The New
Jersey No Fault Personal Injury Protection (PIP) regulations were modified
effective January 4, 2013. Those
regulations, in Section 11:3-29.4(a)(2),
provide
The
non-physician facility fees in subchapter, Appendix, Exhibit 7 [The Hospital
Outpatient Surgery Fee Schedule (HOSF)] shall not apply to services provided in
hospital emergency rooms. The bills for these services shall use the modifier
“-ER”.
PIP
insurance carriers have used this provision to argue that use of the ER
modifier for hospital Emergency Room claims is mandatory in order for the
hospital to receive reimbursement at its usual and customary rates (UCR). Without the modifier,
carriers argue, reimbursement should be at the Exhibit 7 HOSF rate, or worse,
at the Exhibit 1, Physician Fee Schedule rate.
While Callagy Law has been
aggressively opposing the carrier
position, PIP
insurance carriers have, at times, been successful with this argument. Indeed, as a general rule, we have been
prevailing about 65% of the time, with carriers prevailing about 35% of the
time.
Before
even delving into the purpose of modifiers and other arguments against the
carrier’s position, it should be understood at the outset that historically no fee
schedule applied to hospital ER services or, for that matter, any other
hospital services. To the extent the
physician fee schedule had been applied to hospital facility services they were
inappropriate applications of the fee schedule and are, at this point, largely recognized
as such. The HOSF and the regulations
effective 1/4/13 did nothing to change that.
Indeed, it is our position hospital ER services remain
outside the purview of any fee schedule, whether it is the physician’s fee schedule
or the HOSF, since the physician fee schedule applies to physicians and the
HOSF applies to outpatient surgeries.
The exemption to application of Exhibit 7 quoted above, which calls for
use of an “ER” modifier, refers to outpatient surgeries conducted as part of ER
treatment, not standard non-surgical ER services, such as evaluations (9928X),
radiology, labs or other non-surgical items.
Hence, discussion of the ER modifier is completely misplaced in the
absence of ER surgery. But even if the
exemption is implicated either because there is an ER surgery or a carrier
insists on its use even for non-surgical ER treatment, it should never be
construed as mandatory.
PIP
carriers emphasize use of the word “shall” in the regulations to suggest that
use of the modifier is a prerequisite for services to be removed from
application of Exhibit 7. If it were
optional, they argue, a more permissive word, such as “may” or “could,” would
have been used. This is too strict an interpretation and serves to undermine
the intention of the regulations.
First,
it is always eminently clear from hospital bills (UB forms) when the services
are Emergency Room services, including the words “Emergency Room” in front of
the ER evaluation CPT
Code (9928X). It is hard to fathom
how a conclusion could be drawn not to exempt a claim from Exhibit 7 because
the initials “ER” were not used after a CPT
Code but the words “Emergency Room” or something similar appears right on
the UB, and all the clinical records show the treatment was pursuant to
admission to the hospital emergency room.
Second,
the purpose of the modifier is to inform the carrier of the nature of the
services rendered, so that the carrier knows the proper level of reimbursement,
not to create a technical prerequisite to proper payment. It is disingenuous at best for any carrier to
suggest they were unaware the services were pursuant to ER treatment in the
face of a standard hospital ER claim simply because the initials “ER” do not
appear after the CPT
Codes. This certainly elevates form
over substance to an absurd and unjust level.
Finally,
it is ironic that the carrier position suggests that the intent of the
regulations, through use of the word “shall,” is to require the modifier. This turns the regulation on its head. The purpose of the regulation is not to
define modifiers as either mandatory or optional; if that were the regulation’s
purpose, I would agree with the carriers.
The purpose of the regulation is to exempt hospital ER surgical treatment
from the HOSF Fee
Schedule. To deny that exemption
because the modifier is not used defeats that purpose. The carriers’ position calls for use of the
modifier simply for the sake of the modifier, not for the intent of the
regulation, which is the exemption of ER services from application of Exhibit
7.
Several
arbitrators, in very well-reasoned decisions, agree with this position. They
are well-reasoned not because they agree with our view, but because they hold
true to the intent of the regulation and a common sense reading of the
language, rather than an interpretation that is hyper-technical. For example, DRP Joseph Tamburino,
in Cape Regional Medical Center v.
Geico, NJ1404001554453, determined:
[T]he purpose of appending a modifier to a CPT Code is to
provide clarification and detail as to the nature of the medical services
rendered. . . . I find that the
[carrier] was on notice of the nature of the services rendered (emergency room
services) and to now argue that the lack of the “ER” modifier justifies denial
is a matter of form over substance. The
[hospital’s] . . . bill served upon [the carrier] clearly indicates next to CPT
29125 and 99284—“emerg room.”
In
conclusion, even though Callagy Law
is prevailing the great majority of the time on this issue, and we are
confident we will continue to prevail to an even greater degree, and despite
the fact that our position is the correct one from both the legislative intent
of the regulation and a common sense interpretation, we recommend that all of
our hospital clients use the ER modifier.
Even if a manual process needs to be added to ER billing procedures, or
corrected claims need to be issued with the modifier, it is worth it. As explained above, we have found that
carriers are prevailing on this issue in excess of 30% of the time. This is too often and is costing hospitals
significant revenue.
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