Primary Care Coding Alert

These 2 scenarios can help you get observation coding right each time

If you-re not cued in to the finer points of observation services coding, your practice could be missing out on reimbursement you-re fully entitled to.
 
Financial impact: If coders inappropriately report a standard evaluation and management code when the FP performs an observation, the practice's bottom line will suffer. In Wisconsin, for example, Medicare pays $60.34 for level-one observation code 99218, while it pays $34.87 for level-two E/M code 99212, says Quinten Buechner, ACS-FP/GI/PEDS, CPC, CCP, CMSCS, president of ProActive Consultants in Cumberland, Wisc.

Code First Day of Stay With 99218-99220

Use observation code set 99218-99220 for the first day of observations that span more than one calendar date, says Caral Edelberg CPC, CCS-P, CHC, president of Medical Management Resources for TeamHealth in Jacksonville, Fla.
 
-These initial observation care codes are reported only by the supervising or attending physician when the patient is admitted to observation. These codes include initiation of observation status, supervision of the care plan for observation and performance of periodic reassessments,- she says.
 
Example: Consider this low-level observation encounter, courtesy of Buechner: A diabetic patient complains of increased nausea and vomiting, which doesn't appear to be related to his diabetic condition. The FP examines the patient in the hospital emergency department (ED), performs and dictates a detailed history and exam, records medical decision-making (MDM) of low complexity and admits the patient to observation status. During the observation period, the FP gives the patient IV fluids with electrolytes, insulin and antiemetics to treat his symptoms.
 
On the claim, Buechner says that you would:

 - report 99218 (Initial observation care, per day, for the evaluation and management of a patient which requires these three key components: a detailed or comprehensive history; a detailed or comprehensive examination; and medical decision-making that is straightforward or of low complexity) for the observation service.

 - attach 250.02 (Diabetes mellitus without mention of complication; type II or unspecified type, uncontrolled) to 99218 to represent the patient's diabetes.

 - attach 787.01 (Nausea with vomiting) to 99218 to represent the patient's nausea and vomiting.

Explanation: Even though the FP provided services at two separate sites (ED, observation), -all of the services are reported with one code (99218), since the care provided in both sites is related to the same condition/ problem,- Buechner says. 
 
Authority: This is consistent with CPT guidelines, which state, -When -observation status- is initiated in the course of an encounter in another site of service (e.g., hospital emergency department, physician's office, nursing facility) all evaluation and management services provided by the supervising physician in conjunction with initiating -observation status- are considered part of the initial observation care when performed on the same date.-  
 
If a patient is in observation for more than one calendar day, you should code the discharge service as well. Report discharge services with 99217 (Observation care discharge day management).
 
So in the earlier example, if the patient was in observation from 8 p.m. Tuesday until 11 a.m. Wednesday, you-d also include 99217 on the claim (assuming the supervising family physician provided observation care services to the patient on both dates).
 
What never to leave off in your observation documentation: For a physician to bill the initial observation care codes, there must be a  medical observation record for the patient, Buechner says. This record should contain:

 - dated and timed physician's admitting orders regarding the care the patient is to receive while in observation

 - nursing notes

 - progress notes prepared by the physician while the patient was in observation status.

Present these notes on your observation claims, along with -any record prepared as a result of an emergency department or outpatient clinic encounter,- according to Buechner.
 
-Also, documentation must support the level of service charged,- Edelberg adds.
 
For example, if the physician reports 99220 (... a comprehensive history, a comprehensive examination, and
medical decision-making of high complexity), your documentation must support a medically necessary comprehensive history, comprehensive examination and medical decision-making of high complexity.

Meet 3 Requirements Before Coding Observation

Further, all three key components (history, exam, medical decision-making) must meet or exceed the level of service selected. Observation codes are not billed based on time, she says.

Use These Codes for Longer 1-Day Observations

If a patient is admitted to observation and discharged on the same day, you should choose the appropriate code from the 99234-99236 set.
 
-These codes are used when the patient is in and out within a 24-hour period of time on the same date; the observation time cannot span two dates,- says Marianne Wink-Sturgeon, RHIT, CPC, ACS-EM, at New York's University of Rochester Medical Center.
 
These codes represent admission, observation and discharge service, so don't report 99217 with the 99234-99236 codes.
 
Example: A 46-year-old male presents with generalized chest pain at 10 a.m. There is no radiation of the pain, and it is not exertional. After performing an initial evaluation and an electrocardiogram (EKG), the FP admits the patient to observation status. The physician performs two sets of cardiac enzymes, and then a stress test (results negative). The patient's pain resolves, and at 9 p.m. the physician discharges the patient.
 
In this instance, the patient spent a total of 11 hours in observation on the same calendar date. On the claim,

 - report 99236 (Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date which requires these three components: a comprehensive history; a comprehensive examination; and medical decision-making of high complexity) for the observation.

 - link 786.50 (Chest pain, unspecified) to 99236 to prove medical necessity for the observation.
 
Caveat: If the observation does not last at least eight hours on the same calendar day for a Medicare patient, you-ll report the service with codes 99218-99220.    -When a patient is admitted for observation care for less than eight hours and is then discharged on the same day, you should report codes 99218-99220 for the admission, and do not report a discharge code,- according to the Nov. 1, 2000, Federal Register. Private payers, however, don't observe this -eight-hour rule.-
 
Documentation: On your 99234-99236 claims, Wink recommends that you include notes:

 - explaining the admission and discharge of the patient

 -  outlining each time the physician checks the patient (and the physician's actions during those checks)

 -  clarifying the length of the observation status.
 
Also remember to include timed physician/nursing notes for the encounter, -and a discharge note including follow-up care advice,- Wink says.
 
Edelberg says your discharge note should include:

 - a description of the final examination of the patient

 -  a discussion of the hospital observation stay

 -  instructions for continuing care to all relevant caregivers

 -  preparation of discharge records, prescriptions and referral forms.
 
-I always advise folks to look at their local carrier policies for additional guidance [on observation documentation],- Wink says.