Pulmonology Coding Alert

Question: Occasionally we place a patient in observation status for one to three days. We are having trouble getting reimbursed for same-day admission and discharge. How should we properly bill for this?

Arizona Subscriber

Answer: The problem could be that you are reporting two observation codes on the same day. A common mistake is to report an initial observation care code (99218-99220) along with the observation discharge code (99217). Most carriers will not pay for both codes reported on the same day. But there is another option. Be sure to use the same-day admission and discharge codes (99234-99236) to report the services you described.

This is where things can become tricky. CPT does not refer to a minimum length of stay as a factor in reporting 99234-99236, but Medicare has instituted a minimum time requirement. For most non-Medicare payers, you can report the same-day observation and discharge codes regardless of the length of the stay, as long as the documentation shows that the pulmonologist performed both of the services. The main key with these carriers is that the services occur on the same day.

Medicare requires that the patient stay in observation for eight hours. So, you might wonder what to do when the observation is shorter than eight hours. In this case, you should report initial observation care codes 99218-99220 only. For stays longer than eight hours, report the same-day admission and discharge codes (99234-99236). The cause for this discrepancy is that Medicare reasons that when the stay is less than eight hours the physician probably did not provide both admission and discharge services. Therefore, Medicare will only pay for one service.

You should only report same-day admission and discharge codes when the pulmonologist visits the patient at two separate encounters. The physician must show in documentation that he performed two separate services.