Part B Insider (Multispecialty) Coding Alert

Observation services expansion eliminates payer coding variation.

In 2011, coders will have a new option when reporting the middle day of observations that last longer than normal. Check out this expert advice on how CPT additions will affect your observation care services coding starting on Jan. 1, 2011.

New Codes Offer Clarity

Before 2011, coding for the "middle days" of an observation service was a problem, says Jill Young, CPC, CEDC, CIMC, with Young Medical Consulting LLC in East Lansing, Mich. "Although not the norm, there are situations where a patient is admitted to observation and remains in that status for three or more days," Young explains.

The CPT 2011 E/M section addresses these middle days, with new codes. The three new codes parallel the hospital subsequent care series in terms of component requirements and time frames. The new codes include:

• 99224 -- Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: Problem focused interval history; Problem focused examination; Medical decision making that is straightforward or of low complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is stable, recovering, or improving. Physicians typically spend 15 minutes at the bedside and on the patient's hospital floor or unit.
• 99225 -- ... an expanded problem focused interval history; an expanded problem focused examination; Medical decision making of moderate complexity.
• Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is responding inadequately to therapy or has developed a minor complication. Physicians typically spend 25 minutes at the bedside and on the patient's hospital floor or unit.
• 99226 -- ... a detailed interval history; a detailed examination; Medical decision making of high complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is unstable or has developed a significant complication or a significant new problem.

Physicians typically spend 35 minutes at the bedside and on the patient's hospital floor or unit.

When to use: "If you had a patient admitted to observation on July 1 and discharged from observation on July 3, the problem for coders was how to bill for July 2," Young says. In 2011, you'll use 99224-99226 for July 2.

99224-99226 Stamp Out Insurer Variances "Historically there has been some confusion about how to report the middle day for those cases when an observation period transcends three calendar days. The introduction of the new CPT codes resolves that dilemma," explains Michael Granovsky, MD, CPC, FACEP, president of MRSI, in Woburn, Mass.

Prior guidance for these "extended" observation and middle day observation stays created some confusion and led to several different policies, such as the Spring 1993 edition of CPT Assistant, which instructed coders to "use the unlisted evaluation and management service code (99499, Unlisted evaluation and management service) to report these services."

Payers often took their own path, however, when setting policy on "middle day" observation coding. "Previously it was a carrier's prerogative," Young says. Payers would often call for 99499; some carriers, however, preferred 99231- 99233 (Subsequent hospital care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: ...) or 99211-99215 (Office or other outpatient visit for the evaluation and management of an established patient,...). Technically, observation codes are outpatient codes.