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Elizabeth M. Whitehorn, Director

Provider Notice issued 09/16/14

Hospital Rate Reform – Clarification Regarding Observation Billing

​To: Enrolled Hospitals: Chief Executive Officers, Chief Financial Officers, and Patient Accounts Managers​
Date:​ ​September 16, 2014
​Re: Hospital Rate Reform – Clarification Regarding Observation Billing​

As noted in the June 26, 2014 Informational Notice titled, Hospital Rate Reform - Additional Guidance Effective with Inpatient Discharges and Outpatient Dates of Service Beginning July 1, 2014  , hospitals and ASTCs are 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 is one hour.

Recent inquiries have prompted the department to clarify that these UB-04 outpatient coding instructions apply to Medicaid claims, as well as claims that identify Medicare Part B as the primary payer (Medicare crossovers). Service lines that do not contain an appropriate HCPCS code as identified on the last page of the Ambulatory Procedures Listing (APL) will not be included in the Enhanced Ambulatory Patient Group (EAPG) pricing logic.

 

Any questions regarding this notice or inquiries regarding assistance with cash flow issues may be directed to the Bureau of Hospital and Provider Services at 1-877-782-5565.

 

Theresa A. Eagleson, Administrator
Division of Medical Programs