ED Coding and Reimbursement Alert

Hint: Sometimes watching the clock is essential.

Many ED coders have questions about observation care, and the reason is understandable. Although admission to observation is fairly common, the codes aren’t crystal clear, and mistakes are inevitable.

To help you decide on the right observation care codes for a variety of circumstances, we’ve rounded up a few questions that readers have sent us, along with expert guidance, so you can make sense of these common situations.

1. How Can You Address a Separate-Day Admit, Discharge?

One subscriber asked ED Coding Alert which code set to utilize when the physician admits and discharges a patient from observation care on separate dates, but the stay totaled fewer than 24 hours.

Solution: In this situation, you’ll refer to the code range 99218-99220 (Initial observation care, per day, for the evaluation and management of a patient …) for the first day of observation care. You’ll use these codes when the provider admits and discharges the patient on different calendar days, even if fewer than 24 hours passed between admit and discharge. This code set represents the first day of those observation services.

When you’re using the 99218-99220 observation codes, you should be able to report 99217 (Observation care discharge day management …) for the next-day discharge.

For instance: A patient presents to the ED with persistent vomiting, severe headache, and dehydration; she has been unable to hold down liquids for 24 hours. After a dose of Ondansetron, the patient is able to tolerate sips of liquid. The patient is placed in observation status at 11 p.m. Tuesday to ensure that she can maintain oral intake; she is discharged at 4 a.m. Wednesday. Notes indicate a detailed history, comprehensive examination, and a low level of medical decision making (MDM). The final diagnosis is dehydration with headache and persistent vomiting.

For the first day of this encounter, you’ll report 99218 with E86.0 (Dehydration), R11.10 (Vomiting, unspecified), and R51 (Headache) appended to represent the patient’s condition.

For the second day, report 99217. Remember that before reporting a discharge day code, there must be a face-to-face encounter. Therefore, the provider would have to see the patient on the first day (to report a code from the 99218 series, as noted above) as well as on the discharge date. These codes describe the observation services on a specific calendar day, so if you transcend midnight, a second observation code (in this case 99217) should be reported for the discharge day of observation.

Keep in mind that you must document the face-to-face encounters for both dates of service. “Not documented, not done,” says Henry Borkowski MD, CEO of OmniMD, a software firm that helps physicians document more thoroughly. “I’ve seen overcoding, I’ve seen undercoding — my goal is correct coding.”

2. Check out 99234-99236 for Single-Day Observations

Another reader inquired about what to do when a patient is in observation for just one day and is then discharged the same day. Fortunately, there is a simple solution to this question.

Solution: When a patient is in observation for a single calendar day, you’ll choose a code from the 99234-99236 (Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date…) range. Private payers have no time constraints on these codes; you can use them for any observation that occurs on a single calendar day.

Medicare rules: Keep in mind that, as noted in the box above, the rules are slightly different for Medicare patients. You would report 99234-99236 for any patient admitted to observation status and discharged after more than eight hours of care on the same calendar day. For Medicare patients that the provider treats and releases in less than eight hours on the same date, report 99218-99220 instead.

Example: The ED physician sees a patient at 6 a.m. Saturday for a head injury with loss of consciousness (LOC) and decreased visual acuity. The physician attends to the patient until he seems to be improving and then admits him to observation care at noon. During the observation, the provider orders a consultation with an ophthalmologist who examines the patient with a slit lamp and ophthalmoscope. All test results are normal, so the ED physician discharges the patient from observation at 10 p.m. Saturday. Notes indicate a comprehensive history and exam, along with high-level MDM.

For this encounter, you’d report 99236 for the entire observation service, regardless of payer, since the patient was in observation care for over eight hours on one calendar date.

Medicare alert: There’s a bit of a difference in how you’ll use initial observation care codes for Medicare patients. Although these codes definitely apply when the provider admits and discharges the patient on different calendar days, you’ll also use 99218-99220 if the provider treats and releases a Medicare patient on the same calendar day, but for less than eight hours of observation care.

In black and white: “When a patient receives observation care for less than 8 hours on the same calendar date, the Initial Observation Care, from CPT^® code range 99218-99220, shall be reported by the physician,” Part B MAC CGS Medicare states in its “Observation Services Fact Sheet,” which was last revised in 2019.

3. Remember These Codes for Subsequent Observation Days

An ED Coding Alert reader asked how to code when the provider keeps the patient in observation for more than two full calendar days, such as for a behavioral health presentation.

Solution: In this situation, you’ll need to rely on another code set. You’ll report the “middle” day with these subsequent observation codes:

• 99224 (Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: problem focused interval history; problem focused examination; medical decision making that is straightforward or of low complexity ...)
• 99225 (... an expanded problem focused interval history; an expanded problem focused examination; medical decision making of moderate complexity ...)
• 99226 (... a detailed interval history; a detailed examination; medical decision making of high complexity ...)

Remember: Unlike the other observation care codes, you can report the subsequent observation codes based on two of the three key components for each code level. So, if notes indicated that the subsequent observation day involved a detailed interval history and exam with moderate-complexity MDM, you could still report 99226.