Coding Corner: Sweat the Small Stuff to Win Observation Payment

Documentation lapses lead to lost reimbursement

Failure to report observation services, or failure to report them correctly, is one of the most common ways hospitals lose money for outpatient services - don't let your facility jump on this money-losing bandwagon.
The easiest way to shortchange yourself out of observation reimbursement is to make a mistake reporting the hours of service or report a diagnosis code that    doesn't warrant observation status.

Here's the skinny on how to avoid these time-related roadblocks:
Accurately Report Time Spent
The patient's stay in observation must span a minimum of eight hours and the physician must record this time in the clinical record, says Caral Edelberg, CPC, CCS-P, president of Medical Management Resources, who presented on facility ED  coding at the American Academy of Professional Coders 12th Annual Conference.
The time observation services begin is when the physician admits the patient to observation status. The services end at the time the physician discharges the patient to anywhere other than an inpatient floor. If the doctor   doesn't document the number of hours, "the clock ends when the provider signs off on the discharge order," so use that time to determine the hours of observation, Edelberg says.
If you need to report an observation stay that lasted less than eight hours, you'll use one of these codes, depending on the payer's requirements:

  99218 or 99234 - Initial observation care, per day, or   observation or inpatient hos-  pital care, for the evaluation   and management of a patient including admission and discharge on the same date,  which requires these three key components: a detailed  or comprehensive history, a detailed or comprehensive examination, and medical  decision-making that is straightforward or of low complexity
  99219 or 99235 - ... a  comprehensive history, a comprehensive examination, and medical decision-making of moderate complexity
  99220 or 99236 - ... a comprehensive history, a comprehensive examination, and medical decision-making of high complexity.

Make Sure Diagnoses Make the Grade
The only conditions that earn  separate observation payment are chest pain, asthma, and congestive heart failure. But if the patient has one of these conditions without an approved diagnosis documented, you will not receive separate reimbursement.
Check the Nov. 30, 2001, edition of the Federal Register for a list of approved diagnoses for G0244 (Observation care provided by a facility to a patient with congestive heart failure, chest pain, or asthma, minimum eight hours, maximum 48 hours), and the corrections in the March 1, 2002, edition. You must have one of these documented as the patient's admitting diagnosis, principal diagnosis, or one of the secondary diagnoses, Edelberg says.

Admit Directly With G0263
Admitting a patient directly to observation, as opposed to giving the patient an initial emergency department evaluation, follows slightly different rules, but if you're [...]

- Published on 2004-11-22