Primary Care Coding Alert

Reporting your FP's observation services can be tricky business, as there is confusion about how, when, and why to choose from one observation code set or another. Add to that a common misconception about Medicare coding, and you've got a recipe for potential disaster. Clear things up with this observation FAQ.

One reason coders get tripped up on observations is the different code sets for different observation services, depending on length. Coders should select a code from the 99218-99220(Initial observation care, per day, for the evaluation and management of a patient which requires these 3 key requirements: ...) set when the physician admits the patient on one date and discharges him on another, confirms Sharlene A. Scott, CPC, CPC-H, CCS-P, CCP-P, CPCI, CPMA, PMCC-approved instructor at Baltimore's Coding Academy of America, Inc.

"These codes are typically used when a patient is not technically being admitted into the hospital, but is going to (Continued on next page) be observed for a condition. Usually the condition is  severe enough that observation in a medical facility is needed," reports Kathleen Godwin, CPC, coding coordinator with La Porte Regional Health Systems in Indiana.

You won't find a single correct answer to what illnesses can trigger observation service: A patient in observation status might have atypical chest pain, a severe acute asthma attack ... any situation could trigger an observation service, conceivably.

Do this: If you are unsure as to whether or not a patient was in observation, check with the physician. Remember, someone is admitted to observation because the FP is still trying to figure out whether she is sick enough to be admitted as an inpatient.

You'll use the 99217 (Observation care discharge day management) code for the discharge date when a patient is  in observation for more than one calendar date, says Scott.When coding these encounters, append the initial date of  service to the 99218-99220 code, then use 99217 for the discharge date, Goodwin confirms.

Example: The FP meets one of his 43-year-old male patients at the hospital. The patient is complaining of chest pain and the FP puts the patient in observation at 9:23 p.m. on Thursday to make sure he has not suffered a myocardial infarction (MI). Notes indicate a comprehensive history, a detailed exam, and straightforward medical decision making. At 8:12 a.m. the next morning, the physician discharges the patient with a diagnosis of rapid heartbeat.

On this claim, you'd report the following:

• 99218 (... a detailed or comprehensive history; a detailed or comprehensive examination; and medical decision making that is straightforward or of low complexity ...) for the initial observation service;

• 99217 for the discharge service; and • 785.0 (Tachycardia, unspecified) appended to 99218 and 99217 to represent the patient's rapid heartbeat.

Use the 99234-99236 (Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date, which requires these 3 key components: ...) codes for "admission and discharge from observation care on the same date: in other words, the patient is in observation for at least 8 hours but no more than 23 hours on the same date," explains Scott.

Remember: Just like any other observation service, patient condition drives the use of 99234-99236; report these codes only if the physician is deciding whether or not a patient needs hospitalization.

Yes, but it depends on when the eight hours occur. It's widely believed that when a Medicare patient is in observation for less than eight hours, you should report only 99218-99220, regardless of the date(s) of service involved. This is incorrect, however.

The lowdown: According to Section 30.6.8 of Chapter 12 of the Medicare Claims Processing Manual, report observations of less than eight hours on the same date with 99218-99220. (Leave 99217 off these claims.)

For observations that span two calendar dates, "CMS states specifically that if a patient is admitted to observation status on one calendar date and discharged on another calendar date, 99218-99220 should be reported on the date that the patient is admitted and 99217 should be coded on the date that the patient is discharged," Scott explains.

Example: The FP admits a 68-year-old Medicare patient to observation at 10:28 p.m. on Wednesday. After a series of tests, the physician decides the patient does not require hospitalization. At 2:30 a.m. on Thursday, the FP discharges the patient. Notes indicate a level-two E/M service.

According to the CMS transmittal, you should report the following

• 99219 (... a comprehensive history; a comprehensive examination; and medical decision making of moderate complexity ...) for the initial observation service with a Wednesday date of service; and

• 99217 for the discharge service with a Thursday date of service.

On the other hand: When the patient is in observation care for at least eight hours but less than 24 hours, and is discharged on the same calendar date, choose a code from the 99234-99346 set without 99217.