Differentiate between physician and facility billing

In the coding world, it's a never-ending clash that can cause compliance concerns—facility vs. professional.

"The rules are basically the same: Hospitals are supposed to be following the CPT® coding guidelines, etc., with the notable exception of E/M," says Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance for HCPro, Inc., in Danvers, Mass.
 
But in many cases, she says, each setting uses different codes for the exact same services based on the payment systems, the rules, and how each setting applies those rules.
 
Packaging vs. bundling
Physician billing is based upon the coding concept of bundling—incorporating two or more codes for complex procedures into one, says Peggy Blue, MPH, CPC, CCS-P, lead instructor for HCPro's Medicare Boot Camp-Professional Services Version and instructor for HCPro's Certified Coder Boot Camp and Certified Coder Boot Camp Online.
 
When you have a bundling situation, if you report the procedure codes separately or report the components in addition to the major procedure, "sometimes we refer to that as unbundling, and that's considered fraud," Blue says. "There are certain procedures that after a procedure is reported, certain services are bundled into the global surgical period and therefore cannot be reported separately by physicians."
 
Physicians report these bundles with the appropriate CPT or HCPCS Level II code that defines the medical and surgical procedures performed on patients. Some procedure codes are specific in defining a single service.
 
Consider the example of CPT code 58263 (vaginal hysterectomy). Not only does it include the hysterectomy with the uterus, it also includes removal of the fallopian tubes and ovaries.
 
"There are a lot of procedures that can be performed by different approaches, different methods, or in a combination with other procedures," Blue says. "So we have to be careful with our CPT codes that we get the right CPT codes that include the right procedures for our clinical circumstances."
 
The charge for the procedure code represents the bundle of services that have been provided to the patient, Blue adds, and that is what coders and billers report on the CMS 1500 form or its electronic equivalent.
 
NCCI edits
The National Correct Coding Initiative (NCCI) now has a single edit table containing pairs of codes that, in general, should not be reported together. If a provider reports the two codes of an edit pair, the Column 1 code would be eligible for payment, and the Column 2 code would be denied.
 
However, if it is clinically appropriate to use an NCCI-associated modifier, then both the Column 1 code and the Column 2 codes can be eligible for payment. 
 
When a service is denied due to an NCCI edit, the practitioner cannot hold the beneficiary financially liable. If the denial is based upon the billing of a component of a more comprehensive service, then Medicare considers the practitioner to have been paid for the Column 2 code when he or she was paid for the comprehensive service.
 
For example, a provider should not report a vaginal hysterectomy code and total abdominal hysterectomy code together. CMS would assume this represents a billing error because the physician would have performed either a vaginal or an open-abdominal procedure, not both.
 
Global surgical package
For professional billing, the services the physician provides to a patient vary.
 
"After all, in coding, we're trying to take the art of medicine and reduce it in a quantifiable way to a procedure code," Blue says. "So by the very nature of the art of medicine, the services from one patient to the next are going to vary."
 
The specific areas included in a CPT code for global surgery are the preoperative visits after the decision is made to operate, beginning on either the day before or the day of surgery for major procedures, and the day of surgery for minor surgeries.
 
"So these are things that are bundled into the global surgery and therefore are not paid separately," Blue says. "Of course, the normal intraoperative procedures that are a usual and necessary part of the surgical procedure are also part of the global surgery."
 
Outpatient hospital perspective
Hospitals have no global surgery concept. When hospitals have encounters after a service or procedure, they simply bill those separately, Hoy says. Hospitals do, however, have a "pre-global period" that requires them to include certain outpatient services provided prior to an inpatient encounter on the bill for that inpatient encounter.
 
Hospitals are not only impacted by bundling, but also by packaging. Hospitals report packaged services with a HCPCS code, even though they don't receive separate payment for the packaged services. By using a HCPCS code on the claim, hospitals represent the costs of those services, which helps with future payment rate-setting.
 
"For bundled service, hospitals may not report those HCPCS codes separately on the claim, but they can separately report the charge for them under an appropriate revenue code," Hoy says.
 
Physicians need to have a HCPCS code to add services onto their claim. But for hospitals, the claim line starts with a revenue code. A revenue code or revenue center is simply the area where the item occurred, and it's used by Medicare to compare the revenue that's being generated by a department with the cost expended in that department.
 
"In the hospital world, we have so many different departments interacting, we can have some of these bundled services provided in other areas of the hospital, and when they're provided in other areas of the hospital, that other area incurs the cost and the revenue needs to be tracked back to that department," Hoy says. "So for [hospital] purposes, all we need to have is a revenue code, so we can report services without HCPCS codes if we need to report bundled services that occurred in a separate department."
However, hospitals should take care not to report HCPCS codes for bundled services; if they do, they may receive inappropriate payment for bundled items.
 
E/M code selection: Professional services
E/M services represent a huge difference between professional billing and facility billing, Blue says.
Auditors use either the 1995 or the 1997 E/M documentation guidelines to see if the practitioner's documentation supports the level of E/M service reported on the claim. Note that this complex set of guidelines applies only to professional E/M coding.
 
Specifically, auditors will question several areas:
  • Does documentation for professional services support the level of service that's billed? Auditors will check a patient's history of present illness, the review of systems, and the patient's past medical, family, and social history.
  • What kind of exam did the physician document?
  •  What was the presenting problem that the patient came in with? What was the nature of that problem, the number of diagnoses, and the treatment options?
  • How risky were the treatment options, and what is the complexity of data that has to be reviewed?
  • Did the physician order any clinical lab tests or radiology services?
The three key components in an auditor's review will be history, exam, and medical decision-making.
Coders selecting a code based on time may not consider these key components. Auditors, however, will check to see that the practitioner documented the total time of the care. They will also determine whether more than 50% of the time spent with the patient was used for counseling and coordination of care. If that is the case, then there must be documentation about the nature of that counseling and care coordination.
 
"So while it's not exact because you can't really take the art of medicine and quantify it in an exact way, the documentation guidelines as applied to professional claims are really pretty complex," Blue says.
 
E/M code selection: Hospitals
Hospitals use E/M codes very differently than their professional counterparts, Hoy says. Namely, they use E/M codes when they provide a service to a patient and there is no other CPT code that describes that service.
 
"If there is a HCPCS code that describes a service that you've provided, you should use the HCPCS code that describes the service," Hoy says. "But if there is not, then you would use an E/M code."
 
Hospitals are limited to the following areas when using E/M codes:
  • Outpatient visit codes: 99201-99205, 99211-99215
  • Type A ED codes: 99281-99285
  • Type B ED (urgent care) codes: G0380-G0384 (HCPCS codes)
  • Critical care codes: 99291-99292
  • Miscellaneous visit codes
Be careful not to simply use the same E/M code assigned by the physician in a provider-based facility.
 
"It's not appropriate for the hospital to simply bill the same code as the physician for a visit in a provider-based clinic. CMS has specifically says that's not appropriate because the physician's code is not based on the hospital resources utilized," Hoy says.
 
Those who have multiple-specialty clinics and locations can have different coding guidelines for different specialty departments. But be consistent with how you apply those guidelines within a department.
 
New vs. established patient: Professional services
A "new" patient is one who has not received any professional services from the physician or another physician of the exact same specialty and subspecialty who belongs to the same group practice within the past three years.
 
"But of course we can always get into little nuances that aren't quite so straightforward," Blue says.
Consider this example: A radiation oncologist bills for a professional interpretation of an x-ray on Monday and gets paid for that interpretation. Two weeks later, he sees the patient for the first time. Is this visit considered to be from a new patient or an established patient?
 
In this case, it's considered a new patient visit. For the purposes of distinguishing between new and established patients, professional services include those face-to-face services rendered. So even though the physician has already been paid for the professional interpretation, the first time he or she sees the patient will be considered a new patient visit.
 
New vs. established patient: Hospitals
The distinction between new and established is a little bit clearer for hospitals, Hoy says. Patients registered as an inpatient or outpatient in the prior three years are established patients for the hospital.
But watch out for matching codes, Hoy says. "While it's simpler for the hospital to assign this code, it often will conflict with the physician selection of the code," she added.
 
Hospitals often bill an established code when the physician bills a new code—this is because the patient may have been seen in another outpatient department of the hospital by a physician in a completely separate practice (e.g., an ED physician). This situation warrants a new patient code for the physician, but the hospital would still use an established patient code.
 
Since there is a payment difference between these codes, hospitals that simply use the same code assigned by the physician may find themselves facing a compliance issue. "The bottom line is hospitals can't simply replicate the code that the physician is using," Hoy says.
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