Inpatient Facility Coding & Compliance Alert

Question: If we admit a patient to observation at 11 p.m. on Thursday and then release him at 2 a.m. on Friday, how should we code the services? Do we report both an admit and a discharge code?

Illinois Subscriber

Answer: Yes, you should report both admit and discharge codes. On the claim, report the appropriate code from the 99218-99220 (Initial observation care, per day, for the evaluation and management of a patient which requires these 3 key components: …) code set for the first day of observation.

Then, report 99217 (Observation care discharge day management…) for the discharge date. The important piece to also keep in mind is that the patient was admitted and discharged on different days. Had this brief period of time been on one calendar day, you’d use a code from the 99234-99236 (Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date, which requires these 3 key components: …) code set.

If a patient is in observation for two calendar dates, you would report the service with a code from 99218-99220 and 99217 for the day of discharge. If there is a third day in the middle, that code would come from the 99224-99226 (Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: …) series. This coding practice does not change, regardless of the amount of time the patient spent in observation each day.

This is on the physician side. There is an 8-hour rule for Medicare, but this may only apply if the admit and discharge are on the same date of service. The basic idea is that if there are less than 8 hours, then the physician cannot use the same day admit and discharge code. See IOM 100-04, Claims Processing Manual, Chapter 12, Section 30.6.8 B & C.