Correct Use of Observation Codes Can Boost Payment
Published on Tue Aug 01, 2000
Many neurology practices rarely use observation codes, but these relatively new and largely under-used codes can be very helpful. Neurologists 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). Now patients often are sent to an outpatient observation unit or area in the hospital, and there are special codes and criteria that must be met to bill for such services (99218-99220). In addition, codes introduced in 1998 for same-day observation and discharge (99234-99236) are reimbursed at a higher level than regular hospital admission codes.
According to Kathleen Mueller, RN, CPC, CCS-P, a physician reimbursement specialist in Chester, Ill., in some cases, the insurance carrier will not authorize an inpatient admission but will authorize an observation stay because it costs less. Any subsequent admission to the hospital would have to be authorized by the carrier and then billed accordingly, she says.
When to Use Observation Codes
For example, a patient who is being treated for a sports-related concussion (850.0) reports persistent low-grade headaches (784.0) and poor attention and concentration. He calls his neurologist and goes to the hospital, but by the time he meets the neurologist at the emergency department (ED), the headache is gone, and he only feels a little confusion. The neurologist admits the patient to observation and performs a comprehensive exam and history. The neurologist reports a normal exam and requests that the patient remain in observation for the rest of the day. When the neurologist checks back with the patient after 12 hours, the patient reports feeling fine. The neurologist discharges the patient from the hospital.
This scenario would be reported using 99234, because the patient was admitted and discharged on the same day. If another procedure were performed on the same day (for example, a motor nerve conduction study, 95900), the neurologist would bill the evaluation and management (E/M) service with modifier -25 (significant, separately identifiable evaluation and management service by the same physician on the same day of the procedure or other service) so that the payer understands a complete E/M service was performed, rather than a brief inquiry into the patients current condition.
If, however, the neurologist had returned after 12 hours and found that the patient was having difficulty focusing vision, the neurologist might choose to admit the patient to the hospital as an inpatient. In this scenario, the observation becomes part of initial hospital care, and only the initial hospital care codes (99221-99223) are billed by the admitting physician.
If, in a third scenario, the neurologist visited the patient after [...]
