General Surgery Coding Alert

State law may govern whether a patient is -in- or -out-

Although the wrong place-of-service (POS) code can spell denials and delays in getting paid for your observation services, choosing the right POS code should be pretty straightforward, experts say.

General guideline: You should use POS 22 (Outpatient hospital) only for observation codes 99217 (Observation care discharge day management -) and 99218-99220 (Initial observation care, per day -), says Lisa Center, CPC, physician billing certified professional coder with Mt. Carmel Regional Medical Center in Pittsburg, Kan. -These codes are observation codes: the patient has not been admitted to the hospital, so you would not use POS 21 (Inpatient hospital) for these codes.-

Keep in mind that if the facility discharges the patient on the third day of observation or later, you should use office visit codes 99211-99215 for any E/M service(s) on the second day, Center says. You should also use 99211-99215 for any visits on days when the patient isn't discharged.

Important: You should only report one unit of 99218-99220 per observation stay because these codes are for initial care.

Example: The surgeon admits the patient to observation on Monday and discharges her on Wednesday. For any visits on Tuesday, you-d bill 99211-99215, says coder Stephanie Fiedler.

Possible exceptions: If the patient was new to your physician, you-d bill 99201-99205 (Office or other outpatient visit for the evaluation and management of a new patient -). Or if another physician requested a consult, you-d bill the applicable outpatient consult code (99241-99245, Office consultation for a new or established patient -).

Something to consider: You can use either POS 21 or 22 for same-day admission and discharge codes 99234-99236 (Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date -), Center says. These codes are for either observation or inpatient care when the patient was let go within the same day.

Rules Aren't Cast in Stone

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.

The AMA's 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.

State law may complicate matters: 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 that the patient can stay in observation up to 24 hours without being admitted, and Medicare usually bows to those states- laws.

Bottom line: Whether your patient is an inpatient or outpatient may depend on state law, Fiedler says.