On June 1, 2001, the Virginia Department of Medical Assistance Services (DMAS) will implement computer systems changes that will finally bring them into compliance with the prudent layperson provisions of the Balanced Budget Act of 1997 (BBA). On this date, claims for emergency services will no longer automatically reduce payment based on a diagnosis code. Claims will either automatically pay at the fee schedule, or will pend for manual review of the medical record and a payment determination.

Two new lists, or "code tables" as DMAS prefers to call them, are being entered in the system for the June 1^st conversion. The lists are available here: Pend Table  Paid Table

Providers have the option of submitting the medical record along with any claims with a diagnosis on the "pend" list, or waiting to submit this record when prompted by DMAS. Providers are encouraged to review any claims submitted during the past three years to determine whether they want to resubmit claims for which DMAS previously reduced payment.

Please note: Resubmission of claims should NOT be done through the normal appeals process. Read on for special instructions.

This announcement by DMAS culminates three years of activity by the Virginia College of Emergency Physicians (VACEP) engaging DMAS in discussions and meetings to adopt the policies and guidance provided by the Health Care Financing Administration (HCFA) regarding payments for emergency medical services provided to Medicare and Medicaid beneficiaries.

Background

In the early 1990’s, amid a furor that state government was overpaying for services "inappropriately" provided in hospital emergency departments, then-Governor Doug Wilder cut $10M from the DMAS budget for emergency services. To effect this change, DMAS enlisted VACEP support in developing three separate diagnoses lists to help them determine whether services provided in the hospital emergency department would be paid at their fee schedule, or reduced to a flat payment ($20 physician; $30 facility) for "non-emergency" services, or "pend" for manual review of the medical record to make the determination. While we disagreed with this process, we believed our members would be best served if we participated in the list development.

Since the BBA of 1997, VACEP with assistance from national ACEP, communicated with DMAS, their legal counsel, and legislators that DMAS’ use of a diagnosis list to automatically deny, or reduce payment for emergency services was prohibited. DMAS disagreed with our position and was disinterested in meeting with us to discuss the matter. So, VACEP began gathering claims data to support legislative and other potential initiatives to move DMAS into compliance.

A little over a year ago, DMAS appeared to have finally gotten the message when they invited VACEP to assist in their elimination of the auto-reduce table. While not admitting to violations of the BBA, this project was termed a "priority" for the Department and was slated for implementation "as quickly as possible." The goal was development of two new diagnoses tables that would either automatically pay as an emergency service, or "pend" for manual review by the DMAS Claims Processing Unit.

In response, VACEP convened a work group of a dozen physicians and coders, that agreed to meet four separate days over a two-week period to review the more than 6,000 ICD-9-CM codes, and assign these to either a "pend" or "pay" list. Our work was turned over to DMAS in May 2000. We were assured at that time, the Department would reconvene a meeting with us in the near future to review any codes on which they did not agree with our recommendations, and to further discuss their implementation plans. Figuratively speaking, we never heard from them again! Our repeated requests for an update on where the Department was with this project, were pretty much brushed aside as "sitting on the Director’s desk" waiting for decisions to be made. What decisions? We were uncertain. So, we prepared to develop alternate strategies to bring DMAS into compliance and convened a meeting April 18, which included representatives from the VHHA and ACEP Federal Affairs Director, Michelle Fried.

Current Status Puts Implementation at June 1

In our meeting April 18, DMAS revealed they had finalized the new "Pend" and "Pay" lists, and that systems changes were being tested and actual claims processing under the new lists would be implemented June 1, 2001.

Of the 5,821 codes that would be automatically reduced to a nonemergency rate under the current system, 1,309 of 22 percent will be paid without review of the medical record as of June 1. The remaining 4,512 (78 percent) will be flagged for manual review. In addition, 170 of the codes under the current system that now auto-pend will auto-pay under the new system. On the flip side, four of the codes that currently auto-pay will now auto-pend.

When a manual review of the record takes place, the reviews will be applying the prudent layperson standard in the determination of the event as emergency or nonemergency. Under the BBA, an emergency condition is defined as:

"a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that a prudent layperson, who possesses an average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in – (i) placing the health of the individual in serious jeopardy, (ii) serious impairments to bodily functions, or (iii) serious dysfunction to any bodily organ or part."

As you can see, basing a designation of emergency or nonemergency for reimbursement purposes solely on a diagnosis, much less the final diagnosis is not compatible with the BBA’s prudent layperson standard.

The DMAS system is set to scan the admitting diagnosis (presenting diagnosis) on the UB-92 claim, or the presenting or final diagnosis in block 21 locator #1 on the HCFA-1500 form. It is important that the diagnosis that best describes the emergent situation is found in these positions on the claim. If the diagnosis is on the Pend table, it will be important that your documentation not only reflects what you did, but also, to the extent possible, the patient’s perspective of why a visit to the ED was necessary.

Documentation Is Critical

Codes on the Pend table will "kick out" a letter requesting a copy of the medical record, the same as is currently done. Upon receipt of the requested documentation, the Claims Processing Unit nurse reviewers will use it to help determine whether the client sought care in the emergency department setting "prudently." The E&M level of service provided will not be used to make these determinations, so your documentation in the medical record, and appropriate coding, are critical to receiving proper payment.

Don’t miss verbal clues or comments that could get your "pended" diagnoses appropriately reviewed and paid at the emergency rate. For example:

• A patient that complains of symptoms lasting several days needs to be asked why they came to the ED today? If symptoms suddenly or quickly worsened, write it down. If they knew someone with similar symptoms that had a bad result and they came in because they were afraid of a similar outcome, record it.
• A parent that indicates child had fever over 102 recorded at home was given aspirin and brought in to ED where temp is now below 102, needs the "at home" temperature recorded in the chart. Inconsolable crying at home, even though not now in the ED, should be recorded. Any "at home" signs or symptoms that caused enough concern to bring the child to the ED, even though not present on arrival or during the ED visit, need to be recorded in the medical record.
• If a patient mentions they tried to call their PCP but 1) couldn’t get appointment in a timely manner [remember, patient perspective], or 2) was referred to the ED, or 3) no one answered their call or they got an answering machine, put this in the chart.

Such documented comments could make the difference in whether you are paid at the emergency rate fee schedule or only receive $20.

Be aware whether the presenting diagnosis or the final diagnosis bests describes the emergent nature of the visit, and it is entered in the appropriate block on the HCFA-1500. By this, I mean:

• Don’t write down "chest pain" as the admitting (final) diagnosis if it was, in fact, a percordial pain (codes as 786.51). "Chest pain, unspecified" (codes as 786.50) is on the Pend table for review of the medical record, whereas "Percordial pain" is automatically paid.

Potential to Resubmit Claims Under the New System

When we asked what DMAS’ plans were to retroactively apply the new tables to claims already processed, the answer was "none." As stated, the new system is scheduled to go into effect June 1^st. However, the DMAS reimbursement system is not based on date of service and claims stay in the system for three years from date of submission (vs. date of service). This makes it possible for providers to review claims submitted after June 1, 1998, and resubmit old claims that in the past auto-reduced, or pended and were reduced. Potential claims for you to consider are those that moved from auto-reduce to either Pend or Paid, or those that moved from Pend to auto-pay.

If a diagnosis code was switched to the auto-pay table in the new system, the claim should be adjusted to the emergency rate upon resubmission after June 1^st. There may be a potential gain for claims that had pended under the old system if documentation in the medical record would meet the prudent layperson standard, however, these situations would be less certain.

Providers should NOT resubmit claims through the normal appeals process. Instead you are to send the paper claim and documentation supporting the re-evaluation to:

Bonnie Winn, Supervisor
DMAS Payment Processing Unit
Suite 1300
600 East Broad Street
Richmond, VA 23219

If you have any questions regarding the process, please call Ms. Winn at 804-786-2621.

Applicability of Policy Changes

It is important to note that this new system is effective only for DMAS, not for the plans participating in the Medicaid managed care system. Although DMAS admitted that the plans are required to comply with the prudent layperson standard. VACEP and VHHA will continue to push for these plans to meet the BBA’s prudent layperson standard if they currently do not.

Keep Us Informed, It’s Not Over Yet…

VACEP and VHHA have joined forces to monitor DMAS action on this issue. VHHA analyzed the new "Pend" and Pay" tables to highlight which codes moved from the Pend to "Paid" table, or "Reduce" to "Pend" or to "Paid", to assist you in determining whether it is feasible to resubmit claims for your practice. The lists are available at VHHA Comparison Tables

We have determined that very few high utilization codes will automatically pay under the new system. In fact, of all claims paid in 1999 (latest available data), in the "Top 40" only six codes were auto-paid at emergency rates; now one additional "top 40" code, 388.70 – Otalgia, Unspecified, has been added to the auto-pay table. Of 888 codes VACEP recommended DMAS move to the auto-pay table, only 386 were adopted. Very few of these codes would be used in the emergency department setting.

We need to gather data on pended claims under the new system, that are reduced by DMAS and if your attempt to appeal a claim is unsuccessful, please send us a copy of the claim and your documentation. Our goal is to identify any inappropriate patterns of reducing claims and bring the issue to DMAS’ attention, or the General Assembly's attention, if necessary. We are particularly interested if you have pended claims with an E&M visit level of 3, 4 or 5, that are unsuccessfully appealed.

With your help, we will continue to strive to ensure equitable review of claims and payment for your services.