Health Information Management

Tip of the week: Be aware of CMS' additional criteria for E/M visits

APCs Insider, March 14, 2008

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Providers should understand that CMS has introduced an additional observation requirement for 2008. Providers must now report very specific visit codes on their claims to qualify for one of the two separately payable observation composite APC (CAPC) payments. Aside from the new requirement, all other criteria remain in place.

In short, hospitals must report a level four, five, or critical care evaluation and management (E/M) code for patients admitted to observation from the emergency department (ED). For patients directly admitted to observation, providers must report either HCPCS G0379 (for direct admit) or a level five clinic E/M visit code for new or established patients.

Without reviewing this requirement and understanding its implication, providers may meet all other separately payable CAPC criteria except the E/M criteria. As a result, they will not receive separate CAPC payments. To prevent this, providers should review and/or revise their existing internally developed E/M visit guidelines to support the presence of specific E/M codes when a physician orders observation. This is somewhat controversial. Some providers believe that CMS does not intend for them to adjust their level. Not every patient may qualify for level four, five, or critical care. On the other hand, some providers believe that they can adjust their E/M visit levels to reflect that when a physician orders medically necessary observation, this patient reaches at least a level four.

Work with your compliance department to review the interaction of the CAPC criterion and your existing E/M visit guidelines. Seek further guidance from CMS or your fiscal intermediary if you have concerns about adjusting your E/M levels.

(The above tip was excerpted from the March issue of Briefings on APCs)

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