General Surgery Coding Alert

Use new codes with caution -- the OIG is watching.

When patient observation lasts longer than normal, you'll have new options for reporting the middle day, starting Jan. 1, 2011. Check out this expert advice on how CPT 2011 additions will affect your coding for observation-care services next year.

New Codes Offer Clarity

"Historically there has been some confusion about how to report the middle day for those cases when an observation period transcends three calendar days. The introduction of the new CPT codes resolves that dilemma," explains Michael Granovsky, MD, CPC, FACEP, president of MRSI, in Woburn, Mass.

"Although not the norm, there are situations where a patient is admitted to observation and remains in that status for three or more days," explains Jill Young, CPC, CEDC, CIMC, with Young Medical Consulting LLC in East Lansing, Mich.

The CPT 2011 E/M section addresses these middle days, with new codes. The three new codes parallel the hospital subsequent care series in terms of component requirements and time frames.

The new codes include:

• 99224 -- Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: Problem focused interval history; Problem focused examination; Medical decision making that is straightforward or of low complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is stable, recovering, or improving. Physicians typically spend 15 minutes at the bedside and on the patient's hospital floor or unit
• 99225 -- ... an expanded problem focused interval history; an expanded problem focused examination; Medical decision making of moderate complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is responding inadequately to therapy or has developed a minor complication. Physicians typically spend 25 minutes at the bedside and on the patient's hospital floor or unit
• 99226 --... a detailed interval history; a detailed examination; Medical decision making of high complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the patient is unstable or has developed a significant complication or a significant new problem. Physicians typically spend 35 minutes at the bedside and on the patient's hospital floor or unit.

When to use: "If you had a patient admitted to observation on July 1 and discharged from observation on July 3, the problem for coders was how to bill for July 2," Young says. In 2011, you'll use 99224-99226 for July 2.

Downside: You won't be jumping for joy when they hear the accepted payments for these codes. The Relative Value Update Committee had compared new codes 99224-99226 for subsequent observation care to subsequent hospital care and had requested the same work value. CMS, however, disagreed with the proposal. "Instead, to recognize the differences in patient acuity between the two settings, we have removed the pre- and post-services times from the values, reducing the values to 75 percent of the value for subsequent hospital care codes," announced Kenneth Simon, Senior Medical Officer for CMS at the CPT and RBRVS 2011 Annual Symposium in Chicago.

99224-99226 Stamp Out Insurer Differences

Prior guidance for these "extended" observation and middle day observation stays created some confusion and led to several different policies, such as the Spring 1993 edition of CPT Assistant, which instructed coders to "use the unlisted evaluation and management service code (99499, Unlisted evaluation and management service) to report these services."

Payers often took their own path, however, when setting policy on "middle day" observation coding. "Previously it was a carrier's prerogative," Young says. Payers would often call for 99499; some carriers, however, preferred 99231- 99233 (Subsequent hospital care, per day, for the evaluation and management of a patient, which requires at least 2 of these 3 key components: ...) or 99211-99215 (Office or other outpatient visit for the evaluation and management of an established patient,...). Technically, observation codes are outpatient codes.

Beware of 'Observation' Audits

The Office of Inspector General (OIG) indicates that its work plan for 2011 includes review of "the appropriateness of observation payments and medical necessity."

"With the inauguration of these new codes, it will provide a very specific mechanism to track the length and level of care for observation services that providers report," says Kelly Loya, CPC-I, CPhT, managing consultant for Los Angelesbased Sinaiko Healthcare Consulting.

Do this: Make sure you carefully document medical necessity for extended observation when you use these new codes -- so you'll be audit proof if the OIG comes to look at your claims.