Outpatient Hospital Services

Eligible outpatient hospital services providers are facilities that meet the definition of and are licensed as hospitals or hospital clinics that are qualified to participate in Medicare. This includes Indian Health Service (IHS) hospitals designated by the Federal government to provide acute care.

Covered Outpatient Hospital Services

An outpatient hospital clinic is a non-emergency service providing diagnostic, preventive, curative, and rehabilitative services on a scheduled basis.

In medically indicated situations when the member’s physical or mental disability is such that it is not in the best interest of the member to be physically moved to multiple outpatient hospital clinic sites, the outpatient hospital facility may bill a specialty clinic facility fee for each distinctly different specialty clinic service that is brought to the member at one clinic site. Refer to Claims & Payment for additional information regarding claims submission.

When a member is admitted to a hospital as an inpatient and inpatient Service Authorization is denied and/or the member does not meet inpatient criteria (see Inpatient Hospital Notification and Authorization for more information), services provided in the hospital may be covered by PrimeWest Health when billed as outpatient hospital services if the following apply:

The member was in the hospital for less than 48 hours (total); up to 72 hours with documentation
The stay has not been billed as an inpatient stay
The admission hour and discharge hour are indicated on the claim. Code “99” (hour unknown) is not acceptable.

Claims must include the reason for unscheduled outpatient visits. Please note the following:

An unscheduled outpatient visit is defined as type of bill (TOB) 013X or 085X with type of admission 1, 2, or 5 and revenue codes 045X, 0516, 0526, or 0762
Outpatient claims must include the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) code describing the patient’s stated reason or condition (such as follow-up or pregnancy in labor)
The reason for visit is not required for all scheduled outpatient encounters. It may be reported for scheduled visits, such as encounters for ancillary tests, when the data provides additional information to support medical necessity.

If a member is admitted to the hospital as an inpatient from an outpatient department of the hospital (e.g., emergency department, Ambulatory Surgical Center [ASC], observation status whether or not a bed is used), charges from the outpatient services must be included in the inpatient hospital stay. Submit the date of admission as the date outpatient services began.

Hydration, Infusion, Drug Injections, and Chemotherapy Administration

Initial Codes: 96360, 96365, 96374, 96409, 96413

96360: Initial hydration up to one hour
96374: Initial intravenous (IV) drug push
96365: Initial IV infusion up to one hour
96409: Initial chemotherapy IV drug push
96413: Initial chemotherapy IV infusion up to one hour

Service delivery does not drive coding selection. Report the one initial code with the highest level of service provided during that visit or day regardless of the time administered during the visit. After selection of the initial code, report all additional related services provided with add-on, subsequent, or concurrent codes.

Add-on, subsequent, and concurrent codes: 96361, 96366 – 96379, 96411, 96415 – 96549
96368: Concurrent infusions, only reportable once per encounter.

Modifier 59: Reporting of modifier 59 is only appropriate when the member has return visit(s) on the same day or if there is more than one IV site (multiple IV lines running into a single IV site do not qualify as multiple sites). Documentation is required.

96523 (IV irrigation): Code 96523 is not reportable if an injection, infusion, or Evaluation and Management (E/M) is provided on the same day.

Cardiac Rehabilitation (93798, 93799): Cardiac rehabilitation is described by the United States Public Health Service as consisting of “comprehensive, long-term programs involving medical evaluation, prescribed exercise, cardiac risk factor modification, education, and counseling.” It further states that these programs “are designed to limit the physiological and psychological effects of cardiac illness, reduce the risk for sudden death or reinfarction, control cardiac symptoms, stabilize or reverse the atherosclerotic process, and enhance the psychosocial and vocational status of selected patients.” PrimeWest Health follows Medicare criteria for cardiac rehabilitation services.

Cardiac rehabilitation services are the aftercare for myocardial infarction, coronary bypass surgery, stable angina, and other similar diagnoses.
Cardiac rehabilitation services are for the following additional indications: heart valve replacement, angioplasty, heart or heart-lung transplant, and congestive heart failure.
Cardiac rehabilitation services include a recovery program primarily consisting of monitored exercise or exercise therapy with patient instruction and diagnostic testing services.
All settings must have a physician immediately available and accessible for medical consultations and emergencies at all times when items and services are being furnished under the program. PrimeWest Health follows the Centers for Medicare & Medicaid Services (CMS) for services furnished in the hospital or CAH or in an on-campus outpatient department of the hospital or CAH.

Outpatient hospitals and physician-directed clinics that have a Medicare-approved cardiac rehabilitation program may provide cardiac rehabilitation services to PrimeWest Health members.

Outpatient Observation Services

Covered outpatient observation services are reasonable and necessary to treat or diagnose a member and are independent of other procedures (e.g., E/M procedure code is not required in addition to observation for payment of observation). Observation services are covered for up to 48 hours. PrimeWest Health will consider observation services for up to 72 hours for unusual circumstances when submitted with additional documentation.

Outpatient observation services are not covered when they are provided as follows:

In addition to a surgical procedure, unless the observation is monitoring or treatment beyond the community standard for the surgical procedure. Bill the unusual observation service with modifier “22,” and include an explanation of the unusual circumstances.
Prior to an inpatient admission, as those observation services are considered part of the inpatient DRG
For the convenience of the patient, patient’s family, or provider

All hospitals and critical access hospitals (CAHs) are required to provide written notification and an oral explanation to individuals receiving observation services as outpatients for more than 24 hours using the Medicare Outpatient Observation Notice (MOON), which is a standardized notice.

Observation Billing Policy

Bill the facility component of observation services on the 837I claim form or electronic equivalent using revenue code 0762 and HCPCS G0378.
Bill observation services according to CMS and Minnesota Department of Human Services (DHS) billing guidelines.
The date of service is the date observation care began
The total accumulation of observation time for the entire period of observation must be included on a single line.
Submit non-covered observation services on a second line of service with no HCPCS code and include either modifier GZ or GY.
Only report observation series code G0378 when one of the following services was also provided on the same date of service or the day before the date reported for observation:
1. Emergency Department visit (CPT codes 99281 – 99285, HCPCS codes G0380 – G0384)
2. Clinic visit (HCPCS code G0463)
3. Critical care (CPT 99291)
4. Direct referral for observation care (HCPCS G0379). This must be reported on the same date of service as the date reported for observation

Direct Admission to Observation Status

Use code G0379.
Hospitals may bill for members who are directly admitted to observation. G0379 is reportable once per observation stay.
A direct admission occurs when a physician in the community refers the member to the hospital for observation, bypassing the clinic or emergency department.

Prolonged Intravenous (IV) Therapy

Prolonged IV therapy begins when the IV needle is in place, continues through the administration, and ends when the insertion site care is complete.

The following are billable in addition to the prolonged IV therapy:

Blood
Blood products
Biologicals
Chemotherapy agents
Other drugs that require prolonged infusion
Specialty catheters not routinely supplied

Blood Transfusions

Blood transfusions require the actual number of units provided related to the specific product or procedure. Multiple units are not reported when the number of units included in the code description is multiple and the number of units used is equal to or below the unit measurement of the code (this is reported as one unit).

Pulse Oximetry

Pulse oximetry is considered part of the emergency department, ASC, or outpatient specialty clinic and, as such, is part of the Ambulatory Payment Classification (APC) payment. Bill pulse oximetry separately only when an E/M visit is the only other service provided.

Mental Health Partial Hospitalization

Partial hospitalization is a time-limited, structured program provided in an outpatient hospital setting or a Medicare-certified community mental health center (CMHC). Partial hospitalization provides person- and family-centered treatment by a multidisciplinary team under the direction of a physician.

Refer to Mental Health Services - Partial Hospitalization Program for additional requirements and billing instructions.

Billing

Professional Component

For outpatient clinic services provided in a hospital-owned clinic, bill professional services in the 837P claim format using the appropriate HCPCS or CPT code, using place of service 22 or 19. Failure to identify the place of service as “outpatient hospital” may be considered fraudulent or abusive billing, and is subject to monetary recovery or program sanctions.

Facility Fee

For outpatient clinic services performed in a hospital-owned clinic, bill facility fees in the 837I claim format using the appropriate revenue and HCPCS or CPT code.

Critical Access Hospitals (CAHs)

CAHs must comply with 42 CFR 413.70 and follow guidance for facility services. PrimeWest Health accepts Method II billing.

Urgent Care in Emergency Department

Non-emergency care provided in an emergency department is urgent care and must be billed as “urgent care services.”

Emergency Department

Emergent care provided in an emergency department is emergency care and must be billed as “emergency services.” If, in a physician’s professional opinion, emergency treatment for the member’s condition cannot be provided in the emergency department, the physician may seek inpatient admission certification for the member and bill “inpatient admission services.” Refer to Inpatient Hospital Notification and Authorization.

Provider-Based Status for Clinics

Clinics owned by hospitals authorized with provider-based status according to Federal regulations must comply with 42 CFR 413.65. Bill for services as an outpatient hospital department, following the above guidance.

On-Campus Provider-Based Hospital Department Services

When billing outpatient services furnished at an on-campus provider-based department, the 837P professional claim must include place of service 22.

Off-Campus Provider-Based Hospital Department Services

Outpatient services furnished at an off-campus provider-based department are billed as follows:

837P professional claims must include place of service 19
837I claims must use modifier PO for services, procedures, and/or surgeries performed at off-campus provider-based outpatient departments

Modifier PN indicated a non-excepted service provided in an off-campus, outpatient, provider-based department of a hospital.

PrimeWest Health follows the guidance below found in Chapter 26, Completing and Processing Form CMS-1500 Data Set, of the CMS Medicare Claims Processing Manual:

When a physician/practitioner furnishes services to an outpatient of a hospital, payment is made under the Physicians Fee Schedule (PFS) at the facility rate. Physicians/practitioners who furnish services to a hospital outpatient, including in a hospital outpatient department (including in a provider-based department of that hospital) or under arrangement to a hospital shall, at a minimum, report the off campus-outpatient hospital POS code 19 or on campus-outpatient hospital POS code 22 irrespective of the setting where the patient actually receives the face-to-face encounter. In other words, reporting the outpatient hospital POS code 19 or 22 is a minimum requirement for purposes of triggering the facility payment amount under the PFS when services are provided to a registered outpatient.

NOTE: Physicians/practitioners who perform services in a hospital outpatient department shall use, at a minimum, POS code 19 (Off Campus- Outpatient Hospital) or POS code 22 (On Campus-Outpatient Hospital).

Code 19 or 22 (or other appropriate outpatient department POS code as described above) shall be used unless the physician maintains separate office space in the hospital or on the hospital campus and that physician office space is not considered a provider-based department of the hospital as defined in 42.C.F.R.413.65. Physicians shall use POS code 11 (office) when services are performed in a separately maintained physician office space in the hospital or on the hospital campus and that physician office space is not considered a provider based department of the hospital.

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Updated_02/24/2025

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