ED Coding and Reimbursement Alert

Recent Medicare clarification nixes '8-hour rule.'

Reporting your ED physician's observation services can be tricky business, as there is confusion about how, when, and why to choose from one observation code set or another.

Add to that a common misconception about Medicare coding, and you've got a recipe for potential disaster. Clear things up with this observation FAQ.

One reason coders get tripped up on observations is the code sets; there are different code sets for different observation services, depending on length.

Coders should select a code from the 99218-99220 (Initial observation care, per day, for the evaluation and management of a patient which requires these 3 key requirements: ...) set when the physician admits the patient on one date and discharges him on another calendar date, confirms Sharlene A. Scott, CPC, CPC-H, CCS-P, CCP-P, CPC-I, CPMA, PMCC-approved instructor at Baltimore's Coding Academy of America, Inc.

"These codes are typically used when a patient is not technically being admitted into the hospital, but is going to be observed for a condition. Usually the condition is severe enough that observation in a medical facility is needed," reports Kathleen Goodwin, CPC, coding coordinator with La Porte Regional Health Systems in Indiana.

A patient in observation status might have "atypical chest pain, a severe acute asthma attack where the patient may need ongoing treatment or need to be monitored to ensure they don't get into respiratory trouble again," offers Joan Gilhooly PCS, CPC, CHCC, a coding expert with Health Management Resources in Salisbury, N.C.

If you are unsure as to whether or not a patient was in observation, however, check with the physician, Gilhooly recommends. "By definition, someone is admitted to observation because you're still trying to figure out whether they are sick enough to be admitted as an inpatient," she reminds.

"One thing that I would recommend being careful of, however, is attempting to categorize anyone who requires lengthy treatment in the ED as an observation patient," warns Gilhooly.

Get the admit note: The physician should document a clear, dated, and timed order to admit the patient toobservation; ideally, he'll also document a treatment plan. If the physician provides this documentation, identifying your observation coding encounters will be easier.

You'll use the 99217 (Observation care discharge day management) code for the discharge date when a patient is in observation for more than one calendar date, says Scott.When coding these encounters, append the initial date of service to the 99218-99220 code, then use 99217 for the discharge date, Goodwin confirms.

Example: A 48-year-old man report to the ED with chest pain at 6:23 p.m. Thursday. After reviewing the labs and EKG the ED physician decides to admit him to Observation for further monitoring at 9:15 pm. He is kept overnight to make sure he has not suffered a myocardial infarction (MI). Notes indicate a comprehensive history; a comprehensive exam, and high complexity medical decision making. At 8:12 a.m. the next morning, the physician discharges the patient with a diagnosis of rapid heartbeat.

On this claim, you'd report the following:

• 99220 (Initial observation care, per day, for the evaluation and management of a patient, which requires these 3 key components: a comprehensive history; a comprehensive examination; and medical decision making of high complexity ...)
• 99217 for the discharge service
• 785.0 (Tachycardia, unspecified) appended to 99220 and 99217 to represent the patient's chest pain.

Use the 99234-99236 (Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date, which requires these 3 key components: ...) codes for admission and discharge from observation care on the same date: in other words, the patient is in observation for at least 8 hours, but the care is all on a single calendar date.

Remember: Just like any other observation service,patient condition drives the use of 99234-99236; report these codes only if the physician is deciding whether or not a patient needs hospitalization.

Example: A patient reports to the ED at 2 a.m.with syncope secondary to severe dehydration due to her influenza. The physician and staff work to rehydrate the patient and provide her with anti-nausea medicine. At 9 am, she is admitted to observation with a plan for further rehydration therapy and repeat labs. She responds positively to both treatments.

Blood work reveals she is adequately hydrated and her blood pressure is stable, so the patient is sent home at 5:23 p.m. all on the same calendar day with a diagnosis of dehydration. Notes indicate a comprehensive history and exam, along with moderate medical decision making.

In this instance, you should report 99235 (... a comprehensive history; a comprehensive examination; and medical decision making of moderate complexity ...) for the observation service with 276.51 dehydration and syncope 780.2 syncope and collapse appended to represent the patient's symptoms.

According to CMS transmittal 1466 (February 22,2008), observations that span two calendar dates are all subject to the same rules, regardless of total encounter time.

"CMS states specifically that if a patient is admitted to observation status on one calendar date and discharged on another calendar date, 99218-99220 should be reported on the date that the patient is admitted and 99217 should be coded on the date that the patient is discharged," Scott explains.

Example: The ED physician admits a 68-year-old Medicare patient to observation at 10.28 p.m. Wednesday. After a series of tests, the physician decides the patient does not require hospitalization. At 5:30 a.m. Thursday, the physician discharges the patient. Notes indicate the physician performed a comprehensive history and exam, along with moderate MDM..

According to the CMS transmittal, you should report the following

• 99219 (... a comprehensive history; a comprehensive examination; and medical decision making of moderate complexity ...) for the observation service with a Wednesday date of service
• 99217 for the discharge service with a Thursday date of service.