Primary Care Coding Alert

Our coding tool reveals when you should also charge a discharge

To comply with Medicare's "Eight-Hour Rule," keep an eye on how long the patient spends in observation status on which dates.

Financially, CMS' short observation stay coding rule may make sense. Medicare "views a same-day observation discharge more than eight hours after the admission as equivalent in work" to an admission and discharge on different dates, says Brett Baker, a third-party payment specialist with the American College of Physicians.

Payment: You'll collect about the same Medicare reimbursement for an extended same-day observation admission and discharge as one that occurs on subsequent days. Codes 99234-99236 contain 3.58-5.89 relative value units and reimburse at a 2005 Medicare unadjusted rate of $135.67-$223.22. Medicare pays about the same total amount ($138.33-$228.52) for a two-day observation stay using 99218-99220 (1.78- 4.16 RVUs) and 99217 (1.87 RVUs).

CMS Transmittal B-00-65 clarifies that you should assign observation care codes (99217, 99218-99220, and 99234-99236) based on the following time and  date criteria: