# Observation vs Outpatient codes



## msnbabs001

I am reviewing a providers coding and noticed he is billing 99212 for subsequent observation.  My initial thought is that this is not correct and he should be billing subsequent observation codes.  After some review I have read 2 different answers.  
1.  One post has - If the provider admitted the patient to observation it said you can bill the initial, subsequent and discharge observation codes and all other providers would bill either consult or Outpatient service codes. 
      a.  I am not sure if these Outpatient service codes would only be 99201-99205, 99211-99215 or would  they also include the subsequent observation codes.
2.  Another post said you would bill initial observation with AI modifier, subsequent and discharge, just like inpatient.  I don't believe AI modifier applies to observation.


I appreciate any guidance or direction you can give me.

Thank you.


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## thomas7331

CMS guidelines are that only the provider who admits the patient to the observation services should bill the observation codes - any other providers that evaluate the patient should bill the appropriate office or other outpatient codes.  The AI modifier is intended for use with inpatient codes in order to distinguish the services of the attending physician from those of the consulting physicians because in the that setting both will use the inpatient care codes.  

Here is the MLN Matters article that details this, with examples:

https://www.cms.gov/Outreach-and-Ed...k-MLN/MLNMattersArticles/downloads/mm6740.pdf


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## msnbabs001

Thank you for the information.


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## msnbabs001

I thought I would put the guidance I found for anyone else that is looking for this answer:

The following is the guidance from Medicare: 
A/B MACs (B) pay for initial observation care billed by only the physician who ordered hospital outpatient observation services and was responsible for the patient during his/her observation care.  
Payment for an initial observation care code is for all the care rendered by the ordering physician on the date the patient’s observation services began. All other physicians who furnish consultations or additional evaluations or services while the patient is receiving hospital outpatient observation services must bill the appropriate outpatient service codes.
For example, if an internist orders observation services and asks another physician to additionally evaluate the patient, only the internist may bill the initial and subsequent observation care codes. The other physician who evaluates the patient must bill the new or established office or other outpatient visit codes as appropriate.
Similar to initial observation codes, payment for a subsequent observation care code is for all the care rendered by the treating physician on the day(s) other than the initial or discharge date. All other physicians who furnish consultations or additional evaluations or services while the patient is receiving hospital outpatient observation services must bill the appropriate outpatient service codes.

This appears to also be a payor specific rule:   
United Healthcare Oxford guidance is as follows:
Initial Observation Care -The physician supervising the care of the patient designated as "observation status" is the only physician who can report an initial Observation Care CPT code (99218-99220).
Subsequent Observation Care - In the instance that a patient is held in observation status for more than two calendar dates, the supervising physician should utilize a subsequent observation care CPT code (99224-99226). Physicians other than the supervising physician providing care to a patient designated as "observation status" should report subsequent observation care.

I reached out to NAMAS and the following was their reply:
In the Outpatient Setting:
In some settings, like Observation, Medicare says only the admitting specialty can bill the (observation) codes (99217-99220, 99224-99226), all others are to bill for the appropriate outpatient (99201-99215) codes. This is the same thing that CPT states. Some payors say that the different specialties can bill the same ED, or Obs codes. 

There is no absolute for crossing the codes, it depends on the insurance and the policies they follow. Medicare is one of the most thorough explaining the different situations, but I've also seen the same payor (like BCBS) have different policies for different states.

I hope this helps others.
Barb


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