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Observation Services

Observation Services. G0378 is always packaged (“N” SI), either into 1 of 2 composite APCs or , if composite criteria are not met, packaged into payment for the major services on the claim. Observation Services. CMS states

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Observation Services

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  1. Observation Services • G0378 is always packaged (“N” SI), • either into 1 of 2 composite APCs or, • if composite criteria are not met, packaged into payment for the major services on the claim.

  2. Observation Services • CMS states “observation services are ideal for packaging because they are always provided as a supportive service in conjunction with other independent separately payable hospital outpatient services such as an ED visit, surgical procedure, or another separately payable service”

  3. Observation Services • Composite APCs describe an extended encounter for care provided to a patient: • APC 8002 (Level I Extended Assessment and Management Composite) • Nat’l payment rate = $393.44 • APC 8003 (Level II Extended Assessment and Management Composite) • Nat’l payment rate = $729.01

  4. Composite 8002 1) 8 or more units of HCPCS code G0378 are billed-- ● On the same day as HCPCS code G0379; or ● On the same day or the day after CPT codes 99205 or 99215 and; 2) There is no service with SI=T on the claim on the same date of service or 1 day earlier than G0378 Composite 8003 1) 8 or more units of HCPCS code G0378 are billed on the same date of service or the date of service after 99284, 99285, G0384 or 99291 and; 2) There is no service with SI=T on the claim on the same date of service or 1 day earlier than G0378 Criteria for Composite Payment

  5. Observation Services • There is no limitation on diagnosis for payment of these composite APCs. • Composite payments will not be made when observation services are reported in association with a surgical procedure (status indicator T) or if observation hours reported are less than 8.

  6. Observation Services • The OCE (Outpatient Code Editor) will evaluate every claim received to determine if payment through a composite APC is appropriate. • If payment through a composite APC is inappropriate, the OCE, in conjunction with the OPPS Pricer, will determine the appropriate status indicator, APC, and payment for every code on a claim.

  7. Ancillary Services • Charge separately for infusions and injections administered in observation. • Assign revenue code 760 • Report separately any laboratory, radiology, etc. services under the appropriate revenue codes. Transmittal 787

  8. Ancillary Services • OPPS hospitals are reminded to use the full set of drug administration CPT codes when billing for drug administration services provided in the hospital outpatient department. • CPT codes 96360-96361 (Hydration) • CPT codes 90365-90379 (Therapeutic, Prophylactic, and Diagnostic Injections and Infusions)

  9. Ancillary Services • Report all drug administration services, regardless of whether they are separately paid or are packaged. • Hospitals are expected to report all drug administration CPT codes in a manner consistent with their descriptors.

  10. Critical Access Hospitals

  11. Observation in CAH • Falls under Part B (outpatient) services – coinsurance applies • Requires written notice of non-coverage to beneficiary (ABN) prior to stay OBS beds count as part of 25 maximum bed count

  12. Observation in CAH • 72 hour rule does not apply to CAHs. • Provider can combine ER and OBS charges on same UB if provided on the same date. • If services provided on different dates, combine the services and utilize a date range in FL6 OR • Bill on two separate UBs • IP services are billed on separate UB

  13. Observation in CAH • CMS clarified in its Medicare Claims Processing Manual (Section 30.1.1), that CAHs: • Are exempt from the 1 and 3 day payment window provisions • Do not bundle OP services provided prior to inpatient admission on the inpatient bill • OP services must be billed as OP, and on a separate bill (85x TOB) from IP services • Outpatient services rendered on the date of admission to an inpatient setting are still billed and paid separately as outpatient services in a CAH

  14. Observation in CAH • Medicare pays 100% of costs for observation.

  15. Self-administered drugs • Excluded from Medicare coverage • Medicare does not expect to be billed for non-covered self-administered drugs given in the outpatient setting. • Patient liable for cost

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