Initial Observation Care
New or Established Patient
The following codes are used to report the encounter(s) by the supervising physician with the patient when designated as “observation status”. This refers to the initiation of observation status, supervision of the care plan for observation and performance or periodic reassessments. For observation encounters by other physicians, see Office or Other Outpatient Consultation codes (99241-99245) or subsequent observation care codes (99224-99226) as appropriate.
To report services provided to a patient who is admitted to the hospital after receiving hospital observation care services on the same date, see the notes for initial hospital inpatient care (page 14). For observation care services on other than the initial or discharge date, see subsequent observation service codes (99224-99226). For a patient admitted to the hospital on a date subsequent to the date of observation status, the hospital admission would be reported with the appropriate Initial Hospital Care code (99221-99223). For a patient admitted and discharged from observation or inpatient status on the same date, the services should be reported with codes 99234-99236 as appropriate. Do not report observation discharge (99217) in conjunction with a hospital admission.
When "observation status" is initiated in the course of an encounter in another site of service (eg, hospital emergency department, physician's office, nursing facility) all evaluation and management services provided by the supervising physician in conjunction with initiating "observation status" are considered part of the initial observation care when performed on the same date. The observation care level of service reported by the supervising physician should include the services relating to initiating "observation status" provided in the other sites of service as well as in the observation setting.
Evaluation and management services on the same date provided in sites that are related to initiating "observation status" should NOT be reported separately.
These codes may not be utilized for post-operative recovery if the procedure is considered part of the surgical "package." These codes apply to all evaluation and management services that are provided on the same date of initiating "observation status."