Provider Alert! Notification of Observation/Treatment Room and E&M Services Reimbursement Policy

Date: February 29, 2024

Attention: Hospital facilities

Effective Date: May 27, 2024

Call to action: The purpose of this communication is to make hospital facilities aware of a new reimbursement policy for Texas Children’s Health Plan (TCHP), which outlines the billing restrictions for observation and treatment room revenue codes billed with evaluation and management (E&M) services.  This policy applies to hospitals billing outpatient services, and applies to CHIP and Medicaid lines of business.

How this impacts providers: Policy guidelines are as follows:
Observation and treatment room services (revenue codes 760, 761, 762, 769) must be billed with the appropriate observation related procedure code when billed on an outpatient hospital claim.

• Procedure code G0378 should be used for observations services when admitted to observation level of are after an ER, clinic, or critical care visit.
• Procedure code G0379 should be used when a patient is directly admitted to observation level of care without an associated ER, clinic, or critical care visit. 
• Observation care should not be reported if monitoring/reimbursement is included in the diagnostic, therapeutic, or surgical procedure.

Outpatient hospital claims billed with an outpatient type of bill (13X) that include revenue code 760, 761, 762, or 769, will deny with the denial codes (CARC and RARC) when billed with one of the Texas Medicaid payable evaluation and management (E&M) CPT codes shown in the table below.

• CARC: 199 – Revenue code and Procedure code do not match
• RARC: N431 – Not covered with this procedure

E&M Procedure Codes
99202	99203	99204	99205	99211	99212	99213	99214	99215	99221
99222	99223	99231	99232	99233	99234	99235	99236	99238	99239
99242	99243	99244	99245	99252	99253	99254	99255	99281	99282
99283	99284	99285	99291	99304	99305	99306	99307	99308	99309
99310	99315	99316	99341	99342	99344	99345	99347	99348	99349
99350	99358	99359	99366	99367	99374	99375	99377	99378	99379
99380	99381	99382	99383	99384	99385	99386	99387	99391	99392
99393	99394	99395	99396	99397	99417	99418	99460	99461	99463
99464	99465	99468	99469	99471	99472	99473	99474	99475	99476
99477	99478	99479	99480	99492	99493	99494	99499

Next step for Providers: Hospitals should follow the guidance as outlined in the policy and share this communication with their staff.

Resources:

Texas Medicaid Provider Procedure Manual: Inpatient and Outpatient Hospital Services Handbook
https://www.tmhp.com/sites/default/files/file-library/resources/provider-manuals/tmppm/pdf-chapters/2024/2024-02-february/2_11_inpatient_outpatient_hosp_srvs.pdf

Texas Medicaid Provider Procedure Manual: Medical and Nursing Specialists, Physicians, and Physician Assistants Handbook
https://www.tmhp.com/sites/default/files/file-library/resources/provider-manuals/tmppm/pdf-chapters/2024/2024-02-february/2_13_med_specs_and_phys_srvs.pdf

Texas Medicaid Provider Procedure Manual: Children’s Services Handbook
https://www.tmhp.com/sites/default/files/file-library/resources/provider-manuals/tmppm/pdf-chapters/2024/2024-02-february/2_04_childrens_services.pdf

If you have any questions, please email Provider Relations at: providerrelations@texaschildrens.org.

For access to all provider alerts,log into:
www.thecheckup.org or www.texaschildrenshealthplan.org/for-providers.