Health Information Management

Be on the lookout for status indicator "N" versus "Q"

APCs Insider, October 19, 2007

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QUESTION: Our respiratory therapy department performs oxygen saturations with exercise (CPT code 94761-Noninvasive ear or pulse oximetry for oxygen saturation; multiple determinations [e.g., during exercise]) as a patient's only procedure. This code has a status indicator "N"; however there is a local coverage determination (LCD) for the procedure. Because the patients have one of the diagnoses for which there is an LCD, we can't obtain a signed Advance Beneficiary Notice. How should we handle this scenario?

ANSWER: CMS previously addressed this issue in one of their hospital Open Door Forum calls in 2006. A caller asked if it would be appropriate to bill for a low-level clinic visit if the only procedure that the provider performed was a packaged service (status indicator "N") for which there was no separate payment. The CMS representative indicated during the call that when there is a CPT code that correctly represents the service that the hospital provided, the hospital should bill the CPT code-and not a clinic visit code- for the procedure.

The CMS representative acknowledged that billing a packaged procedure would result in no payment. The representative pointed out that although the outpatient code editor would reject a claim with only packaged services, CMS was tracking these rejected claims and would consider separate payment in the future.

Subsequently, for 2007, the status indicator "Q" was introduced, providing separate payment for six packaged codes when they are the only service reported on a claim. Unfortunately, CPT code 94761 was not included in this exception for 2007. CMS proposes for it to remain a status indicator "N" for 2008.

As your question indicates, when this is a covered service, under applicable coverage policies, it would be inappropriate to charge the patient for the service. This means that the hospital unfortunately has no payable service to report, when the only procedure provided is that which CPT code 94761 describes. However, remember that a service is typically only packaged when it is normally provided as part of or in conjunction with another service. Based on that, you might consider reviewing the clinical records for these cases to ensure that there are no other appropriately coded services rendered during the visit.

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