New Outpatient Facility Policy Enhancements

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New Outpatient Facility Policy Enhancements

EmblemHealth will make a change to the way we process claims for outpatient services. In an effort to provide greater consistency in claims processing and more accurate payment determination, we will begin applying nationally and locally supported edits designed to enforce standards for correct coding and claims payment. These edits will occur in addition to the edits we already have in place to validate correct claims data.


You should also find greater consistency between EmblemHealth’s outpatient edits and those of CMS, which should help you and your staff more easily predict how your claims will be edited, and assist you in your efforts for compliance with CMS billing and coding requirements.


For a detailed listing of all our coding edit policies, please click here to view our Coding Edit Reimbursement Policy.


Policy enhancements include:


CMS’ Outpatient Claims Editor (OCE) rules

The OCE consists of editing logic developed by CMS to edit hospital outpatient claims (bill types 12X, 13X, or 14X). The OCE detects incorrect billing data (e.g., accuracy of units of service, correct modifiers, coverage policies, etc.) and reviews each HCPCS and ICD-10-CM code for validity and coverage. Numerous OCE edits are incorporated into EmblemHealth’s current adjudication process and are being applied to claims submitted by outpatient facilities. 


CMS releases quarterly updates to the OCE and program memorandums that detail the application of the OCE. For more information about OCE edits, visit the CMS website.


National Coding Policies and Guidelines

Several policies are being instituted that are based on CMS and AMA policies and guidelines. In most cases, these policies are the same as or similar to the same policies we have already instituted for professional claims editing including CMS national coverage determinations (NCDs). We are highlighting for you some of the more frequently encountered edits:


National Correct Coding Initiative (NCCI)

The National Correct Coding Initiative is a collection of bundling edits created and sponsored by CMS that are separated into two major categories. The first category contains the Comprehensive and Component procedure code edits; the second contains the Mutually Exclusive procedure code edits.


Correct Coding Initiative edits are for services performed by the same facility on the same date of service only and do not apply to services performed within the global surgical period.


Global Surgery

A national definition of the Global Surgery Package was instituted by CMS to provide consistency in coverage for surgery-related procedures. Evaluation and management (E/M) services billed the same day as a medical or surgical service are included in the payment for the medical or surgical service unless the facility indicates that the E/M service is separate and distinct from the surgery and is therefore separately payable.


CMS Bundling Rules

There are a number of services/supplies that are covered by CMS, but which are bundled into the payment for other related services.


AMA Code Definitions and Appropriateness of Codes When Used Together

Throughout the AMA CPT-4 Manual and CMS HCPCS Manual, the publishers have provided instructions on code usage. EmblemHealth has adopted edits that support correct coding based on the definition or nature of a procedure code or combination of procedure codes. These edits will bundle procedures based on the appropriateness of the code selection.


Revenue Code Validation

Revenue codes are 4-digit codes used to classify types of service. They are required for accurate hospital outpatient claims processing. Revenue codes will be required for processing of all outpatient facility claims. If revenue codes are not present on a claim, the charges will be denied. There are also additional rules regarding the appropriate use of revenue codes on outpatient facility claims.

  • Many revenue codes are required to be billed with a CPT/HCPCS code. If these revenue codes are not submitted with a valid CPT/HCPCS code, the charges will be denied. Example: Revenue code 0510 (clinic) is required to be billed with an HCPCS code. If billed without one, the charges will be denied.
  • Alternatively, the CPT/HCPCS codes billed must be appropriate for use with the billed revenue code. If the codes do not match, the charges will be denied.
  • Certain revenue codes are not appropriate for use with outpatient hospital claims billed by facilities. If these revenue codes are billed by facilities for outpatient claims, the claims will be denied: Room and Board revenue codes 010X-021X are intended to be used only in the inpatient hospital setting. It is inappropriate for these codes to be billed with outpatient hospital bills (bill types 12X, 13X, or 14X). Additionally, revenue codes 096X-098X are utilized to bill professional services.


*As new policies are introduced, EmblemHealth will provide notification.

05/22 JP 56776