EM Coding Alert

Question: My physician saw a patient in observation status but discharged the patient before hitting the eight hour threshold. In the past, we have coded encounters like this with 99217, 99234, or 99235 but the claims were denied. How should we be coding?

Ohio Subscriber

Answer: When your physician sees a patient in observation status and discharges him before hitting the eight-hour threshold, you should report a code from the 99218-99220 range (Initial observation care, per day …), based on the level of service your physician documented.

You wouldn’t use 99234 (Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date, which requires these 3 key components: A detailed or comprehensive history; A detailed or comprehensive examination; and Medical decision making that is straightforward or of low complexity …) and 99235 (…which requires these 3 key components: A comprehensive history; A comprehensive examination; and Medical decision making of moderate complexity…) because they’re only used with an initial observation of a  minimum of eight hours but less than 24 hours. You can’t use 99217 (Observation care discharge day management) because that code is used when the admission and discharge are on different calendar dates.

The eight-hour observation status rule as defined by CMS states: “When a patient is admitted to observation status for less than 8 hours on the same calendar date, the physician shall report a code from CPT^® code range 99218 - 99220. Observation care discharge (code 99217) shall not be reported.”

When a patient is admitted for observation care and discharged on a different calendar date, the physician needs to report a code from the same range mentioned above, plus 99217 for observation care discharge service.

Lastly, when a patient is admitted to observation status for a minimum of eight hours, but less than 24 hours, and discharged on the same calendar date, the physician needs to report a code from code range 99234-99236. No additional discharge code is needed. As always, documentation requirements need to be met.