Observation services are outpatient hospital services that are reasonable and necessary to evaluate an outpatient’s condition or to determine if the patient requires possible admission to the hospital.
Medicare has identified a high utilization of observation services and, through their medical review process, they have identified billing errors resulting from discrepancies between the physician’s admission orders and services being billed by hospitals.
Listed below are 8 tips for billing observation care:
#1 – Bill the initial observation codes CPT 99218-99220 only if your physician is the one who admits the patient to hospital observation. These codes include the care provided to the patient on the date of admission to observation.
#2 – Use other office, outpatient, or outpatient consultation codes as appropriate for physicians other than the admitting physician who may see the patient while the patient is in observation.
#3 – Report observation admission and discharge codes CPT 99234-99236 for admission and discharge of a patient from observation on the same calendar date. The patient must be in observation for a minimum of eight hours on the same calendar date.
#4 – If a patient is admitted to observation for less than eight hours on the same date, bill the initial observation codes CPT 99218-99220. No separate discharge code should be reported.
#5 – Code CPT 99217 for observation discharge only when the discharge occurs on a different date from the date of admission.
#6 – Bill initial hospital visit code CPT 99221-99223 instead of observation discharge code CPT 99217 if the patient is admitted as an inpatient on a date after the patient was admitted to observation.
#7 – Bill initial hospital visit codes CPT 99221-99223 if the physician admits a patient to observation and then to inpatient status on the same day.
#8 – Use the appropriate office/outpatient CPT code for each day between admission and discharge if the patient remains in observation for more than two calendar days. Do not use subsequent hospital codes for the “middle days.” You should check with your local payers to determine if they require CPT 99499 or CPT 99212-99215 for the “middle days.” This will depend if your local payer follows Medicare or CPT policy.
Remember that all 2009 CPT and HCPCS codes are effective January 1, 2009.
If you have any questions or need additional information regarding this article please contact Cindy Tipton at Cindy_Tipton@med3000.com
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