UHC Downgrade of ED Visit Codes Continues Rile Industry

The downgrade of emergency physician visit codes expected April 1.

In the Jan. 6, 2020 RACmonitor Special Bulletin titled “March 21, 2018, RACmonitor article,” Publisher Chuck Buck raises the alarm over a situation that will affect already razor-thin ED revenue margins, beginning this spring. 

Timothy Powell, CPA, CHCP, originally sounded the alarm as UnitedHealthcare (UHC) announced the Optum tool, which analyzes emergency department charges and physician professional fees for medical necessity (March 21, 2018, RACmonitor article). Charges are based on evaluation and management (E&M) levels. When I originally heard this (Anthem Blue Cross California developed a similar tool for ED coding) I thought, “what took so long?” ED visits are a major source of claims. As we all know, the ED is frequently the place where people seek care that might otherwise be provided in a primary care venue.

For those unfamiliar, ED visit coding (and, to a large degree, observation stays as well) are based on the basis of the intensity of service and resource expenditure. Mr. Powell’s article provides a wonderfully detailed description of how E&M works in billing, for hospital and provider services. In a nutshell, for professional fees, it’s an intricate dance involving provider self-reporting, assessed the complexity of medical decision-making, and professional time expenditure. Hospital E&M coding is largely procedure-driven. The most resource-intensive services are high-cost imaging studies.

And here’s the best part: there are no national standards. A Level 5 is whatever a doctor says it is, and the hospital codes whatever tests and imaging the physician orders. Medical necessity has not been a discernable consideration. It’s like the joke about a 500-year-old attorney, as measured by billable hours. He was really only 45. 

In my opinion, busting back Level 4s and 5s is low-hanging fruit. The driver for ED levels is way too often based on over-utilization of high-cost imaging; as to physician pro fees, well, I already made that point. Additionally, time spent in ED physician analysis of high-cost diagnostics of questionable medical necessity is included in the pro-fee level calculation. If a diagnostic test cannot be justified by the final physician impression, then walking the medical necessity backward is an algorithm not difficult for non-techies to imagine. 

Payers are setting the national standard, one payor at a time, apart from provider input.  

A typical Level 5 should result in admission or placement in observation; a return to the ED within 72 hours should do so rarely, or not at all. A Level 5 will surely not be walking out the door under their own power (meaning it happens all the time).

In the opinion of many physicians, it has to begin with tort reform. That way, the ED physician groups will have more skin in the game and will be incentivized to participate. 

Hospital UM committees have an opportunity to act within their mandates to monitor utilization. Here, I am putting the issue ahead of readmission reduction in the UM plan for my hospital. The impact is significant. In the past, politics, rather than rational thinking, predominated. That’s going to change if EDs are to remain even marginally profitable. In the absence of action by providers, payer-driven financial goals will fill the vacuum.