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Thread: Observation Billing

  1. #1

    Default Observation Billing

    AAPC: Back to School
    Does anyone else have this frustration and problem? Until recently when a patient is in observation for 3 days I have billed 99217-99220 (example, 1st day 99220, 2nd day 99218 and discharge day 99217) and have been paid for it this way until recently they have been denying the 2nd day. I found out that i am supposed to be billing E/M visit codes 99212-99215 for the 2nd day. So i've done this and now am getting an additional adjustment b/c an E/M code was billed in an outpatient setting by a family practice dr. Has anyone else experienced this? Does anyone get this additional adjustment?

  2. #2
    Join Date
    Apr 2007


    I'm not sure I understand what you mean when you say "additional adjustment". I am taking it to mean the payment is less than usual for those codes.

    The payment for 99212-99215 would be less in an outpatient hospital setting than it would in the office. Payments for place of service 11 include support staff, rent, utilities, etc. When you use place of service 22 they reduce the payment to the physician because they are also pay the hospital for their costs, so the physician is only getting reimbursed for their personal services not the others that are involved in their private office.

    Hope this helps,

    Laura, CPC, CEMC

  3. #3


    yes your explanation helped, thank you. I guess i shouldn't say additional adjustment, the payment is actually adjusted; we get a reduced amount. thanks for your help!

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