Practice Economics

Service Distinction Crucial for Medical Claim Submissions


Service Distinction Crucial for Medical Claim Submissions


Hospitalists often are tasked with coordinating and overseeing patient care throughout a hospitalization. Depending on the care model and the availability of varying specialists, a patient could see several specialists throughout the stay, and even during a single day. A recurring issue for many hospitalists is justifying the medical necessity of their services, because payers do not want to reimburse overlapping care (i.e., multiple providers caring for the same patient problem) when more than one physician provides care on the same service date.

Payers often consider two key principles before reimbursing multiple visits on the same date:1

  • Does the patient’s condition warrant the services of more than one physician?
  • Are the individual services provided by each physician reasonable and necessary?

Consider the following example: A 65-year-old female patient is admitted with a hip fracture (820.8) after slipping on the ice outside her home. The patient also has hypertension (401.1) and type II diabetes (250.00). The surgeon manages the patient’s peri-operative course for the fracture, while the hospitalist manages the patient’s medical issues.

Payers must be sure that the services of one physician do not duplicate those provided by another.1 For the above scenario, it is imperative that the hospitalist understand which services are considered the surgeon’s responsibility. The global surgical package includes payment for the surgical procedure and the completion of its corresponding facility-required paperwork (e.g. pre-operative history and physical exam, operative consent forms, pre-operative orders), in addition to the following services:2

  • Pre-operative visits after making the decision for surgery beginning one day prior to surgery;
  • All additional post-operative medical or surgical services provided by the surgeon related to complications but not requiring additional trips to the operating room;
  • Post-operative visits by the surgeon related to recovery from surgery, including but not limited to dressing changes, local incisional care, removal of cutaneous sutures and staples, line removals, changes and removal of tracheostomy tubes, and discharge services; and
  • Post-operative pain management provided by the surgeon.

Another physician who performs any component of the global package will not receive separate payment unless the surgeon is willing to forego a portion of the payment. For example, a hospitalist admits a patient who has no other identifiable medical conditions aside from the problem prompting surgery. The hospitalist’s role may be dictated by facility policy—quality of care or risk reduction, for example—and administrative requirements (history and physical exam, discharge services, coordination of care) rather than what a payer would perceive as necessary “medical” management. Similarly, if the hospitalist’s post-op care is limited to ordering routine post-op labs or maintaining appropriate pain management, the hospitalist’s service will likely be denied as incidental to the surgical package.

The hospitalist’s role may be dictated by facility policy and administrative requirements history and physical exam, discharge services, coordination of care rather than what a payer would perceive as necessary “medical” management.

Remember, if the hospitalist’s claim is submitted and paid, it doesn’t mean that the payer won’t retract the payment upon review if an erroneous payment is suspected. A payer review may be triggered when the diagnosis listed on the hospitalist’s claim matches the diagnosis listed on the surgeon’s claim (e.g. 820.8). If too many claims are considered “not medically necessary” due to overlapping care, hospitalists may need to negotiate other terms of payment with the facility to recoup unpaid time and effort when involved in this type of care.

When more than one medical condition exists and several physicians participate in the patient’s care, medical necessity is easily established for each physician. Each physician manages the condition related to his/her expertise. In the above example, the surgeon cares for the patient’s fracture, while the hospitalist oversees diabetes and hypertension management. Service distinction is crucial during the claim submission process. The hospitalist should report a subsequent hospital care code (99231-99233) with a primary diagnosis corresponding to his/her specialty-related care (i.e., 9923x with 250.00, 401.1).3

When more specialists are involved, claim submission becomes more complex. A cardiologist who was also involved in patient management would report his or her service using 401.1. When a different primary diagnosis is assigned to the visit code to indicate the reason for each physician’s involvement, all claims are more likely to be paid.4 As long as the hospitalist maintains care over one of the patients’ conditions, concurrent care is justified.

Because these physicians are in different specialties and different provider groups, most payers do not require the modifier 25 (separately identifiable evaluation/management [E/M] service on the same day as a procedure or other service) with the visit code; however, some managed care payers may have a general claim edit that pays the first claim and denies the second unless modifier 25 is appended to the concurrent E/M visit code (i.e., 99232-25) as an attestation that the service is distinct from any other provider’s service that day, despite claim submission under different tax identification numbers. This may not be identified until the claim is rejected or denied. If appropriate modifier use does not yield payment, appeal the denied concurrent care claims with supporting documentation from each physician visit, if possible. This demonstrates each physician’s contribution to care.

Carol Pohlig is a billing and coding expert with the University of Pennsylvania Medical Center, Philadelphia. She is also on the faculty of SHM’s inpatient coding course.

Code This Case

A hospitalist providing night coverage admits a patient with chest pain after midnight on Day 1. Later that same day, the cardiologist is consulted and manages the patient’s care. If the hospitalist’s role is to provide “night coverage,” can each physician see the patient for management on Day 2?

If the patient does not have any noncardiac issues, it would be difficult to justify the hospitalist service on Day 2, since the cardiologist is managing the same patient. Medicare and other payers advise against separate reporting in this case. Payers only consider reimbursement for concurrent services involving different aspects of patient care and reimburse separate services when billed with different diagnoses.4

Circumstances become even more difficult when a hospitalist sees the patient after midnight, and an internist sees the patient during the day. Medicare acknowledges that there are circumstances in which concurrent care may be billed by physicians of the same specialty.4

In this situation, if the nocturnist was called to manage a change in the patient’s condition, a separate service is warranted and should be reported. Since both physicians are enrolled with the payer as “internists,” it is unlikely that payers will reimburse each service; therefore, the first claim received is paid. If the hospitalist submits the first claim, the payer is likely to pay the hospitalist and deny the internist; however, the hospitalist claim may not always be first, and an appeal using both the internist’s and the hospitalist’s notes is suggested.

To maintain costs and avoid internal conflict, some hospitalist groups contract with the facility and receive a stipend for night coverage instead of submitting claims. It is best to seek legal advice before pursuing this option in order to prevent any inappropriate arrangements.

—Carol Pohlig

SHM Offers Training

Want to get better at documentation and coding? Check out iCATT, SHM’s new Interactive Coding Audit and Training Tool. iCATT is:

  • A self-directed training tool (on documentation and coding) for hospitalists;
  • A tool for testing the coding/documentation competency of new hospitalists; and
  • A training tool for coders who conduct coding/documentation audits of hospital medicine groups.

Physicians in Group Practice

According to Medicare, “physicians in the same group practice who are in the same specialty must bill and be paid as though they were a single physician. If more than one evaluation and management (face-to-face) service is provided on the same day to the same patient by the same physician, or more than one physician in the same specialty in the same group, only one E&M service may be reported unless the services are for unrelated problems. Instead of billing separately, the physicians should select a level of service representative of the combined visits and submit the appropriate code for that level.”5

For example, hospitalist A evaluates the patient in the morning and hospitalist B subsequently reviews test results and discusses the course of treatment with the family members who will be involved in the patient’s care upon returning home. The hospitalist group can submit only one subsequent hospital care service for the day; the selected visit level should represent the combined visits (e.g. 99233).

The hospitalists must determine which name to report on the claim, the physician who provided the initial encounter or the physician who provided the most extensive—or best documented—encounter.

Physicians who are in the same group practice and submit claims under the same tax identification number can still be paid if they are enrolled with the payers as different specialty providers. This requires accurately identifying the physician’s primary two-digit specialty code on the payer enrollment form. For example, a hospitalist is enrolled as an internist (code 11), and a cardiologist is enrolled using code 06.6

Physicians can declare two specialty codes on their enrollment forms, but the primary code is the most crucial for accurate claim submission.

—Carol Pohlig


  1. Centers for Medicare and Medicaid Services. Medicare Benefit Policy Manual: Chapter 15—Covered Medical and Other Health Services. Section 30.E. Available at: Accessed March 5, 2015.
  2. Centers for Medicare and Medicaid Services. Medicare Claims Processing Manual: Chapter 12—Physicians/Nonphysician Practitioners. Section 40.A. Available at: Accessed March 5, 2015.
  3. American Medical Association. Current Procedural Terminology 2015 Professional Edition. Chicago: American Medical Association Press; 2014.
  4. Centers for Medicare and Medicaid Services. Medicare Claims Processing Manual: Chapter 12—Physicians/Nonphysician Practitioners. Section 30.6.9.C. Available at: Accessed March 5, 2015.
  5. Centers for Medicare and Medicaid Services. Medicare Claims Processing Manual: Chapter 12—Physicians/Nonphysician Practitioners. Section 30.6.5. Available at: Accessed March 5, 2015.
  6. Centers for Medicare and Medicaid Services. Medicare Claims Processing Manual: Chapter 26—Completing and Processing Form CMS-1500 Data Set. Section 10.8.2. Available at: Accessed March 5, 2015.

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