Gastroenterology Coding Alert

Observation care may be the most confusing E/M service for gastroenterologists to bill. Many practices admit that they are confused about the circumstances under which they can bill these codes and what series of codes should be reported. To make matters worse, a Medicare policy, effective January 2001, set up guidelines for the reporting and documentation of observation care codes that are different from those established by CPT.
 
"Medicare uses these codes, and it attaches its own criteria to them," says Pat Stout, CMC, CPT, an independent gastroenterology coding consultant and president of the medical billing firm One Source in Knoxville, Tenn. "It's important that coders understand the definition of the American Medical Association versus Medicare."
 
Observation care codes are used to report E/M services provided to patients who are admitted to observation status in the hospital. A gastroenterologist may admit a patient to observation for a variety of reasons including to treat complications after an endoscopic procedure or to monitor a patient with an unclear clinical diagnosis. Both Medicare and CPT warn that these codes should not be used to report services such as blood pressure checks that may be part of the routine postoperative recovery of the patient.
 
When the gastroenterologist admits the patient to observation, it should be with the anticipation that the patient will be stabilized and discharged in the next 24 hours, says Kathy Pride, CPC, CCS-P, HIM applications specialist with QuadraMed, a national healthcare information technology and consulting firm based in San Rafael, Calif. However, a patient may be in observation for more than 48 hours.
 
The status of the patient determines whether he or she is in observation; the patient does not have to be in a specially designated observation care unit of a hospital. "At our hospital if you have day surgery, you could be in the outpatient center overnight or on a regular hospital floor," says Cindy Poe, CPC, certified coder with Eagle Physician and Associates, a multispeciality practice with seven gastroenterologists in Greensboro, N.C. "Both are considered observation. Observation status is not determined by what room they are in, but how the gastroenterologist admitted them."

One of the more confusing aspects of these codes is that three different series are listed in the CPT manual:
 

99218-99220 (initial observation care, per day, for the evaluation and management of a patient). According to the CPT, initial observation care by the admitting physician should be reported with these codes. The level of history, examination and medical decision-making performed by the gastroenterologist during the period of observation determines the level of code that is reported.
 

99217 (observation care discharge day management). This code is used to report the final examination of the patient and the preparation of discharge instructions and records if the discharge from observation is on a date other than the initial date of observation, according to the CPT. There is no specified level of history, examination or medical decision-making associated with this code.
 

99234-99236 (observation or inpatient hospital care, for the evaluation and management of patient including admission and discharge on the same date). The CPT instructs that these codes, which were added in 1998, should be used when the patient is admitted and discharged from observation on the same day. A separate discharge code should not be reported. Again, the level of history, examination and medical decision-making performed by the gastroenterologist determines the level of code that is reported.
 
Unlike other E/M services, observation care does not have CPT established time parameters. "Time is not a factor in selecting the level of observation care service," Stout explains.

However, the Medicare policy brings the element of time into determining which observation code to report. The Medicare payment policy in summary is:
 

When a patient is admitted for observation care and discharged on a different calendar day, 99218-99220 (initial observation care) should be used to report the admission and 99217 (observation care discharge) should be used to report the discharge.
 
This is the same policy as CPT's. If a patient has to stay overnight, for example, normally one of the codes in the 99218-99220 series will be used to report the admission on day one, and 99217 is used to report the discharge on the next day, Poe says.
 

When a patient is admitted for observation care for more than eight hours and is then discharged on the same day, 99234-99236 (observation or inpatient hospital care) should be reported.
 
"If the patient had a procedure at 6 in the morning, and was discharged at 9 or 10 at night, they have been there most of the day. It's the same calendar day, so you bill from the 99234-99236 series," Poe says.
 

When a patient is admitted for observation for less than eight hours and is discharged on the same day, 99218-99220 should be used to report this admission. No discharge code should be reported.
 
This is where Medicare departs from CPT, by only allowing the initial observation care code to be billed for relatively short stays on the same calendar day. Some gastroenterologists, such as the ones in Poe's practice, don't report an observation care code for stays of less than eight hours.
 

When a patient is held in observation status for more than two calendar days, the gastroenterologists should bill subsequent services furnished before the date of discharge using the outpatient/office visit codes (99212-99215). The gastroenterologist may not use the subsequent hospital care codes (99231-99233) because the patient is not an inpatient of the hospital.
 
Most local Medicare carriers follow this new national policy, and many private payers have adopted it as well, though Poe reports that there is occasionally a problem with Medicare's emphasis on calendar days as opposed to 24-hour days. "Most payers consider anything less than 24 hours to be outpatient status," she explains. "Because some carriers and hospitals base their policies on hours, not calendar days, it gets kind of funny."

Gastroenterologists should keep the following tips in mind when billing observation codes.
 
1. Only admitting physicians can report observation codes. If a gastroenterologist sees a patient who was admitted to observation by another physician, the gastroenterologist may report an outpatient/office visit (99212-99215) or an outpatient consultation (99241-99245), Pride says. An inpatient consultation (99251-99255) cannot be billed because the patient does not have inpatient status at the hospital.
 
2. Observation codes cannot be reported in combination with most other E/M services on the same day. If a gastroenterologist sees a patient in the emergency department before admitting him or her to observation, only the appropriate observation care code can be reported, Pride says. Similarly, if a gastroenterologist admits a patient to inpatient status on the same day that he or she was admitted to observation, only an initial hospital care code (99221-99223) can be reported.
 
Two admissions can be reported, however, if the patient is admitted to inpatient status on a different calendar day from the admission to observation. "If the patient is admitted to the hospital on a day subsequent to his or her admission to observation, then you can bill for two admissions," Pride notes. "Do not bill 99217 for the discharge from observation."
 
3. Add modifier -25 to the observation code when performed on the same day as an endoscopic procedure. If the patient is being monitored in observation for signs of complications after an endoscopic procedure, modifier -25 (significant, separately identifiable evaluation and management service by the same physician on the same day of the procedure or other service) should be added to the E/M code, and the diagnosis should reflect the signs and symptoms of complications such as nausea (787.02) and vomiting (787.03), Poe says.
 
The diagnosis for the observation won't always be different from the diagnosis for the endoscopy procedure. "Sometimes a patient will come into observation with abdominal pains (789.00) and the gastroenterologist later decides to do an endoscopy," Poe says. "If you don't find the cause of the pain during the procedure, then you will have the same diagnosis for the endoscopy abdominal pain."
 
4. Contact with the patient is required. Although the CPT does not specifically address the issue of personal contact with the patient, the new Medicare policy states that the billing physician must be present and must personally perform the observation services.
 
The contact with the patient does not have to be continuous, however, Stout says. It is also possible that the gastroenterologist may not examine the patient until after he or she has been admitted. "The patient may come to the emergency room in the middle of the night with abdominal pain. The emergency-room physician may call the patient's gastroenterologist, who gives the order to admit the patient to observation," Stout says. "The gastroenterologist will go in the next morning and perform an evaluation based on the signs and symptoms that the patient is currently experiencing. If the patient is feeling better, then the gastroenterologist won't have a very high-level visit to bill."
 
5. The gastroenterologist must personally document the E/M service. The new Medicare payment policy also requires that billing physicians indicate the length of time the patient was in observation in the medical record and write the admission and discharge orders.
 
Pride says this means that the orders must be in the gastroenterologist's handwriting, that the date and time of the admission/discharge must be written in the medical record, and that a separate discharge note must be included. The documentation must also include a description of the patient's condition at the time of admission and should build a case for why the patient was admitted to observation.
 
The gastroenterologist needs to explain what lead him or her to believe that the patient should be admitted to observation versus inpatient status. Pride says, "If the patient's status changes to inpatient, the gastroenterologist must indicate when [date and time] the change occurred." 
 
Note: A copy of Medicare's revised payment policy for observation care codes is available online at www.hcfa.gov/regs/pfs/1120fc.pdf. Adobe Acrobat is required to view the file and is available free at www.codinginstitute.com.