ED Coding and Reimbursement Alert

When a patient presents to the emergency department (ED) with chest pain, the pain could be a cardiac problem or just indigestion. The physician needs to order specific diagnostic tests, interpret the results and observe the patients condition over time to make the proper diagnosis. Comprehensive documentation will avoid denials of reimbursement for such observation care.

Most EDs hold patients in observation from time to time, and some departments even have specialized units dedicated to observation services (observation units, chest pain centers, critical decision units, etc.).

Because treating a patient in observation involves more physician work and time than a regular evaluation and management (E/M) visit, CPT has specific codes for these services (99218-99220, initial observation care, new or established patient; and 99234-99236, observation or inpatient hospital care [including admission and discharge services]). These codes have higher relative value units (RVUs) than the regular emergency visit E/M codes (99281-99285).

Many ED groups have had problems getting appropriate reimbursement for observation care. Last year, we started noticing that we were not getting paid for these codes, notes Tracy Bondi, CPC, coordinator of physician education and auditing for MedAmerica Billing Services in Modesto, Calif. MedAmerica Inc., an emergency medicine group with affiliates nationwide, has approximately 600 emergency physicians and physician assistants in California. One of our groups was asked by the partnership to be a test site to see if, when they beefed up the documentation requirements to bill for it, they could get reimbursed for observation.

Almost a year later, the group has been seeing appropriate reimbursement from Medicare and private payers for observation services. The group found that specific documentation and billing practices need to be followed to make sure the payers can tell that the service provided was observation as opposed to a regular ED visit, Bondi says.

CPT Requirements for Using Observation Codes

The specific observation code assigned for the visit varies, depending on the level of history, examination and medical decision-making provided and documented by the physician, just like a regular E/M visit code, says Jan Loomis, CPC, director of coding and documentation for TeamHealth West Inc., an emergency physician staffing company in Pleasanton, Calif.

The codes have the same specific documentation criteria for the detail of exam required, type of medical decision-making, etc., she notes. For example, code 99218 is for initial observation care, per day, for the evaluation and management of a patient which requires a detailed or comprehensive history, a detailed or comprehensive examination and medical decision-making that is straightforward or of low complexity.

According to CPT, observation codes should be used to report encounter(s) by the supervising physician with the patient when designated as observation status. CPT stipulates that observation care includes the initiation of observation status, supervision of the care plan for observation and performance of periodic reassessments.

Although CPT is not specific about what constitutes observation status, most hospitals should have a protocol that specifies which patients can be placed in observation, how observation status is initiated and the procedures that physicians and staff should follow, says Loomis. Payers, if they have a question about reimbursement for observation codes, will want to see documentation that this protocol has been followed. And they most likely will want enough documentation to make it clear that this service was observation care as opposed to a regular ED visit that simply took a long time, she says.

Using Additional Supporting Documentation

Documentation of the patient encounter should indicate clearly when the initial ED evaluation stopped and the observation care began, say Loomis and Bondi. Many physicians have a separate observation record.

The observation record should indicate when the patient was admitted to observation status, some rationale for the observation (i.e., patient is admitted to observation due to suspicion of gallstones), the physicians orders for the specific nursing care, diagnostic tests, etc., to be performed while the patient is in observation and notes of the periodic reassessments.

The most important thing is having a formal admit to observation note, Loomis says. Whether it is in the body of the ED chart or is a separate progress note doesnt matter. But it must be really explicit and indicate that the initial ED visit has ended, and the patient is formally admitted to observation status.

For example, for a patient with chest pain, the physician would document: Patient admitted to observation status for evaluation of chest pain at 3 p.m. The documentation should go on to state the specific tests ordered (EKG, heart enzymes, etc.) and the criteria for continued observation or discharge.

Bondi says MedAmerica has developed an even more specific documentation standard. The physicians have to state that the patient is being admitted to the observation area or to observation services, she explains. Their area is called the critical decision unit or CDU. We have even found that when an audit is performed, if the physician writes admit to CDU, and the paper claim is looked at, it gets denied. They need to say, admit to observation status. They also are required to write orders to admit to the areathere are particular orders to be followed by the nursing staff while the patient is in observation. Then, they must have the progress notes documenting the care of the patient while in observation and the ultimate result of the carewhich should either be an admit to the hospital or discharge from observation. Finally, we need the discharge date and time, and a little blurb about why the patient was discharged from observation.

Although this amount of documentation is not required by CPT or Health Care Financing Administration (HCFA) and may not always be necessary, Loomis says that every bit of documentation can help support assignment of the observation codes. Part of it is just being able to defend why you used the code. If it is not specifically stated, it is not as easy to defend, and the carrier may not understand, she says. The more you make the distinction, the less likely you are to get cutbacks and denials.

Tip: Some EDs use an observation checklist that allows coders to ensure that the documentation supports the assignment of an observation code. The checklist also can be used to educate physicians about appropriate documentation of this service. See insert for an example.

Assignment of Correct Level of Codes

Codes 99234-99236 should be used if the patient is admitted and discharged from observation status on the same calendar day. Codes 99218-99220 should be used if the patient is in observation for more than one calendar day. If codes 99218-99220 are used, code 99217 (observation care discharge day management) should be used to bill for the discharge.

The history and physical used to determine the level of observation code assigned can take place either during the observation service or the initial ED visit, Loomis notes. But CPT rules do not permit the assignment of a regular E/M code and an observation code on the same day of service.

According to CPT, When observation status is initiated in the course of an encounter in another site of service (e.g., hospital emergency department, physicians office, nursing facility) all evaluation and management services provided by the supervising physician in conjunction with initiating observation status are considered part of the initial observation care when performed on the same date.

Site of Service Can Affect Payment

Some payers reject observation codes if the claim indicates the emergency department as the site of service, says Bondi, even though CPT states that it is not necessary that the patient be located in an designated observation area for the codes to be used. Occasionally, we still have a problem if we indicate the ER as the place of service, she says. We try to make sure that we use the hospital place of service or another place of service indicator (unit or clinic) to make it clear we are billing from the observation unit.

EDs should not be penalized if the observation care is not provided in a separately designated place of service, says Loomis, because it is permissible to place a patient in observation in the ED. The patient can remain in the ED, she says. Where the bed is should not be an issue, but most EDs do have a separate area. They do have to have a designated bed, you cant just leave them in the main part of the ER. But the bed or room can still be in the ER.

Loomis recommends negotiating with the payer if this is a problem.