Health Information Management

Q/A: Facility guidelines for E/M levels

APCs Insider, July 24, 2009

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Q: I work in a hospital outpatient clinic setting. Has CMS issued a deadline for developing facility guidelines for billing our clinic visits? Our hope has been that CMS would issue guidelines so we wouldn’t need to develop our own. Meanwhile, we’ve used physician E/M levels as our facility level. I’ve been told that I missed the deadline for implementing resource based coding guidelines. However, my Internet research hasn’t yielded any helpful information.
A: CMS stated in its CY2008 OPPS Final Rule, published November 27, 2007, that it had no plans to develop a set of guidelines. The agency attributed this decision to its general satisfaction with the manner in which providers had been submitting clinic services over the past several years. CMS asked hospitals to continue using their own guidelines. The agency further stated it would continue to monitor for any aberrant billing patterns that might indicate the need for national guidelines in the future. However, CMS had no plans to implement specific national coding guidelines for E/M codes in provider based facilities at that time.
However, the same rule provided 11 general principles CMS believes hospitals should follow in developing their internal guidelines. A review of the principles available at 72 Federal Register 66805 states that guidelines should be based on facility resources rather than physician resources. Using physician E/M levels as the facility level could be problematic.
Other problems can occur when hospitals follow physician coding of an encounter. The definitions distinguishing between new and established are quite different and could produce a result in which a patient is new to one entity and established in the other. For example a patient referred from the facility’s ED could be new to the physician’s practice. The physician should bill a new patient E/M code. However the hospital must bill an established patient E/M code. The facility definition states that new patients may not have been registered as an inpatient or outpatient at the hospital in the previous three years.
A similar issue exists with modifier -25. The definition of modifier -25 is the same for both entities, but documentation relied upon is much different. Documentation must demonstrate that the facility provided significant and separately identifiable services to qualify for a separate E/M code with modifier -25. At times the physician’s services may reach this threshold while the facility services may not.
CMS did not provide a deadline because it appears to have assumed hospitals already had been following their own guidelines. With that in mind, we encourage you to read the pertinent sections of the final rule and develop your own E/M guidelines for facility services as you deem appropriate.

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