Pediatric Coding Alert

Question: I billed an observation stay with face-to-face admission on day 1, continued observation on the following day, and face-to-face discharge from observation on day 3 as 99234, 99232, 99238, and place of service (POS) code 11 (Office). The payer denied the charges due to an invalid POS. What POS code would you use?

California Subscriber

Answer: Provided the hospital record shows the physician admitted the patient to observation status, you should use POS 22 (Outpatient hospital), rather than POS 11 (Office). CPT considers observation an outpatient hospital service, not an office service.

Because the observation in your scenario lasted three calendar days with face-to-face care on each date, you need to resubmit the claim using individual observation care codes. Reserve "Observation or Inpatient Care Services (Including Admission and Discharge Services)" (99234-99236) for the "evaluation and management of a patient including admission and discharge on the same date." Here's how to correct the services:

• Resubmit the admission to observation with 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 ...). Code 99218 requires the same key components as 99234 (Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date, 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 ...).

• Because CPT considers observation care outpatient and offers no subsequent observation care code, use office visit codes 99212-99215 (Office or other outpatient visit for the evaluation and management of an established patient ...) for the in-between day.

• On the discharge day, use 99217 (Observation care discharge day management [This code is to be utilized by the physician to report all services provided to a patient on discharge from "observation status" if the discharge is on other than the initial date of "observation status" ...]).

Beware: Some insurers may have specific regulations on maximum observation stay hours and may disagree with coding the middle day as an office visit. Check your major payers' policies.