Initial Observation Care – E&M codes (99218, 99219, 99220) used to report the first hospital observation encounter between the patient and admitting physician.
Subsequent Observation Care – E&M codes (99224, 99225, 99226) used to report subsequent observation visits.
Observation Care Discharge Day Management – E&M code (99217) used to report the work performed to discharge a patient from an observation stay.
Admission and Discharge to Observation, Same Day – E&M codes (99234 – 99236) used to report services for a patient who is admitted and discharged from an observation or inpatient stay on the same calendar date. Patient’s stay must be a minimum of eight hours in order to bill these codes.
CPT observation codes
CPT codes 99234-99236 should be reported for patients who are admitted to and discharged from observation status on the same calendar date. CPT code 99217 can only be reported for a patient discharged from observation status on a different calendar date.
Observation is a "patient status" rather than a place. Observation services may take place in a regular bed in the ED, in a special observation area of the ED, a formal observation unit, or even in an inpatient bed.
2 physicians
For Medicare, if both physicians are of the same specialty, in the same group, generally either an ED service 99281-99285 or observation may be billed, but not both. If the visit crosses over midnight and involves two calendar days, then in some circumstances it might be proper to code both. (See FAQ #6, Q1.) If a qualified health care professional works in the ED and is employed by the physician group then the answer is the same.
For CPT, strictly speaking, the "same physician = same specialty/group" concept does not apply. That being said, many payers have adopted this concept, so you are advised to check your local payer policy.
CPT® describes typical times of 40 minutes for 99234, 50 minutes for 99235 and 55 minutes for observation code 99236. These times include bedside care, reviewing ancillary studies, documentation and other cognitive services related to the patient's observation care.
Same-day observation admit/discharge codes 99234-99236 for Medicare patients must include a minimum stay of at least 8 hours. For duration of less than 8 hours on the same date, the Initial observation code series 99218-99220 are used for Medicare patients. In this case, the discharge code 99217 is not used since the admission and discharge were on the same date of service.
Other payers may set their own respective payment policies. Of course, providers are required to follow the policies of only those payers with whom the provider must comply by reason of statute, regulation, or contract. In the absence of any contrary policy, CPT coding principles pertain. See Medicare Claims Processing Manual 12-21-11. Section 30.6.8 for details.
Procedure performed in the ED and then admitted the patient to observation
The code for the procedure performed in the ED may be assigned in addition to the observation code. A -25 modifier may be appended to the Observation code when appropriate to indicate a distinct, separately identifiable service.
There are no procedure codes that CPT considers bundled into Observation. A global surgical fee usually includes payment for "observation" secondary to and immediately following the procedure. Under certain circumstances however, observation may be paid when a procedure with a global period is performed during the same encounter. An example is an ED visit after a fall resulting in a head injury and laceration. The observation stay for the head injury evaluation (with a -25 modifier as appropriate) and the laceration repair procedure (performed in the ED) could both be submitted.
the addition of typical times to the observation code sets 99218-99220, 99234-99235 and 99224-99226, they now qualify for use with the prolonged service in the inpatient or observation setting add-on codes (99356 and 99357).
For observation services that are much longer than usual CPT offers specific guidance regarding the Observation Prolonged Service codes. Prolonged service refers to direct patient contact, is face-to-face and includes additional non-face-to-face services on the patient's floor or unit in the hospital or nursing facility during the same session, even if the time spent is not continuous. (NOTE: Eligible unit/floor time for prolonged services includes time the practitioner establishes and/or reviews the patient's chart, examines the patient, writes notes, and communicates with other professionals and the patient's family). It is reported in addition to the designated evaluation and management services at any level and any other services provided at the same session as evaluation and management services.
www.acep.org
"Two-Midnight" rule for physicians to use in determining patient admission status for inpatient or outpatient care under the Inpatient Prospective Payment System for hospitals. CMS stipulates that when a physician anticipates the patient will require care that crosses two midnights and orders inpatient admission based upon that expectation, inpatient status is generally appropriate. At this writing, time spent in Observation or other Outpatient status via an Emergency Department encounter may be retroactively combined with inpatient status to reach the two-midnight Inpatient threshold.
8 minute rule thread.
www.cco.community
But what if the patient’s status changes from observation to inpatient? The initial hospital visit codes will be used to report the consultant’s work, codes 99221—99223. The level of service will be determined by the existing 1995/1997 guidelines (this will change in 2023 as there will be no more 95/97 guidelines)
https://www.ama-assn.org/system/files/2023-e-m-descriptors-guidelines.pdf
All patients receiving services in hospitals and clinical access hospitals (CAHs) must receive a Medicare outpatient observation notice (MOON) no later than 36 hours after observation services as an outpatient begin.
The MOON informs patients, who receive observation services for more than 24 hours, of the following:
They are outpatients receiving observation services and not inpatients.
Reasons for such status.
Hospitals and CAHs may deliver the MOON to a patient receiving observation services as an outpatient before the patient has received more than 24 hours of observation services but no later than 36 hours after observation services begin.
Greater than 48 hours in duration are seen as rare and exceptional cases.
Cover up to 72 hours if medically necessary.
Observation services rendered by non-OPPS providers beyond 72 hours is considered medically unlikely and should be submitted as non-covered on a second line of service (i.e., one revenue code line with 72 hours of covered observation units and charges, a second revenue code line with hours exceeding medically necessary observation services with non-covered units and charges).
Follow the appeals process to have observation services exceeding 72 hours considered for payment.
Type of bill 13X or 85X
Revenue code 0762
HCPCS code
G0378: Hospital observation service, per hour. Report units of hours spent in observation (rounded to the nearest hour).
G0379: Direct admission of patient for hospital observation care.
Report all services rendered while the patient is in observation with the appropriate revenue codes, HCPCS/Current Procedure Terminology codes, and diagnosis codes
Should be billed according to observation billing guidelines.
All hours of observation up to 72 hours should be submitted on a single line.
The date of service being the date the order for observation was written.
Orders for observation services are not considered to be valid inpatient admission levels of care orders.
When billing observation services, we expect the charges associated with those services to be billed as outpatient level of care services.
Observation ends when all clinical or medical interventions have been completed, including follow-up care furnished by hospital staff and physicians that may take place after a physician has ordered the patient be discharged home or admitted as an inpatient.
If the patient is admitted as an inpatient after observation, an order to admit is required.
Additionally, if the patient is discharged from observation and subsequently admitted as an inpatient, all services provided to the patient while in observation are included on the inpatient claim.
Since observation is considered an outpatient hospital service performed within 3 days of an inpatient admission, the services follow the 3-day/1-day payment window.
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www.aapc.com
www.cms.gov
www.todayshospitalist.com
Subsequent Observation Care – E&M codes (99224, 99225, 99226) used to report subsequent observation visits.
Observation Care Discharge Day Management – E&M code (99217) used to report the work performed to discharge a patient from an observation stay.
Admission and Discharge to Observation, Same Day – E&M codes (99234 – 99236) used to report services for a patient who is admitted and discharged from an observation or inpatient stay on the same calendar date. Patient’s stay must be a minimum of eight hours in order to bill these codes.
CPT observation codes
CPT codes 99234-99236 should be reported for patients who are admitted to and discharged from observation status on the same calendar date. CPT code 99217 can only be reported for a patient discharged from observation status on a different calendar date.
Observation is a "patient status" rather than a place. Observation services may take place in a regular bed in the ED, in a special observation area of the ED, a formal observation unit, or even in an inpatient bed.
2 physicians
For Medicare, if both physicians are of the same specialty, in the same group, generally either an ED service 99281-99285 or observation may be billed, but not both. If the visit crosses over midnight and involves two calendar days, then in some circumstances it might be proper to code both. (See FAQ #6, Q1.) If a qualified health care professional works in the ED and is employed by the physician group then the answer is the same.
For CPT, strictly speaking, the "same physician = same specialty/group" concept does not apply. That being said, many payers have adopted this concept, so you are advised to check your local payer policy.
CPT® describes typical times of 40 minutes for 99234, 50 minutes for 99235 and 55 minutes for observation code 99236. These times include bedside care, reviewing ancillary studies, documentation and other cognitive services related to the patient's observation care.
Same-day observation admit/discharge codes 99234-99236 for Medicare patients must include a minimum stay of at least 8 hours. For duration of less than 8 hours on the same date, the Initial observation code series 99218-99220 are used for Medicare patients. In this case, the discharge code 99217 is not used since the admission and discharge were on the same date of service.
Other payers may set their own respective payment policies. Of course, providers are required to follow the policies of only those payers with whom the provider must comply by reason of statute, regulation, or contract. In the absence of any contrary policy, CPT coding principles pertain. See Medicare Claims Processing Manual 12-21-11. Section 30.6.8 for details.
Procedure performed in the ED and then admitted the patient to observation
The code for the procedure performed in the ED may be assigned in addition to the observation code. A -25 modifier may be appended to the Observation code when appropriate to indicate a distinct, separately identifiable service.
There are no procedure codes that CPT considers bundled into Observation. A global surgical fee usually includes payment for "observation" secondary to and immediately following the procedure. Under certain circumstances however, observation may be paid when a procedure with a global period is performed during the same encounter. An example is an ED visit after a fall resulting in a head injury and laceration. The observation stay for the head injury evaluation (with a -25 modifier as appropriate) and the laceration repair procedure (performed in the ED) could both be submitted.
the addition of typical times to the observation code sets 99218-99220, 99234-99235 and 99224-99226, they now qualify for use with the prolonged service in the inpatient or observation setting add-on codes (99356 and 99357).
For observation services that are much longer than usual CPT offers specific guidance regarding the Observation Prolonged Service codes. Prolonged service refers to direct patient contact, is face-to-face and includes additional non-face-to-face services on the patient's floor or unit in the hospital or nursing facility during the same session, even if the time spent is not continuous. (NOTE: Eligible unit/floor time for prolonged services includes time the practitioner establishes and/or reviews the patient's chart, examines the patient, writes notes, and communicates with other professionals and the patient's family). It is reported in addition to the designated evaluation and management services at any level and any other services provided at the same session as evaluation and management services.
- +99356 Prolonged service in the inpatient or observation setting requiring unit/floor time beyond the usual service; first hour (Use 99356 in conjunction with 99218-99220, 99221-99233, 99224-99226, 99231-99233, 99234-99236, 99251-99255, 99304-99310, 90822, 90829).
- + 99357 each additional 30 minutes (List separately in addition to 99356).
American College of Emergency Physicians;Observation - Physician Coding;Observation;Physician Coding
Observation - Physician Coding FAQ
www.acep.org
"Two-Midnight" rule for physicians to use in determining patient admission status for inpatient or outpatient care under the Inpatient Prospective Payment System for hospitals. CMS stipulates that when a physician anticipates the patient will require care that crosses two midnights and orders inpatient admission based upon that expectation, inpatient status is generally appropriate. At this writing, time spent in Observation or other Outpatient status via an Emergency Department encounter may be retroactively combined with inpatient status to reach the two-midnight Inpatient threshold.
8 minute rule thread.
Resource - 8 Minute Rule
Time-based (constant attendance) CPT codes: These codes allow for variable billing in 15-minute increments when a practitioner provides a patient with one-on-one services such as therapeutic exercise or manual therapy. Service-based (supervised or untimed) CPT codes: These are the codes...
www.cco.community
But what if the patient’s status changes from observation to inpatient? The initial hospital visit codes will be used to report the consultant’s work, codes 99221—99223. The level of service will be determined by the existing 1995/1997 guidelines (this will change in 2023 as there will be no more 95/97 guidelines)
https://www.ama-assn.org/system/files/2023-e-m-descriptors-guidelines.pdf
All patients receiving services in hospitals and clinical access hospitals (CAHs) must receive a Medicare outpatient observation notice (MOON) no later than 36 hours after observation services as an outpatient begin.
The MOON informs patients, who receive observation services for more than 24 hours, of the following:
They are outpatients receiving observation services and not inpatients.
Reasons for such status.
Hospitals and CAHs may deliver the MOON to a patient receiving observation services as an outpatient before the patient has received more than 24 hours of observation services but no later than 36 hours after observation services begin.
Observation hours
Not expected to exceed 48 hours in duration.Greater than 48 hours in duration are seen as rare and exceptional cases.
Cover up to 72 hours if medically necessary.
Observation services rendered by non-OPPS providers beyond 72 hours is considered medically unlikely and should be submitted as non-covered on a second line of service (i.e., one revenue code line with 72 hours of covered observation units and charges, a second revenue code line with hours exceeding medically necessary observation services with non-covered units and charges).
Follow the appeals process to have observation services exceeding 72 hours considered for payment.
Observation billing requirements
Observation services are outpatient services.Type of bill 13X or 85X
Revenue code 0762
HCPCS code
G0378: Hospital observation service, per hour. Report units of hours spent in observation (rounded to the nearest hour).
G0379: Direct admission of patient for hospital observation care.
Report all services rendered while the patient is in observation with the appropriate revenue codes, HCPCS/Current Procedure Terminology codes, and diagnosis codes
Reminders
Observation services are provided on an outpatient basis.Should be billed according to observation billing guidelines.
All hours of observation up to 72 hours should be submitted on a single line.
The date of service being the date the order for observation was written.
Orders for observation services are not considered to be valid inpatient admission levels of care orders.
When billing observation services, we expect the charges associated with those services to be billed as outpatient level of care services.
Observation ends when all clinical or medical interventions have been completed, including follow-up care furnished by hospital staff and physicians that may take place after a physician has ordered the patient be discharged home or admitted as an inpatient.
If the patient is admitted as an inpatient after observation, an order to admit is required.
Additionally, if the patient is discharged from observation and subsequently admitted as an inpatient, all services provided to the patient while in observation are included on the inpatient claim.
Since observation is considered an outpatient hospital service performed within 3 days of an inpatient admission, the services follow the 3-day/1-day payment window.
Billing Outpatient Observation Services
www.novitas-solutions.com
Observation Coding
Navigate the fine lines between ED, outpatient, inpatient By Sarah Todt, RN, CPC, CPC-EDS Observation services, as reported with evaluation and management
Article - Billing and Coding: Acute Care: Inpatient, Observation and Treatment Room Services (A52985)
Use this page to view details for the Local Coverage Article for billing and coding: acute care: inpatient, observation and treatment room services.
www.cms.gov
The ins and outs of billing observation
Observation patients make up an increasing percentage of many hospitalists' workloads. Here's how to bill for that.
www.todayshospitalist.com