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Alberta Health Z-Code Billing Rate Changes: "Out-of-office" codes - Statgo

Written by Kieran Ryan | Apr 17, 2024 12:41:21 AM

UPDATE: This post was original published in October 2020. On December 2, 2021 Alberta Health announced implementation of lower value z-codes would be further delayed until October 1, 2022 (MED 251). The implementation of z-codes has now been delayed several times since this post was written. This post has been updated to reflect the latest announcements.  

Earlier this year, the Alberta Government announced that new lower billing code rates would be implemented for physicians providing services in publicly funded facilities. Some of the rate reductions were substantial – up to 50% less for the same work. These “z-codes,” for services provided in “out-of-office locations, were implemented on March 31, 2020 and physicians currently need to bill them where appropriate. But the government did not yet implement the rate changes which were delayed until October 1, 2020. These changes were delayed again, until January 1, 2021. As of December 22, 2020, the changes have been delayed a 3rd time with implementation currently scheduled for April 1, 2021. The most current AHCIP bulletin MED 238 can be found here.

We understand these iterative changes are difficult to keep track of, so in this post, we’ll breakdown these changes and implementation. Although many physicians now have to bill z-codes, the impact of rate changes coming will differ based on specialty, and some specialties won’t have any reductions at all. We’ll review what the z-code rates are, which physicians will be impacted, and how much the rates will be lowered.

Background

In March 2020, Alberta Health issued a bulletin that would change the rates for new Facility Based Health Service Codes for certain services provided in publicly funded facilities or “out-of-office” locations (MED223).  The use of z-codes was implemented, but the new fee code rates, to be effective March 31, 2020, were delayed until October 1, 2020 (MED227-Amended). During this time, physicians were still required to use the newly created out-of-office (z-codes) but the out-of-office rate would stay equals to the in-office rate for all physicians. On October 1, 2020 Alberta Health has again issued a delay in the implementation of the new rates (MED236).

Why were z-codes created?

The rationale that the Alberta Government presented is the following:

“Fees paid to physicians include both funding for the cost of their services and funding for overhead such as equipment, supplies, leases and technical staff – essentially the overhead costs a doctor has in their own practice. We know this is an important cost – that is why we pay for it through the fees. We want to ensure physicians are not billing overhead costs for work they deliver in an AHS facility – because those overhead costs are already provided by the public health facility.“

What are considered publicly funded facilities (out-of-office)?

Publicly funded facilities include:

Active Treatment Centres (ACT) (e.g. hospitals)

Ambulatory Care Centres (AMCC)

Community Ambulatory Care Centres (CACC) including: ‒ Urgent Care Centres (UCC); and Advanced Ambulatory Care Centres (AACC)

Auxiliary Hospitals (AUX)

Health Canada Nursing Stations (HCNS)

Community Mental Health Clinics (MLHL)

Nursing Homes (NH)

Regional Contracted Practitioner Offices (RCPO)

Subacute Auxiliary Hospitals (SUBA)

The new rates for out-of office facilities do not include compensation for facility costs such as rent, utilities, equipment, supplies, staff wages etc.

What are considered self-funded facilities (in-office)?

Self-funded facilities include:

Community clinics

Registered rented offices in an AHS facility

The rates for out-of-office facilities does include compensation for facility costs such as rent, utilities, equipment, supplies, staff wages etc.

Which Physicians are impacted?

All physicians need to be aware of the z-codes as it impacts how they bill. But even if you bill z-codes, you may not experience any rate changes.

Here’s a list of physicians who will be impacted:

Physicians who work exclusively in the hospital but their current rates in the SOMB are based on a community clinic setting. As such, they receive compensation including facility costs (e.g. hospital-based paediatricians).

Physicians who split their time between community and hospital currently receive the (higher) community rates for services performed in hospital (e.g. ophthalmologists).

Here’s a list of physicians who will not be impacted:

Physicians who work exclusively in the community will not experience any changes as they will continue submitting claims using the in-office HSCs.

Physicians who are part of a hospital-based specialty will not experience any changes to their rates (e.g. infectious disease specialists, anesthesiologists, emergency medicine specialists etc.). However, they will still be required to submit claims using the new HSCs.

Physicians with registered offices in AHS facilities will continue billing “in-office” codes.

Physicians who pay rent to AHS may register their office as a community office with a discrete facility ID. By registering their office, they will not be impacted by this change and will be able to bill the “in-office” fee codes.

Family physicians in rural areas often split their time between a community clinic and a hospital emergency room. Recognizing this situation, the rates for more commonly billed limited visit (03.03A) and comprehensive visit (03.04A) services are matched with the current rates for these services (rotational duty rates) paid to physicians who work in other emergency rooms (Urgent Care Centres) on regular basis.

Rural physicians will be able to use billing codes that have overhead included and they will be exempted from any future changes to the policy.

What codes are impacted?

Below is a list of all z-codes and their corresponding “in-office” codes.

In-Office Codes (for services performed in self-funded facilities e.g. community clinics, registered rented offices in an AHS facility) Out-of-office Codes (for services performed in publicly funded facilities e.g. hospitals)
03.03A 03.03AZ
03.03B 03.03BZ
03.03F 03.03FZ
03.04A 03.04AZ
03.05I 03.05IZ
03.07A 03.07AZ
03.08A 03.08AZ
03.08B 03.08BZ
03.08I 03.08IZ
03.08J 03.08JZ
08.19A 08.19AZ
08.19G 08.19GZ
08.19GA 08.19GZ
08.45 08.45Z

What is the impact to compensation?

Facility based HSCs are changing for publicly funded facilities. Physicians will receive lower compensation for overhead when a service is provided in a registered publicly funded facility. These new codes will likely be of lower value. For example, code 03.03A ($25.09) will be replaced by new lower value code 03.03AZ ($18.50).

Physician have been required to use the new “z-codes” for services provided in a publicly funded facility since March 31, 2020. But these “z-codes” still pay at the higher in-office rate for all physicians until implementation of the lower rates on January 1, 2021. Below is a table of new out-of-office HSCs and the corresponding in-office HSCs. Relevant bulletins: MED 215, MED 223, MED 227.

Examples of Impacted Physicians

Physician Type In-Office Codes (for services performed in self-funded facilities e.g. community clinics, registered rented offices in an AHS facility) Out-of-office Codes (for services performed in publicly funded facilities e.g. hospitals) In-Office Rate Out of Office Rate Difference % Difference
Pediatrics 03.08A 03.08AZ 200.4 140.28 60.12 -30..0%
08.45 08.45Z 170.34 144.79 25.55 -15.0%
03.03F 03.03FZ 100.2 70.14 30.6 -30.0%
Internal Medicine 03.03A 03.03AZ 55.64 42.84 12.8 -23.0%
03.07A 03.07AZ 111.27 85.68 25.89 -23.0%
03.03F 03.03FZ 63.58 48.96 14.62 -23.0%
Plastic Surgery 03.08A 03.08AZ 103.65 71.52 32.13 -31.0%
03.07A 03.07AZ 51.82 35.76 16.06 -31.0%
03.03A 03.03AZ 62.19 42.91 19.28 -31.0%
General Practitioner 03.08A 03.08AZ 124.25 90.7 33.55 -27.0%
08.04A 03.04AZ 104.6 90.21 14.39 -13.8%
08.45 08.45Z 152.14 111.06 41.08 -27.0%
Psychiatry 03.03A 03.03AZ 39.71 30.97 8.74 -22.0%
08.19GA 08.19GA 55.92 44.01 11.91 -21.3%
08.45 08.45Z 209.16 163.14 46.02 -22.0%
Radiology 03.03A 03.03AZ 37 18.5 18.5 -50.0%
03.04A 03.04AZ 66.28 33 33.28 -50.2%
Cardiology 03.03A 03.03AZ 54.13 37.35 16.78 -31.0%
03.03F 03.03FZ 103.25 71.24 32.01 -31.0%
03.08A 03.08AZ 175 120.75 54.25 -31.0%
General Surgery 03.08A 03.08AZ 153.19 124.08 29.11 -19.0%
03.07A 03.07AZ 63.39 51.35 12.04 -19.0%
03.04A 03.04AZ 63.39 51.35 12.04 -19.0%
Obstectrics 03.03A 03.03AZ 37.02 29.25 7.77 -21.0%
03.08A 03.08AZ 92.55 73.11 19.44 -21.0%
03.07A 03.07AZ 61.7 48.74 12.96 -21.0%
Orthopaedics 03.08A 03.08AZ 109.88 89 20.88 -19.0%
03.07A 03.07AZ 67.39 54.59 12.8 -19.0%
03.03A 03.03AZ 31.95 25.88 6.07 -19.0%

Examples of Non-impacted Physicians

Physician Type In-Office Codes (for services performed in self-funded facilities e.g. community clinics, registered rented offices in an AHS facility) Out-of-office Codes (for services performed in publicly funded facilities e.g. hospitals) In-Office Rate Out of Office Rate Difference % Difference
Anesthesiologist 03.08A 03.08AZ 115.00 115.00 0.00 0.0%
03.07A 03.07AZ 54.48 54.48 0.00 0.0%
03.04A 03.04AZ 60.00 60.00 0.00 0.0%
Emergency 03.08A 03.08AZ 122.55 122.55 0.00 0.0%
03.07A 03.07AZ 60.04 60.04 0.00 0.0%
03.04A 03.04AZ 53.92 53.92 0.00 0.0%
Infectious Diseases 03.08A 03.08AZ 199.97 199.97 0.00 0.0%
03.08I 03.07AZ 49.99 49.99 0.00 0.0%
03.03F 03.03FZ 59.99 59.99 0.00 0.0%

Summary

The introduction on new z-codes will have significant compensation impacts on some physicians. That said, the Alberta Government has now delayed implementation of these new rates twice and the may yet alter their implementation again. We’ll continue to monitor the updates and keep you posted. As always, if you have any questions or comments, please let us know. We’re always happy to hear from you.