G0176 for activity therapy is billed on a non-partial hospitalization claim, the line item will be rejected and the remainder of the claim will be processed for payment. 
  • If HCPCS code G0177 for training and educational services related to a patient’s disabling mental health problem is billed without other mental health services on the same day, the claim will be returned to the provider. 
In addition to reporting the applicable HCPCS code for the covered non-partial hospitalization outpatient services, hospitals should also report an appropriate revenue code. The mental health revenue codes are primarily in the 090X (Behavioral Health Treatment/Services) and 091X (Behavioral Health Treatment/Services – Extension of 090X) series of codes.
Covered non-partial hospitalization mental health services are paid under the OPPS, as are most hospital services payable under Part B. Separately payable services under the OPPS are assigned to ambulatory payment classifications (APCs), which are the basis for payment. Not all covered and payable services are separately payable, however. That is, there is generally a separate payment for a significant service, but the payment for other services that are an integral part of a separately payable service are often “packaged.” When a service is packaged, the payment for that service is included in the payment for the more significant service into which it is packaged. When “packaged,” a service is identified with status indicator “N.”
Most non-partial hospitalization services are identified with status indicator “S,” which identifies those codes as separately payable services when not payable as part of a “composite” payment. When certain criteria are met, however, those codes are paid under a single composite payment, rather than separately. A composite payment is designed to provide a single payment for certain combinations of HCPCS codes (which would otherwise each be separately payable) when the composite criteria are met. Services that are potentially payable as part of a composite payment are identified with status indicator “Q3” in Addendum B and Addendum M to the calendar year (CY) 2015 OPPS final rule.  
During CY 2015, payment for hospital non-partial hospitalization outpatient psychiatric services is capped at the reimbursement for APC 0176 Level II Partial Hospitalization in a Hospital-based Partial Hospitalization Program (PHP). The national allowable for APC 0176 is $195.70.
The IOCE aggregates the separate payments for multiple outpatient mental health services (identified with status indicator “Q3” in Addenda B and M) provided on the same date of service. If the sum of the payment amounts for the individual mental health services is greater than the payment amount for APC 0176, the Mental Health Composite APC 0034 is assigned to the first listed mental health code and the status indicator for all other mental health codes subject to composite payment is changed to “N” packaged.
If, however, the sum of the payment amounts for the individual mental health services does not exceed the payment amount for APC 0176, the individual services are processed for payment under standard OPPS/IOCE payment logic. That is, they will each be identified with status indicator “S” and individually separately payable based on the individual APC to which they are assigned, as set out in Addendum B.
A Medicare patient received individual psychotherapy for 45 minutes (CPT code 90834, for which the national payment rate is $115.52) in a hospital outpatient provider based clinic, followed by one hour of face to face psychological testing with a technician (CPT code 96102, for which the national payment rate is $199.33). Assuming that both codes have a status indicator of “Q3” in Addendum B, what is the total amount the hospital can expect to receive for these services (ignoring any wage index adjustment)?
$195.70 for Composite Mental Health APC 0034–The payment for CPT code90834 is $115.52, the payment for CPT code 96102 is $199.33 for a total of $ 314.85, which exceeds the payment of $195.70 for APC 0176 Level II Partial Hospitalization in a Hospital-based PH. Therefore, the payment is made under the Mental Health Composite.

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