Ambulatory Coding & Payment Report
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READER QUESTIONS: Observe Medicare's Simplified Observation Rules



Question: A patient with  claudication presented to the ED. A cardiologist admitted her to observation in the morning and discharged her late that night (during the same calendar day). Should I use an observation code to report the service?


Wisconsin Subscriber


Answer: You should report G0378 (Hospital observation service, per hour) or one of the 99234-99236 codes (Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date ...), depending on the payer and/or the level of service that the medical documentation supports.

Reason: If a physician in your facility treats a Medicare patient, you should choose your professional fee observation code by focusing on two factors: the date of your claim and the patient’s length of stay. In the facility setting, you need only report G0378 and the number of hours the patient spent in observation under revenue code 0762 (Observation room).

In a nutshell: Physician and non-Medicare facility reporting of observation is a bit more complicated than it is for Medicare facility observation services. CMS greatly simplified the observation reporting rules for hospitals in 2006, which is good news, since proper reporting has always been a struggle.

Report ICD-9 code 440.21 (Atherosclerosis of native arteries of extremities, with intermittent claudication) for the diagnosis of claudication.



- Published on 2006-04-17
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