Evaluation and Management Leveling Solution

Background :

For the Emergency Department (ED) facility-level coding, CMS allows the hospitals to come up with their own coding methodology and does not provide any guidance on how to code the facility level. As a result, different organizations use different methodologies. Most commonly used methodologies are by American College of Emergency Physicians (ACEP) and American Health Information Management Association (AHIMA). ACEP and AHIMA have their own guidelines but their guidelines are more or less similar to regular E&M coding. Both these methodologies have factors that can be impacted by the judgement of the nursing and coding staff.

Some of the hospitals have opted to use what they call as “activity-based point scheme”. In this case, activities are based on the documentation which is done by the nursing staff and then coded separately by coders. At some places, nurses are doing documentation as well as coding based on documentation. However, the only issue with that is the compliance concern with “up-coding” since there is no separation between the staff doing documentation and coding and bias can easily set in without any check-and-balances.

Regardless of the methodology adopted, CMS guidelines state facilities should code a level of service based on facility resource consumption.

Solution :

CTech’s solution brings a more comprehensive approach to coding and routine assessment of whether Medicare reimbursements are in line with resource utilization. Our approach and solution are being used at several hospital facilities and we believe it is a more objective, compliant and defendable coding methodology/practice using the hospital’s own (or outsourced coding) resources. In line with CMS guidelines that facilities should code a level of service based on facility resource consumption, salient aspects of our methodology are:

  • Activity-based point system for assigning ED E&M levels.
  • Detailed analysis of outpatient ED claims at the HCPCS level so as to identify services that are bundled with E&M levels and services that are paid separately.
  • Comparing the cost of services that are reimbursed through E&M levels to the E&M revenues.
  • Aligning E&M levels in Step 1 with costs computed in Step 3.

A number of other companies in this field try to use Standard Analytical Files (SAF) data to position the organization within a certain quartile in comparison to other facilities in the country. However, that in itself is not a sound approach. Our methodology will use SAF data just as another data point which can help us with overall decision-making process but placing or trying to force-fit the organization in a given quartile is not the objective. Our goal is to simply assist the facility to code a level of service based on facility resource consumption. To that effect, CTech has the following process in place:

  • CTech has the framework and has developed an ED Calculator that can be used alongside any Enterprise EHR such as Epic® , Cerner® etc. The current version of CTech’s ED Calculator based on the number of activities identified by the coding and nursing staff has approximately 90 different activities (any number of activities can be defined, 60-90 range is typical) that have points associated with them. CTech will review these activities with facility’s coding and nursing staff to identify activities that they do not deem relevant and also incorporate other activities that they feel need to be included. CTech will also review with them points associated with each activity and adjust the points accordingly thereby making the solution customized based on the judgement of the facility’s coding and nursing staff.

  • CTech would request about 300 cases that have already been coded to be coded through CTech’s ED Calculator and then compare the results of CTech’s ED Calculator with the actual E&M codes billed.

  • At this point, CTech will compare the cost of overall services as described earlier and what adjustments are needed to align the cost of services to ED E&M reimbursement.

  • During the initial year of implementation, CTech might do two quarterly reviews of how the overall E&M levels under the new methodology are compared with the 300 cases that were retroactively coded under our methodology and the Activity-based Calculator is adjusted as needed. Once the Calculator has been based on six months of activity, CTech can review the overall E&M levels on annual basis on account of the fact that our new estimation is based on a much larger sample.

With this approach, CTech believes the facility can use a consistent methodology that is compliant, dependable and the cost of services that are reimbursed through E&M levels are in line with the E&M revenue.

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