Medicare Compliance & Reimbursement

Observation guidelines and drugs receive federal scrutiny.

Be prepared: The Medicare Modernization Act is now in full effect - or close, anyway - and the Centers for Medicare & Medicaid Services' proposed rule for the outpatient prospective payment system aims to implement the few changes that are left. Follow These 7 Rules for Separate Observation Pay For 2005, CMS attempts to smooth out a few rough edges in the complicated guidelines for reporting observation, but the changes may not make the road less bumpy. For starters, the agency wants to scrap the requirements that staff perform certain diagnostic tests in favor of an approach friendlier to clinical judgment, with quality review to keep an eye on the change - and make sure patients are getting tests when necessary.

"Requiring specific tests at least made the coding objective," says Sarah Goodman, president of SLG Inc., a consulting firm in Raleigh, NC. The rules "appear to have become somewhat more 'subjective' under the new guidelines, which could potentially pose a problem."

These diagnostic tests are no longer required to receive payment for observation: For congestive heart failure (CHF):

chest x-rays (71010, 71020, 71030), EKGs (93005), and pulse oximetry (94760-94762)

For asthma:

breathing capacity tests (94010) and pulse oximetry

For chest pain:

two sets of cardiac enzyme tests - either two creatine phosphokinase (82550-82553) or two troponins (84484, 84512) and two sequential EKGs.
 
Seven must-do's will earn observation reimbursement, CMS says. Follow these requirements when reporting these services: 1. Document observation time in the patient's record, beginning with the admission time and ending when the patient is discharged. 2. Include written proof that the physician specifically evaluated the patient's risk to determine that the patient would benefit from observation. 3. Make sure documentation shows that the patient was under physician supervision during the observation time through admission, discharge and progress notes. 4. If using code G0244, the observation has to have lasted a minimum of eight hours. 5. The patient must have chest pain, asthma or CHF, and the bill needs to include a principal diagnosis of one of these conditions. 6. Report an emergency department visit, clinic visit or critical care on the bill the same day as G0244 (or the day before). If the doctor admitted the patient directly to observation, report G0263 (in place of the visit code) on the same day as G0244. 7. If the procedure has a T status indicator, chances are the facility can't report it with observation - unless it's a code for non-chemotherapy drug infusion. Earn Fee Schedule Rates for Expired Pass-Throughs The pass-through status of 13 medications expires Dec. 31 - but CMS will treat them as sole source drugs come 2005. This means providers will get reimbursed between [...]