Oncology & Hematology Coding Alert

Now that ambulatory payment classifications (APCs) have become part of everyday hospital activities, oncology physicians who occasionally admit patients to the hospital for observation could begin to see some changes. For now, the rules for physicians remain the same, but APCs likely will affect the way hospitals do business.

There are a lot of changes with hospital observation services, 99217-99220, says Cindy Parman, CPC, CPC-H, principal and founder of Coding Strategies Inc., a Dallas, Ga.-based coding consulting firm. Under APCs, observation services are no longer payable.

Because of this, some hospitals may choose to close observation units, says Parman. But until then, physicians with admitting privileges still can bill for hospital observation services. If, for example, a cancer patient has an adverse reaction to chemotherapy or supportive care drugs that requires hospital attention, but is not serious
enough to be admitted for a hospital stay, the physician can bill 99218-99220 for initial observation care.

Guidelines for Billing Observation Codes

According to Parman, physicians must adhere to the following guidelines when billing observation codes:

1. Initial observation care may be billed only by the physician who admitted the patient to hospital observation and was responsible for the patient during his or her observation stay. To bill the observation codes, there must be a medical observation record. The record should include the date and time of the admission by the physician. The admitting order must contain a description of the care the patient is to receive while in observation as well as nursing notes and progress notes prepared by the physician while the patient was in observation status.

The medical observation record should be prepared in addition to any emergency department record, says Parman.

2. Payment for a hospital observation code is for all the care rendered by the admitting physician on the date the patient was admitted to observation. Other physicians who see the patient while he or she is in observation must bill the office and other outpatient services or outpatient consultation codes (99241-99245, office or other outpatient consultations). Of course, those physicians must adhere to the key components of an evaluation and management (E/M) visit and bill accordingly.

For example, if an oncologist admits a patient to observation and asks another oncologist in his or her practice to consult on the patients condition, only the admitting oncologist may bill the observation code. The consulting oncologist must bill using outpatient consultation codes 99241-99245.

3. Use only initial observation codes when billing for observation and discharge on the same day. If the patient is discharged on the same date as admission to observation, the admitting physician can bill only 99218-99220.

If the patient stays in observation after the first midnight [...]