ED Coding and Reimbursement Alert

E/M Coding:

Rehash Hospital Coding Rules to Ensure Compliance

Published on Thu Feb 08, 2024

Do you know which hospital services share codes now?

In case you haven’t noticed, CPT^® has taken a red pen to its evaluation and management (E/M) section the past few years; in the process, it’s changed coding rules (and codes) for a good number of services.

Coders that report E/M services for hospital admissions, observation care, and same-day observation and discharges should have fully incorporated all the revisions that have been released this decade.

Now that it’s 2024, check out this advice to make sure you’re applying all of the guidelines correctly.

Know Definitions, Then Code Initial Service

At the end of 2022, CPT^® deleted the initial, subsequent, and discharge observation service codes (99218-99220, 99224-99226, and 99217 respectively), and rolled observation services into the new initial and subsequent inpatient care service codes.

The initial service codes are as follows:

99221 (Initial hospital inpatient or observation care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and straightforward or low level medical decision making. When using total time on the date of the encounter for code selection, 40 minutes must be met or exceeded)
99222 (Initial hospital inpatient or observation care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/ or examination and moderate level of medical decision making. When using total time on the date of the encounter for code selection, 55 minutes must be met or exceeded.)
99223 (Initial hospital inpatient or observation care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and high level of medical decision making. When using total time on the date of the encounter for code selection, 75 minutes must be met or exceeded.)

Before using one of these codes, you should take into account the following definitions:

Per day means the “total time on the date of the encounter … by calendar date” according to CPT^®. A visit spanning two calendar dates is “a single service and is reported on one calendar date,” even if the services are continuous services beginning on one calendar date and extending through midnight into the next. In the 2024 CPT^® guidelines, the AMA clarifies that “per day” means you should report a single code when a patient has multiple visits on the same calendar date and in the same setting. The guideline goes on to state, “When using MDM for code level selection, use the aggregated MDM over the course of the calendar date. When using time for code level selection, sum the time over the course of the day using the guidelines for reporting time.”

Observation means “ongoing short-term treatment, assessment, and reassessment, furnished while a decision is being made regarding whether a patient will require further treatment as a hospital inpatient or if they are able to be discharged from the observation care.” It generally does not exceed 24 hours, and “only in rare and exceptional cases do outpatient observation services span more than 48 hours” according to an observation care fact sheet from Medicare Administrative Contractor (MAC) Novitas Solutions (https://www.novitas-solutions.com/ webcenter/portal/MedicareJL/pagebyid?contentId=00159301).

Place of service (POS) “should identify the patient’s location,” according to the Novitas fact sheet. As the Centers for Medicare & Medicaid Services (CMS) regards observation services as outpatient services, this means typically using POS code 22 (On campus — outpatient hospital) for Medicare claims that are solely for outpatient services. If the observation services turn into an inpatient admission, you should use POS code 21 (Inpatient hospital). Some payers may give additional place of service (POS) direction.

Report Subsequent Services When You Can

Once a patient has “received any professional services from the physician or other qualified health care professional [QHP] or another physician or other qualified health care professional of the exact same specialty and subspecialty who belongs to the same group practice, during the inpatient, observation … admission and stay,” per CPT^® guidelines, you can assign one of the following codes for subsequent inpatient care per day:

99231 (Subsequent hospital inpatient or observation care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and straightforward or low level of medical decision making. When using total time on the date of the encounter for code selection, 25 minutes must be met or exceeded.)
99232 (Subsequent hospital inpatient or observation care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/ or examination and moderate level of medical decision making. When using total time on the date of the encounter for code selection, 35 minutes must be met or exceeded.)
99233 (Subsequent hospital inpatient or observation care, per day, for the evaluation and management of a patient, which requires a medically appropriate history and/or examination and high level of medical decision making. When using total time on the date of the encounter for code selection, 50 minutes must be met or exceeded.)

CPT^® also considers “advanced practice nurses [APNs] and physician assistants [PAs]” as “working in the exact same specialty and subspecialty” when they work together with a physician, the guidelines expound.

Do This on Same-Day Admission and Discharge

To report inpatient care services for a patient admitted then discharged on the same day, you know to use one of the following:

99234 (Hospital inpatient or observation care, for the evaluation and management of a patient including admission and discharge on the same date, which requires a medically appropriate history and/or examination and straightforward or low level of medical decision making. When using total time on the date of the encounter for code selection, 45 minutes must be met or exceeded.)
99235 (Hospital inpatient or observation care, for the evaluation and management of a patient including admission and discharge on the same date, which requires a medically appropriate history and/or examination and moderate level of medical decision making. When using total time on the date of the encounter for code selection, 70 minutes must be met or exceeded.)
99236 (Hospital inpatient or observation care, for the evaluation and management of a patient including admission and discharge on the same date, which requires a medically appropriate history and/or examination and high level of medical decision making. When using total time on the date of the encounter for code selection, 85 minutes must be met or exceeded.)

However, the trick to assigning one of these codes for Medicare, or those following Medicare rules, lies in documenting how long the patient stayed in the facility. “To bill 99234-99236, the stay for observation care or inpatient hospital care was greater than eight hours but less than 24 hours. If the observation is greater than 24 hours, then you would use 99221-99223 for the initial day of inpatient hospital care,” advises Jessica Miller, CPC, CPC-P, CGIC, manager of professional coding for Ciox Health in Alpharetta, Georgia. Keep in mind if the stay crosses midnight and is greater than eight hours you would report 99221-99223 for the first date of service and a discharge code for the discharge date of service.

Document and Report Discharges

You’ll document discharge services administered by your provider or QHP with one of the following time-based codes:

99238 (Hospital inpatient or observation discharge day management; 30 minutes or less on the date of the encounter)
99239 (… more than 30 minutes on the date of the encounter)

But you’ll need to make sure you follow these CPT^® guidelines before you do:

Document all patient services provided on discharge day, including the provider’s “final examination of the patient, discussion of the hospital stay, instructions for continuing care to all relevant caregivers, and preparation of discharge records, prescriptions, and referral forms.”

Do not report in conjunction with initial hospital inpatient or observation care service codes 99221, 99222, 99223. Instead, you’ll use 99234, 99235, or 99236 as appropriate for discharges on the same day as admission.

Report only those services provided by the physician or QHP responsible for discharge. If other providers render services on the date of discharge, they should report the appropriate code from the subsequent category.

Count Time Correctly With This Advice

Last, if you document any of these codes by time, remember this advice: “Time is often underreported for inpatient E/M services. Providers don’t always remember to document time that is spent on the unit/floor that is outside the face-to-face time with the patient and family,” notes JoAnne M. Wolf, RHIT, CPC, CEMC, coding manager at Children’s Health Network in Minneapolis.