An Outpatient Prospective Payment System Overview: Ambulatory Payment Classifications

Vol. 15 •Issue 15 • Page 14
CCS Prep!

An Outpatient Prospective Payment System Overview: Ambulatory Payment Classifications

Part I: Status Indicators, Bundling and Modifiers

Besides understanding the assignment of symptom, disease process and procedure codes, coding professionals are expected to understand how those codes interact with other components in the billing process to determine reimbursement. Because many new coders have responsibility for coding outpatient accounts and services, this article will provide an overview of ambulatory payment classifications (APCs), Medicare’s outpatient prospective payment system (OPPS). The reimbursement system was implemented throughout the country in 2000. Similar to the inpatient prospective payment system, other payers are beginning to implement APCs. More than ever, the majority of the codes assigned by HIM coding professionals directly drive the reimbursement in the acute care setting.

In addition, candidates sitting for the certified coding specialist (CCS) exam are expected to understand the regulatory guidelines and reporting requirements for hospital-based outpatient services.

Although not all outpatient services are reimbursed via the OPPS, for purposes of this article, the discussion will focus on those that do. And while there are many dissimilarities between the APC and the DRG inpatient prospective payment systems, one similarity is that each APC has a corresponding relative weight that is multiplied by a hospital-specific base rate (or conversion value) to determine reimbursement. One of the most important differences between the APC and DRG systems is that under OPPS, an APC is assigned for each CPT code assigned and many APCs may be present on a single encounter. Each CPT code also has a corresponding status indicator, which helps determine certain payment decisions. For example, most invasive surgical procedures carry a status indicator of “T,” which means that when performed in combination, the reimbursement for the secondary procedures will be discounted, or reimbursed at only 50 percent of their relative weight value. The table contains examples of commonly assigned CPT codes and their corresponding status indicators.

HIM coding professionals most often assign codes for significant procedures, which are defined as those services with status indicators of either “T” (Discounted) or “S” (Not Discounted). The majority of the codes that represent surgical services carry a “T” status indicator, which means that they will be discounted when performed in combination with one another. But coders must use care when reporting multiple CPT codes for a single encounter. Some CPT codes represent components, or portions of other, more comprehensive services. It’s necessary to have separate codes available for these component services, because in some cases they’re provided alone and must be reported. In other cases they’re provided in combination with a comprehensive service but are considered separately reportable due to the fact that they’re provided on a different body site, through a different incision, etc. The regulations concerning the appropriate reporting of multiple CPT codes are referred to as bundling or unbundling guidelines. For example, a physician provides a diagnostic cystoscopy procedure and then irrigates the bladder for evacuation of multiple blood clots. If the physician lists these procedures separately and the coder assigns separate codes, they may include the following:

52000 Cystourethroscopy (separate procedure)

52002 Cystourethroscopy with irrigation and evacuation of multiple obstructing clots

Medicare’s Outpatient Code Editor (OCE) provides editing information on bundling and unbundling of services. Correct Coding Initiative (CCI) edits comprise a portion of the OCE and provide information concerning which code is a component of the other. In the case above, a CCI edit would indicate that the 52000 code is considered a component of code 52002. This is because there’s a coding guideline indicating that any diagnostic endoscopy service is always considered included in any other treatment-related endoscopy of the same type. Another indication to the coder that code 52000 should not be reported separately is the fact that the code has a designation of “separate procedure.” Within the CPT manual, many procedure codes are designated as “separate procedure” when they are very commonly performed as a component service of another more comprehensive service.

There may be cases, however, when the CPT codes should be reported separately. For instance, a patient with a bladder tumor undergoes cystoscopy with fulguration of the small tumor. In other separate areas of the bladder, random biopsies are also performed. For these services the following codes would be assigned:

52234 Cystourethroscopy, with fulguration (including cryosurgery or laser surgery) and/or resection of: SMALL bladder tumor(s) (0.5 up to 2.0 cm)

52204 Cystourethroscopy; with biopsy

When the CPT codes above are entered into an APC grouper, however, a CCI edit is generated, indicating that the biopsy service is a component of the fulguration procedure. But the physician documentation in the case indicates that the biopsies were performed in a separate location than that of the fulguration. To “override” the CCI edit, modifier 59 (Distinct Procedural Service) should be assigned, appended to code 52204, the component service. It’s important that coders understand when to assign a modifier to override a CCI edit and when it’s not appropriate to do so. The documentation in the medical record must support the fact that the component service was performed on a different site or organ system or involved a separate excision or incision. The assignment of the modifier must be performed by a staff member who has access to the medical record documentation and should never be assigned by a patient accounts or billing staff member who has no such access. It should also never be assigned indiscriminately, for example, as a result of receiving notification of a claims edit on a report, without review of the case documentation. Coders or other personnel should not automatically assign modifier 59 on a case with multiple CPT codes. If there is no CCI edit, the procedures are commonly provided together and appropriate APCs and resulting reimbursement are generated, no modifier is necessary.

It’s important to note that the anatomical modifiers (such as RT for right side and LT for left side) also perform the function of overriding a CCI edit, but if the same anatomical modifier is used for both codes (such as both procedures being performed on the right side), it is recommended that the coder also append modifier 59 to the component code to ensure that there is no question that the service should be reported separately. It’s also important that coders not assume that other external factors affect the assignment of modifier 59. For example, if different surgeons perform the procedures during the same operative episode, modifier 59 is still required to be appended to the component code if appropriate. The Medicare outpatient code editor does not utilize surgeon information to determine CCI edit status.

The other type of CCI edit that coders should be aware of involve cases in which the codes assigned are considered mutually exclusive, meaning that one service is not considered a component of the other, but that the services, by their very definitions, would not normally ever be performed together. For example, there are two codes that describe implant removal:

20670 Removal of implant; superficial, (e.g., buried wire, pin or rod) (separate procedure)

20680 Removal of implant; deep (e.g., buried wire, pin, screw, metal band, nail, rod or plate)

Because removal of an implant would typically be classified as either superficial or deep (not both), only one code should be assigned. But there may be a case in which more than one implant is removed at the same operative episode. If one implant is considered superficial and the other deep, both codes could be assigned with modifier 59 appended to code 20670 to override the CCI edit.

Coding professionals should also be aware of the implications of assigning CPT codes with other status indicators, which include:

• Status Indicator “C” indicates that the procedure has been designated by Medicare as an “Inpatient Only” procedure and should only be performed for a Medicare patient on an inpatient basis. If performed in the outpatient setting, no reimbursement will be generated. Coders should carefully double-check those cases for which an “Inpatient Only” code is being assigned. No services that are provided on the same date of service will be reimbursed. Note that this applies only to Medicare patients; other payers may reimburse these procedures when provided on an outpatient basis.

• Status Indicator “N” is intended to designate those services that are considered packaged and are inherently included in other procedures provided during the same encounter. A common example is that of a Foley catheter placement performed in the ED setting for a patient in urinary retention. The catheter insertion is considered included in the Evaluation & Management (E/M) services for the encounter. Coders should be aware that while it’s acceptable to assign a code for a packaged service when it’s provided on a case with other procedures, a packaged services code should never be assigned as the only CPT code on an outpatient case. This will cause an OCE error indicating that there are no reimbursable services on the bill.

• Status Indicator “V” indicates a medical visit, which typically involves either emergency department or hospital-based clinic encounters. Note that these services may be reimbursed in addition to more invasive services when appropriate, but modifier 25 (Significant, separately identifiable Evaluation and Management service by the same physician on the same day of the procedure or other service) must be appended to the E/M code.

• Status Indicator “S” is reserved for those services that are considered significant procedures but that are not discounted when provided in combination with other services or procedures. Many of these CPT codes reflect services that are generated by the hospital’s Charge Description Master (CDM), but some services (such as cardiopulmonary resuscitation, code 92950) may be assigned by coding staff and also carry the “S” status indicator.

• Status Indicator “X” services include ancillary services that are included in the OPPS system, most notably radiology services. These services are typically assigned via the hospital’s CDM but will in many cases augment the CPT codes assigned by HIM coding staff.

Part II of this series will include information on CPT vs. HCPCS Level II codes under the OPPS, medical necessity issues and other diagnostic-related outpatient coding guidelines. Until then, take the following quiz to test your understanding of the OPPS information contained in this article.

1. CCI edits only involve CPT codes with a status indicator of “T.”

a. True

b. False

2. Modifier 59 should be assigned in which of the following cases?

a. A patient has bunionectomy procedures performed on both right and left feet. The coder assigns codes 28292-RT and 28292-LT-59.

b. Both EGD with biopsy and Savory guide wire esophageal dilation are performed in the same surgical encounter. The coder assigns 43239-59 and 43248.

c. A cystourethroscopy was performed with manipulation of a ureteral stone and placement of a double-J stent in the right ureter. The coder assigns 52330 and 52332-RT-59.

d. A surgeon planned to do a laparoscopic cholecystectomy and after performing it, decided to also add an operative cholangiography. The coder assigns codes 47563 and 47562-59.

e. A colonoscopy procedure was planned, but due to poor colon prep, the procedure was discontinued when the scope could not be advanced beyond the sigmoid colon. The coder assigns 45378-74 and 45330-59.

3. The “separate procedure” designation in CPT means which of the following?

a. The procedure must be performed separately (alone) and in no combination with other procedures in order to assign the code.

b. It’s permissible to report the code with other procedures, but modifier 51 (Multiple Procedures) should be appended to the code with the “separate procedure” designation.

c. It’s permissible to report the code with other procedures, but only if the documentation reflects that the service is a distinct, independent service from the other service(s) present on the case.

d. The designation is to be used for professional component coding only; hospital coders are not required to follow the separate procedure guidelines.

This month’s column has been prepared by Cheryl D’Amato, RHIT, CCS, director of HIM, and Melinda Stegman, MBA, CCS, manager of clinical HIM services, HSS Inc. (, which specializes in the development and use of software and e-commerce solutions for managing coding, reimbursement, compliance and denial management in the health care marketplace.

Coding Clinic is published quarterly by the AHA.

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Answers to CCS PREP!: 1. b. False: CCI edits can involve CPT codes with other status indicators, most notably those with status indicator “S;” 2. c. CPT Assistant, September 2001, p. 2 notes that placement of an indwelling ureteral stent is a separately reportable service. Case (a) should not use modifier 59 because it is a bilateral procedure and code 28292 should be assigned with modifier 50 (Bilateral Procedure) alone. Case (b) should not use modifier 59 because these procedures are commonly performed in conjunction with one another and do not generate any CCI edit. Case (d) should not use modifier 59 because only one combination code should be assigned for the cholecystectomy (47563). Case (e) should not use modifier 59 because only one discontinued procedure was performed. Depending upon the payer, either 45378-74 or 45330 should be assigned, but not both; 3. c. Codes with the separate procedure guideline may be reported in addition to codes for other procedures but only if the documentation substantiates that it was actually performed separately. The guidelines related to the designation apply to both professional and technical component coding.