Medicare Compliance & Reimbursement

Keep careful documentation of longer stays.

While most patients will be either discharged or admitted within two days, at times the decision takes longer. When a physician keeps a patient in observation more than two days, look to the subsequent observation codes.

According to Medicare, the decision whether to discharge a patient from the hospital or admit the patient as an inpatient can be made in less than 48 hours, usually in less than 24 hours, says Todd Thomas, CPC, CCS-P, president of ERcoder, Inc. in Edmond, Ok.

Rarely does an observation span more than 48 hours. When, however, a patient is admitted to the hospital on day one, stays all of day two, and is discharged on day three, you’ll report one of the following codes for the second day:

• 99224, Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: problem focused interval history; problem focused examination; medical decision making that is straightforward or of low complexity
• 99225, … an expanded problem focused interval history; an expanded problem focused examination; medical decision making of moderate complexity
• 99226, … a detailed interval history; a detailed examination; medical decision making of high complexity.

You only need to satisfy two of the three key components for each code level, says Thomas.

Caveat: You might want to give your insurer a heads-up before sending in this claim. Often, payers request that you include documentation as to why the patient was in observation for so long without being admitted to the hospital.