Pulmonology Coding Alert

Multi-day stays means separate discharge codes.

You may encounter many bumps on the road to reporting for your physician’s observations, because different code sets exist for different types of observation services. Keep your calendar, clock, and wits ready at hand before you take up the venture to choose the correct observation code.

Further, there might be differences between observation coding for Medicare and private payers. Mix all that together, and you have a potential E/M mess.

Untangle the observation coding knot with this expert advice, and straighten out your observation coding once and for all.

Caution: The following rules for coding observations are for Medicare, and payers that follow Medicare policies. “Practices need to check with third-party payers to determine if they follow Medicare guidelines for observation,” advises Mary I. Falbo, MBA, CPC, CEO of Millennium Healthcare Consulting, Inc. in Lansdale, Pa.

Use 99218-99220 For Initial Day

You have at your disposal two observation code sets, and which set you choose from will depend on the encounter.

Employ the observation code set 99218-99220 (Initial observation care, per day, for the evaluation and management of a patient ...) in the following instances:

1. When the physician admits a patient for observation care, and then discharges the patient on a different calendar date, you’ll report a code from the 99218-99220 range for the first date of service, confirms Falbo.

Example: The physician admits a patient with a history of smoking to observation at 5 p.m. Monday with acute breathing difficulties and chest pain. The pulmonologist decides to keep the patient in observation overnight. On the claim, you’ll report a code from the 99218-99220 range for this initial service, depending on encounter specifics.

2. When the physician admits and discharges a patient from observation care in less than eight hours on the same calendar date, you’ll also employ 99218-99220, confirms Falbo.

Example: A 66-year-old patient with asthma is admitted to observation care at 8:30 am for treatment of an exacerbation due to heavy pollen exposure. She responds to therapy and is discharged at 4 pm the same day. You would code 99219 (Initial observation care, per day, for the evaluation and management of a patient, which requires these 3 key components:…) for the admission and discharge on the same day. You code ICD-9-CM code 493.01 for the asthma exacerbation. The ICD-10 equivalent for 493.01 is J45.22 (Mild intermittent asthma with status asthmaticus).

Take note: You’ll need to make sure that the physician who cares for the patient for observation is also the one that admits the patient to Observation, Falbo says. Otherwise, you shouldn’t be using the observation codes.

Use Separate Discharge Code On Multi-Day Observations

When the physician keeps a patient in observation overnight, and then releases him on the next calendar day, you should report 99217 (Observation care discharge day management…) for the face-to-face discharge service, says Falbo.

Example: A 69 year old with a mild acute exacerbation of obstructive chronic bronchitis is admitted to observation care by the pulmonologist for treatment. He responds to treatment and is discharged home on the next day. Because of the documented complexity of his condition and decision-making, you code 99219 for the initial day and 99217 for the discharge day. You code ICD-9-CM code 491.21 for the acute exacerbation of the obstructive chronic bronchitis. The patient was also seen by a cardiologist on the day of discharge who coded a 99204 (Office or other outpatient visit for the evaluation and management of a new patient...) for the visit and used ICD-9-CM code 402.10 for his diagnosis of hypertensive heart disease without heart failure. In ICD-10-CM, 491.21 will be replaced by J44.1 (Chronic obstructive pulmonary disease with [acute] exacerbation), and 402.10 will make way for I11.9 (Hypertensive heart disease without heart failure)

Pointer: Most observation services last one to two days at the most; after that much time, the physician will typically admit or release the patient. There might be instances, however, when a patient is in observation care for more than two calendar days. When this occurs, contact your payer before coding the service. You should use subsequent observation care codes (99224-99226) for the days between admission and discharge.

Change Coding When 1-Day Observations Hit 8 Hours

If the physician provides a single-day observation service that lasts more than eight hours on the same calendar date, your coding choices change, confirms Falbo.

For these longer single-day observations, choose from the 99234-99236 (Observation or inpatient hospital care, for the evaluation and management of a patient including admission and discharge on the same date ...) code set.

Example: A patient with asthma complications presents to the emergency department (ED) at 9 a.m. Thursday and the pulmonologist admits her to observation care an hour later. The physician discharges her at 8 p.m. that evening. Since the visit exceeded eight hours, you should report a code from the 99234-99236 range, depending on encounter specifics.

You would code 99235 (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 comprehensive history; A comprehensive examination; and Medical decision making of moderate complexity…) for the admission and discharge on the same day. You code ICD-9-CM code 493.01 for the asthma exacerbation. In order to correctly document and report 99234-99236, the physician must personally include the duration of observation in the note, as well as evidence of each component of these codes, the admission component and the discharge component (i.e., the effort of two visits).

When the length of stay is eight hours or longer, providers should report codes 99234-99236 for Medicare, says Falbo. “However, CPT^® does not mention the minimum time requirement, and states that providers may use these codes as long as the admission and discharge occur on the same date of service.”

Best bet: Once again, you’ll have to check with third-party payers before coding for these observation services -- as they might not all follow Medicare’s prescription for these codes. 

Pulmonologists as Consultants

“If the pulmonologist is not the attending of record and is called to see a patient in Observation, the pulmonologist cannot report the Observation Care codes,” cautions Carol Pohlig, BSN, RN, CPC, ACS, Senior Coding & Education Specialist at the Hospital of the University of Pennsylvania. “Instead, the pulmonologist reports the most appropriate outpatient/office codes based upon the nature of the service and extent of documentation: Outpatient Consult (99241-99244) for payers who accept consult codes; New Patient (99201-99205) or Established patient (99212-99215) if the patient was seen by a same specialty group member within the last three years in any setting,” she adds.

Steer Clear of Overlaps With Other Services

CMS guidelines clearly state that observation services cannot be billed concurrently with diagnostic or therapeutic services. However, CMS has recently changed the rules in this area so that both diagnostic and therapeutic services are included in the stipulation for the professional (i.e., physician billing) perspective, which means that you cannot bill for observation services when the patient comes in for an outpt procedure (e.g., bronchoscopy) unless something separately identifiable is addressed. Routine post-procedural “monitoring and recovery” are built into the payment and should not be separately reported. If the patient needs to be admitted to OBS to manage a separately identifiable issue, that could be billable.