Medicare, private payers might differ on coding shorter 1-day observations.
When it comes to coding observations, you need to know your code descriptors in order to ensure that you report your physician’s services correctly. Put simply, there are different code sets based on the amount of time the patient spends in observation.
Check out this quick tutorial on the basics of observation coding.
When a patient is in observation for multiple days, you should report the first day of the service with a code from the 99218-99220 (Initial observation care, per day, for the evaluation and management of a patient which requires these 3 key components: …) code range, confirms Mary I. Falbo, MBA, CPC, CEO of Millennium Healthcare Consulting, Inc. in Lansdale, Pa.
Remember: If the patient is in observation for multiple days, be sure to include 99217 (Observation care discharge day management) for the discharge day.
Example: The physician provides level-two observation service for a patient on a Thursday evening. On Friday morning, the physician discharges the patient home. In this instance, you should report 99219 (… a comprehensive history; a comprehensive examination; and medical decision making of moderate complexity) for the first-day observation service and 99217 for the discharge service.
Also: Medicare wants you to choose from 99218-99220 when a patient is in observation care for less than eight hours on the same calendar date, Falbo says.
When a patient is in observation for more than eight hours on the same calendar date, you’ll need to choose a code from 99234-99236 (Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date, which requires these 3 key components: …) instead.
Example: The physician admits a patient to observation at 6:30 a.m. Wednesday and discharges her at 6 p.m. Wednesday; notes indicate a level-two observation service. On the claim, you’d report 99235 (… a comprehensive history; a comprehensive examination; and medical decision making of moderate complexity).
Caveat: Medicare stipulates that you should only report 99234-99236 when the length of stay is eight hours or longer, Falbo explains. “However, CPT does not mention the minimum time requirement, and states that providers may use [99234-99236] as long as the admission and discharge occur on the same date of service,” she says.
Impact: Practices need to check with third-party payers to see if they follow Medicare’s coding lead on single-day observations of less than eight hours.