Pulmonology Coding Alert

Question: I am not sure when to use observation care versus subsequent hospital care. Can you shed some light on which conditions may point to the need for one or the other?

Minnesota Subscriber

Answer: By definition, a physician admits someone to observation because she's trying to determine whether the patient's condition requires extended treatment in an inpatient setting. Use these two examples to help you choose an appropriate code:

Example 1: A 68-year-old patient with bronchiectasis and a pleural effusion undergoes thoracentesis at the hospital. A few hours later, the patient is admitted to observation because a post-thoracentesis chest X-ray demonstrates a mild- to moderate-size pneumothorax. The pulmonologist performs a detailed history and a detailed examination along with straightforward medical decision making, then places the patient on mask oxygen therapy and schedules a repeat chest X-ray that night.

On the claim, report 99218 (Initial observation care, per day, for the evaluation and management of a patient, which requires these 3 key components: a detailed or comprehensive history; a detailed or comprehensive examination; and medical decision making that is straightforward or of low complexity) for the observation with ICD-9 codes 494.0 (Bronchiectasis without acute exacerbation), 511.9 (Unspecified pleural effusion), and 512.0 (Spontaneous tension pneumothorax) appended to prove medical necessity.

Example 2: A 65-year-old patient with moderate airflow limitation due to chronic bronchitis and emphysema is admitted to observation for acute bronchitis. The pulmonologist 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 pulmonologist decides to admit the patient to the hospital.

This is a hospital care service, not an observation. On the claim, report 99223 (Initial hospital care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: a comprehensive history; a comprehensive examination; medical decision making of high complexity) for the initial evaluation with 491.22 (Obstructive chronic bronchitis; with acute bronchitis) to describe the acute bronchitis, complicating the patient's chronic bronchitis and emphysema.

Watch out: The physician may not always have control over what type of stay the patient requires. If the patient does not meet the payer's guidelines for acuity, you may downgrade the intended inpatient stay to an observation stay. If this happens and the physician learns of it in a timely manner, the physician may report the appropriate observation care code instead of the inpatient care code.