Primary Care Coding Alert

In the July 17, 2000, edition of the Federal Register, the Health Care Financing Administration (HCFA) published proposed changes to its observation care guidelines.
According to Kathy Pride, CPC, CCS-P, a coding and reimbursement specialist at Martin Memorial Medical Group in Stuart, Fla., the proposal affects observation stays of less than eight hours, and stays of eight hours to less than 24 hours. Currently, both of these scenarios would be coded with one code from the 99234-99236 series (observation or inpatient hospital care [including admission and discharge services]).

Under this proposal, observation admission codes 99218-99220 (initial observation care, new or established patient) would be assigned for patients if their stay was less than eight hours, Pride says. Discharge services would not be considered a separately billable service.

Services provided to patients admitted to observation for more than eight hours but less than 24 hours would continue to be reported with codes 99234-99236, but with altered physician work relative value units (RVUs) and documentation requirements, she says.

In its proposal, HCFA says it will continue to value the admission portion of the physician work as equivalent to CPT codes 99218-99220 but would reduce the discharge work RVUs from 1.28 to 0.67. The proposal notes this decrease would make the discharge work equal to the work in code 99213 (office or other outpatient visit). This means that for observation care more than eight hours but less than 24 hours, the RVUs would be:

99234 = 1.95 RVU
99235 = 2.81 RVU
99236 = 3.66 RVU

In addition to the guidelines for history, physical examination and medical decision-making, HCFA also would require the following to be documented in the medical record:

stay involving eight hours, but less than 24 hours;
billing physician was present and personally
performed the services; and
admission and discharge notes written by the billing physician.

HCFA notes that these proposed changes are designed to create a consistent payment policy for physicians who admit patients into observation for up to 24 hours regardless of the time at which they were admitted. In its proposal, HCFA points out that a physician who admits a patient to observation at 8 a.m. and discharges him at 8 p.m. would be allowed payment only for the admission services (99218-99220). However, a physician who admits a patient at 8 p.m. and discharges him at 8 a.m. the following morning would be allowed payment for both admission and discharge services (99218-99220, plus 99217, observation care discharge day management).