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ED Coding and Reimbursement Alert

The Devils in the Details When Reporting Observation Codes

Published on Wed Jan 01, 2003

Emergency department physicians devote crucial time to monitoring patients when rendering observation care. Payers sometimes overlook these services but you shouldn't. When observation services go undocumented, the ED physician does work that's unrewarded. You can do your best to recognize physician work by avoiding the errors that typically get observation codes denied on the professional side.

Same-Day Observation Codes for Medicare

Not knowing when to use same-day observation codes is a common error when reporting observation care to Medicare.

If you want to report same-day observation codes 99234-99236 to Medicare, the patient must have been in observation status a minimum of eight hours on the same calendar date, says James Blakeman, senior vice president of Healthcare Business Resources, in Bala Cynwyd, Pa. If the visit is less than eight hours on the same date, you can only report the initial observation codes from the 99218-99220 series. Note that in this scenario, you don't get paid for the discharge.

In addition, you shouldn't report 99234-99236 if the doctor visits the patient only once. "The doctor should record the admission and the discharge under a separate heading," says Kathy Pride, CPC, CCS-P, coding supervisor for the Martin Memorial Medical Group, a 57-physician group practice in Stuart, Fla. A separate sheet of paper is unnecessary.

When reporting same-day observation codes for Medicare patients, make sure your documentation supports the key components under the E/M service guidelines (for more on observation care documentation, refer to the story in article 3):

  • 99234 requires a detailed or comprehensive history, a detailed or comprehensive examination, and medical decision-making that is straightforward or of low complexity.
  • 99235 requires a comprehensive history, a comprehensive examination, and medical decision-making of moderate complexity.
  • 99236 requires a comprehensive history, a comprehensive examination, and medical decision-making of high complexity.

    The codes describing initial observation care also require that your documentation support E/M components:

  • 99218 requires a detailed or comprehensive history, a detailed or comprehensive examination, and medical decision-making that is straightforward or of low complexity.
  • 99219 requires a comprehensive history, a comprehensive examination, and medical decision-making of moderate complexity.
  • 99220 requires a comprehensive history, a comprehensive examination, and medical decision-making of high complexity.

    Same-Day Observation for Non-Medicare Payers

    Private payers have a more straightforward policy for same-day observation codes: The eight-hour minimum is not a threshold for reporting them.

    When a physician admits a patient to observation care and discharges the same day, you should report same-day admission and discharge codes 99234-99236, says Dee Mandley, RHIT, CCS, CCS-P, director of HIS and education services for CURES, a coding and compliance company in Twinsburg, Ohio. Report same-day observation codes regardless of the length of stay, as long as documentation shows that the physician performed both an admission and a discharge.

    Different-Day Observation and Discharge

    A good rule of thumb for multiple-day observation status for all payers: Report services per day.

    When the observation time-span straddles two dates in a row, report the initial observation code for the first calendar date, and then bill services on the date of discharge by reporting 99217 (Observation care discharge day management). Report 99217 only with initial observation codes, never with the family of codes 99234-99236, because these codes already include RVUs related to the discharge services, Blakeman says.

    Let's say a patient was admitted at 9 p.m. on one day, and discharged early the next day at 6:00 a.m. You report a code for the level of initial observation care (99218-99220) for the first calendar date. You should also report the discharge code, 99217, for the second calendar date. Make sure the discharge includes: "Full examination of the patient, discussion of hospital stay, instructions for continuing care, and preparation of discharge records," Blakeman says.

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