Local Payer Determines Observation/Inpatient Payment
Published on Fri Dec 01, 2000
Effective Jan. 1, 2001, Medicare will revise its payment policy for observation and inpatient hospital care services when the patient is admitted and then discharged more than eight hours later on the same day. Although at first glance this policy revision appears to increase the reimbursement to gastroenterologists for short-term stays, many local carriers already have a more generous payment policy in place.
Before billing these observation and inpatient hospital care services, however, according to the new Medicare ruling, gastroenterologists should check with their local carrier to see if it has adopted the national policy or if it has a local policy with different billing instructions.
A gastroenterologist may admit a patient to observation or inpatient hospital care services for less than a day for a variety of reasons, according to Linda Parks, MA, CPC, lead coder at Atlanta Gastroenterology Associates, a 22-physician practice. A patient who is dehydrated may be admitted to observation for rehydration, she explains. Also after a PEG tube placement, our gastroenterologists will admit the patient to observation for 23 hours.
New National Policy for Observation Care Codes
As published in the Nov. 1, 2000, edition of the Federal Register, the revised national Medicare policy for observation care services is as follows:
When a patient is admitted for observation care for more than eight hours and is then discharged on the same day, codes 99234-99236 (observation or inpatient hospital care) should be reported.
When a patient is admitted for observation care for less than eight hours and is then discharged on the same day, codes 99218-99220 (initial observation care) should be used to report the admission, and no discharge code should be reported.
When a patient is admitted for observation care and discharged on a different date, codes 99218-99920 (initial observation care) should be used to report the admission and code 99217 (observation care discharge) should be used to report the discharge.
New Policy for One-Day Inpatient Hospital Stays
Also included in the Nov. 1, Federal Register, is the revised national Medicare policy for inpatient hospital care services, which reads:
When a patient is admitted for inpatient hospital care for more than eight hours and is then discharged on the same day, codes 99234-99236 (observation or inpatient hospital care), which have an admit and discharge component, should be reported.
When a patient is admitted for inpatient hospital care for less than eight hours and is then discharged on the same day, codes 99221-99223 (initial hospital care) should be used to report the admission, and no discharge code should be reported.
When a patient is admitted for inpatient hospital care and discharged on a different date, codes 99221-99223 (initial hospital care) [...]
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