General Surgery Coding Alert

Coders in general surgeons offices tend not to use observation codes very often. However, these relatively new and largely under-utilized codes can be very useful. Coders need to be aware of their options so they can examine their documentation and make informed decisions about which codes to use when admitting patients to the hospital.

In the past, patients usually were admitted directly to the hospital and billed with the hospital admit codes (99221-99223). However, patients often are admitted to an outpatient observation unit in the hospital, and there are special codes and criteria that must be met to bill for such services (99218-99220). In addition, new codes introduced in 1998 for same-day observation and discharge (99234-99236) are reimbursed at a higher level than regular hospital admission codes.

Furthermore, many carriers will not authorize an inpatient admission but will authorize an observation stay because the hospital reimbursement is less, says Kathleen Mueller, RN, CPC, CCS-P, a physician reimbursement specialist in the office of Allan L. Liefer, MD, a general surgeon in Chester, IL. Any subsequent admission to the hospital would have to be authorized by the carrier and then billed accordingly, she says.

Hospital stays fall into one of three place of service categories: outpatient hospital, inpatient hospital, and ER. These roughly correspond with observation, hospital admission and ER admission. Mueller says its important that surgeons offices recognize, for example, that observation is considered outpatient hospital. To enter a charge into the billing system, patient/physician information, the name of any referring physician, and the place of service must be entered. If the place of service (outpatient hospital) does not match the classification of service (observation) the claim will be denied.

Mueller cites the following three scenarios to illustrate the utility of the observation codes.

Same-day Observation and Discharge

Scenario 1: A 10-year-old boy comes to the ER with general abdominal pain. The surgeon sees the child and admits him to observation. The patient is kept NPO (nothing by mouth) and given IV fluids. When the physician returns later that afternoon, the boy is much improved and is discharged. The physician does a comprehensive exam and history, with moderate decision-making.

The correct code for this scenario, Mueller says, is
E/M code 99235 (observation or inpatient hospital care), which includes admission and discharge on the same day (whether admission or observation) and requires the physician to take a comprehensive history of the patient, perform a comprehensive examination, and make medical decisions of moderate complexity. The 99235, which is formulated to include the work of both the discharge summaries and the admission history and physical (H&P) would be accompanied by ICD-9 code 789.07 (abdominal pain, unspecified site, generalized).

The 99235 is one of three new codes (99234-99236) that apply to both observation and inpatient care, as long as the patient is discharged the same calendar date (midnight to midnight) he or she was admitted. This means the place of service for 99234-99236 can be hospital inpatient, hospital outpatient, or ER.

Observation, Discharge on Different Date

Scenario 2: A 35-year-old female is admitted for observation with epigastric pain and coffee ground emesis (578.0, hematemesis, vomiting of blood). Later that same day, the surgeon performs an upper GI endoscopy (43235, upper gastrointestinal endoscopy including esophagus, stomach, and either the duodenum and/or jejunum as appropriate; diagnostic, with or without collection of specimen(s) by brushing or washing [separate procedure]), which shows an acute duodenal ulcer with bleeding. The patient is started on medication and discharged the following morning.

Codes 99218-99220 (initial observation care for both new or established patients) would be used to bill the admission as hospital outpatient (observation). The codes differ only in terms of the level of complexity of the E/M services performed, and depend on the documentation provided by the surgeon for the first day.

Since an endoscopy was performed on the same day as the visit, a modifier -25 (significant, separately identifiable evaluation and management service by the same physician on the same day of the procedure or other service) needs to be attached to the 99218-99220, says Cynthia Thompson, CPC, a senior coding specialist with Gates, Moore & Co., an Atlanta-based medical management consulting firm.

The endoscopy also can be billed separately. ICD-9 for the admission should be 789.06 (abdominal pain, epigastric), as well as 578.0 (vomiting of blood). The discharge would take a diagnosis of 532.00 (duodenal ulcer, acute with hemorrhage, without mention of obstruction). When the woman leaves the hospital the next day, the discharge is billed with the observation and discharge code 99217, says Thompson. The 99217 is billable because 43235 has zero global days.

Observation and Inpatient Admission

Scenario 3: In the following example, a 62-year-old patient is admitted to observation with nausea, vomiting and abdominal pain. The surgeon suspects a small bowel obstruction. The next day, the patient has not improved and is admitted to inpatient status.

The first thing the coder should do is find out whether the hospital differentiated between hospital outpatient (observation) and inpatient status. If the hospital did, in fact, categorize the entire visit as inpatient, the coder would use an inpatient admission code 99221-99223 (initial hospital care). Of course, the specific code would have to be determined based on the documentation of the E/M visit provided by the physician.

However, if the hospital (correctly) classified the initial visit as an observation admit, the first-day admission should be coded 99218-99220 (the initial observation care codes), while the second day would be coded with 99221-99223 (the inpatient hospital care codes), provided that a separate H&P is dictated on the same patient for both the observation and inpatient days, Mueller says. The third day in the hospital would be coded 99231-99233 (subsequent hospital care), depending on the level of complexity of care by the surgeon and the documentation he or she provides.

If a separate H&P is not dictated or is not medically necessary, the first day would be billed using 99218-99220 (observation), while the second day would take a 99231-99233 for subsequent hospital care. The diagnosis would be 787.01 (nausea with vomiting); the abdominal pain, since it isnt specific as to quadrant, would be the generalized 789.07 (abdominal pain).

Note: Although the physician suspects a bowel obstruction, coders should never rule out or suspect in their diagnoses. Instead, the ICD-9 codes for the symptoms presented should always be used. Even though many physicians will perform tests to rule out a certain condition, or because he suspects a condition, until that condition is proved it cannot be coded.

Code for Other Observations

If a surgeon sees a patient in the office, the ER or a skilled nursing facility and then admits the patient to observation, reimbursement for those E/M services become part of the observation code, much like an E/M visit on the same day of surgery.

If the patient ends up in observation following surgery, the observation becomes part of the global surgical package and cant be billed separately either; the rationale being that ensuring that the patient is OK before he or she is sent home is part of the physicians responsibility.
Sometimes ER patients end up in observation as well. Say, for example, a patient is examined in the ER, then put in observation for 12 hours. Only the observation would be billed at that point.

If global surgery is performed, a -57 (decision for surgery) or -25 modifier (based on the length of the global period) would have to be attached to the observation code. The extent of the surgery determines whether the patients status remains admission or observation. If the patient is released quickly and the surgery was minor, the visit will be considered outpatient/observation.

Note: If minor surgery was done on the second calendar day of observation, modifier -25 is not required, as it applies only to an E/M service performed on the same day as the surgery or procedure.

The entire sequence of eventsfrom when the surgeon first saw the patient until he or she leaves the hospitalshould be carefully followed. If the patient is examined, admitted, operated on, and discharged within a 24- to 36-hour period, an observation code with a -57 or -25 modifier should be used to indicate that the decision to perform surgery was made during observation. Any services performed afterward will likely be rolled into the surgerys global period.

However, if the patient is observed in the ER, and then surgery is performed and the patient remains in the hospital for a few days, only the inpatient admission, not the observation, can be claimed. Again, a -57 or -25 modifier would be attached to the appropriate inpatient E/M code. Documentation will still need to be provided to indicate the admission was valid.