Practice Management Alert

Expert: When observation stay goes beyond the pale, payer will have questions.

Most observation services don’t last more than a day — or two, at the outside. By then, the physician has typically discharged the patient or admitted her to the hospital.

In most cases, Medicare feels that the decision to either discharge a patient from observation or admit her as an inpatient should take less than 48 hours, usually less than 24 hours, says Todd Thomas, CPC, CCS-P, president of ERcoder, Inc. in Edmond, Ok.

Exception: There are those encounters, however, that turn into marathon observation services where the physician keeps a patient for more than two full calendar days. When this occurs, you’ll code the “middle” day with subsequent observation codes.

So let’s say the physician admits the patient to the hospital observation area on day one, the patient stays in observation all of day two, and is discharged on day three. You’ll choose from this code trio for the second day, depending on encounter specifics:

• 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…
• 99225, … an expanded problem focused interval history; an expanded problem focused examination; medical decision making of moderate complexity…
• 99226, … a detailed interval history; a detailed examination; medical decision making of high complexity.

You only need to satisfy two of the three key components for each code level, reminds Thomas.

Caveat: You might want to give your insurer a heads-up before sending in this claim. Often, payers request that you include documentation as to why the patient was in observation for so long without being admitted to the hospital.