Otolaryngology Coding Alert

When an otolaryngologist admits a patient to observation status, keeping the numerous E/M codes straight requires more than a watchful eye. Consider the following scenarios to avoid incorrectly reporting the physician's services, which could result in undercharging or even double-dipping.

Prior to CPT's creation in 1998 of observation care services (99234-99236), physicians had no way of charging for both a same-day admission and discharge. CPT allows only one E/M (code) per day, so carriers would pay for the admission service only and not the discharge service.

Now, instead of using the initial observation care codes (99218-99220) in conjunction with a separate discharge code (99217), physicians have the same-day admission and discharge codes (99234-99236) as an option. Although CPT does not require a minimum length of stay as a factor in reporting 99234-99236, Medicare has a minimum time requirement.

For all non-Medicare payers, when a physician admits a patient to observation care and discharges the same day, report same-day admission and discharge codes 99234-99236 (Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date ), says Dee Mandley, RHIT, CCS, CCS-P, director of HIS and education services for CURES, a coding and compliance company in Twinsburg, Ohio. You should report 99234-99236, regardless of the length of stay, as long as documentation reflects that the otolaryngologist performed both an admission and a discharge. CPT has no rules requiring a minimum stay to charge admission and discharge codes 99234-99236. Medicare, however, requires an eight-hour stay to report these codes.

"Time only matters with Medicare," says Kathy Pride, CPC, CCS-P, coding supervisor for the Martin Memorial Medical Group, a 57-physician group practice in Stuart, Fla. Otherwise, the key is that the services occurred on the same calendar day. When charging Medicare for admission and discharge on the same calendar day and less than eight hours, report initial observation care codes 99218-99220 (Initial observation care, per day, for the evaluation and management of a patient ) only, she says. Medicare reasons that for stays of less than eight hours, the physician probably didn't provide both admission and discharge services, so it will pay for one service only the admission, not the discharge. For stays longer than eight hours, assign same-day admission and discharge codes 99234-99236.

Report same-day discharge and admission only when the physician visits the patient at two separate encounters and records these as two separate services. "The doctor should record the admission and the discharge under a separate heading," Pride recommends. A separate sheet of paper is unnecessary. You should not report 99234-99236 if the doctor visits the patient only once.

Only one encounter occurred, so charging for an admission and a discharge is inappropriate. "The physician must have admitted the patient and then come back," Pride says. Otherwise, the provider is charging for a service that did not occur.

Assigning discharge code 99217 is also improper because the discharge code is for services provided on a different calendar day than the day the physician initiates observation care, Mandley says.

When the otolaryngologist admits a patient to inpatient status from observation status on the same day, report only the inpatient service. Coding convention allows reporting only one E/M service per day. Therefore, when the same otolaryngologist provides multiple E/M services on the same day, you should combine the work involved and use it to report a higher-level service rather than report the services individually.

For instance, an otolaryngologist admits a post-tonsillectomy patient to observation status due to a rapid heart rate and dehydration. The patient's symptoms worsen, and the otolaryngologist hospitalizes the patient.

Report the initial hospital visit (99221-99223) only. Do not bill for the admission to observation. "You should not separately report same-day E/M services provided in sites that are related to the admission, such as observation," Mandley says. Instead, include the work involved in the observation services in the admission code.

The same rules apply to services provided in the doctor's office that require further E/M outpatient or inpatient observation services.

For instance, a patient has a severe anaphylactic reaction to an allergy injection. The otolaryngologist is concerned about delayed reactions and admits the patient to the hospital observation unit.

Report 99218-99220 or 99234-99236 for the E/M services provided and documented that day. The doctor should roll the work performed in the office into the observation code, Pride says. "He doesn't need to repeat the elements."

When the physician admits a patient to inpatient hospital care on a different calendar day than the initial observation date, the doctor may report the initial hospital care (99221-99223) but not the discharge from observation status. This reflects coding guidelines that allow reporting one E/M service per day.

Consider the patient who is admitted to observation status due to concerns about delayed reactions from an anaphylactic reaction. Overnight, the patient experiences extreme swelling and hives that are unresponsive to drug therapy. The otolaryngologist admits the patient to the hospital the next day.

For the admission to observation care on day one, assign 99218-99220. For the physician's services on day two, report initial hospital care codes 99221-99223. Do not report the discharge from observation (99217) because coding rules stipulate same-day inpatient-observation codes as per-diem codes. Include any work performed during the observation on day two in the initial hospital care code.

When an otolaryngologist admits a patient to observation status and discharges him on a different calendar day, report each service separately.

For instance, the patient in the anaphylactic example spends an uneventful night in the observation unit. The otolaryngologist examines and discharges the patient the next morning.

For the initial admission to observation status, you should assign 99218-99220. For the discharge on day two, report 99217.

When a patient remains in observation status for two calendar days, the otolaryngologist should use outpatient office visit codes (99211-99215) for services between the initial admission and discharge.

Consider the doctor who admits the anaphylactic-shock patient on Thursday night due to her earlier reaction. The otolaryngologist decides to keep her in observation status on Friday due to continued but subsiding signs of irritation. On Saturday morning, he discharges her.

For the initial observation admission, report 99218-99220. For the otolaryngologist's services on Friday, report an outpatient office visit (99211-99215). For the discharge on Saturday, assign 99217.

When another doctor requests an otolaryngologist's opinion regarding a patient who is in observation care, the otolaryngologist reports the consultation, and the other physician bills for the observation services.

For example, an internist requests a consultation for a patient with parotitis (527.2). The otolaryngologist decides the patient does not need surgery at that time. She reports an outpatient consultation (99241-99245). The internist charges for all observation services.

On the other hand, if the patient requires surgery, the otolaryngologist should bill for the initial consultation in addition to draining the abscess (e.g., 42300*, Drainage of abscess; parotid, simple). The consultation led to the decision to perform surgery and therefore is separately reportable. To indicate that the consultation is a separate service from the surgery, append modifier -25 (Significant, separately identifiable evaluation and management service by the same physician on the same day of the procedure or other service) to 42300.

Make sure documentation is consistent with the hospital's records. The physician's order should state, "Admit to observation status," Pride recommends. File the claim with a place-of-service indicator "22" for outpatient hospital. The record should also reflect any status changes to show clearly where each E/M service took place. Clear documentation will support correct coding and should eliminate payer denials for incorrect place of service.

Additionally, the diagnosis does not affect physician payment, Pride says. The hospital may not receive reimbursement for certain diagnoses that CMS deems inappropriate for observation status, but the diagnosis does not matter for physician work. CMS is collecting data on how often physicians admit patients with particular diagnoses to observation status. It will use this data to determine reimbursement, so accurate reporting is crucial to ensure future payment.

Remember, the physician determines whether the patient should be admitted to observation or inpatient status, and the hospital must follow the doctor's orders, Pride stresses.