Expect denials as the healthcare giant is cracking down on Levels 4 and Level 5

UnitedHealthcare (UHC) will reportedly review and possibly adjust or deny facility emergency department (ED) claims submitted with Level 4 and Level 5 evaluation and management (E&M) codes, with facilities able to submit reconsideration or appeal requests. These codes include the following:

99284: Usually, the presenting problem(s) are of high severity and require urgent evaluation by the physician, but do not pose an immediate significant threat to life or physiologic function.

For physician E&M length of stay (LOS) billing, 99284 requires these three key components:

  •  A detailed history;
  • A detailed examination; and
  • Medical decision-making of moderate complexity.

There is no national standard for hospital ER coding. As part of the Outpatient Prospective Payment System (OPPS), Medicare requires hospitals to create their own facility billing guidelines. Coding guidelines should be:

  • Based on facility resources
  • Clear and easy to understand
  • Requiring compiling documentation that is clinically necessary for patient care

99285: Usually, the presenting problem(s) are of high severity and pose an immediate significant threat to life or physiologic function. Professional billing of a 99285 E&M LOS requires these three key components within the constraints imposed by the urgency of the patient’s clinical condition and/or mental status:

  •  A comprehensive history; 
  •  A comprehensive examination; and
  • Medical decision-making of high complexity.

Again, for hospitals there are no such clear-cut guidelines.

Institutions with employed physician groups that can access the pro-fee LOS for a given patient often tacitly mirror facility billing to be concordant with the professional billing level of service. The concept is that there is often correlation between severity of illness and intensity of services and resource utilization. This may be problematic if the physician group is a high outlier on 99284 and 99285. If the group staffing the ED is not employed, the nursing staff would not be privy to the E&M LOS selected by the provider, and it must choose its own code.

UHC has now indicated it will use the Optum ED Claim Analyzer tool to determine appropriate evaluation and management coding levels. Data such as diagnostic testing, comorbidities and the patient’s presenting problem will be considered by the tool.
UnitedHealthcare listed several exceptions to the policy in its bulletin, including claims for:

  • Admissions from the ED
  • Critical care patients
  • Patients less than 2 years oldCertain diagnoses requiring greater than average resource use when performed in the ED
  • Patients who die in the ED
  • Facilities whose billing of level 4 and 5 E/M codes does not abnormally deviate from Optum’s EDC Analyzer tool determination

The Optum 3D Analyzer takes the sum of three cost categories in reaching a coding decision:

  • Standard Costs
  • Extended Costs
  • Patient Complexity Costs

Step 1: Standard Costs
The EDC Analyzer™ reviews all reasons for visits listed in diagnosis codes and assigns a proportional standard cost allocation (PSCA) and associated standard cost weight to each code based on the age and gender of the patient. If multiple PSCAs are assigned to a claim, the EDC Analyzer™ takes the highest PSCA found. There are five possible PSCAs, corresponding to the five ED visit levels:


PSCA weights were derived from the standard resource valuation for the presenting problems in ED visit level and include the costs associated with the following:

  • Nursing and ancillary staff time (for a routine arrival, triage, registration, basic patient/family communications, and a routine discharge)
  • The room
  • Creation of a medical record
  • Coding and billing



Step 2: Extended Costs
The EDC Analyzer™ reviews all line-level services on the claim to identify diagnostic tests that fall into each of the following categories:

  • Laboratory tests
  • X-ray tests (film)
  • EKG/RT/other diagnostic tests
  • CT/MRI/ultrasound tests

Each category carries an extended cost weight. The EDC Analyzer™ adds together the weights for each unique category of tests found on the claim to determine the overall extended cost weight. For example, if two laboratory tests and three X-rays are billed, the EDC Analyzer™ will count the laboratory tests as one and the X-rays as one.
Extended cost weights are calculated for each category based on the level of ED resources expended (including staff time) to create orders, communicate with the patient and staff, and follow up as needed.


Step 3: Patient Complexity Costs
The EDC Analyzer™ reviews all principal and secondary diagnosis codes on the claim, looking for complicating conditions that may impact the level of facility resource utilization. The EDC Analyzer™ then assigns a weight to each complicating diagnosis code that is found. The highest-weighted diagnosis code on the claim is used to determine the overall patient complexity cost weight. If a reason for a visit diagnosis code is billed as a principal or secondary diagnosis code, it is excluded from acting as a complicating condition during this step.

Patient complexity cost weights were developed for each complicating condition by analyzing the additional services typically provided to patients with that complicating condition.
Below are some examples showing how the EDC Analyzer™ assigns a patient complexity cost weight based on a diagnosis code:


The first and most obvious conclusion is that this change will force hospitals to make sure that the coding for complex ED visits will yield the same result as coding using the Optum tool. This is more than just a coding issue. In a coding audit, the reviewer compares the billed codes to the medical record, in addition to the actual billed charges.

Getting the billed claims to meet the requirements of the Optum tool will mean that the chargemaster of each facility must include a crosswalk.

Likely, it will also mean that facilities will have to pay to purchase the Optum tool or pay a consultant that has purchased the tool. Either way, this is potentially a large expense and will require resources from both IT departments and patient financial services area. This increases the ongoing headache of the revenue cycle as other payers like Aetna and Humana likely follow suit with their versions of ER billing requirements.

On my wish list would be that Medicare would publish guidelines for hospital emergency services in the same way that it has for physician services. Considering the current guidelines for physician services have not been updated in 21 years, I am not holding my breath.

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