Primary Care Coding Alert

Question: One of our physicians admitted a patient to hospital after an evaluation and management (E/M) service in the office. The following day, according to the note, the physician then placed the patient under observation. This is an unusual scenario as, in my experience, the sequence of events is usually the other way around — the patient usually goes under observation first, then may be admitted, or the patient is admitted and then is discharged after the condition is resolved. So, can I code this situation and, if so, how do I go about doing it correctly?

Codify Subscriber

Answer: You are correct in saying an encounter where a patient goes from inpatient status to observation status is unusual. It is possible, however, and because of that there are no guidelines that prohibit you from coding the situation.

To do this, you would use the usual inpatient hospital and hospital observation care codes. This means using the appropriate code from 99221-99223 (Initial hospital care, per day, for the evaluation and management of a patient …) for the first day inpatient admission and the appropriate code from 99218-99220 (Initial observation care, per day, for the evaluation and management of a patient …) for the second day’s initiation of observation care.

It is also entirely possible that there may be some error in your provider’s documentation. Because of that, we suggest that you contact the provider to make sure the documentation is correct and, if not, to ask the provider to clarify and correct the documentation if necessary.