Neurology & Pain Management Coding Alert

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 the 12-hour observation period and found that the patient was lightheaded, the neurologist might choose to extend the observation period for another six hours, thus progressing the observation period from one calendar day to the next. In this case, the neurologist would bill the initial observation codes, which are for observation status patients but are not restricted to same-day admission and discharge. These codes are billed per day, but only the physician who admits the patient to observation can use them. If, for example, a physiatrist saw the patient during the observation period, the physiatrist would bill using the office or other outpatient consult codes (99241-99245).

Observation Is Considered Outpatient

Hospital stays fall into one of three place of service categories: outpatient hospital, inpatient hospital and ED. These roughly correspond with observation, hospital admission and ED admission. Mueller says practices 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 included. If the place of service (outpatient hospital) does not match the classification of service (observation) the claim will be denied.

Although the physician alone determines whether a patient is admitted to the hospital or is in observation, many doctors, coders, hospitals and carriers operate under the misconception that the hospital is in charge, says Dari Bonner, CPC, CPC-H, CCS-P, president of XACT Coding/Reimbursement Consulting Inc., in Port St. Lucie, Fla.

Individual hospitals follow their own guidelines and have their own reasons for categorizing patients as inpatient, outpatient or observation. Neurologists should familiarize themselves with the hospitals policy because if the hospital bills for an inpatient while the neurologist bills an observation, the claim may be returned and records may be requested.

Any observation bill returned by the carrier for this reason should be refiled, however, along with supporting documentation that indicates why the physician had the patient under observation, Bonner says. Ultimately, it is the physician, not the hospital, who is in charge of the patient. Coders need to let the hospital know that the physician who is in charge of the patient used an observation code, she says. Bonner does not recommend the doctors coding staff phone the hospital to ask how the institution coded the situation, so the office staff can follow the hospitals lead. Instead, the information should flow from the neurologists office to the hospital billers for purposes of coding the patients visit.

Documenting Observation Care

If a neurologist sees a patient in the office, the ED or a skilled nursing facility and then admits the patient to observation, reimbursement for those E/M services becomes part of the observation code.

Tracy Bondi, CPC, coordinator of physician education and auditing for MedAmerica Billing Services, a multidisciplinary billing service in Modesto, Calif., says that documentation must be specific to prove that the criteria for observation were met.

The physicians have to state that the patient is being admitted to observation or to observation services, Bondi says. Their area is called the critical decision unit (CDU). We even have found that when an audit is performed, if the physician wrote admit to CDU, and the paper claim is seen, it gets denied. They need to say, admit to observation status.

Bondi says that physicians also are required to document details about the patients observation unit care.

There are particular orders to be followed by the nursing staff while the patient is in observation. Then, they must have the progress notes documenting the care of the patient while in observation and the ultimate result of the care which should either be an admit to the hospital or discharge from observation. Finally, we need the discharge date and time, and a little blurb about why the patient was discharged from observation.