Gastroenterology Coding Alert

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) should be used to report the admission, and codes 99238-99239 (hospital discharge day management) should be used to report the discharge.

Reimbursement Higher for 99234-99236

At first, the new Medicare policy appears to increase reimbursement to the gastroenterologist. As stated in sections 15504.b and 15505.1(c) of the Medicare Carriers Manual, the previous policy had allowed the reporting of an admission code for observation/inpatient hospital stays only when the patient was admitted and discharged on the same day.

Under the new policy, however, observation or inpatient hospital stays where the patient was admitted and then discharged more than eight hours later on the same day are billable with 99234-99236. Because these codes include both an admission and a discharge in their descriptions, they have higher relative value units (RVUs) than just the initial observation or hospital care codes.

With the new Medicare policy, for example, a gastroenterologist may admit a patient for observation, take a comprehensive patient history, perform a comprehensive examination and do medical decision making of moderate complexity. The patient is discharged more than eight hours later, but on the same day. The gastroenterologist may then report 99235 (outpatient or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date which requires these three key components: a comprehensive history; a comprehensive examination; and medical decision making of moderate complexity), which has a 2001 transitioned facility RVU of 4.74. Under the old policy, only 99219, which has a 2001 transitioned facility RVU of 3.06, could have been reported.

Medicare Policy At Odds With CPT

What will cause some coding confusion is that, despite the policys revision, it is still at odds with CPT coding instructions, which state that 99234-99236 should be used to report observation or inpatient hospital care services provided to patients admitted and discharged on the same date of service.

CPT doesnt differentiate by time and doesnt require a stay be eight hours or more in order to bill 99234-99236, says Catherine A. Brink, CMM, CPC, president of Healthcare Resource Management Inc, a physician practice management consulting firm in Spring Lake, N.J. If the stay goes into the next calendar day, CPT says to report both an admission and a discharge.

Local Carrier Policies for 99234-99236

Many local Medicare carriers follow these CPT coding instructions and allow gastroenterologists to report 99234-99236 when a patient is admitted and discharged on the same day, regardless of the amount of time spent in observation or inpatient hospital care.

With Georgia Medicare, we would be reimbursed for 99234-99236 even when the patient was under care for less than eight hours, says Parks. Under this new policy, he or she must be there for at least eight hours before you can bill the admission/discharge code.

In addition to Georgia Medicare, many other local carriers have local medical review policies (LMRPs) that stipulate a more generous payment policy. The LMRP of Empire Medicare Services of New Jersey states, codes 99234-99236 should be reported when observation care is provided to patients admitted and discharged on the same date of service.

Nationwide Medicare Services, the carrier for Ohio and West Virginia, has a similar policy to Empire Medicare Services of New Jersey, except that it extends its LMRP to include the inpatient and outpatient setting. The Nationwide policy states, Codes 99234-99236 are acceptable when the patient is admitted and discharged from either an inpatient or outpatient setting on the same date, which is the same as the CPT instructions.

Because the carriers have final discretion over what their payment policies will be, it is unclear whether the local payers will revise their policies to be in line with the new national ruling or maintain their LMRPs as currently stated. Gastroenterologists should always check their local carriers policy before reporting the service.

Documentation of Time

The new national ruling also requires gastroenterologists to document the length of time spent in observation care or inpatient hospital status in order to report codes 99234-99236. In addition, the gastroenterologist must meet the existing requirements for documenting the patients medical history, the results of the physical examination, and the level of medical decision making that occurred during the admissions process.

CPT Definitions for Observation and Inpatient Hospital Care Codes The CPT 2001 definitions for observation and inpatient hospital care codes are defined as follows: 99217 observation care discharge day management. This code is to be utilized by the physician to report all services provided to a patient on discharge from observation status if the discharge is on other than the initial date of observation status. To report services to a patient designated as observation status or inpatient status and discharged on the same date, use the codes for Observation or Inpatient Care Services [including Admission and Discharge Services, 99234-99236 as appropriate]. 99218-99220 initial observation care, per day, for the evaluation and management of a patient 99221-99223 initial hospital care, per day, for the evaluation and management of a patient 99234-99236 observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date 99238 hospital discharge day management; 30 minutes or less 99239 hospital discharge day management; more than 30 minutes.

New Medicare Policy on Observation/ Inpatient Hospital Care Codes Observation Care Codes Less than eight hours in observation, discharge on the same day: New national policy: Bill only initial observation care codes 99218-99220, do not bill discharge code Old policy: Bill only initial observation care codes 99218-99220, do not bill discharge code. Various LMRPs: Bill observation/inpatient hospital care codes 99234-99236. More than eight hours in observation, discharge on the same day: New national policy: Bill observation/inpatient hospital care codes 99234-99236. Old policy: Bill initial observation care codes 99218-99229 only, do not bill discharge code. Various LMRPs: Bill observation/inpatient hospital care codes 99234-99236. Admission and discharge on different dates: No change: Bill 99218-99220 and 99217 (observation care discharge). Inpatient Hospital Care Codes Less than eight hours in hospital, discharge on the same day: New national policy: Bill 99221-99223, do not bill discharge code. Old policy: Bill 99221-99223, do not bill discharge code. Various LMRPs: Bill 99234-99236. More than eight hours in hospital, discharge on the same day: New national policy: Bill observation/inpatient hospital care codes 99234-99236. Old policy: Bill initial hospital care codes 99221-99223 only, do not bill discharge code. Various LMRPs: Bill observation/inpatient hospital care codes 99234-99236. Admission and discharge on different dates: No change: Bill 99221-99223 and 99238-99239.