Gastroenterology Coding Alert

State law may have more to say about this than you think

When you-re coding for observation services, using POS code 21 (inpatient hospital) and POS 22 (outpatient hospital) can be confusing. Don't risk denials from using the wrong place-of-service code.
 
We-ll help clear it up so that choosing the right POS code for observation is more straightforward.
 
You should use POS 22 only for observation codes 99217-99220. The patient has not been admitted to the hospital, so you would not use 21.
 
But if the facility discharges the patient on the third day of observation or later, you should use office visit codes 99211-99215 for any visit on the second day. You should also use 99211-99215 for any visits on days when the patient isn't discharged.
 
For example: The gastroenterologist admits the patient to observation on Monday and discharges him on Wednesday. For any visits on Tuesday, you-d bill 99211-99215, says coder Stephanie Fiedler. Exceptions: If your physician hasn't seen this patient before and the patient is a new patient, you-d bill 99201-99205, or if another physician requested a consult, you-d bill the applicable consult code.
 
You can use either POS 21 or 22 for same-day admission and discharge codes 99234-99236. Use these POS codes for either observation or inpatient care codes when the gastroenterologist lets the patient go within the same day.
 
Get Some Answers

Check with your carrier: Some carriers may prefer POS 21 with observation codes, Fiedler says -- even if this may make less sense because the facility hasn't admitted the patient.
 
CPT Assistant has stated that you should ask your individual payer which POS codes to use with observation codes, says Collette Shrader, compliance/education coordinator with Wenatchee Valley Medical Center in Wenatchee, Wash.
 
Check state law: Medicare usually decides whether the patient is a same-day admission or discharge based on whether the patient leaves by midnight, Fiedler says. But some states have laws that say the patient can stay in observation up to 24 hours without being admitted, and Medicare usually bows to those states- laws. So whether your patient is an inpatient or outpatient may depend on state law, she says.