Cardiology Coding Alert

Although coding for observation can be frustrating because of differing hospital, Medicare and private payer requirements, following some relatively simple guidelines should make the exercise less confusing and decrease the number of denials.

Observation Definition and Codes

According to CPT, when a patient is in observation status, the attending physician supervises the persons care and performs periodic reassessments. In other words, observation is a kind of halfway house for patients whose physicians are uncertain whether individuals should remain in hospital or be sent home. The purpose of observation is to hold the patient until the physician has enough information to determine whether admission is warranted. For example, a patient who arrives in the emergency room (ER) with ill-defined chest pain may be placed in observation by the cardiologist until the cause of the pain can be ascertained. A person also may require observation after a procedure or test if complications arise or a separate problem presents itself that the physician believes merits closer scrutiny.

CPT lists seven observation codes that are broken down into two categories:

1. for patients admitted to and discharged from observation on different calendar days, and

2. for patients admitted and discharged from observation or inpatient on the same calendar day.

For same-day observation or inpatient admittal and discharge, the following codes are used for both new and established patients and are determined by the appropriate level of service supported by documentation:

99234 (new or established patient admitted and discharged to observation status on same date of service requiring detailed history, detailed exam, and medical decision-making of straightforward or low complexity).

99235 (comprehensive history, comprehensive exam, and medical decision-making of moderate complexity).

99236 (comprehensive history, comprehensive exam, and medical decision-making of high complexity).

If, for example, a patient presents to the ER with chest pain and is admitted to observation in the morning and discharged late that night (during the same calendar day), cardiologist should use one of the above codes, depending on the level of service provided that is supported by the medical documentation.

For patients admitted to observation on one date of service and discharged on another, the following codes should be used by the admitting physician only:

99218 (new or established patient admitted to observation status on one date of service and discharged on a different date of service, per day, requiring a detailed history, detailed exam, and medical decision making of straightforward or low complexity).

99219 (comprehensive history, comprehensive exam, and medical decision making of moderate complexity).

99220 (comprehensive history, comprehensive exam, and medical decision making of high complexity).

99217 (observation care discharge day management). This is used to bill for a discharge from observation that takes place on a day other than the admission.

For example, a patient presents to the ER with chest pain. The cardiologist admits the patient for observation on May 31 and discharges from observation status on June 1. The encounter would be coded as follows:

99219 (initial observation care, per day)

99217 (observation care, discharge)

Note: The codes are used for both new and established patients and are determined per level of service by supporting medical documentation. If the patient is admitted as an inpatient to the hospital, the appropriate codes (99221-99223, (inpatient hospital visit) should be used.

The 99217-99220 series of observation codes are reimbursed much the same as initial hospital visit codes, according to the 1999 National Physician Fee Schedule Relative Value Guide. For example, 99219 (comprehensive history and exam, moderately complex medical decision-making) is assigned 3.35 relative value units (RVUs), while a similar level initial hospital visit (99222) gets 3.34 RVUs. However, subsequent hospital care (99231-99233) at similar levels receives far fewer RVUs (99232, 1.58 RVUs).

Although observations lasting more than 23 hours are both rare and difficult to justify, cardiologists should note that observations are measured by calendar day, not by 24-hour period. This means that a 20-hour observation could be billed over a two-day period and would reimburse at a significantly higher rate than a similar level hospital admit with one day of subsequent care.

Guideline No. 1: Policy Does Not
Determine Observation Coding

Although the physician alone determines whether a patient is admitted to the hospital or is in observation, many doctors, coders, hospitals and carriers operate under the misconception that the hospital is in charge, says Dari Bonner, CPC, CPC-H, CCS-P, president of Xact Coding and Reimbursement in Port St. Lucie, FL.

Individual hospitals follow their own guidelines and have their own reasons for categorizing patients as inpatient, outpatient or observation. Cardiologists should familiarize themselves with the hospitals policy because if the hospital bills for an inpatient while the cardiologist bills an observation, the claim may be returned and records may be requested.

Any observation bill returned by the carrier for this reason should be refiled, however, along with supporting documentation that indicates why the physician had the patient under observation because, ultimately, it is the physician, not the hospital, who is in charge of the patient, Bonner says. Coders need to let the hospital know that the physicianwho is in charge of the patientused an observation code, she says. Bonner does not recommend the doctors coding staff phone the hospital to ask how the institution coded the situation, so the office staff can follow the hospitals lead. Instead, the information should flow from the cardiologists office to the hospital billers for purposes of coding the patients visit.

Guideline No. 2: Dont Bill Observation Before a Procedure on the Same Day

When a patient arrives at the hospital with ill-defined chest pain, the cardiologist may want to put him or her in observation until the cause of the chest pain can be determined. If the cardiologist then schedules the patient for a procedure, such as a heart cath, the doctors claim for observation services may be denied because observation care is not understood to include such procedures.

To get reimbursed for both the evaluation and management (E/M) services and the heart cath, the patients status should be changed to inpatient once the physician knows a heart cath is required.

Note: No E/M, including observation, should be billed for patients receiving elective procedures, including cardiac catheterization. If the procedure is elective, the patients history and physical were already taken when the intervention was scheduled. Any minimal exam performed before the procedure already is included in the procedure itself, and billing for it would constitute double-dipping.

Guidline No. 3: Medical Necessity Required
for Observation Following Procedure

In theory, cardiologists mainly perform outpatient services, such as stress tests. But real life often can make a dramatic entrance and theory goes out the window. For example, a patient can collapse on a treadmill during a stress test, presenting the cardiologist with a clinical emergency and a coding conundrum: Should the patient be admitted under inpatient or observation status?

If the cardiologist knew in advance the patient would have to remain in the hospital for several days, he or she should simply admit the person instead of billing for inpatient observation. Similarly, if the patient is sent home four hours later, the physician should bill for an observation including proof of medical necessity.

In the case of the patient who collapsed on the treadmill, the observation claim likely will be denied without clear evidence of medical necessity. Now, one might think the collapse event itself should provide enough medical necessity for even the strictest carriers, but in this situation the physician must provide supporting documentation.

Communication by physicians to their own office staff regarding what was done in the hospital is abysmal 90 percent of the time, says Thomas Kent, CMM, principal of Kent Medical Management in Dunkirk, MD. Typically, the doctor brings in this wrinkled pink sheet of paper (a copy of the hospital note), and all that is on there is the admitting diagnosis, in this case, the reason for the treadmill. His or her office staff, and, by extension, the carrier, have no idea why the patient was put in observation.

What carriers, including Medicare, do know is that if a cardiologist performs routine follow-up after an outpatient procedure, such as a cardiac catheterization, they will not pay an observation charge because the simple follow-up is bundled to the procedure. Medicare may pay for an E/M service, such as observation, only if a complication or another problem presents itself while the patient is being observed following the procedure. In that case, modifier -25 (significant, separately identifiable E/M service on the same day as a procedure or service) should be attached to the appropriate observation code.

Modifier -57 (return to surgery) should be used if the patient must be sent to the operating room for a pacemaker insertion, defibrillator implant or valvuloplasty, together with supporting documentation.

In other words, medical necessity is the key to getting paid for any observation performed after a procedure, says Georgeann Edford, RN, MBA, a coding and reimbursement specialist in Birmingham, MI. She cites as an example a 70-year-old patient who has an ambulatory outpatient cardiac catheterization. The heart cath was completed without complications. But because the procedure began two hours late, the man has no one available to pick him up. The cardiologist does not want to send him home alone, so he puts the patient in observation overnight. Here, the physician cannot bill for the observation because it was done for patient convenience, not medical necessity.

If the same patient developed hypertension and required medication as well as monitoring, and the cardiologist wrote admit to observation, then released the patient the following morning, the observation should be billed because the patient had a documented problemthe hypertensionfollowing the original procedure, Edford says. But if the patient had responded promptly to the medication and thus didnt need to be admitted for observation, there again would be no medical necessity.

Note: If the new problem or complication is serious, the patient would likely be admitted to the hospital, in which case an initial hospital visit code would be used, not an observation code.

Guideline No. 4: Second Physician
Bills Outpatient Visit

When a patient is admitted to observation by one physician and another doctor sees the person the next day, the second physician would use the appropriate new or established outpatient codes (99201-99215).

For example, a patient presents to the ER with chest pain, and Dr. Jones admits the patient to observation status on May 30. On May 31, Dr. Smith, another physician in Dr. Jones practice who is covering for him, sees the patient. Dr. Jones returns on June 1 to discharge the patient.

This scenario would be coded as follows:

Dr. Jones, May 30, 99220 (initial observation care).

Dr. Smith, May 31, 99214 (subsequent outpatient visit, established patient).

Dr. Jones, June 1, 99217, (observation discharge).

The supporting medical documentation should note that the patient was admitted for observation only.