[
Independence would like to remind our participating outpatient hospitals
about our reimbursement policy for observation services when billed in
combination with other outpatient services, as specified in your Hospital
Agreement (Agreement).
In accordance with your Agreement, the Observation Fee Schedule includes all
implants, biologicals, equipment, supplies, drugs, and ancillary services
provided to the beneficiary during the visit or procedure, including the
professional components of laboratory and radiology.
When billed with outpatient surgical and/or emergency services, observation
services are reimbursed as follows:
- Observation services billed with outpatient surgery. Outpatient
surgical services are reimbursed according to the Agreement; observation
services are not separately reimbursed.
- Observation services billed with an ER visit. Emergency
room/department (ER) visits and observation services are both reimbursed
according to the Agreement.
- Observation services billed with an ER visit and outpatient surgery.
Outpatient surgical services and the ER visit are both reimbursed according to
the Agreement; however, observation services are not separately reimbursed.
The following table shows examples of how our reimbursement policy will pay
when certain revenue codes are combined with Healthcare Common Procedure Coding
System (HCPCS) and/or Current Procedural Terminology (CPT
®)
codes:
| | Revenue code | HCPCS/CPT code | Reimbursement policy |
|---|
| Example
1 | 0490 | 67105 | Reimbursed according to contracted
rate |
| 0762 | 99234 | No separate reimbursement |
| Example 2 | 0450 | 99281 | Reimbursed according to
contracted rate |
| 0762 | 99234 | Reimbursed according to
contracted rate |
| Example
3 | 0450 | 99281 | Reimbursed according to contracted
rate |
| 0490 | 67105 | Reimbursed according to contracted
rate |
| 0762 | 99234 | No separate reimbursement |
As noted above, the Observation Fee Schedule is inclusive of all ancillary
services; therefore, observation services are not separately reimbursed.
Observation services must be billed with revenue code 0762, plus the
appropriate number of units the patient spent in observation (one unit per
hour). Reimbursement for observation services shall not exceed the contracted
observation maximum.
In the past you may have been inadvertently paid for services that should
not have been separately reimbursed. Please note that we will be enforcing our
reimbursement policy for facility reporting of observation services as set
forth in your Agreement and as clarified above. For more information regarding
observation services, please refer to our Medical Policy Portal.
If you have any questions, please contact your Network Coordinator.
CPT copyright 2014 American Medical Association. All
rights reserved. CPT is a registered trademark of the American Medical
Association.
]