Hospital Coding: It Isn’t Just for Inpatients

By Catrena Smith, CPC, CCS, CCS-P, and Elizabeth Giustina, CCS-P

 A common misconception is that hospital coding is synonymous with inpatient coding, but hospitals provide many services in addition to inpatient care. Hospital coders may find themselves coding for different settings, such as the facility’s outpatient clinics, emergency department (ED), urgent care center, ambulatory surgery center (ASC), laboratory, observation unit, diagnostic radiology, and other departments.
To give you an inkling of what’s required of a hospital coder, we’ll focus on several aspects of hospital outpatient coding and assignment of evaluation and management (E/M) codes in the hospital/facility setting. We’ll also introduce you to Medicare’s Outpatient Prospective Payment System (OPPS) and the charge description master.
Facility Bill Includes All But the Doc

Outpatient coding captures facility expenses. All things must be recouped in the facility’s reimbursement, including the cost of the operating room, the nursing staff, the medical supplies, all salaries, all utilities, and building maintenance. The physician’s service fee, however, is not usually part of this bill.
E/M Code Assignment
When most coders think of E/M coding, they think of the Centers for Medicare & Medicaid Services’ (CMS) 1995 and 1997 Documentation Guidelines for Evaluation and Management Services. These systems are point based and rely heavily on the documentation level in the three key components of history, examination, and medical decision-making. These are national guidelines used in physician E/M coding.
Hospitals do not follow the 1995 or 1997 documentation guidelines for reporting their facility services; national facility E/M coding guidelines do not exist. There is, however, a set of standards, and each facility is responsible for developing and using its own internal E/M code assignment guidelines. These guidelines are based on the intensity of the service(s) documented and provided. However, coders must be careful because the level of E/M assigned for professional services will not always match the facility E/M level.
The American College of Emergency Physicians (ACEP) offers an easy method for assigning E/M levels for EDs, basing levels on possible interventions and including potential symptoms/examples to support those interventions. An article and corresponding E/M guide can be found on ACEP’s website (
In the E/M grid provided on the ACEP website, levels are building blocks: The higher E/M levels could include interventions from the lower levels. For example, let’s take a look at the options for patients treated for trauma. According to ACEP’s E/M grid:

  • A patient seen for a simple trauma with no X-rays is reported with 99282 Emergency department visit for the evaluation and management of a patient, which requires these 3 key components: An expanded problem focused history; An expanded problem focused examination; and Medical decision making of low complexity.
  • A patient seen for a minor trauma (with potential complicating factors) is reported with 99283 Emergency department visit for the evaluation and management of a patient, which requires these 3 key components: expanded problem focused history; An expanded problem focused examination; and Medical decision making of moderate complexity.
  • A patient treated for blunt/penetrating trauma with limited diagnostic testing is reported with 99284 Emergency department visit for the evaluation and management of a patient, which requires these 3 key components: A detailed history; A detailed examination; and Medical decision making of moderate complexity.
  • A patient with blunt/penetrating trauma requiring multiple diagnostic tests is reported with 99285 Emergency department visit for the evaluation and management of a patient, which requires these 3 key components within the constraints imposed by the urgency of the patient’s clinical condition and/or mental status: A comprehensive history; A comprehensive examination; and Medical decision making of high complexity.

As the possible interventions and potential symptoms increase, so does the reportable E/M level.
Medicare’s Hospital OPPS
The OPPS was developed in 2000 to reimburse certain services in the outpatient setting. Often, the payment is made in the Ambulatory Payment Classification (APC). Although not all services are paid through the APC, the calculation of the reimbursement is based on a package of services. The services included in the APC are not individually paid.
For example, for 2012, CMS proposed APC 8009 Cardiac resynchronization therapy with defibrillator composite, which combined payment for CPT® codes 33225 Insertion of pacing electrode, cardiac venous system, for left ventricular pacing, at time of insertion of pacing cardioverter-defibrillator or pacemaker pulse generator (including upgrade to dual chamber system and pocket revision) (List separately in addition to code for primary procedure) and 33249 Insertion or replacement of permanent pacing cardioverter-defibrillator system with transvenous lead(s), single or dual chamber.
This does not mean, however, that all outpatient services provided on the same date of service are included in the APC.
Find more information about OPPS on the CMS website:


Charge Description Master
The APC is based on a HCPCS Level I (CPT®) or Level II code and medical necessity, often determined by the associated ICD-9-CM codes. Many hospitals have a financial system that will assign the HCPCS code using a charge description master (CDM). The CDM is often invisible to the person assigning the financial code and to the coder. The financial code may be a general ledger code, an inventory code, or other description. Using a dictionary or decision tree, the facility computer system will look at the general ledger code and the patient insurance information to assign the HCPCS code and revenue codes (used to summarize all services within a department on the bill).
Coders’ Involvement
Before final processing, the coding department should look at the charges, assign the diagnosis codes, and ensure the services are medically appropriate (i.e., confirm medical necessity). The billing department may also look at the bill prior to submission to verify insurance coverage. Using the encoders, insurance company edit tools, and National Correct Coding Initiative (NCCI) edits, both departments may verify that all charges are included to ensure prompt, accurate payment.
Health insurance management (HIM) and billing departments often have predefined computer parameters to review services. For example, the date requirement may be “any account five days post discharge,” and a minimum dollar amount, such as “any account over $100.” Each coder may have a predefined set of work parameters, or work lists, to review. For example:

CPB : Online Medical Billing Course

  • Coder Amy may look at all Medicaid pediatric accounts.
  • Coder Betty may look at all Medicaid adult accounts.
  • Coder Carol reviews all Medicare with a last name range of A-L.

This process allows coders to more easily conduct a review of charges compared to the medical record to detect any additional or missing charges, and also verify assignment of all diagnoses. For example, if there are magnetic resonance imaging (MRI) results, but no charge, the bill may be placed on hold.
The outpatient bill should reflect the actual services rendered, leading to proper reimbursement. The assignment of accurate and compliant codes allows facilities to be properly reimbursed for the quality care they provide.
Catrena Smith, CPC, CCS, CCS-P, is owner of Access Quality Coding and Consulting, LLC in Orange Park, Fla. Access Quality Coding and Consulting provides coding education and training, auditing, coding, and account management services in hospital and physician settings.
Elizabeth Giustina, CCS-P, has worked in many settings, including the Military Health System, inpatient and outpatient hospitals, and physicians’ offices. She works for First Class Solution as a consultant for ICD-10 documentation improvement, and also does CPT® auditing and coding.

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