Revised Medicare Policy Adds Twist to Observation Codes
Published on Fri Feb 01, 2002
Observation care may be the most confusing E/M service for gastroenterologists to bill. Many practices admit that they are confused about the circumstances under which they can bill these codes and what series of codes should be reported. To make matters worse, a Medicare policy, effective January 2001, set up guidelines for the reporting and documentation of observation care codes that are different from those established by CPT.
"Medicare uses these codes, and it attaches its own criteria to them," says Pat Stout, CMC, CPT, an independent gastroenterology coding consultant and president of the medical billing firm One Source in Knoxville, Tenn. "It's important that coders understand the definition of the American Medical Association versus Medicare."
Observation care codes are used to report E/M services provided to patients who are admitted to observation status in the hospital. A gastroenterologist may admit a patient to observation for a variety of reasons including to treat complications after an endoscopic procedure or to monitor a patient with an unclear clinical diagnosis. Both Medicare and CPT warn that these codes should not be used to report services such as blood pressure checks that may be part of the routine postoperative recovery of the patient.
When the gastroenterologist admits the patient to observation, it should be with the anticipation that the patient will be stabilized and discharged in the next 24 hours, says Kathy Pride, CPC, CCS-P, HIM applications specialist with QuadraMed, a national healthcare information technology and consulting firm based in San Rafael, Calif. However, a patient may be in observation for more than 48 hours.
The status of the patient determines whether he or she is in observation; the patient does not have to be in a specially designated observation care unit of a hospital. "At our hospital if you have day surgery, you could be in the outpatient center overnight or on a regular hospital floor," says Cindy Poe, CPC, certified coder with Eagle Physician and Associates, a multispeciality practice with seven gastroenterologists in Greensboro, N.C. "Both are considered observation. Observation status is not determined by what room they are in, but how the gastroenterologist admitted them."
Three Types of Observation Codes
One of the more confusing aspects of these codes is that three different series are listed in the CPT manual:
99218-99220 (initial observation care, per day, for the evaluation and management of a patient). According to the CPT, initial observation care by the admitting physician should be reported with these codes. The level of history, examination and medical decision-making performed by the gastroenterologist during the period of observation determines the level of code that is reported.
99217 (observation care discharge day management). This code is used to report the final [...]
