Gastroenterology Coding Alert

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.

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 exceed the requirements to qualify for the level of service. Do not use these codes to report hospital observation services with admission and discharge on the same day.

For the discharge service on a subsequent day, you will use 99217 (Observation care discharge day management), which reports the final examination, discussion of the stay, instructions for continuing care, and preparation of discharge records. Report this code only when discharge is on a day other than the initial date of observation status.

The observation or inpatient care codes (99234-99236) represent services provided to patients whom the physician admits and discharges on the same date. These codes include the discharge services provided to patients discharged from either observation status or inpatient hospital care. Once again, all three of the key components must meet or exceed the requirements to qualify for the level of service. All of these observation codes are applicable "per day."

These guidelines may seem confusing considering there are a variety of common scenarios concerning observation care, inpatient care, and discharge. Take note of the following examples to clarify some of your coding woes:

1. Same-day admission and discharge. For patients admitted and discharged from observation status on the same day, use observation or inpatient care service codes (99234-99236). Do not code extra for the discharge service.

2. Different-day admission and discharge. For patients admitted to observation status and discharged on different days, use the hospital observation services codes (99217-99220). For the first day, bill the appropriate level of service for observation care (99218-99220), and on the subsequent day bill 99217 only.

3. Admission to inpatient from observation on same day. If the physician admits the patient into inpatient status from observation on the same day, then bill for only one combined level of care for the entire day by using the inpatient codes (99221-99223).

4. Admission to inpatient on subsequent day to initial observation. If the gastroenterologist admits a patient into inpatient status from observation on different days, then bill hospital observation care for the first day (99218-99220) and initial inpatient service codes (99221-99223) for the subsequent day. Do not bill 99217 for discharge from observation status.

5. Admission to observation from outpatient. You will combine all outpatient documentation with the observation care documentation to get one level of observation care for that day (99218-99220).

6. Observation for more than two days. For patients under observation for more than two days, you must bill the services between the initial visit and the discharge using outpatient codes (99212-99215). For example, the first day would be billed from the series 99218-99220, subsequent days from the series 99212-99215, and the discharge day using 99217. Be aware that this scenario is not probable for most gastroenterological observation care.

7. Services by other physicians. The admitting physician is the only physician who can get reimbursed using observation codes. Any services given by another physician must be billed using the consultation codes (99241-99245).

The water becomes murky when dealing with Medicare and a few local carriers because they have guidelines that add another factor into the equation: time. According to Kathy Pride, CPC, CCS-P, coding supervisor for the Martin Memorial Medical Group in Stuart, Fla., time is only a factor with Medicare. In all other instances, the important factor is that the services occur on the same day. The Federal Register lays out Medicare's policy regarding the "eight-hour rule": You should bill observation or inpatient care services (99234-99236) only when the patient remains under observation for more than eight hours and leaves on the same day.

If the gastroenterologist keeps the patient under observation for less than eight hours and discharges him or her on the same day, then you need to use the hospital observation service codes (99218-99220). Do not code for the discharge.

The rules remain the same for patients admitted to observation status and discharged on different days. Use the hospital observation codes 99218-99220 to report the initial observation and 99217 to report the discharge.

You may be wondering why there is such a discrepancy between CPT guidelines and Medicare policy. The most direct answer is money and technology. According to Michael Weinstein, MD, a gastroen-terologist in Washington, D.C., and a former member of the CPT advisory panel, hospital payment for observation services is much less than inpatient services. Also, the other factor is technology and the ability of computers to recognize different dates. For physician services, the codes 99234-99236 have RVUs ranging from 3.6 to 5.93, while codes 99218-99220 have RVUs ranging from 1.78 to 4.16. Therefore, coding for the lesser observation codes will allow you to be reimbursed for more money and will cost Medicare more.

If you have been coding using CPT rules and are being reimbursed, then continue down that road. Most non-governmental payers follow the CPT guidelines, and local medical review policies usually use the 24-hour rule instead of the eight-hour criteria. However, if you are being met with problems getting paid for observation services, the problem may be the extra rule that Medicare tags onto the observation coding guidelines. For those of you in doubt as to your local carrier's policy, simply call them and find out which rules they follow.