How to Approach Emergency Department Claim Denials

By now, many hospitals have received denials for emergency department level-of-care coding.

We could legitimately ask, “how did this happen?” Today we shall address how it started, why it’s important, and potential institutional responses.

Denials for emergency care are not new. The spectrum of denials and the audacity with which payers deny claims now strains the boundaries of reasonableness. The expanding mendacity of these emergency department claim denials finds one of its earliest applications in an “Aetna OfficeLink Update.” This September 2016 document states that effective Dec. 1, 2016, “[w]hen a hospital or physician bills a level 5 emergency room service (CPT 99285) with a designated minor diagnosis code, we will down-code 99285 to a level 4 emergency room service (CPT 99284).”

The document does not provide a list of “designated minor diagnosis code[s],” but does offer the guidance “[s]ervices for constipation, earaches, and colds, for example, should not be billed using CPT code 99285” and instructs providers “[i]f you have questions on the diagnosis or CPT codes, visit our secure provider website on NaviNet®.” Aetna referred to this automated down-coding as a “coding and policy change.”

Aetna may not necessarily have the authority to impose coding changes, however, it may, under contract, decline to pay for some codes under certain conditions. This type of “policy change” should always provoke an institutional assessment as to whether the change requires contractual review and renegotiation. To be clear, physician evaluation and management coding is almost exclusively controlled by guidelines issued by the Centers for Medicare & Medicaid Services (CMS) in 12995 and 1997. Hospital coding guidance is found in the annual Official Guidelines for Coding from CMS.

Regarding emergency department coding, CMS has issued general guidance dating back to 2007, relating level of care to resources used. Thus, Aetna may be able to contractually exclude payment for some codes. It seems unlikely that a provider would allow coding to be controlled by non-standard coding guidance unique to any payer. This distinction – coding change versus payment policy – is crucial since coding and policy changes may not engender appeal rights for providers.

As might be expected, Aetna was merely the bellwether. UnitedHealthcare (UHC) followed in March 2018 with the implementation of a coding policy. This was followed in 2019 with a reimbursement policy “intended to ensure that you are reimbursed based on the code or codes that correctly describe the healthcare services provided.” The policy applies to all UB-04 claims.

The policy “describes how UnitedHealthcare reimburses UB claims billed with evaluation and management (E&M) codes Level 4 (99284/G0383) and Level 5 (99285/G0384) for services rendered in an emergency department.” UHC states that the policy arise from “coding principles established by (CMS) and the CPT and HCPCS code descriptions.” Finally, the policy states that UHC will “will utilize the Optum Emergency Department Claim (EDC) Analyzer to determine the emergency department E&M level to be reimbursed for certain facility claims.” Some claims may have “adjustments to the level 4 or 5 E&M codes submitted to reflect a lower E&M code calculated by the EDC Analyzer or may receive a emergency department claim denials for the code level submitted.” To further confuse, some claims may be excluded from adjustment of emergency department claim denials under the following circumstances:

Criteria that may exclude facility claims from being subject to an adjustment or emergency department claim denials include:

• The patient is admitted to inpatient or observation, has an outpatient surgery during the course of the same ED visit, or is discharged/transferred to other types of healthcare institutions;
• Critical care patients (99291, 99292);
• The patient is less than 2 years old;
• Claims with a certain diagnosis that when treated in the ED most often necessitates greater than average resource usage, such as significant nursing time;
• Patients who have expired in the emergency department; or
• Claims from facilities billing level 4 and 5 E&M codes that do not disparately deviate from the EDC Analyzer.

The policy offers no insight into how the exclusions were determined, nor what it means to “disparately deviate from the EDC Analyzer.”

Let’s parse UHC’s statements:

• The EDC is only used to reduce payment to providers.
• There is no pretense of accurate coding and billing. The policy is a unidirectional cost-containment program designed to reduce payment for services rendered.
• The tool is never used to evaluate claims with levels 1-4 for the possibility of undercoding. This stands in contrast to government programs such as Recovery Audit Contractors (RACs) that also report underpayments.
• During a recent telephone discussion, a UHC representative indicated that level 4 claims are analyzed, but those are never changed to level 5.

Bearing that in mind, let’s turn to the Optum EDC Analyzer (EDC). UHC states that the EDC “applies an algorithm that takes three factors into account in order to determine a calculated visit level for the emergency department E&M services rendered.” The three factors used to calculate an ED level of care are:

• Presenting problems – as defined by the ICD-10 reason for visit (RFV) diagnosis;
• Diagnostic services performed – based on intensity of the diagnostic workup, as measured by the diagnostic CPT codes submitted on the claim (i.e. lab, X-ray, EKG/RT/other diagnostic, CT/MRI/ultrasound); and
• Patient complexity and co-morbidity – based on complicating conditions or circumstances as defined by the ICD-10 principal, secondary, and external cause of injury diagnosis codes.

Each of these factors presents concerns:

• Presenting problem: This is the ICD-10 diagnosis code representing the reason recorded for the visit. This is coded in FL 70a-c on the UB-04. In many cases, this will be a symptom or a sign readily discernable to the layperson. The reason for the visit may have little bearing on the resources reasonably required to assess and treat the patient.

The EDC assigns a “Proportional Standard Cost Allocation (PSCA) and associated standard cost weight to each code based on the age and gender of the patient.” Optum’s website displays a table with sample presenting problems, but “standard cost weight” is redacted. Optum does not indicate how standard cost weights are calculated or how frequently they are updated. There’s no indication that standard cost weight is adjusted for expected patient demographics or hospital size. For example, a patient may present to a small community hospital with chest pain. The patient may be treated and transferred to a cardiac referral center. The small hospital may submit a level 5 ED claim that will not be reviewed, under UHC’s policy. In contrast, the referral center’s claim will be reviewed and potentially denied.

• Diagnostic services performed. The EDC is analyzed for “unique categories” of tests. The analyzer does not assess resources, but only the number of categories. The Optum website does not delineate the categories or which tests might be in each. The “extended cost weight” is also redacted, without reference to how the extended cost is calculated.
• Patient complexity and co-morbidity. The EDC analyzes for patient complexity costs. The EDC “reviews all principal, secondary, and external cause of injury diagnosis codes on the claim looking for complicating conditions or circumstances that may impact facility resource utilization.” The EDC the assigns “weights” to the diagnoses on the claim and applies complexity cost weights based on “services typically provided to patients with that complicating condition or circumstance.”

Now that we’ve summarized the current state of UHC’s “reimbursement policy” and the use of Optum’s EDC, let’s look at CMS’s expectation for ED coding. In 2007, CMS delineated 11 principles that should guide development of internal guidelines:

1. 1. The coding guidelines should follow the intent of the CPT code descriptor in that the guidelines should be designed to reasonably relate the intensity of hospital resources to the different levels of effort represented by the code.
   2. The coding guidelines should be based on hospital facility resources. The guidelines should not be based on physician resources (emphasis added).
   3. The coding guidelines should be clear to facilitate accurate payments and be usable for compliance purposes and audits.
   4. The coding guidelines should meet the HIPAA requirements.
   5. The coding guidelines should only require documentation that is clinically necessary for patient care.
   6. The coding guidelines should not facilitate upcoding or gaming.
   7. The coding guidelines should be written or recorded, well-documented, and provide the basis for selection of a specific code.
   8. The coding guidelines should be applied consistently across patients in the clinic or emergency department to which they apply.
   9. The coding guidelines should not change with great frequency.
   10. The coding guidelines should be readily available for fiscal intermediary (or, if applicable, MAC) review.
   11. The coding guidelines should result in coding decisions that could be verified by other hospital staff, as well as outside sources.

Finally, we can review how the EDC fits with CMS’s requirements. Let’s review the individual requirements:

• The coding guidelines should be based on hospital facility resources (requirement No. 2). The Optum EDC clearly documents that it analyzes categories of resources, and not actual resources consumed.
• The coding guidelines should be clear to facilitate accurate payments and be usable for compliance purposes and audits (requirement No. 3). The EDC provides no transparency into the “redacted” portions of the standard or extended cost weight contribution in the ED level determination. Further, UHC’s policy makes it clear that the purpose is not accurate payments, but reduction of payments to providers. Finally, if the claims were subsequently the subject of audit or investigation, a provider would have no way to demonstrate compliance with CMS requirements. Feeding documentation into a computerized “black box” over which the provider has no control is indistinguishable from magic.
• The coding guidelines should only require documentation that is clinically necessary for patient care (requirement No. 5). The EDC uses “presenting problems.” Although presenting problems offer some guidance in initial assessment, the inherent possibility of a disparity with the final diagnosis makes the relationship between presenting problem and “documentation that is clinically necessary” speculative.
• The coding guidelines should not facilitate upcoding or gaming (requirement No. 6). This requirement presents the most compelling argument against the EDC. The EDC is not used for upcoding. However, the fact the UHC employs the EDC for the sole purpose of downcoding a select group of claims raises the possibility of gaming.
• The coding guidelines should be written or recorded, well-documented, and provide the basis for selection of a specific code (requirement No. 7). This is where use of the EDC is perhaps most problematic. To date, only UHC has embraced the EDC. Aetna’s random coding downgrades based on “designated minor diagnosis code” are inherently consistent with the EDC. To avoid emergency department claim denials, providers must use at least two separate, payer-specific coding guidelines.
• The coding guidelines should be applied consistently across patients in the clinic or emergency department to which they apply (requirement #8). In this case UHC has acknowledged that the EDC is used for a select group of claims. The application of the EDC is demonstrably inconsistent across patients in the ED.
• The coding guidelines should be readily available for fiscal intermediary (or, if applicable, MAC) review (requirement #10). The explanation of the EDC is readily available on the Optum website. However, the details remain insufficient to determine if coding requirements are reliably met.
• The coding guidelines should result in coding decisions that could be verified by other hospital staff, as well as outside sources (requirement #11). In the case of the EDC it is technically possible for others to replicate a result by “plugging in” the data from the UB-04. The lack of transparency related to how the algorithm arrives at a level of care makes reproducibility largely irrelevant.

Now, it’s clear that UHC’s use of the EDC violates multiple guidelines established by CMS. Providers can invoke the inconsistencies in order to appeal ED coding emergency department claim denials by both Aetna and UHC.

Providers should expect that payers will respond by applying line-item medical necessity denials to claims.

For More Information: https://www.racmonitor.com/how-to-approach-ed-claim-denials