EM Coding Alert

Question: The physician in an independent pediatric office has a patient with irregular pulse oximetry readings/hypoxia who came in for a follow-up visit. The patient has been previously hospitalized and discharged for pneumonia a few days earlier. The physician put the patient in "observation" status for four hours and checked her pulse ox multiple times throughout the visit. I considered reporting 99218, but these codes seem to be for hospitals only. Which code can I report?

Michigan Subscriber

Answer: You can only report E/M hospital observation services codes (99217-99226) and observation or inpatient care services codes (99234-99236) for patients designated as "observation status" in an outpatient setting of a hospital, not the physician's office. So, in your case, 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 ...) is not the correct choice.

Instead, you should consider using the appropriate level of service for the visit the physician performed and consider using a prolonged service code. Here too, the documentation should indicate the actual face-to-face time with the patient and not just the patient's presence in the office. The physician would need to count the time spent with the patient toward the coded services. For instance, if the documentation was comprehensive, the visit might be billable at a 99215 with a prolonged service code added if the time the patient was in the office was spent directly with the physician. Otherwise, the E/M service would be your best option.

Review the rules for hospital observation services codes to make sure you always get them right.

You should report outpatient hospital observation codes like 99218 when your physician sends a patient to the hospital for that type of observation service and maintains responsibility for that patient during the stay.

Remember: Only the supervising or attending physician can report these initial observation care codes when the patient is actually considered an observation admission. These codes include initiation of observation status, supervision of the care plan for observation, and performance of periodic reassessments.

Check the documentation: For a physician to bill the initial observation care codes, make sure the medical documentation includes the following information:

• The date and time the observation began
• Nursing and progress notes
• The treatment the physician will provide while the patient is in observation
• The appropriate ICD-10 codes to support medical necessity
• The three key components (history, exam, and medical decision-making) to selecting an E/M service level must be met.

If a patient is in observation for more than one calendar day, you should code the discharge service as well. Report discharge services with 99217 (Observation care discharge day management...). The subsequent observation days between the admission and discharge can also be billed with (99224-99226).

If the observation lasts more than eight hours, you should report 99234-99236 (Observation or inpatient care services), according to Medicare guidelines.

Careful: If the patient stays in observation status for less than eight hours on the same day, you should report 99218-99220. Also, you can't report discharge code 99217 (Observation care discharge day management...) for observations under eight hours.