Pennsylvania Bulletin

PA Bulletin, Doc. No. 16-831

NOTICES

Payment for Observation Services

[46 Pa.B. 2475]
[Saturday, May 14, 2016]

The Department of Human Services (Department) is announcing its intent to pay acute care general hospitals for observation care provided to eligible Medical Assistance (MA) beneficiaries in the acute care general hospital (hospital) outpatient setting, effective with dates of service on and after July 1, 2016. Further, the Department is providing notice of the addition of observation services to the MA Fee Schedule.

Background

The Governor signed the act of December 28, 2015 (P.L. 500, No. 92) (Act 92), which amended the Public Welfare Code, now known as the Human Services Code (code) (40 P.S. §§ 101—1503). Act 92 added several new provisions to the code including a new paragraph (1.1) under section 443.3(a) of the code (40 P.S. § 443.3(a)(1.1). This paragraph authorizes the Department to establish rates for observation services effective for services provided on or after July 1, 2016, by publication of notice in the Pennsylvania Bulletin. Further, Act 92 permits the Department to issue an MA Bulletin specifying the conditions for payment of these observation services pending adoption of regulations. Act 92 also amended section 805-G of the code (40 P.S. § 805-G). Section 805-G(A)(1) of the code appropriates funding from the Quality Care Assessment Account for the services specified, including outpatient observation services in accordance with section 443.3(a)(1) of the code.

Discussion

Observation services are a well-defined set of clinically appropriate and medically necessary services, which include short-term treatment, assessment and reassessment, that are furnished while a decision is made as to whether to admit an MA beneficiary to the inpatient hospital setting for further treatment or to discharge the MA beneficiary from the hospital outpatient setting. The Department is recognizing the need for observation services because a physician may not be able to initially determine whether an inpatient hospital admission is medically necessary.

Currently, the Department does not pay hospitals or physicians for the provision of observation services rendered in a hospital outpatient setting under the Fee-for-Service delivery system. Effective with dates of service on and after July 1, 2016, the Department is announcing its intent to pay for medically necessary observation services provided in the hospital outpatient setting, when prescribed or ordered by a practitioner.

Observation services must be prescribed or ordered for MA beneficiaries who may be directed from the emergency department, practitioner's office or clinic and require care and monitoring for a minimum of 8 hours.

Payment Methodology for Hospitals

The Department intends to make a one-time, all-inclusive payment to an acute care hospital for medically necessary observation services. The Department's all-inclusive payment rate to the hospital for observation services is intended to include payment for medical diagnostic services provided during an observation stay. The Department intends to add the following procedure codes to the MA Program Fee Schedule for payment to hospitals for observation care, effective with dates of service on and after July 1, 2016.

Procedure Code National Description Provider Type Provider Specialty Place of Service Pricing Modifier Info Modifier MA Fee MA Units
of Service

G0378 Hospital observation service. 01 183 22 $976.54 One unit of service per observation stay

G0379 Direct admission of patient for hospital observation care. 01 183 22 $0.00 One unit of service per observation stay

The Department analyzed Fiscal Year (FY) 2012-2013 encounter data from MA managed care organizations to determine an average payment per observation stay, including the average payment for related ancillary services. The Department intends to use this average payment per observation stay as the rate hospitals will receive for the provision of observation care to MA beneficiaries.

Payment Methodology for Physicians

Under 55 Pa. Code § 1150.61 (relating to guidelines for fee schedule changes) the Department will pay physicians for observation services rendered in the acute care hospital outpatient setting, effective with dates of service on and after July 1, 2016. The Department is adding the following procedure codes to the MA Program Fee Schedule for payment to physicians for observation care, effective with dates of service on and after July 1, 2016.

Procedure Code National Description Provider Type Provider Specialty Place of Service Pricing Modifier Info Modifier MA Fee MA Units of Service

99217 Observation care discharge day management. 31 All Spec 22 $36.89 One unit of service per day

99218 Initial observation care, per day, for the evaluation and management of a patient which requires these 3 key components: A detailed or comprehensive history; A detailed or comprehensive examination; and medical decision making that is straightforward or of low complexity. Counseling and/or coordination of care with other physicians, other qualified health professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the problem(s) requiring admission to ''observation status'' are of low severity. Typically, 30 minutes are spent at the bedside and on the patient's hospital floor or unit. 31 All Spec 22 $50.56 One unit of service per day

99219 Initial observation care, per day, for the evaluation and management of a patient which requires these 3 key components: A detailed or comprehensive history; A detailed or comprehensive examination; and medical decision making that is straightforward or of moderate complexity. Counseling and/or coordination of care with other physicians, other qualified health professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the problem(s) requiring admission to ''observation status'' are of moderate severity. Typically, 50 minutes are spent at the bedside and on the patient's hospital floor or unit. 31 All Spec 22 $69.14 One unit of service per day

99220 Initial observation care, per day, for the evaluation and management of a patient which requires these 3 key components: A detailed or comprehensive history; A detailed or comprehensive examination; and medical decision making that is straightforward or of high complexity. Counseling and/or coordination of care with other physicians, other qualified health professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the problem(s) requiring admission to ''observation status'' are of high severity. Typically, 70 minutes are spent at the bedside and on the patient's hospital floor or unit. 31 All Spec $94.67 One unit of service per day

99224 Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 components: Problem focused interval history; Problem focused examination; medical decision making that is straightforward or of low complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is stable, recovering, or improving. Typically, 15 minutes are spent at the bedside and on the patient's hospital floor or unit. 31 All Spec 22 $20.44 One unit of service per day

99225 Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 components: Problem focused interval history; Problem focused examination; medical decision making that is straightforward or of moderate complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is responding inadequately to therapy or has developed a minor complication. Typically, 25 minutes are spent at the bedside and on the patient's hospital floor or unit. 31 All Spec $36.87 One unit of service per day

99226 Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 components: Problem focused interval history; Problem focused examination; medical decision making that is straightforward or of high complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is unstable or has developed a significant complication or a significant new problem. Typically, 35 minutes are spent at the bedside and on the patient's hospital floor or unit. 31 All Spec 22 $53.25 One unit of service per day

99234 Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date, which requires these 3 key components: A detailed or comprehensive history; A detailed or comprehensive examination; and medical decision making that is straightforward or of low complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually the presenting problem(s) requiring admission are of low severity. Typically 40 minutes are spent at the bedside and on the patient's hospital floor or unit. 31 All Spec 22 $69.18 One unit of service per day

99235 Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date, which requires these 3 key components: A comprehensive history; A comprehensive examination; and medical decision making of moderate complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually the presenting problem(s) requiring admission are of moderate severity. Typically 50 minutes are spent at the bedside and on the patient's hospital floor or unit. 31 All Spec 22 $86.29 One unit of service per day

99236 Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date, which requires these 3 key components: A comprehensive history; A comprehensive examination; and medical decision making of high complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually the presenting problem(s) requiring admission are of high severity. Typically 55 minutes are spent at the bedside and on the patient's hospital floor or unit. 31 All Spec 22 $111.46 One unit of service per day

In accordance with section 443.3(a)(1.1) of the code, the Department will issue an MA Bulletin to inform providers of the Department's payment conditions for observation services provided in an acute care hospital outpatient setting.

Fiscal Impact

The FY 2016-2017 fiscal impact as a result of these payments is $28.280 million ($10.229 million in State general funds).

Public Comment

Interested persons are invited to submit written comments regarding these changes to the Department of Human Services, Office of Medical Assistance Programs, c/o Regulations Coordinator, Room 515, Health and Welfare Building, Harrisburg, PA 17120. Comments received within 30 days will be reviewed and considered.

Persons with a disability who require an auxiliary aid or service may submit comments using the Pennsylvania AT&T Relay Service at (800) 654-5984 (TDD users) or (800) 654-5988 (voice users).

THEODORE DALLAS,
Secretary

Fiscal Note: 14-NOT-1020. (1) General Fund;

(7) MA—Capitation; (2) Implementing Year 2015-16 is $0; (3) 1st Succeeding Year 2016-17 is $4,111,000; 2nd Succeeding Year 2017-18 through 5th Succeeding Year 2020-21 are $0; (4) 2014-15 Program—$3,823,000,000; 2013-14 Program—$3,995,000,000; 2012-13 Program—$3,631,000,000;

(7) MA—Fee-for-Service; (2) Implementing Year 2015-16 is $0; (3) 1st Succeeding Year 2016-17 is $6,118,000; 2nd Succeeding Year 2017-18 through 5th Succeeding Year 2020-21 are $0; (4) 2014-15 Program—$564,772,000; 2013-14 Program—$428,041,000; 2012-13 Program—$718,947,000;

(8) recommends adoption. Funds have been included in the budget to cover this increase.

[Pa.B. Doc. No. 16-831. Filed for public inspection May 13, 2016, 9:00 a.m.]

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Procedure Code	National Description	Provider Type	Provider Specialty	Place of Service	Pricing Modifier	Info Modifier	MA Fee	MA Units of Service
G0378	Hospital observation service.	01	183	22			$976.54	One unit of service per observation stay
G0379	Direct admission of patient for hospital observation care.	01	183	22			$0.00	One unit of service per observation stay

Procedure Code	National Description	Provider Type	Provider Specialty	Place of Service	MA Fee	MA Units of Service
99217	Observation care discharge day management.	31	All Spec	22	$36.89	One unit of service per day
99218	Initial observation care, per day, for the evaluation and management of a patient which requires these 3 key components: A detailed or comprehensive history; A detailed or comprehensive examination; and medical decision making that is straightforward or of low complexity. Counseling and/or coordination of care with other physicians, other qualified health professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the problem(s) requiring admission to ''observation status'' are of low severity. Typically, 30 minutes are spent at the bedside and on the patient's hospital floor or unit.	31	All Spec	22	$50.56	One unit of service per day
99219	Initial observation care, per day, for the evaluation and management of a patient which requires these 3 key components: A detailed or comprehensive history; A detailed or comprehensive examination; and medical decision making that is straightforward or of moderate complexity. Counseling and/or coordination of care with other physicians, other qualified health professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the problem(s) requiring admission to ''observation status'' are of moderate severity. Typically, 50 minutes are spent at the bedside and on the patient's hospital floor or unit.	31	All Spec	22	$69.14	One unit of service per day
99220	Initial observation care, per day, for the evaluation and management of a patient which requires these 3 key components: A detailed or comprehensive history; A detailed or comprehensive examination; and medical decision making that is straightforward or of high complexity. Counseling and/or coordination of care with other physicians, other qualified health professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the problem(s) requiring admission to ''observation status'' are of high severity. Typically, 70 minutes are spent at the bedside and on the patient's hospital floor or unit.	31	All Spec		$94.67	One unit of service per day
99224	Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 components: Problem focused interval history; Problem focused examination; medical decision making that is straightforward or of low complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is stable, recovering, or improving. Typically, 15 minutes are spent at the bedside and on the patient's hospital floor or unit.	31	All Spec	22	$20.44	One unit of service per day
99225	Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 components: Problem focused interval history; Problem focused examination; medical decision making that is straightforward or of moderate complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is responding inadequately to therapy or has developed a minor complication. Typically, 25 minutes are spent at the bedside and on the patient's hospital floor or unit.	31	All Spec		$36.87	One unit of service per day
99226	Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 components: Problem focused interval history; Problem focused examination; medical decision making that is straightforward or of high complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is unstable or has developed a significant complication or a significant new problem. Typically, 35 minutes are spent at the bedside and on the patient's hospital floor or unit.	31	All Spec	22	$53.25	One unit of service per day
99234	Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date, which requires these 3 key components: A detailed or comprehensive history; A detailed or comprehensive examination; and medical decision making that is straightforward or of low complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually the presenting problem(s) requiring admission are of low severity. Typically 40 minutes are spent at the bedside and on the patient's hospital floor or unit.	31	All Spec	22	$69.18	One unit of service per day
99235	Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date, which requires these 3 key components: A comprehensive history; A comprehensive examination; and medical decision making of moderate complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually the presenting problem(s) requiring admission are of moderate severity. Typically 50 minutes are spent at the bedside and on the patient's hospital floor or unit.	31	All Spec	22	$86.29	One unit of service per day
99236	Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date, which requires these 3 key components: A comprehensive history; A comprehensive examination; and medical decision making of high complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually the presenting problem(s) requiring admission are of high severity. Typically 55 minutes are spent at the bedside and on the patient's hospital floor or unit.	31	All Spec	22	$111.46	One unit of service per day

NOTICES

Payment for Observation Services

[46 Pa.B. 2475][Saturday, May 14, 2016]

[Pa.B. Doc. No. 16-831. Filed for public inspection May 13, 2016, 9:00 a.m.]

[46 Pa.B. 2475]
[Saturday, May 14, 2016]