Neurology & Pain Management Coding Alert

Question: What's the proper method for reporting hospital observation codes (99218-99220, 99234-99236)?

Minnesota Subscriber

Answer: According to CMS guidelines, the initial observation care codes (99218-99220) are appropriate when admitting a patient for observation care for less than eight hours. If the patient is discharged on the same date of service, no discharge code is necessary. If the patient is discharged on a different date of service, report the discharge separately using 99217 (Observation care discharge).

Observation or inpatient hospital care codes (99234-99236) are used to report an admission for observation care for more than eight hours. Again, if the patient is discharged the same day, there is no need to report an additional code for the discharge. If the patient is released on a different date of service, however, you may code the discharge using 99238-99239 (Hospital discharge day management).

At 8 p.m. the neurologist admits a patient for observation who has had a persistent headache since receiving a concussion a few days before. The patient remains in observation until 3 a.m. the next day. Because the patient is admitted to observation for less than eight hours and released on a later date of service, you should code the admit (99218-99220, as appropriate) and the discharge (99217). If the patient is admitted at noon and released the same day at 10 p.m., bill only the admit (99234-99236) because, although the observation services lasted beyond eight hours, the admission and discharge occur on the same date of service.

Coders should note, however, that the CMS guidelines published in the Nov. 1, 2000, Federal Register and effective Jan. 1, 2001 contradict CPT coding instructions, which specify that 99234-99236 should be used to report observation or inpatient hospital care services for all patients admitted and discharged on the same date of service. In other words, CPT does not differentiate by time and doesn't require a stay of eight hours or more to report 99234-99236. Codes 99218-99220, on the other hand, are to be reported once per day for patients designated/admitted to observation status.

According to CPT guidelines, if the patient in the above example is admitted to observation and discharged the same day, 99234-99236 are always appropriate. If the patient is admitted at 8 p.m. on day one and discharged at 3 a.m. on day two, 99218-99220 are appropriate and the discharge may be reported separately using 99217.

Most third-party payers, as well as some Medicare carriers, follow CPT guidelines and allow neurologists to report 99234-99236 when a patient is admitted and discharged on the same day, regardless of the amount of time spent in observation or inpatient hospital care. Because of this, you should ask payers for their policies. When billing observation codes for those payers who follow CMS guidelines, always document the length of time spent in observation care or inpatient hospital care to report 99234-99236. In addition, the neurologist must meet the existing requirements for documenting the patient's medical history, the results of the physical examination and the level of medical decision-making that occurred during the admissions.