ED Coding and Reimbursement Alert

Question: I've been told that patients placed in observation and then receiving prior to or after the observation period a procedure (endoscopy, IR procedure, Cardiac Cath), the institution can only bill for one (observation or the procedure). My concern is that the patient will most likely be billed directly for the other portion. I would really appreciate if you can point me in the right direction to find out more information on this.

New York Subscriber

Answer: Using the Medicare rules the facility does submit a bill for all relevant procedures for observation patients. The Outpatient Code Editor then bundles most typical ancillaries (CT scans, Labs, and X Rays) into the observation process and pays only the Observation facility service. However, if the patient has a more significant procedure (the technical jargon is a T status procedure) then the T status procedure is paid and the Observation service is not recognized. In that situation the observation charge defaults back to an ED visit (facility side) and the ancillaries.

There has not been a problem in the past with patients receiving bills for procedures and services since the hospital submits all the charges to the insurance company (such as Medicare) and the insurance company adjudication logic determines the allowable payment for the reported services.