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March 22, 2004

The Changing Face of Emergency Department Coding Compliance
By Barbara Aubry, RN, CCM, CPC
Vol. 16 No. 6 p. 30

On August 29, 2003, the Centers for Medicare & Medicaid Services (CMS) issued a final rule clarifying hospital obligations to patients who request treatment for emergency medical conditions under the Emergency Medical Treatment and Labor Act (EMTALA). These revisions were designed to ensure that people receive appropriate screening and emergency treatment, regardless of their ability to pay, while removing barriers to the efficient operation of hospital emergency departments (EDs).

However, since the final rule went into effect on November 8, 2003, few hospitals have formulated plans that focus on addressing medical necessity coding compliance in the ED.

Basic EMTALA Requirements
To understand the key provisions of the final rule, one must first understand the original EMTALA, which was passed as part of the Consolidated Omnibus Budget Reconciliation Act of 1986. EMTALA was created to discourage hospitals from what is known as patient “dumping”—ie, rejecting patients, refusing to treat them, or transferring them to “charity hospitals” or “county hospitals” because they are unable to pay or are covered under the Medicare or Medicaid programs.

EMTALA requires a hospital to provide an appropriate medical screening examination (MSE) to any person who comes to the hospital ED and requests treatment or an MSE for a medical condition. If the examination reveals an emergency medical condition, the hospital must also provide either necessary stabilizing treatment or an appropriate transfer to another medical facility.

EMTALA applies to all hospitals that participate in the Medicare program and offer emergency services and covers all patients treated at those hospitals, not only those who receive Medicare benefits. Hospitals that violate EMTALA may have their Medicare participation terminated and may be subject to civil money penalties of up to $50,000 per violation. Individuals who have suffered personal harm and hospitals to which a patient has been improperly transferred and that have suffered financial loss as a result of the transfer are also provided a private right of action against hospitals that violate EMTALA.

EMTALA Challenges
When the Office of Inspector General (OIG) began to investigate alleged patient dumping complaints, many hospitals were not prepared for EMTALA’s scope and quickly realized they were lacking in the clinical, administrative, and financial ED policy and procedures required for compliance. As a result, hospitals encountered many policy- and procedure-related problems, including the lack of the following:
• additional on-call professional staff and stipends;
• a policy for evaluation and transfer in facilities without psychiatric service;
• on-call OB/GYN coverage and a policy for ED examinations;
• adequate ED triage or MSE protocol;
• a policy and procedure for determining medical necessity of further treatment; and
• a policy criteria required for determining when a patient is stable and able to be transferred.

In addition to policy and procedure challenges, hospitals also encountered a new set of clinical considerations, such as the following:
• When do EMTALA obligations begin?
• Are departments other than the ED affected by EMTALA?
• Does EMTALA apply only to outpatients, inpatients, or both?
• What constitutes a “dedicated ED” and MSE?
• What criteria are required when transferring an unstable patient is unavoidable?
• What intensity of psychiatric symptoms qualifies as an emergency medical condition?
• What is the appropriate level of observation for psychiatric cases?

And finally, EMTALA had a significant effect on patient registration and billing. Medicare requires confirmation of medical necessity for services provided in the ED, so hospitals were also left trying to answer the following questions:
• Are policies and procedures in place to ensure compliance with CMS rules regarding medical necessity of further ED treatment to the stable patient?
• Can reasonable registration policies be carried out after the patient is stable?
• What are “reasonable registration polices” under EMTALA?
• How does EMTALA define stable?
• Does the act allow for request of medical records?
• When can a copay be collected?
• Is the CMS-required Advance Beneficiary Notice (ABN) disallowed in the ED?

Because of these and other challenges, lawmakers revisited EMTALA. With input from industry thought leaders and others, modifications were developed. By providing definitions of terminology, these revisions answered many of the questions created by the initial EMTALA. But, with the final regulations came new challenges for the industry and lawmakers. Review of the final rule is necessary to understand the planned OIG medical necessity investigation of EDs in 2004.

Key Provisions of the Final Rule
In summary, the new rule expands the definition of ED to mean any department or facility of the hospital, whether situated on or off the main hospital campus, that (1) is licensed by the state as an emergency room or ED; (2) is held out to the public as providing care for emergency medical conditions without requiring an appointment; or (3) during its previous calendar year, has provided at least one-third of all its outpatient visits for the treatment of emergency medical conditions on an urgent basis.

Other key provisions of the final rule include the following:
• Clarification of the circumstances in which physicians, particularly specialty physicians, must serve on hospital medical staff “on-call” lists. Under the revised regulations, hospitals will have discretion to develop their on-call lists in a way that best meets the needs of their communities. In keeping with traditional practices of “community call,” physicians will be permitted to be on-call simultaneously at more than one hospital and to schedule elective surgery or other medical procedures during on-call times.
• Clarification that hospital-owned ambulances may comply with citywide and local community protocols for responding to medical emergencies and thus be used more efficiently for the benefit of their communities.
• Permits hospital departments that are off-campus to provide the most effective way of caring for emergency patients without requiring that the patient be moved to the main campus—when this would not be best for the patient.

The final rule clarifies that EMTALA does not apply to individuals who come to off-campus outpatient clinics that do not routinely provide emergency services or to those that have begun to receive scheduled, nonemergency outpatient services at the main campus—for example, routine laboratory tests. Other regulations and state licensing laws already cover the hospital’s obligations to patients in such circumstances.

In addition, the rule clarifies that EMTALA does not apply after a patient has been seen, screened, and admitted for inpatient hospital services, unless the admission is made in bad faith to avoid the EMTALA requirements. This provision was adopted to conform to the decisions of five circuits of the United States Courts of Appeals.

The Operative Word: Stabilized
Much confusion was caused by the use and meaning of the word stabilized in the original EMTALA. Is there a difference between inpatient and outpatient stabilization? Does stable mean the same for patients with the same diagnosis? Different diagnoses? Multiple diagnoses? Does medical stabilization differ from psychiatric stabilization? Can someone other than a physician determine patient stability?

In the new rule, the CMS took pains to clarify its definition of stabilized and the hospital’s EMTALA obligation to inpatients. The EMTALA set forth the standard for determining when a patient is stabilized with 42 CFR. 489.24 (b), which defines stabilized to mean “…that no material deterioration of the condition is likely, within reasonable medical probability, to result from or occur during the transfer of the individual from a facility, or with respect to an emergency medical condition as defined in this section under paragraph (ii) of that definition, that the woman has delivered the child and the placenta.”

The State Operations Manual, Appendix V, page 24, further clarifies the definition of stabilized by stating that the attending physician or qualified medical professional (QMP) determines when a patient is stabilized: “A patient will be deemed stabilized if the treating physician or QMP attending to the patient in the emergency department/hospital has determined, within reasonable clinical confidence, that the emergency medical condition has been resolved.”

Further, the State Operations Manual states that a patient is stable for transfer when “the patient is transferred from one facility to a second facility and the treating physician attending to the patient has determined, within reasonable clinical confidence, that the patient is expected to leave the hospital and be received at the second facility with no material deterioration in his or her medical condition, and the treating physician reasonably believes the receiving facility has the capability to manage the patient’s medical condition and any reasonably foreseeable complication of that condition.”

Medical Necessity and the Stabilized Patient
A stable patient is one whose emergency medical condition is resolved, even though the underlying medical condition persists. For example, an individual with a history of asthma presents to the ED complaining of chest tightness, wheezing, and shortness of breath. A physician completes an MSE and diagnoses an asthma attack, which is considered an emergency medical condition. Stabilizing treatment is provided—medication and oxygen—to alleviate the acute respiratory symptoms. In this case, the emergency medical condition was resolved, but the underlying medical condition still exists. After stabilizing the patient, the hospital no longer has an EMTALA obligation. The physician may discharge the patient, admit him or her to the hospital, or transfer the patient to another hospital depending on his or her needs or request (the “appropriate transfer” requirement under EMTALA does not apply to this situation since the patient has been stabilized).

What happens when the ED sends a stabilized asthmatic patient for x-rays or an ultrasound? Under EMTALA, a hospital is responsible for treating and stabilizing, within its capacity and capability, any individual who presents himself or herself to a hospital with an emergency medical condition. The hospital must provide appropriate care until the condition ceases to be an emergency or until the patient is properly transferred to another facility.

When nonemergency service is provided to a Medicare beneficiary in the ED, medical necessity requirements go into effect. According to the CMS, hospitals are not obligated to provide screening or diagnostic services beyond what is necessary to determine whether an emergency medical condition exists and resolve it. So, the ED staff is responsible for determining the medical necessity of nonemergency care provided.

This can be accomplished by accessing the appropriate Local Medical Review Policy (LMRP) or National Coverage Determination policy. When the care proposed does not meet CMS medical necessity requirements, ED staff must provide the patient with an ABN, as required by law. If the ABN isn’t provided, the patient cannot be billed, and not only does the hospital lose revenues resulting from denied Medicare claims, but it may also learn that it has a date with an OIG investigator.

The OIG and Medical Necessity Compliance
Isn’t every service provided in the ED medically necessary? The answer to the question is yes and no. Yes, services are most likely necessary, but the place of service may not be appropriate. Recent data indicate this is the case as it relates to diagnostic testing in the ED. The OIG reports that the cost for diagnostic testing in the ED has risen to approximately $85 million per year for standard imaging (x-rays), as well as an additional $70 million for advanced imaging (such as magnetic resonance imaging and computed tomography scans). The CMS monitored the sharp rise in utilization and cost—triggering the upcoming 2004 OIG investigation. Accordingly, Diagnostic Testing in the Emergency Room has been added to the OIG work plan for 2004. The study will assess the appropriateness of Medicare billings for diagnostic tests performed in hospital EDs. The OIG will determine whether or not the services were medically necessary and whether or not the tests were interpreted contemporaneously with the beneficiary’s treatment. To view the entire 2004 work plan, visit http://oig.hhs.gov/publications/docs/workplan/2004/2-CMS%20FY04.pdf.

The Bottom Line: Technology’s Role
The CMS hints at and the OIG will make clear the lack of policy and procedures being used to determine medical necessity in the ED. The CMS intends to investigate the cause(s) of escalating costs for diagnostic and other nonemergency procedures in the ED. Hospitals need to face this reality; not establishing medical necessity in the ED and providing ABNs when necessary represents noncompliant behavior. That’s why it’s critical for ED staff to have tools (eg, diagnostic testing, screenings) for determining the medical necessity of nonemergency care.

Forward-thinking companies are providing hospitals with these tools. Info-X, for example, provides hospitals with MedicalNecessity.com, a Web-based coding compliance tool that can be integrated into existing operational workflows. Powered by Info-X’s comprehensive medical data dictionaries, ED staff can use this tool to validate medical necessity for nonemergency procedures, eliminate the laborious task of gathering LMRP data, and automatically generate ABNs—all from a simple desktop PC.

Use of technology solutions can help hospitals ensure EMTALA compliance and avoid the OIG’s wrath, all while providing a positive return on investment.

— Barbara Aubry, RN, CCM, CPC, serves as clinical business analyst for Info-X, a leading provider of coding compliance solutions for hospitals and physician groups.

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