Notification of Hospital Emergency Room (ER) Reimbursement Policy

Date: June 3, 2024

Attention: All Providers

Effective Date: September 1, 2024

Call to action: The purpose of this communication is to make providers aware of a new reimbursement policy for Texas Children’s Health Plan (TCHP), which outlines and standardizes reimbursement for emergency room (ER) services.

This policy is for general acute care hospitals that do not have emergency room services defined in their contract. This applies to CHIP and Medicaid lines of business.

How this impacts providers: Policy guidelines are as follows:

ER services (upper level and lower level) provided in a hospital emergency room setting must be billed with revenue code 45X and the following procedure codes:

Lower level ER services are defined as procedure codes 99281, 99282, and 99283.
Upper level ER services are defined as procedure codes 99284 and 99285.

For Non-Rural Hospitals, ER services will be reimbursed as follows:

Lower level ER services (revenue code 45X with procedure codes 99281 – 99283) will be reimbursed at 125% of the adult rate for procedure code 99202, which is a flat rate of $51.36. If the facility has a contract rate above 100%, the contract rate will be applied to the flat rate.
Upper level ER services will be reimbursed at 100% of the hospital’s outpatient ratio of cost to charge (OP RCC) minus the high volume/non-high volume discount or 100% of the facilities’ contracted outpatient percentage. If the facility has a contract rate above 100%, the contract rate will be applied to the final outpatient percentage.
NOTE: The high volume/non-high volume discounts used to calculate the upper lever ER rate are found in the Texas Medicaid Provider Procedure Manual, Outpatient and Inpatient Hospital Services Handbook, Section 4.5.2 Outpatient Reimbursement.

For Rural Hospitals, ER services will be reimbursed as follows:

Lower level ER services (revenue code 45X with procedure codes 99281 – 99283) will be reimbursed at 55% of the facilities’ outpatient ratio of cost to charge (OP RCC) or outpatient percentage (contracted OP percentage rate). If the facility has a contract rate above 100%, the contract rate will be applied to the final outpatient percentage.
Upper level ER services will be reimbursed at 100% of the hospital’s outpatient ratio of cost to charge (OP RCC) or 100% of the facilities’ contracted outpatient percentage. If the facility has a contract rate above 100%, the contract rate will be applied to the final outpatient percentage.
NOTE: Rural hospital state mandated high volume/non-high volume discount is currently 100%. If this rate changes, the discount/reduction will be applied to the upper level ER rate.

For Hospitals eligible for DPP (Directed Payment Programs) CHIRP (Comprehensive Hospital Increase Reimbursement Program) Enhancement, CHIRP is applied as follows:

DPP-CHIRP will only be applied to STAR and STAR+PLUS lines of business; it does not apply to CHIP or STAR Kids.
For lower level ER services (99281 – 99283), the rate increase only applies for rural hospitals; this increase will not be reimbursed for all other CHIRP participating facilities for non-emergent services.
For upper level ER services (99284 – 99285), the rate increase will be applied for all CHIRP participating facilities.

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

References:

Texas Medicaid Provider Procedure Manual: Inpatient and Outpatient Hospital Services Handbook

TMHP Bulletin: Non-emergent Emergency Room Visits for Rural Hospitals Pricing Percentage Rate Reduced, Effective September 1, 2021

Texas Administrative Code: RULE §355.8061 Outpatient Hospital Reimbursement

Texas Administrative Code: RULE §355.8066 State Payment Cap and Hospital-Specific Limit Methodology

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