ED Coding and Reimbursement Alert

Answer: If a patient's admission is less than eight hours, CPT requires using 99218-99220 (initial observation care, per day, for the E/M of a patient).
 
If the patient is admitted and discharged within eight to 24 hours, use 99234-99236 (observation or inpatient hospital care, for the E/M of a patient including admission and discharge on the same date). However, if the patient's admission passes from midnight into the next day and exceeds eight hours, use 99218-99220 plus 99217 (observation care discharge day management).
 
It is important to code for observation when appropriate because its reimbursement is higher than for an E/M service, and it certainly reflects the work performed. Five documentation factors distinguish observation from an E/M service: order to assign to observation status, time of order, admission note (includes previous ED record), rechecks and discharge note.