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Outpatient Hospital Services
Revised: 09-14-2015
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Eligible Providers
Eligible Recipients
Covered Services
Noncovered Services
Billing
Definitions
Legal References
Hospital Services Home Page
Critical Access Hospital (CAH) Services
Inpatient Hospital Authorization
Inpatient Hospital Services
Hospital In-reach Service Coordination (IRSC)
Overview
Outpatient hospital services are provided in a facility qualified to participate in Medicare. Outpatient
hospital services must be medically necessary and provided by or under the supervision of a physician,
dentist, or other provider having medical staff privileges in the facility.
Eligible Providers
An eligible facility, meeting the definition of and licensed as a hospital or hospital clinic, qualified to
participate in Medicare, including a hospital that is part of the Federal Indian Health Service (IHS),
designated by the federal government to provide acute care.
Provider Type Home Page Links
Review related Web pages for the latest news and additions, forms, and quick links.
 Hospital
 Indian Health Service/Facility & Tribal Social Services
 Managed Care & Prepaid Health Plan
 Optician
Eligible Recipients
All MHCP recipients are eligible to receive outpatient hospital services.
Covered Services
Pay-for-Performance Program
Review information about the MHCP Pay-for-Performance Program.
Outpatient Hospital Clinic
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, due to the recipient's physical or mental disability, it is not in the
best interest of the recipient 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 recipient at one clinic site.
Observation Services
Outpatient observation services are covered when they are reasonable and necessary to treat or
diagnose a recipient, and are independent of other procedures. Observation services are covered for up
to 48 hours. MHCP will consider observation services for up to 72 hours for unusual circumstances when
submitted with additional documentation. See the Noncovered Services section for when outpatient
observation services are not covered.
Inpatient Hospital Services when Inpatient Authorization is Denied
When a recipient is admitted to a hospital as an inpatient and Inpatient Hospital Authorization (IHA) is
denied, or the recipient does not meet inpatient criteria, MHCP may cover services provided in the
hospital when billed as outpatient hospital services if the following apply:
 The recipient was in the hospital for less than 48 hours (total), up to 72 hours with documentation
 The stay was not billed as an inpatient stay
 The claim indicates admission hour and discharge hour (Code "99” -hour unknown) is not acceptable
If a recipient is admitted to the hospital as an inpatient from an outpatient department of the hospital (for
example, emergency department, ambulatory surgical center, observation status whether or not a bed is
used), charges from the outpatient services must be included in the inpatient hospital stay. According to
NUBC directives, the From Date is the date outpatient services began and the Admission Date is the date
the physician wrote the order for inpatient level of care.
Hydration, Infusion, Drug Injections and Chemotherapy Administration
Initial Codes: 96360, 96365, 96374, 96409, 96413
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. Refer to the following code information:
 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 recipient 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
Codes: 93798, 93799
Cardiac rehabilitation is described by the U.S. Public Health Service as consisting of "comprehensive,
long-term programs involving medical evaluation, prescribed exercise, cardiac risk factor modification,
education, and counseling."
Outpatient hospitals and physician directed clinics with a Medicare-approved cardiac rehabilitation
program may provide cardiac rehabilitation services to MHCP recipients.
A cardiac rehabilitation program is 36 sessions. Request authorization for additional sessions when more
than 36 sessions will be provided.
MHCP follows Medicare criteria for cardiac rehabilitation services, which includes the following:
 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:
 Angioplasty
 Congestive heart failure
 Heart or heart-lung transplant
 Heart valve replacement
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Cardiac rehabilitation services include a recovery program primarily consisting of monitored exercise
or exercise therapy with recipient 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. MHCP
follows CMS for services furnished in the hospital or CAH or in an on-campus outpatient department
of the hospital or CAH.
Prolonged Intravenous 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
Direct Admission to Observation Status
Hospitals may bill for recipients who are direct admissions to observation. G0379 is reportable once per
observation stay.
A direct admission occurs when a physician in the community refers the recipient to the hospital for
observation bypassing the clinic or ED dept.
Blood Transfusions
Blood transfusions require the actual number of units provided related to the specific product or
procedure.
Pulse Oximetry
Pulse oximetry is considered part of the ED, ASC, or outpatient specialty clinic.
Mental Health Partial Hospitalization
Mental health partial hospitalization is a covered service for adults and adolescents if the hospital has
received MHCP approval for its partial hospitalization program. Refer to Partial Hospitalization Program
for billing instructions.
Additional Services
Professional services (for example, anesthesiologist, physician) are covered in addition to outpatient
hospital services. Other services, such as lab, radiology, supplies, injectable drugs, etc., may also be
separately covered services when outpatient hospital services are provided. Refer to the specific service
sections of this manual for coverage and billing policy.
Noncovered Services
The following outpatient hospital services are not covered and are ineligible for payment:
 Services provided by an employee of the hospital, such as an intern or a resident
 Services lasting 24 hours or more, except for observation status
 Detoxification not medically necessary to treat an emergency
 Outpatient hospital services that immediately precede an inpatient hospital admission
 Patient convenience items revenue code 990-999
 Facility fees, ancillary charges and other procedure or service charges related to outpatient hospital
charges for noncovered services
 Hospital charges when related to outpatient hospital care for investigative services, plastic surgery or
cosmetic surgery, which are not covered unless determined medically necessary through the medical
review authorization process and services designated as noncovered in Statute or Rule. A physician
may donate his or her services to perform a noncovered service, but MHCP does not cover facility
fees, ancillary charges and other procedure or service charges related to performing the noncovered
services
Observation Services
Ambulatory Payment Classification (APC) facility service payments are paid according to the most recent
CMS APC system rates published in the Federal Register. The rates are listed in the column titled
“Payment Rate.”
Outpatient observation services are not covered when they are provided according to the following:
 In addition to a surgical procedure unless the observation is monitoring or treatment beyond the
community standard for the surgical procedure
 Immediately preceding inpatient admission, as those observation services are considered part of the
inpatient DRG
 For the convenience of the recipient, recipient’s family or provider
Billing
Refer to the following billing requirements:
 MHCP will deny an entire outpatient claim if one line of the claim is denied.
 Bill outpatient hospital claims using type of bill (TOB) 13X or 14X
 Bill outpatient authorized services on a separate claim from non-authorized services
 Bill covered and non-covered services on the same claim
 When more than one clinic visit (distinctly separate E/M service) is provided, bill with condition code
G0 on the same or separate claims
 Urgent care facilities must follow Medicare guidelines for the facility charge
Copay Policies
Copays apply to some services provided to MA recipients. Copay guidelines are listed in the Billing the
Recipient section, under Copays and Family Deductible.
The copay for a non-emergency visit to a hospital-based emergency department will be deducted from
the outpatient hospital facility claim. MHCP will use the type of admission in conjunction with the revenue
code to determine whether the visit was considered an emergency visit or a non-emergency visit. MHCP
will consider a type of admission equal to “1” in conjunction with revenue code 45X to be an emergency.
Direct Admission Billing Policy
MHCP uses Medicare criteria for billing direct admission observation care. Follow these requirements:
 Bill the facility component of observation services on the 837I (institutional format) using the revenue
code 762
 Report revenue code 762 with procedure codes G0379 and G0378 and the appropriate units of
service (one hour equals one unit). Round fractions of time less than 30 minutes down. Round
fractions of time greater than 30 minutes up
Observation Billing Policy
MHCP uses Medicare criteria for billing observation status care. Follow these requirements:
 Bill the facility component of observation services in the 837I (institutional format) using the revenue
code 762 and the appropriate procedure code
 Bill observation services separately from surgical services
 When observation services continue from one day to the next (over midnight), bill the beginning
observation service date
 When observation services are provided on two consecutive days, interrupted by a discharge, bill two
distinct line items, each reflecting the specific service dates
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If the recipient’s coverage changes, from FFS to PMAP or PMAP to FFS you must split bill the
services and bill the appropriate payer
When observation services are provided on two consecutive days but separate months, bill the
beginning observation service date
For observation, one hour equals one unit. Round fractions of time less than 30 minutes down. Round
fractions of time greater than 30 minutes up
Bill fetal monitoring using revenue code 762 and the appropriate procedure code
Unusual Circumstances Observation
Bill the unusual observation service with modifier "22," and include an explanation of the unusual
circumstances.
Blood Transfusions
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 part of the Ambulatory Payment Classification (APC) payment. Pulse oximetry can be
separately billed only when an E/M visit is the only other service provided.
Mental Health Partial Hospitalization
Bill mental health partial hospitalization using one of the following HCPCS codes:
 H0035 –adult
 H0035 with modifier HA –adolescent
One unit equals one hour.
Definitions
Refer to Definitions section of Hospital Services home page.
Legal References
Minnesota Statutes 144.50 (Hospital, Licenses; Definitions)
Minnesota Statutes 256B.0625, subd.4 (Outpatient and Physician-directed clinic services)
Minnesota Statutes 256B.32 (Facility Fee Payment)
Minnesota Statutes 256.969; 256.9695
42 CFR 410.27 – (Outpatient hospital or CAH services and supplies incident to a physician or
nonphysician practitioner service: Conditions)
42 CFR 410.49 (b)(3)(ii) – (Cardiac rehabilitation program and intensive cardiac rehabilitation program)
42 CFR 440.20 - (Outpatient hospital services and rural health clinic services)