ED Coding and Reimbursement Alert

Question: Our ED physician admitted a patient to observation and later discharged him. The patient's diagnosis did not meet the facility requirements to apply for Medicare reimbursement, so the hospital didn't report code G0244 (Observation care provided by a facility to a patient with congestive heart failure, chest pain, or asthma, minimum 8 hours, maximum 48 hours). Can we bill for the physician's professional services in observation even though the patient didn't meet Medicare criteria on the facility side?
      
Georgia Subscriber Answer: The hospital can only bill Medicare for observation services when the patient meets specific requirements and has one of these three diagnoses: asthma, chest pain, or congestive heart failure.
 
But Medicare reimburses for the professional component of all observation services for all medically necessary diagnoses. The catch is that Medicare requires that the patient stay in observation for at least eight hours in order for you to use 99234-26 (Observation or inpatient hospital care ... Professional component) or 99217 (Observation care discharge). For observation stays less than eight hours for Medicare patients, you can report 99218-99220, but your best bet - in light of relative value units - would be to select a code from the 99281-99285 series (emergency department E/M). CPT does not have a time requirement for observation services, so for private payers, just follow the CPT descriptor in choosing the correct code.