Billing initial visits for Medicare Patients in Observation

[allison_w_99]

I work for a practice that is not affiliated with the hospital. The situation sometimes arises when the patient is admitted to observation and we are asked to consult by the admitting physician. The POS is almost always an outpatient hospital (22). Medicare does not recognize consults and since we are usually not the admitting physician we cannot bill the initial observation codes. I have been using the OV codes for this since the code description lists "office or other outpatient." The medical biller I work with is very adamant that the POS is wrong, and not compatible with the OV codes but the Medicare regulations state that reimbursement for physician services is determined by the status of their admission. Saying that we can't bill the OV codes for a patient in observation with that POS because we're not affiliated with the hospital is like saying we can't bill the inpatient codes when we see the patient when they're admitted. According to Medicare regs, we're reimbursed at the facility rate when we see the patient in a facility because reimbursement is determined based on where the provider performed the service. To those reading this, do you agree with me? Am I interpreting the source correctly?

 

[lmn]

I have always billed observation with ov code and place of service as outpt hospital if we didn't admit into observation status. Otherwise, you wouldn't be able to bill. Which POS does she want you to use or am I misunderstanding the question?

 

[thomas7331]

You are correct, you should use the office/outpatient codes with POS 22 in this situation. It would be incorrect to report this with an office place of service and, as you point out, it could potentially cause an overpayment if the services were not paid at the facility rate due to an incorrect POS code. The Medicare instructions for billing consultations to patients in observation can be found in the MLM article 6740.