(Medicare Claims Processing Manual)

NOTE : Information regarding the Form CMS- 1450 form locators that correspond with these fields is found in Chapter 25 of this manual.  See the ASC X12 837 Institutional Claim Implementation Guide for related guidelines for the electronic claim.   The A/B MAC (A) must return to the hospital (RTP) claims where a line item date of service is not entered for each HCPCS code reported, or if the line item dates of service reported are outside of the statement covers period.  Line item date of service reporting is effective for claims with dates of service on or after June 5, 2000.    261.6 - Payment for Intensive Outpatient Program Services  (Rev. 12423; Issued: 12- 20-23; Effective: 01 -01-24; Implementation: 01- 02-24)   Beginning with services provided on or after January 1, 2024, the A/B MAC (A) makes payment for hospital outpatient departments under the hospital outpatient prospective payment system for intensive outpatient program services. The Part B deductible and coinsurance apply.  For CAHs, payment is made on a 101% reasonable cost basis.  In CY 2024, payment for non- excepted off -campus hospital -based IOPs will be made under the MPFS, paying the CMHC per diem rate for APC 5851, for providing up to 3 IOP services per day and APC 5852, for providing 4 or more IOP services per day.  The Part B deductible, if any, and coinsurance apply.   270 - Billing for Hospital Outpatient Services Furnished by Clinical Social Workers (CSW)  Marriage and Family Therapists (MFTs) and Mental Health Counselors (MHCs)  (Rev. 12423; Issued: 12- 20-23; Effective: 01 -01-24; Implementation: 01- 02-24)   Payment may be made for covered diagnostic and therapeutic services furnished by CSWs , MFTs, and MHCs  in a hospital outpatient setting.  CSW , MFT, and MHC  services furnished under a partial hospitalization program are included in the partial hospitalization rate.  CSW, MFT, and MHC services furnished under an intensive outpatient program are included in the intensive outpatient rate.  Other CSW, MFT, and MHC services must be billed to the A/B MAC (B) on Form CMS -1500 or the electronic equivalent.    See chapters 13 and 15, of the Medicare Benefit Policy Manual, for a discussion of the coverage requirements for CSWs, MFTs, and MHCs .     270.1 - Fee Schedule to be Used for Payment for CSW Services  (Rev. 12423; Issued: 12- 20-23; Effective: 01 -01-24; Implementation: 01- 02-24)    The fee schedule for CSW services is set at 75 percent of the fee schedule for comparable services furnished by clinical psychologists, except for services under a CAH partial hospitalization or intensive outpatient  program.  These are paid on a reasonable cost basis.   270.2 - Outpatient Mental Health Payment Limitation for CSW Services  (Rev. 1, 10- 03-03)  The CSW services are subject to the outpatient mental health services limitation in 1833 of the Act.  The imitation of 62.5 percent is applied to the lesser of the actual charge or fee schedule amount.  Diagnostic services are not subject to the limitation.   270.3 - Coinsurance and Deductible for CSW Services  (Rev. 1, 10- 03-03)  The annual Part B deductible and the 20 percent coinsurance apply to CSW services.  280 - Hospital -Based Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) Billing for Non RHC/FQHC Services  (Rev. 3941; Issued: 12- 22-17; Effective: 01 - 01-18; Implementation: 01 -02-18)  A-01-93, A -03-066  Hospitals sometimes operate hospital based RHCs or FQHCs.  Prior to implementation of outpatient PPS, hospital based RHCs/FQHCs were permitted to include both RHC/FQHC and non- RHC/FQHC services on the same claim, under the RHC/FQHC bill type, with appropri ate revenue codes.   Beginning with the implementation of OPPS, non- RHC/FQHC services provided by the hospital based RHC/FQHC, including RHCs/FQHCs that are parts of CAHs or other exempted or excluded (from OPPS) hospitals, must be billed under the host hospitals provider num ber, using hospital billing procedures and bill types.  These services are not covered or paid as RHC/FQHC services but instead may be covered hospital outpatient services and paid under the applicable methodology for the hospital.  The RHC/FQHC services remain subject to the encounter rate payment methodology and are billed using the RHC/FQHC provider number, bill type and revenue codes. See the Medicare Benefit Policy Manual for a description of covered RHC/FQHC services.   See chapter 9, in this manual for billing instructions for provider based and independent RHC/FQHC services.   290 - Outpatient Observation Services  (Rev. 1, 10- 03-03) A3-3663, A3- 3112.8.D, A -01-91  290.1 - Observation Services Overview  (Rev. 1760, Issued:  06- 23-09; Effective Date:  07 -01-09; Implementation Date:  07-06-09)  Observation care is a well -defined set of specific, clinically appropriate services, which include ongoing short term treatment, assessment, and reassessment, that are furnished while a decision is being made regarding whether patients will require further  treatment as hospital inpatients or if they are able to be discharged from the hospital. Observation services are commonly ordered for patients who present to the emergency department and who then require a significant period of treatment or monitoring in order to make a decision concerning their admission or discharge.  Observation services are covered only when provided by the order of a physician or another individual authorized by State licensure law and hospital staff bylaws to admit patients to the hospital or to order outpatient services.   Observation services must also be reasonable and necessary to be covered by Medicare. In only rare and exceptional cases do reasonable and necessary outpatient observation services span more than 48 hours.  In the majority of cases, the decision whether to discharge a patient from the hospital following resolution of the reason for the observation care or to admit the patient as an inpatient can be made in less than 48 hours, usually in less than 24 hours.  290.2 - General Billing Requirements for Observation Services  (Rev. 787, Issued: 12- 16-05, Effective: 01 -01-06, Implementation: 01- 03-06)  290.2.1 - Revenue Code Reporting  (Rev. 1760, Issued:  06- 23-09; Effective Date:  07-01-09; Implementation Date:  07-06-09)  Hospitals are required to report observation charges under the following revenue codes:   Revenue Code  Subcategory  0760 General Classification category  0762 Observation Room   Other ancillary services performed while the patient receives observation services are reported using appropriate revenue codes and HCPCS codes as applicable.   290.2.2 - Reporting Hours of Observation  (Rev.  2234, Issued: 05- 27-11, Effective: 07 -01-11, Implementation: 07- 05-11)  Observation time begins at the clock time documented in the patients medical record, which coincides with the time that observation care is initiated in accordance with a physicians order.  Hospitals should round to the nearest hour.  For example, a pati ent who began receiving observation services at 3:03 p.m. according to the nurses notes and was discharged to home at 9:45 p.m. when observation care and other outpatient services were completed, should have a 7 placed in the units field of the reported  observation HCPCS code.   General standing orders for observation services following all outpatient surgery are not recognized.  Hospitals should not report as observation care, services that are part of another Part B service, such as postoperative monitoring during a standard rec overy period (e.g., 4 -6 hours), which should be billed as recovery room services.  Similarly, in the case of patients who undergo diagnostic testing in a hospital outpatient department, routine preparation services furnished prior to the testing and recove ry afterwards are included in the payments for those diagnostic services.  Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure (e.g., colonoscopy, chemotherapy).  In situations where such a procedure interrupts observation services, hospitals may determine the most appropriate way to account for this time. For example, a hospital may record for each period of observation services the beginning and ending times during the hospital outpatient encounter and add the length of time for the  periods of observation services together to reach the total number of units reported on the claim for the hourly observation services HCPCS code G0378 (Hospital observation service, per hour).  A hospital may also deduct the average length of time of the interrupting procedure, from the total duration of time that the patient receives observation services.   Observation time ends when all medically necessary services related to observation care are completed.  For example, this could be before discharge when the need for observation has ended, but other medically necessary services not meeting the definition of observation care are provided (in which case, the additional medically necessary services would be billed separately or included as part of the emergency department or clinic visit).  Alternatively, the end time of observation services may coincide with the time the patient is actually discharged from the hospital or admitted as an inpatient.  Observation time may include medically necessary services and follow -up care provided after the time that the physician writes the discharge order, but before the p atient is discharged.  However, reported observation time would not include the time patients remain in the hospital after treatment is finished for reasons such as waiting for transportation home.   If a period of observation spans more than 1 calendar day, all of the hours for the entire period of observation must be included on a single line and the date of service for that line is the date that observation care begins.   290.3 - Reserved  (Rev. 1882, Issued:  12- 21-09; Effective Date:  01 -01-10; Implementation Date:  01-04-10)  290.4 - Billing and Payment for Observation Services Furnished Between January 1, 2006 and December 31, 2007  (Rev. 1445, Issued:  02- 08-08; Effective:  01 -01-08; Implementation:  03 -10-08)  290.4.1 - Billing and Payment for All Hospital Observation Services Furnished Between January 1, 2006 and December 31, 2007  (Rev. 1760, Issued:  06- 23-09; Effective Date:  07 -01-09; Implementation Date:  07-06-09)  Since January 1, 2006, two G -codes have been used to report observation services and direct referral for observation care.  For claims for dates of service January 1, 2006 through December 31, 2007, the Integrated Outpatient Code Editor (I/OCE) determines whether the observation care or direct referral services are packaged or separately payable.  Thus, hospitals provide consistent coding and billing under all circumstances in which they deliver observation care.   Beginning January 1, 2006, hospitals should not report CPT codes 99217- 99220 or 99234- 99236 for observation services.  In addition, the following HCPCS codes were discontinued as of January 1, 2006:  G0244 (Observation care by facility to patient), G0263 ( Direct Admission with congestive heart failure, chest pain or asthma), and G0264 (Assessment other than congestive heart failure, chest pain, or asthma).   The three discontinued G -codes and the CPT codes that were no longer recognized were replaced by two new G -codes to be used by hospitals to report all observation services, whether separately payable or packaged, and direct referral for observation care, w hether separately payable or packaged:    G0378-  Hospital observation service, per hour; and   G0379-  Direct admission of patient for hospital observation care.