ED Coding and Reimbursement Alert

Question: Is it necessary that a patient be located in a designated observation area to use observation care codes 99234, 99235 and 99236? What should we do in an emergency room (ER) without a designated area provided serial assessments are done? Codes 99218, 99219, 99220 and 99217 do not require a designated area. Do the same rules apply with 99234, et al.?

Barbara Gedwill
Boston, Mass.

Answer: Per the CPT guidelines, when a patient is changed to observation (OBS) status, there is no designated area where a patient must go. If the supervising physician who initiates the OBS status performs an evaluation and management (E/M) service before the observation status was initiated, all those services must be included in the OBS charge (99234-99236).

For any physician to code for observation services, the documentation should include:

1. time placed in observation status;
2. orders to nursing staff;
3. assessment and monitoring by the physician throughout the observation stay;
4. time of discharge from observation status; and
5. discharge instructions and diagnosis.