Hospitals struggle through HCFA’s E/M instructions
Facilities must decide what coding system to use
When industry analysts reviewed the final outpatient prospective payment system regulation, one portion seemed to universally catch them by surprise: instructions for evaluation and management (E/M) coding.
The rule, published in the April 7 Federal Register, stipulates that the Health Care Financing Administration (HCFA) in Baltimore will hold each facility responsible for developing and following its own system for coding clinic and emergency department visits. HCFA says that the system should map the provided services or combination of services for assigning the different levels of HCPCS (HCFA common procedure coding system) codes.
"As long as the services furnished are documented and medically necessary and the facility is following its own system, which reasonably relates the intensity of hospital resources to the different levels of HCPCS codes, we will assume that is in compliance with these reporting requirements as they relate to the clinic/emergency department visit code reported on the bill," the rule states. HCFA also says it does not expect to see a high degree of correlation between the code reported by the physician and that reported by the facility.
"The E/M coding is one of the hot debate items [in the rule]," says Darice Grzybowski, RHIA, national manager for HIM industry relations with 3M HIS in Salt Lake City. She says she had expected the rule to say that hospitals would have to use the physician documentation definitions for the E/M coding. (For information about other debated items in the final rule, see story, p. 101.)
The final E/M decision most likely resulted from feedback that HCFA received from the proposed rule, says Sue Prophet, RHIA, CCS, director for coding policy and compliance at the Chicago-based American Health Information Management Association (AHIMA). "I know there were a lot of concerns and comments about the fact that the E/M codes and the CPT [common procedure terminology] coding system were developed to capture the physician work involved in taking care of a patient, which is significantly different than the type of resources expended by a facility."
In a medical visit to a hospital emergency department, patients can receive care that wouldn’t take place in a doctor’s office, and that doesn’t reflect on the doctor’s time, such as X-ray, nursing, and registrar services, Grzybowski says. "[E/M coding guidelines] were designed to measure physician treatment, time spent with patients, and physician office visits, but HCFA was not using it for that intent."
Sitting in limbo
Although Grzybowski and Prophet say they are pleased that HCFA recognized the problem and responded to industry concerns, they know the current rule leaves the E/M coding situation somewhat in limbo.
"There are mixed feelings from hospitals," Prophet says. "There is certainly some sense of relief that they don’t have to use the physicians guidelines for assigning the codes. On the other hand, they are left wondering how they are going to assign them."
In addition, hospitals are concerned about how to determine if the system they use is reasonable. "Is the OIG’s definition of reasonable going to be the same as HCFA’s and the same as the hospitals? What does reasonable really mean?" Prophet asks. "Just because you think your system is reasonable doesn’t mean the government will think the same thing. People might feel more secure if everyone had a standard system to use."
AHIMA’s first preference was for HCFA to offer another mechanism for developing the ambulatory payment classifications for medical visits other than the physician’s E/M codes. "The problem is that there really wasn’t a system available for them to use that relates E/M codes to facility resources," she explains. HCFA has said it plans to work with the American Hospital Association in Chicago and AHIMA to develop appropriate facility-based patient visit codes before the next proposed rule.
"HCFA will probably look around to see who has developed the best system of how to determine the relationships between the E/M codes and the facility resources and ultimately adopt a system," Prophet says.
What should hospitals do now?
While hospitals wait for HCFA to propose a standard E/M coding system, they can choose one of three options in response to the agency’s current recommendations, says Grzybowski:
1. Continue handling E/M coding the same way they do now.
Some hospitals may continue to enter the codes in the chargemaster as a result of how much time and acuity measurements the nursing visit is spent on the patient, Grzybowski says. Others may handle the codes based on documentation criteria — how many items are marked off the record.
Hospitals may have less change and, therefore, less stress if they continue handling the E/M coding as they have been. "[Not changing] also may allow consistency in your audit results," she adds. "If someone were auditing you against how you were doing things previously, you’re going to come up with the same answer. It helps protect you from a compliance perspective."
Given the way ambulatory payment classifications are formulated and the way the E/M codes are going to be used, however, hospitals may be getting potentially less revenue than they are due. "People tend to be sloppy with their current systems, and they don’t have very objective criteria," Grzybowski says. "It is a little more subjective in some places. It’s a potential cash-flow risk."
Prophet says she has concerns that many providers don’t have a formal system to handle E/M coding. Many hospitals just assign the lowest code, since that brings no risk of payment penalties or ramifications. "A lot of facility coders, therefore, are not familiar with or have had education on the proper assignment of E/M codes. So they do not have any system to do it the same old way."
These hospitals, then, must choose from the two remaining options.
2. Adopt the physician documentation standards as HCFA originally intended.
"To do that, you would have to revise your documentation processes and realize that it’s very intensive for the physicians to document that way," Grzybowski says. In addition, hospitals must take sides in the debate about whether to use the 1995 CPT rules or the 1997 rules.
"According to HCFA, right now for physician reimbursement, hospitals can choose either set of criteria," she explains. "Most stick with 1995 because it is easier."
Big change for hospitals
Hospitals would likely undergo the most dramatic change to adopt these standards, she says. "You may optimize your revenue, but on the other hand, you may not, depending on the quality of documentation you get back from the physicians." Switching to this system changes other processes — not just the method to capture E/Ms. "How do the doctors get their documentation? Are they dictating? Are they using template check-off boxes? Who is doing the coding? Is it the HIM department or is it going to be a different department?" Grzybowski recommends the health information management department do that type of review since that is in its area of expertise.
3. Develop new criteria.
Hospitals can also begin doing their E/Ms based on whatever they want. The coding can be based on some form of documentation, some type of formula they have developed based on coding, or other types of time spent and acuities.
Developing a new system may not be as dramatic a change as switching to the physician documentation standards, but it will still require educating staff. "That takes time," Grzybowski says, "and July 1 is rapidly approaching." The last two choices also don’t give hospitals consistency in their coding methods.
If hospitals choose to maintain their present system of E/M coding, she recommends that one more set of actions be taken. "I would add some audits to make sure I was doing it as objectively as possible to ensure proper reimbursement."
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