AHIMA Comments on Proposed Changes to the Hospital Outpatient Prospective Payment System (PPS) for Calendar Year 2004

October 4, 2004

Mark McClellan, MD, PhD
Centers for Medicare & Medicaid Services
Department of Health and Human Services
Attention:   CMS-1427-P
PO Box 8010
Baltimore, Maryland 21244-8018

Re:   File Code CMS-1427-P

Medicare Program; Changes to the Hospital Outpatient Prospective Payment System and Calendar Year 2005 Payment Rates; Proposed Rule (69 Federal Register 50447)

Dear Dr. McClellan:

The American Health Information Management Association (AHIMA) welcomes the opportunity to comment on the Centers for Medicare & Medicaid Services' (CMS') proposed changes to the Hospital Outpatient Prospective Payment System (PPS) and calendar year 2005 Rates, as published in the August 16, 2004 Federal Register . AHIMA is a not-for-profit professional association representing more than 48,000 health information management (HIM) professionals who work throughout the healthcare industry. AHIMA's HIM professionals are educated, trained, and certified to serve the healthcare industry and the public by managing, analyzing, and utilizing data vital for patient care, while making it accessible to healthcare providers and appropriate researchers when it is needed most.

Consistency in medical coding and the use of medical coding standards in the US is a key issue for AHIMA. As part of this effort, AHIMA is one of the Cooperating Parties, along with CMS, the Department of Health and Human Services' (HHS) National Center for Health Statistics (NCHS), and the American Hospital Association (AHA). The Cooperating Parties oversee correct coding rules associated with the International Classification of Diseases Ninth Revision, Clinical Modification (ICD-9-CM).   AHIMA also participates in a variety of coding usage and standardization activities in the US and internationally, including the American Medical Association's (AMA's) Current Procedural Terminology® (CPT®) Editorial Panel.

II-J-1-c:   Physical Examinations (69FR50473)

AHIMA is concerned about CMS' proposal to create a new “G” code for the initial preventive physical examination because there is no current CPT code that contains the specific elements required for Medicare coverage.   There are existing CPT codes for preventive medicine services.   The use of duplicative, overlapping code sets is extraordinarily costly and can result in coding confusion and errors, compromises of clinical data, and the inability to conduct analysis longitudinally and across healthcare settings.    Also, the use of HCPCS level II codes for services that are included in the CPT code set is contrary to the administrative simplification and uniformity goals of HIPAA.    

We recommend that CMS either use the existing CPT codes, with the requirement that they can only be reported for a Medicare beneficiary if the provided service meets the Medicare criteria, or that CMS request the CPT Editorial Panel to create a new preventive medicine code that meets the requirements of the new Medicare benefit.

We are also concerned as to how the physician providing the preventive medicine service or the individual assigning the appropriate diagnosis and procedure code(s) to be reported on the claim will be aware that this is the patient's “initial preventive physical examination,” as defined by the Medicare coverage policy.   Responsibility for making the physician and the staff aware that the Medicare-covered physical examination is the reason for the encounter (as opposed to a non-covered preventive medicine service) will rest with the beneficiary.   It will be imperative that the beneficiary provide this information before the services are rendered in order to ensure that the physician includes the elements of the service that are required by Medicare.   And the medical record documentation will need to clearly indicate that this special type of physical examination was provided in order for the new code to be submitted on the claim.    If the beneficiary fails to let the physician's office or clinic know that he is eligible for the Medicare-covered preventive physical examination, and later complains that Medicare did not pay for the service because it was not billed using the new code, it may be too late to obtain Medicare reimbursement for that encounter because the physician may have failed to address all of the required elements of the Medicare-covered physical examination.

We request clarification regarding how Medicare would reimburse for an encounter if both the initial preventive physical examination and an evaluation and management (E/M) service are provided during that encounter.    Should both the new code for the initial preventive physical examination and a code for the E/M service be reported?  

V-H-4:   Drug Administration (69FR50519)

AHIMA fully supports CMS' proposal to use the CPT codes for drug administration rather than the “Q” codes.   This will make it much easier for hospitals, since they already use these CPT codes for reporting drug administration services to other payers.    We believe the same codes should be reported to all payers for the same services.

As stated above, the use of duplicative, overlapping code sets is extraordinarily costly and can result in coding confusion and errors, compromises of clinical data, and the inability to conduct analysis longitudinally and across healthcare settings.    And the use of HCPCS level II codes for services that are included in the CPT code set is contrary to HIPAA.

VII-C-2:   Status Indicators and Comment Indicators (69FR50531)

AHIMA supports CMS' proposal to delete condition indicators “DNG” and “DG” in light of the elimination of the 90-day grace period for reporting discontinued HCPCS codes.

VII-D:   Observation Services (69FR50532)

AHIMA supports CMS' proposal to remove the current requirements for specific diagnostic testing in order to receive payment for observation services.    This would relieve the administrative burden on hospitals, eliminate the performance of medically unnecessary diagnostic tests, and allow hospitals to receive appropriate reimbursement for observation services.

We also support the proposal to modify how time in observation care is counted such that observation care ends at the time the patient is actually discharged from the hospital or admitted as an inpatient, rather than using the time of the physician's order to discharge the patient.   This will relieve the hospitals' administrative burden in capturing the length of time in observation and billing accurately for that time.  

We request that CMS reconsider their decision not to unpackage observation services beyond the typical expected recovery time for surgical and interventional procedures.   CMS indicated that their analysis showed that the great majority of claims for surgical and interventional procedures reported no observation services.   However, these services are currently packaged, we believe that they are significantly underreported.   When lengthy observation services are provided to patients following a surgical procedure, the hospital incurs significant additional expense.   We recommend that consideration be given to allowing separate payment for observation services following a surgical or interventional procedure if the observation service extends significantly beyond expected recovery time, such as more than eight hours after completion of the procedure.

VII-F-2:   E/M Services Guidelines (69FR50539)  

CMS indicates that the set of proposed national coding guidelines for emergency and clinic visits recommended by the independent expert panel convened by AHIMA and the American Hospital Association, as well as the public comments received, are currently being considered.    CMS also notes that they plan to make any proposed guidelines available to the public for comment as soon as they are complete.   In order to allow adequate time for training prior to implementation, AHIMA urges CMS to post the guidelines as soon as possible.   AHIMA fully supports the recommendations of the independent expert panel.     The hospital industry is anxious to move forward with implementation of an improved system for facility reporting of evaluation and management services, particularly given concerns about HIPAA compliance.    It has now been more than a year since the independent expert panel submitted their recommended guidelines to CMS.    Many hospitals have held off updating their own coding guidelines in anticipation of the implementation of a national model.

The delay in proposing a national set of guidelines, and the resulting uncertainty as to the time frame CMS plans to issue a proposal, is frustrating to AHIMA members and the hospital industry.   Once the independent expert panel submitted recommendations for a national set of guidelines, the industry was not expecting to still have no proposed national guidelines more than a year later.   Hospitals must continue to use hospital-specific guidelines that are not comparable across hospitals and are not compliant with HIPAA indefinitely.   We urge CMS to move forward as quickly as possible with completion of any refinement to the recommended guidelines and make them available for public comment so that the country can start transitioning toward a national model for facility coding of E/M services.  


We appreciate the opportunity to comment on the proposed modifications to the Hospital Outpatient PPS.    If AHIMA can provide any further information, or if there are any questions or concerns with regard to this letter and its recommendations, please contact either Sue Bowman, RHIA, CCS, AHIMA's director of coding policy and compliance at (312) 233-1115 or sue.bowman@ahima.org , or myself at (202) 659-9440 or dan.rode@ahima.org .


Dan Rode, MBA, FHFMA
Vice President, Policy and Government Relations

cc.   Sue Bowman, RHIA, CCS