Denials Management

Navigating Bad Payer Behavior in Emergency Services Billing

September 27, 2018 8:44 am

As health plans and government payers announce more stringent requirements for emergency department (ED) claims, both payer medical necessity audits and coding denials are on the rise in emergency medicine. Several factors are contributing to these trends. In order to mitigate the risk of nonpayment by insurers, healthcare organizations should be aware of these cuts, ensure correct and comprehensive coding of ED claims, and report inappropriate nonpayment activity.

Payment Cuts in Emergency Medicine

Awareness and proactive management are essential to retain revenue and curb financial loss in the ED, one of health care’s most difficult care settings. Patients are being diverted to other care settings not only to prevent ED overcrowding but also to save insurers money. 

So far in 2018, Anthem, Humana and Medicaid have all announced discretionary ED policies that limit conditions covered and reduce payments. In fact, Anthem’s policy landed one Kentucky resident a $12,596 bill for emergency services at Frankfort Regional Medical Center after her visit for a suspected ruptured appendix was deemed nonemergent by her health plan. 

Meanwhile, patient deductibles are on the rise. And since ED claims are usually the first to be submitted to health plans, associated charges fall within the patient’s deductible amount and are often not covered. This makes patients the primary payer for many emergency care encounters. Patients who once may have left the emergency department with a $50 or $100 copay are now walking out with a bill for $5,000 or more. 

In this challenging environment, hospital revenue cycle leaders need to be proactive if they want to be paid properly for the services provided in their EDs. 

Correct and Comprehensive Coding of ED Claims

Providers should be working to educate coders and ensure correct coding before submitting ED claims. This is especially true for ICD-10 and Evaluation and Management (E&M) code assignment. 

The Centers for Medicare and Medicaid Services (CMS) has specific payment policies for evaluation and management (E&M) leveling of emergency services. CMS states that when an emergency services provider bills an E&M level 4 or level 5 service with a diagnosis indicating a lower level of complexity or severity, the provider may be paid at the lower, level 3, E&M rate. In addition, these claims are adjudicated using a coding algorithm that determines pay based on the ED claim category and the diagnosis code on the claim. If the code classification indicates a lower level of complexity or severity, the claim is paid at an E&M level 3 contracted rate. 

Some insurers are proposing a 25 to 50 percent decrease in E&M reimbursement if Modifier 25 is applied. Modifier 25 is used to designate a significant, separately identifiable E&M service by the same physician on the same day of the procedure or other service. These insurers assert that they are essentially paying twice for the practice expense and the work value of the relative value units (RVUs). 

In the case of Modifier 25, leaving it off is not advisable because it’s part of CPT rules—omission is a compliance issue.  The coding team must understand when to use Modifier 25 as the emergency payment landscape continues to evolve.   

The key to avoiding denials for ED services is to provide accurate and detailed documentation and coding. With ICD-9, providers generally knew which codes each health plan or government payer would accept. In ICD-10, coder focus shifts to knowing specific codes that should never be billed in order to avoid ED claims rejections and denials.

Here are four best practices in emergency services documentation and coding:

  • Cite a high-quality differential diagnosis that justifies the medical decision making and the patient’s severity
  • Be specific with the final impression and avoid unspecified ICD-10 codes whenever possible
  • Support emergency physicians by expanding clinical documentation improvement programs into the ED care setting
  • Hire certified coders and billers skilled in emergency services and knowledgeable about insurer-specific rules and requirements

Report Bad Behavior

Training at all levels of coding is the key to proactively addressing payment issues, along with responding quickly to denials and lower payments. Data that demonstrates systematic practices of unfair payment will help with advocacy efforts.  

Taking these changes into account, it’s advisable to challenge or appeal every unfair denial to the Emergency Department Practice Management Association (EDPMA) Quality, Coding, and Documentation Committee and the American College of Emergency Physicians (ACEP) Coding and Nomenclature Advisory Committee

A concerted effort among providers is the best way to address and correct bad payer behavior in the ED. Other proven strategies include monitoring clinical documentation and coding compliance, hiring knowledgeable staff, and taking a proactive approach to denial prevention for the emergency services your organization provides. 

Tyler Williams is the president of Payor Logic, Inc., Dayton, Ohio.

Weaver Hickerson is CEO of LightSpeed Technology Group, Chapel Hill, N.C. 


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