Primary Care Coding Alert

Many factors affect coding when patients are admitted to the hospital for observation. Coders must know when patients were admitted to observation status, whether or not they were discharged on the same date, and if they were admitted to the hospital or another healthcare facility upon their discharge.

In addition, family practice coders should familiarize themselves with coding guidelines that affect observation status. Observation codes, like other evaluation and management (E/M) codes, may be assigned on multiple levels, and the rules about other E/M and admission codes may be paired with them.

Family physicians admit patients to observation in a wide range of scenarios, says Debra Wiggs, CMPE, chief executive officer of Community Physicians Administrative Support Services, (ComPASS, LCC), a billing and collections firm that provides support to 45 primary-care practices in Washington.

Typical situations where admission for observation may be necessary include geriatric patients experiencing symptoms of a serious medical condition like a stroke, pediatric patients presenting with an extremely high but unexplained fever, or individuals who have undergone some type of trauma like a head injury with loss of consciousness, she says.

Admitting and Discharging From Observation on the Same Day

In many cases, a patient may be admitted to observation and discharged that same date. For example, at about noon on the third day of a record-breaking heat wave, a 35-year-old male construction worker is seen after he collapses at the work site. After diagnosing dehydration (276.5, disorders of fluid, electrolyte, and acid-base balance; volume depletion), the physician admits the man to observation to monitor his condition while he receives fluids intravenously. Six hours later, he is released.

In a situation like this, where the patient has been admitted for observation and discharged on the same day, coders will choose a code from the 99234-99236 series (observation or inpatient care services [including admission and discharge services]), says Kathy Pride, CPC, CCS-P, coding specialist for Martin Memorial Medical Group, a practice with 57 primary-care physicians located in Stuart, Fla. These codes are used to describe the initiation of observation status, supervision of a care plan and performance of periodic assessments, as well as routine discharge services like final examination and instruction of continuing care.

When assigning codes from this E/M series, it is not necessary that the patient be located in a specifically designated observation area (i.e., as a separate unit in the hospital), she says.

Unless there were additional symptoms or related complications, it is likely the dehydration case described above would be assigned the lowest level of care, 99234. If, on the other hand, a patient presents with symptoms that indicate conditions like a cardiac event or neurological disorder, the higher level codes may be reported.

Codes from this series include services related to the observation status that were initiated at another site, Pride says. For instance, if the encounter with the patient began in the physicians office or the emergency department, you would not report both an E/M code for those services and the observation admission code. According to CPT guidelines, the code assigned for the observation care level of service should take into account time spent with the patient in other settings.

Note: See accompanying story, Proposed Changes Would Lower Observation Reimbursement, on page 68 containing information about changes HCFA has proposed regarding patients under observation status for less than 24 hours.

In some instances, patients are admitted to observation and then admitted as an inpatient later that same day. In this case, coders would report only the initial hospital care code (99221-99223, initial hospital care, new or established patient). Coding both the observation care services and the inpatient admission would be inappropriate, Wiggs points out.

When a patient is in observation for longer than 23 hours, his or her condition may be more serious than initially thought, or may be deteriorating. In these instances, hospitals may admit the patient, and then contact the physician to update the admission status on his or her orders.

Admit to Observation, Discharge on a Different Day

When a patient remains in observation for a long period of time, additional coding challenges arise. Coders must be familiar with the duration of the patients observation status. If the observation status lasted several days, coders must know how to assign E/M and discharge codes.

When a patient remains under observation for more than one day, codes 99218-99220 (initial observation care, new or established patient) apply, points out Pride. These codes are assigned to reflect the services provided on the day the patient is admitted, which usually include initiation of observation status, supervision of the care plan and performance of periodic assessments.

Pride notes that Medicare allows patients to remain under observation for 48 hours, but uses calendar dates to delineate days of service. The service codes for initial observation care are reported only on the date the patient was admitted, she says. It doesnt matter whether the patient was admitted to observation at 8 a.m. or 11 p.m., code 99218, 99219 or 99220 would be assigned for that first date of service.

According to Pride, First Coast Service Options, the Medicare carrier in Florida, has issued specific guidelines for patients under observation status for multiple days. If the patient remains under observation a second day, for example, the physician would bill for his or her services using the outpatient office visit codes, 99211-99215 (office or other outpatient services, established patient). When the patient is discharged from observation, code 99217 (observation care discharge) would be reported.

Pride offers the following example: A patient who experienced head trauma is admitted for observation at 11 p.m. on Sept. 1 and remains in observation until 9 a.m. on Sept. 3. This extends across three calendar dates, but totals only 34 hours well within Medicares 48-hour limit.

Coders would assign one code from the 99218-99220 series for Sept. 1. A code from the outpatient series (99212-99215) would be assigned for encounters the physician has with the patient on Sept. 2. Code 99217 would be reported for discharge services provided on Sept. 3.

Pride admits that this scenario may seem confusing and adds that some local carriers often reject this coding when it is initially submitted. Even though this is what we have been told to do, carriers never seem to pay for this on the first try. If this happens, resubmit the claim with an explanation and a copy of their directions, she says.

Wiggs cautions that coders should ask their local carriers how they want observation status that lasts longer than one day to be billed. Different carriers define these scenarios differently. Some consider one day to be a 24-hour period, even though that time frame may encompass two calendar dates. It's wise to check this out.

In addition, other carriers may require that code 99499 (unlisted evaluation and management service) be used to describe services provided on the second day of observation. Coders should try to get carrier requirements in writing if possible, and update them at least once a year.

If specialists other than the admitting physician see the patient in observation, they would bill their time using the appropriate outpatient visit or consultation codes, depending on the nature of the service.

Discharge From Care vs. Discharge From Hospital

When a patient is discharged from observation on a date other than the one he or she entered observation status on and is not admitted to the hospital or another healthcare facility as an inpatient, coders would assign 99217, Wiggs says. This code is used to describe services including final examination, discussion of the hospital stay, instructions for continuing care, and preparation of discharge records.

If the patient is admitted immediately to the hospital or other affiliated facility, no discharge code would be assigned. If there is not a gap in service and if the patient does not leave your care, it would be inappropriate to report a discharge code, she says. Instead, coders would report the code that most accurately reports the admission to the hospital from the 99221-99223 series.

If, however, the patient is dismissed from observation but admitted to an independent facility like a nursing home, Pride says the discharge code may be reported in addition to the appropriate nursing home admission code, 99301-99303 (comprehensive nursing facility assessments, new or established patient).