BREAKING NEWS: Horizon Alert on Observation Status

This week, MSNJ met with representatives from Horizon to discuss a coding and payment issue that arises when patients who have been admitted through the emergency room are placed on observation status. At issue is whether the point of service (POS) should be 23 (ED-hospital) or 22 (outpatient hospital). This is important because it bears on whether preauthorization is necessary for services rendered and whether payment will be made. Many of our members believe that the POS should be 22, but Horizon believes that when the patient emanates from the emergency room that services rendered during observation status should be coded with a POS 23. Our members are concerned that this is incorrect coding and that they may be vulnerable to allegations of fraud or future overpayment recoupments. MSNJ fully appreciates these concerns and wants to ensure that correct coding is used.

Horizon has agreed to further investigate the coding issue. MSNJ will also independently review the issue. In the meantime, members should read Horizon’s alert on this issue.  It confirms that Horizon will pay for these services without preauthorization when coded POS 23.

About MSNJ

Founded in 1766, the Medical Society of New Jersey is the oldest professional society in the United States. The organization and its dues-paying members are dedicated to a healthy New Jersey, working to ensure the sanctity of the physician–patient relationship. In representing all medical disciplines, MSNJ advocates for the rights of patients and physicians alike, for the delivery of the highest quality medical care. This allows response to the patients’ individual, varied needs, in an ethical and compassionate environment, in order to create a healthy Garden State and healthy citizens.

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