General Surgery Coding Alert

Place of service is key.

Beginning Jan. 1, you will find a subtle but important revision to some observation care E/M codes in CPT® 2018.

Don't miss: The change may be small, but it could have an outsized impact on your coding and billing, depending on the type of facility where your surgeon works. Read on to see how this change might affect your practice.

Check Out Code Revisions

CPT^® 2018 revises four E/M "Observation" codes.

Here's why: According to Suzan Hauptman, MPM, CPC, CEMC, CEDC AAPC fellow, senior principal of ACE Med Group in Pittsburgh, the revision clarifies where these observation services should be rendered.

You can see the change in the following E/M codes (underline represents language added to the descriptor):

• 99217 (Observation care discharge day management (This code is to be utilized to report all services provided to a patient on discharge from outpatient hospital "observation status" if the discharge is on other than the initial date of "observation status." ...))
• 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. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient's and/or family's needs. Usually, the problem(s) requiring admission to outpatient hospital "observation status" are of low severity. Typically, 30 minutes are spent at the bedside and on the patient's hospital floor or unit)
• 99219 (Initial observation care, per day, for the evaluation and management of a patient, which requires these 3 key components: A comprehensive history; A comprehensive examination; and Medical decision making of moderate complexity. ... Usually, the problem(s) requiring admission to outpatient hospital "observation status" are of moderate severity. Typically, 50 minutes are spent at the bedside and on the patient's hospital floor or unit)
• 99220 (Initial observation care, per day, for the evaluation and management of a patient, which requires these 3 key components: A comprehensive history; A comprehensive examination; and Medical decision making of high complexity. ... Usually, the problem(s) requiring admission to outpatient hospital "observation status" are of high severity. Typically, 70 minutes are spent at the bedside and on the patient's hospital floor or unit).

"These changes appear to be clearing up the confusion that often arises with observation patient status," says Barbara J. Cobuzzi, MBA, CPC, CENTC, COC, CPC-P, CPC-I, CPCO, AAPC Fellow, vice president at Stark Coding & Consulting LLC, in Shrewsbury, New Jersey. "Essentially, CPT^® is clarifying that patients that are in observation are always in an outpatient status," Cobuzzi explains.

Don't Miss Introductory Comments

You have to look closely to notice, but the preamble to the "Initial Observation Care, New and Established Patient" section of CPT^® also has the words "outpatient hospital" inserted before the term "observation status." For example, the passages now states. "The following codes are used to report the encounter(s) by the supervising physician or other qualified health care professional with the patient when designated as outpatient hospital 'observation status.'"

This verbiage indicates that observation services are only allowed in the outpatient hospital setting, whereas the presumption in the past was that observation was a "status" and not a defined place.

The fact that observation status is now limited to the outpatient hospital setting could be a concern for surgeons depending on whether they're performing services at facilities deemed not to be outpatient hospitals.

POS: Given the new restriction, the place of service for observation services should be outpatient hospital (22), not emergency department (23) or inpatient (24), says Glenn Littenberg MD, a physician in Pasadena, Calif.