ED Coding and Reimbursement Alert

Want Audit Proof Claims? Review Medicare’s Requirements For Observation Care Because observation services are by definition outpatient services, you’ll need to ensure that claims show placement into observation was specifically ordered at a time when it was uncertain if an inpatient admission would be necessary.  

Key: Hospitals will report the ED or clinic visit code or, if applicable, G0379 (Direct admission of patient for hospital observation) and G0378 (Hospital observation services, per hour)  and the number of units representing the hours (rounded to the nearest hour) spent in observation for all Medicare observation services, says Edelberg.  

Use this check list to make sure your facility observation claims are bullet proof:

• There must be a physician order to place the patient in observation.
• For Medicare payment, a HCPCS Type A ED visit code 99284, 99285, or G0384 Type B ED visit code, critical care (99291), or a G0463 HCPCS clinic visit code is required to be billed on the day before or the day that the patient is placed in observation. If the patient is a direct referral to observation the G0379 may be reported in lieu of an ED or clinic code. 
• The observation stay must span a minimum 8 hours and these hours must be documented in the "units" field on the claim form.  For facilities, the "clock" starts at the time that observation services are initiated in accordance with a practitioner's order for placement of the patient into observation status.
• The patient must be under the care of a physician or non-physician practitioner during the time of observation care, and this care must be documented in the medical record with an order for observation, admission notes, progress notes, and discharge instructions (notes) all of which are timed, written, and signed by the physician.  In the 2014 final rule, CMS further clarified the 2011 rule  that a non-physician practitioner that is licensed by the state and approved by internal credentialing and bylaws to supervise patients in observation may do so.  
• The medical record must include documentation that the physician used "risk stratification" criteria to determine that the patient would benefit from observation care. (These criteria may be either published generally accepted medical standards or established hospital-specific standards).
• All related services provided to the patient should be coded in addition to the observation code G0378.