Provider coding guidelines are published extensively, and most physicians, physician assistants and nurse practitioners have been to at least one presentation on the subject.
In addition, many ED providers take it upon themselves to learn about the reimbursement rules affecting the department. For example, understanding relative value units (Medicare Part B's reimbursement methodology) is crucial these days, because so many ED providers receive salary incentives based on RVUs.
On top of all this, ED providers who are running their own businesses need some knowledge of the departmental revenue cycle, including coding, cash posting, follow-up and so on. This is important even if their billing is outsourced, since some reasonable knowledge helps them assess the quality of work done by their billing vendor.
But there is another, somewhat mysterious side to the ED lurking in plain sight. This is what is often referred to as the “facility” side (or sometimes the “outpatient” or “hospital” side) of ED coding and billing.
In my experience, providers tend to shy away from learning the facility side of the revenue cycle. This is understandable, given that any resemblance between physician and facility reimbursement is purely coincidental! However, understanding “the other side” of the ED can help providers maximize the department's revenue, making them more valuable partners for their hospitals.
The ED Facility Side
As for providers, ED facility evaluation and management (E/M) codes reflect the intensity of resource use during an episode of care. Some providers view facility charges as "nursing services," but they are much more than that. Examples include:
- Room charges
- Medical supplies
- Some diagnostic tests (x-rays, bedside testing)
- Services that don't fall under the provider fee (patient monitoring, bandaging, case management)
- Some medications
For example, a patient comes in for an ankle sprain. The provider codes the encounter as 99283 (E/M Level 3) and charges $300. Meanwhile, the hospital's facility charge for a Level 3 visit is typically in the $1,000–$1,500 range!
Why so much more? Well, as noted above, hospital pricing covers the "overhead" for the patient encounter. The cost is arbitrary and comes directly from the hospital's charge master, or fee schedule.
The takeaway: There's quite a lot of revenue to be made — and lost — on the facility side of the ED.
Like providers, hospitals code using CPT, ICD-9 and sometimes HCPCS. They typically use the same E/M levels (99281–99285) to code episodes of care based on resource utilization.
Hospitals and providers also share a system for coding procedures. A small laceration repair is coded 12001 for both the provider and the facility.
That is where any resemblance between provider and facility coding ends. In assigning E/M levels for providers, coders are governed by very specific rules around the documentation of history, physical and medical decision-making. Astoundingly, there are no similar guidelines on the facility side! The issue of guidelines for facility services has been debated for many years. But to date, the Centers for Medicare and Medicaid Services (CMS) hasn’t chosen a methodology.
As a result, there is no recognized standard for ED facility level coding. In fact, CMS allows hospitals to write their own rules, so long as they're applied consistently. In practice, methods vary from ACEP's well-recognized ED Facility Level Coding Guidelines to homegrown point systems — or even (gulp) leaving facility coding to the whims of the EMR.
In 2012, I was part of a team that extensively studied ED facility level coding and found significant variance from hospital to hospital (well beyond variances on the physician side).
If you're a contracted provider, one way to increase your value to the hospital is to know the basics of its coding methodology. For example, if the hospital is using ACEP's guidelines, learn them and have a copy handy. This allows you to tailor your documentation so that encounters can be coded at the highest level that is appropriate.
As noted above, the hospital has leeway to bill for many services and supplies that individual providers can't. Taken together, these represent a major revenue source for your ED and hospital. However, many of these services are notoriously difficult to document, which means the hospital often ends up leaving money on the table.
One common example is hydration therapy, infusions and injections, which are subject to a very specific set of documentation guidelines. For example, the Basic Infusion code (96365) requires at least 15 minutes of treatment. However, if the documentation is incomplete or unclear, the coder must assign the less lucrative IV Push code (96374).
For this reason, a provider who understands procedural coding can be invaluable to a hospital. In addition to documenting their own encounters thoroughly, they can provide quality assurance and serve as a resource for others. (Providers generally respond better to correction from peers than from the medical records department.) The ability to maximize ED revenue from procedures can make a difference in the hospital's bottom line — and provides an opportunity for contracted ED groups to demonstrate value.
The most obvious difference between ED facility and ED provider billing is that most hospitals handle facility billing in-house. Providers are more likely to outsource billing, unless the group is large enough to have its own medical services arm.
Complexity is the primary reason that facility billing isn't outsourced. From a processing point of view, it includes a variety of forms and reimbursement methods. Also, many revenue centers within the hospital (lab, pharmacy) feed into the ED facility bill.
This doesn't mean that ED facility billing can't be outsourced. In many cases it probably should be. Too often, ED billing is deprioritized as the billing department chases higher reimbursements from inpatient services. Another disadvantage of the in-house approach: ED facility revenue tends to get lumped in with other revenue sources, which makes it useless for reporting and tracking purposes.
For these reasons, I think hospitals should consider outsourcing the facility side of the ED revenue cycle. In many cases, contracted emergency medicine groups can point their hospitals to vendors with the appropriate software and expertise to do the job.
Though the shift can be a difficult one, a handful of billing companies that traditionally served providers are adding facility billing to their repertoires:
In short, physician groups can sometimes offer the hospital a real solution to a nagging problem. As providers improve their documentation, less money will be left on the table. It's a win for the hospital and an opportunity for contracted groups to demonstrate their value and alignment.
Our company had years of experience specializing in ED physician billing and coding. We have been very focused on the ED as a revenue center that had significant potential for financial return for our hospital. This was due in part to our experience with coding and billing the professional claims, as well as our unique relationship with the ED providers and nursing staff.
Assuming responsibility for both the professional and facility side of the ED billing presented a number of new challenges. This required customizing our internal processes while creating effective feedback loops regarding medical necessity as it relates to ancillary testing and becoming proficient in facility ED coding.
We are pleased to be able to process both the physician and hospital side of the ED visit and have gained efficiencies that continues to significantly benefit both of our clients.
— Patricia Pitrolo, President, Atlantic Billing Associates
[Image credit: "EMT/Nursing Pediatric Emergency Simulation - April 2013 18" by COD Newroom licensed under CC BY 2.0]