ED Coding and Reimbursement Alert

Patients often present to the ED with signs and symptoms that indicate a possibly serious illness—but which could also indicate a minor complaint. Chest pain is a good example. Is the patient suffering from a cardiac problem that may lead to a myocardial infarction (MI)? Or, is it simply gastrointestinal distress?

Often, the only way to tell is to keep the patient in the department for several hours in order to observe how the illness or disease process develops. Known as observation care, this is sometimes delivered in a designated hospital unit—chest pain centers and observation units are examples— and sometimes just delivered in the original site of care, the ED or a physician’s office.

However, knowing how and when to report the observation codes instead of the normal emergency E/M codes is not always clear to many ED clinicians and coders.

“How should observation codes be reported in the emergency department, and what documentation is required,” writes Arthur Diskin, MD, FACEP, chairman of the emergency department at Mt. Sinai Medical Center in Miami Beach, FL.

Knowing how to report observation services can be key to receiving adequate reimbursement, notes Susan Stradley, CPC, CCS-P, a consultant in the healthcare division of Elliott, Davis and Co. and a former ED coder.

“The observation codes (99218-99220, initial observation care) are worth more relative value units than the regular emergency E/M codes,” she advises. Here are four tips for correctly reporting observation care.

1. Is the service observation ? According to CPT, hospital observation codes are used to report “evaluation and management services provided to patients designated/ admitted as ‘observation status’ in a hospital. It is not necessary that the patient be located in an observation area designated by the hospital.”

The codes are used by the supervising physician to indicate “initiation of observation status, supervision of the care plan for observation, and performance of periodic reassessments,” CPT states.

“An example of observation care in the ED is a child who has ingested an unknown substance being brought into the department,” Stradley explains. “This child could have ingested poison at some point. The physician and parents don’t know because the child is two years old and there is only some residue on the mouth. So, the physician decides to keep them in the department and watch them for a number of hours to see whether the child begins to experience adverse effects. There are times when a patient comes in and you can see pretty readily that you are just going to just have to watch that person.”

2. Check with payers for time requirements. If the documentation indicates the physician kept the patient in for observation, then the time the patient spent in the department should be determined.

The key to knowing when to report observation care versus a regular E/M code is the amount of time the patient spent in the area where he or she was “observed.”

“There are often differences between payers on what they consider observation services,” Stradley says. “Some expect at least 12 hours. You should check specifically with Medicare and Medicaid in your state, and your other large payers, to determine what their minimum and maximum cutoffs are.”

“If you have the patient in the department for six hours, that is a really hard one to sell,” Stradley notes. “If the time in the department is 12-24 hours, then I think it is much more readily acceptable to payers.”

The coder must decide, based on the physician documentation and time spent, whether the service should be billed as observation or as a regular ED visit.

“You don’t have to have the specific documentation of time that is required for critical care or prolonged services— the doctor writing ‘I spent 1 hour and 43 minutes,’” she explains. “The coder needs to look at the admission and discharge times documented and determine if the total time met the payers definition of observation care. ”

4. Correctly report initial care and discharge.

The initial observation care codes include all services related to the initiation and supervision of the patient’s observation that day, Stradley notes.

If the patient’s stay continues on into the next calendar day, the physician can report two observation codes, she advises. “There is the potential to bill two different codes, but, technically there is a lot of paperwork involved.”

In many cases, observation patients are sent over to the ED by a supervising physician outside the hospital, she explains. The physician will come in at some point that day to check on the patient and write orders for the patient’s care. That counts as the “initiation of observation status” indicated in the CPT definition. Or, the ED physician decides to keep someone in observation status and writes orders for the patient to get certain medication and to be monitored by the nurse.

If the patient is in the ED and the observation care continues into the next calendar day, a coder should not report another observation code unless the physician physically checks on the patient again, Stradley feels.

“These codes are used to indicate the physician portion of the service,” she explains. “If you have a physician put someone in observation and never go back to check on him, it is only the nurse going back and forth, then the physician should report the code for the day that he put the patient in observation.”

Many physicians write orders indicating that when a patient meets specific clinical criteria he or she can be discharged from observation and then want to bill for the discharge, even though they are not physically present, she adds. “There has been a lot of discussion about this. But, I lean toward the recommendation that, if he doesn’t go back and see the patient that day, he should not bill for it.”

The initial observation codes include the initiation of observation status, supervision while in observation and performance of reassessments.

The patient’s discharge from observation care should be reported with the observation care discharge code (99217) only if the patient is discharge on a different day than the observation care was initiated. To report a discharge from observation that occurred on the same date, a code in the range of 99234-99236 (observation or inpatient care services including discharge services) should be chosen.