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Elizabeth M. Whitehorn, Director

Outpatient Rate Reform Questions and Answers

1. What is the effective date of outpatient rate reform?

For outpatient claims, it is dates of service on or after 07/01/14.

2. Beginning on 07/01/14, what version of the EAPG will be used by the department?

The EAPG will be version 3.7.

3. Will outpatient claims be paid based on the APL (Ambulatory Procedure List) code?

HFS will continue to publish this listing of procedures most appropriately performed in the hospital outpatient setting, but will no longer assign a rate to each specific procedure code. An outpatient claim must contain at least one procedure code or an emergency department or observation revenue code as listed in the APL.

4. Will billing for the ER change with rate reform?

Hospitals are still required to code emergency department Revenue Codes 0450, 0451, and 0456 with their associated HCPCS Codes as identified in the APL.

5. How will observation be billed with rate reform?

Hospitals and ASTCs are still required to code observation services with Revenue Code 0762 and an associated HCPCs Code as identified in the APL, and note the number of hours in observation in FL 46 – Service Units. Additionally, providers must code a second Revenue Code 0762 line and identify HCPCS code G0378 in order for observation services to process correctly. The minimum billable observation time will be one hour.

6. Can a hospital bill emergency room, observation and an inpatient stay on two claims?

The current policy will remain the same. If during the same treatment span, subsequent to emergency department or observation services, the patient is admitted to the hospital as an inpatient, only the emergency room charge or the observation service may be billed on the outpatient claim. It is up to the hospital to determine which outpatient service will provide greater reimbursement. Charges incurred as a result of services provided by other outpatient departments prior to the patient’s admission, such as laboratory or radiology services, are to be shown on the inpatient claim.

7. Can a hospital bill both renal dialysis (Category of Service 25) and er/observation (Category of Service 24) for the same date of service?

In the past, hospitals have been instructed to bill the highest paying service but cannot submit a claim for both. The policy will remain the same.

8. The 72 hour rule for Medicare states that any outpatient diagnostic or other medical service performed within 72 hours prior to admission to the hospital be bundled into one bill. Will HFS follow the same policy?

No, HFS will not follow the 72 hour rule for Medicare.

9. Will the hospital still be able to bill series claims?

Hospitals will be able to bill multiple APL groups on a series claim. All claims must contain a series-billable revenue code and a series-billable APL code for each service date billed. Value code 80 is still required to identify the number of covered days. Dates of service on series claims cannot span July 1, 2014. Series claims must be split in order to price correctly. If a series claim contains more than 54 Revenue Code lines, the claim service dates must be split into two or more separate claims.

10. How will Medicare/Medicaid combination claims (crossovers) be paid?

HFS will no longer use the number of departments visited to establish the Medicaid maximum allowable amount. The department will calculate its allowable amount based on the EAPG grouper.