Primary Care Coding Alert

When your FP performs observation services, pay attention to the number of days (or hours) the patient remains in observation. And once you arrive at the proper code, be sure you-ve got all the supporting documentation in order before sending the claim off. Check out this primer on coding the different types of observation services.

Report codes 99218-99220 for the first day of observations that last multiple days, says Gerry Salwek, RHIT, CPC, coding manager at Caledonia Financial Services in Plantation, Fla.

The admitting physician uses 99218-99220 for the patient's initial day of observation, unless the patient happens to be subsequently discharged to home or admitted to inpatient status on the same calendar day.

The initial observation care codes include all of the E/M services the admitting physician (or another physician of the same specialty in the same group) provides the patient for that entire day, including office, ED, or other visits leading up to the admission to observation (regardless of location).

Warning: Be on the lookout for services that might appear to be observations but really aren-t, says Joan Gilhooly, CPC, CHCC, president of Medical Business Resources LLC, in Deer Park, Ill. Attempting to categorize everyone who requires lengthy treatment in the hospital as an observation patient is not good practice.

Example 1: A patient with moderate airflow limitation due to chronic bronchitis and emphysema is admitted to observation for acute bronchitis. The FP performs a comprehensive history and a comprehensive examination along with medical decision-making of high complexity.

Initially, the saturation is satisfactory and the provider starts the patient on antibiotics and bronchodilators by inhalation. Within two hours, the patient's condition begins to deteriorate, the saturation falls, and the FP admits the patient to the hospital.

This is a hospital care service, not an observation. Report 99223 (Initial hospital care, per day, for the evaluation and management of a patient, which requires these three key components: a comprehensive history; a comprehensive examination; medical decision-making of high complexity) for the evaluation with 491.22 (Obstructive chronic bronchitis; with acute bronchitis) to describe the bronchitis.

"By definition, someone is admitted to observation because you-re still trying to figure out whether his condition requires extended treatment in an inpatient setting," Gilhooly says. Keep this in mind when trying to decide if an observation code is the most appropriate code to report.

Example 2: The FP meets a patient with chronic obstructive pulmonary disease (COPD) at the ED. The patient suffered an acute exacerbation. Following the administration of nebulizer treatments and steroids, the patient is somewhat improved but not safe for discharge. The FP writes an order to admit the patient to observation at 9 p.m. The patient receives several additional rounds of nebulizers along with repeat physician assessments overnight.

This is an observation service. On the claim, report 99220 (Initial observation care, per day, for the evaluation and management of a patient, which requires these three key components: a comprehensive history; a comprehensive examination; and medical decision-making of high complexity) with ICD-9 code 491.21 (Obstructive chronic bronchitis; with [acute] exacerbation) appended to prove medical necessity for the initial observation care.

(When the patient is discharged the next morning, assuming there is a face-to-face encounter between the patient and the physician, you will also report a discharge code for that service -- keep reading for more details.)

The success of your observation claims may rest on the level of documentation the FP provides. Solid encounter notes are the key to successful observation claims, Salwek says. The provider should include details that explain the encounter specifics and the reasons an observation code was appropriate.

When reviewing observation claims, be sure you consider the following documentation:

- an order admitting the patient to observation

- admission date and time

- any nursing or progress notes

- details of the physician encounter provided during observation

- a discharge note

- discharge date and time.

When the physician provides observation services to the patient on more than one day, report 99217 (Observation care discharge day management) to represent the physician's service on the day of discharge, Salwek says.

Do not include 99217 on observations that last a single calendar day; the service must span at least two dates before 99217 is appropriate. Do not report the discharge code unless the physician provides a face-to-face encounter with the patient on the day of discharge.

Suppose a patient is admitted to observation on Monday at 3 p.m., and the physician provides and documents a high-complexity observation service. At 9 a.m. Tuesday, the physician evaluates the patient and discharges him. For this encounter, you-ll submit a code for each day of service:

- 99220 for the Monday service

- 99217 for the Tuesday discharge service.

The other set of observation codes, 99234-99236, is for use when a patient is admitted and discharged within the same calendar day, Salwek says.

Consider this example: The FP admits a wheezing asthmatic patient to observation at 8 a.m. Monday. During the next few hours, the patient receives nebulizer bronchodilator therapy and corticosteroids. A 4 p.m., chest x-ray and a repeat pulse oximetry show that the patient has stabilized. Notes indicate a moderate-complexity observation service. The FP discharges the patient at 6 that evening.

In this example, the patient's stay occurred on a single calendar day, so on the claim, you-d report 99235 (Observation or initial hospital care, for the evaluation and management of a patient including admission and discharge on the same date, which requires these three key components: a comprehensive history; a comprehensive examination; and medical decision-making of moderate complexity).

Because 99234-99236 comprises both components of care, documentation for these observation codes should include information on the initial observation care and the discharge service.

"Be sure the record identifies the length of stay -- and shows that the time in observation status was greater than eight hours," Gilhooly says.

Exception: "It is important to remember that if the patient's condition does not improve and the physician admits the patient, then the coder should choose the appropriate initial inpatient admission code (99221-99223)," Salwek says.

If you report an inpatient admission code on the same day you admit the patient to observation, the hospital care code includes the observation services. But admitting the patient to inpatient status on day two of the observation stay allows you to report the initial observation service (99218-99220) on day one, and the initial hospital care service (99221-99223) on day two.

You should also keep 99218-99220 handy for encounters with Medicare and Medicaid patients who receive less than eight hours of observation care on a calendar day, Salwek says.

Why? Medicare and Medicaid guidelines state that the patient must be in observation for more than eight hours before you can use 99234-99236. CPT does not state that the observation care must be more than eight hours, so this rule does not apply to non-Medicare/Medicaid payers, unless the insurer observes Medicare coding conventions.

Gilhooly agrees, saying that "if the admit and discharge occur on the same calendar day and the number of hours in observation status is less than eight, choose 99218-99220 instead of 99234-99236" for your Medicare or Medicaid patients.

Note: Some non-Medicare insurers do not recognize the same-day admit/discharge codes (99234-99236). For these insurers, you can report only the most appropriate initial observation care code (99218-99220).