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Oncology & Hematology Coding Alert

Are You Forfeiting Hospital Observation Reimbursement?

Published on Fri Feb 27, 2004

Earn $70 when you use 99218

Reporting established patient codes (99212-99215) when your physician sends a patient for hospital observation after an office visit could cost your practice $70 a session. To get what you deserve, you should choose hospital observation codes 99218-99220.

Review the following expert answers to your hospital observation questions.

Q. When should we use 99218-99220?

You should report hospital observation codes (for example, 99218, Initial observation care, per day, for the evaluation and management of a patient ...) when your oncologist admits a patient to the hospital and maintains responsibility for that patient during the stay. The codes cover one 24-hour period, says Linda L. Lively, MHA, CCS-P, RCC, CHBME, founder and CEO of American  Medical Accounting and Consulting in Marietta, Ga.

Suppose a chemotherapy patient presents to your oncologist with severe dehydration (276.5, Volume depletion) and stomach cramps (789.0x, Abdominal pain). Your physician sends the patient to the hospital for observation. Because your physician admitted the patient, you should report 99218 instead of an office visit code, such as 99212 (Office or outpatient visit ... established patient ...). Observation care includes "all evaluation and management services provided by the supervising physician" on the same day of service, according to CPT 2004.

The bottom line: You should expect higher reimbursement if you assign 99218 instead of 99212 when the physician admits a patient for observation. For instance, Medicare pays $70 for 99218, based on national averages. But the government pays only $40 for 99212.

Q. What should initial-observation documentation include?

To best document the observation, you should put the following in the medical record:

  •  the date and time of admission
  •  the treatment the physician will provide while the patient is in observation (for example, 90780, Intravenous infusion for therapy/diagnosis, administered by physician or under direct supervision of physician; up to one hour)
  •  nursing and progress notes
  •  the appropriate ICD-9 codes to support medical necessity.

    Example: To support using 99218 for the dehydration scenario above, you should assign 276.5 and the correct cancer code (143.0-199.0).

    Q. What if the physician admits and discharges the patient on the same day?

    The key to choosing the right code in this situation is to count the hours the patient stays in observation, Lively says.

    Careful: If the patient stays in observation status for less than eight hours on the same day, you should report 99218-99220. Also, you can't report discharge code 99217 (Observation care discharge day management) for observations less than eight hours, Lively says.

    But if the observation lasts a minimum of eight hours, you should report 99234-99236 (Observation or inpatient care services), according to Medicare guidelines. And if you report one of these codes, you can expect better reimbursement than if you used 99218-99220. For instance, Medicare pays $140 for 99234, based on national averages.

    How to Get Paid for Discharges
     
    When the oncologist discharges the patient on the day following admission, you can bill 99217 (Observation care discharge day management), which also reimburses about $70 nationally, in addition to 99218-99220 for the admission day.

    Remember that to report a discharge code -- such as 99217 -- the physician must actually participate in the discharge service, says Marcella Bucknam, CPC, CCS-P, CPC-H, CCA, coordinator of HIM certificate programs at Clarkson College in Omaha, Neb.

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