Gastroenterology Coding Alert

If you are tired of watching the clock and feeling confused about when you can bill insurers for observation care, you need to freshen up on the ins and outs of observation care coding.

Since the inception of Medicare's observation coding policy, which conflicts with CPT guidelines, there has been some confusion regarding the appropriate way to bill for observation care. Many gastroenterologists have no trouble following CPT rules, but you need to be familiar with the intricacies of both policies to get optimum benefits from your observation care. When to Use Observation Codes Different physicians use observation status to varying degrees. Stephanie Goodfellow, billing manager at the Mid-America Gastro-Intestinal Consultants in Kansas City, Mo., says her office uses observation care only with certain procedures and under extenuating circumstances. Physicians often need to monitor elderly patients before certain procedures, such as a colonoscopies. Other times, the gastroenterologist needs to observe a liver patient before surgery. For example, the gastroenterologist observes the patient the day before surgery, and he or she goes home the same day as the procedure. This is often the case before a liver biopsy or ERCP. Coding, of course, depends on how long the patients are in observation.

There are certain criteria you must follow in coding for observation care. Observation status is used as an alternative to admission to a hospital. According to Empire Medicare New Jersey local medical review policy, "Only the physician who admitted the patient to hospital observation and is responsible for the patient during his stay in observation may bill the hospital observation codes." All other physicians who see that patient must bill the appropriate office or other outpatient consultation codes. The global surgery fee includes payment for most hospital observations. Payment is made for observation services in addition to the surgical package only if two criteria are met:

The hospital observation service justifies the use of modifier -24, -25, or -57

The hospital observation service meets all of the criteria for the hospital observation code billed. In addition, the physician must include a medical observation record for the patient that includes dated and timed admitting orders concerning the patient's care, along with nursing notes and progress notes prepared while the patient is in observation status. Make Sense out of CPT Guidelines You will use hospital observation service codes (99218-99220) to report E/M services provided to patients admitted as observation status in a hospital. However, the patient does not have to be in a specified observation area, only admitted as observation status. These codes report the initial observation care and apply to new or established patients. All three of the key components (history, examination, and medical decision-making) must meet or [...]