Coding Strategy

Medicare clears up confusion surrounding ‘8-hour rule.’

Reporting your FP’s observation services can be tricky business, as there is confusion about how, when, and why to choose from one observation code set or another.

Add to that a common misconception about Medicare coding, and you’ve got a recipe for potential disaster. Clear things up with this observation FAQ.

When Should I Use 99218-99220?

One reason coders get tripped up on observations is the different code sets for different observation services, depending on length.

Coders should select a code from the 99218-99220 (Initial observation care, per day, for the evaluation and management of a patient which requires these 3 key requirements: …) set when the physician admits the patient on one date and discharges him on another, confirms Sharlene A. Scott, CPC, CPC-H, CCS-P, CCP-P, CPC-I, CPMA, PMCC-approved instructor at Baltimore’s Coding Academy of America, Inc.

“These codes are typically used when a patient is not technically being admitted into the hospital, but is going to be observed for a condition. Usually the condition is severe enough that observation in a medical facility is needed,” reports Kathleen Godwin, CPC, coding coordinator with La Porte Regional Health Systems in Indiana.

What Conditions Warrant Observation Service?

You won’t find a single correct answer to what illnesses can trigger observation service: A patient in observation status might have atypical chest pain, a severe acute asthma attack: any situation could trigger an observation service, conceivably.

Do this: If you are unsure as to whether or not a patient was in observation, check with the physician. Remember, someone is admitted to observation because the FP is still trying to figure out whether she is sick enough to be admitted as an inpatient.

What About 99217?

You’ll use the 99217 (Observation care discharge day management) code for the discharge date when a patient is in observation for more than one calendar date, says Scott. When coding these encounters, append the initial date of service to the 99218-99220 code, then use 99217 for the discharge date, Goodwin confirms.

Example: The FP meets one of his 43-year-old male patients at the hospital. The patient is complaining of chest pain and the FP puts the patient in observation at 9:23 p.m. Thursday to make sure he has not suffered a myocardial infarction (MI). Notes indicate a comprehensive history, a detailed exam, and straightforward medical decision making. At 8:12 a.m. the next morning, the physician discharges the patient with a diagnosis of rapid heartbeat.

On this claim, you’d report the following:

• 99218 (… a detailed or comprehensive history; a detailed or comprehensive examination; and medical decision making that is straightforward or of low complexity …) for the initial observation service
• 99217 for the discharge service
• 785.0 (Tachycardia, unspecified) appended to 99218 and 99217 to represent the patient’s rapid heartbeat.

When Should I Use 99234-99236?

Use the 99234-99236 (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: …) codes for “admission and discharge from observation care on the same date: in other words, the patient is in observation for at least 8 hours but no more than 23 hours on the same date,” explains Scott.

Remember: Just like any other observation service, patient condition drives the use of 99234-99236; report these codes only if the physician is deciding whether or not a patient needs hospitalization.

Is There an ‘8-Hour Rule’ for Medicare?

Yes, but it depends on when the eight hours occur. It’s widely believed that when a Medicare patient is in observation for less than eight hours, you should report only 99218-99220, regardless of the date(s) of service involved. This is incorrect, however.

The lowdown: According to Section 30.6.8 of Chapter 12 of the Medicare Claims Processing Manual, report observations of less than eight hours on the same date with 99218-99220. (Leave 99217 off these claims).

For observations that span two calendar dates, “CMS states specifically that if a patient is admitted to observation status on one calendar date and discharged on another calendar date, 99218-99220 should be reported on the date that the patient is admitted and 99217 should be coded on the date that the patient is discharged,” Scott explains.

Example: The FP admits a 68-year-old Medicare patient to observation at 10.28 p.m. Wednesday. After a series of tests, the physician decides the patient does not require hospitalization. At 2:30 a.m. Thursday, the FP discharges the patient. Notes indicate a level-two E/M service.

According to the CMS transmittal, you should report the following 99219 (… a comprehensive history; a comprehensive examination; and medical decision making of moderate complexity …) for the initial observation service with a Wednesday date of service 99217 for the discharge service with a Thursday date of service.

On the other hand: When the patient is in observation care for at least eight hours, but less than 24 hours, and is discharged on the same calendar date choose a code from the 99234-99346 set without 99217.

@ Family Practice Alert

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Understand ‘significant’ and ‘separate’ to earn a gold star.

Knowing when to report modifiers and choosing the best one for each situation can be an easy trip-up for coders. If you find yourself especially befuddled by modifier 25 (Significant, separately identifiable evaluation and management service by the same physician on the same day of the procedure or other service), keep reading for real-world tips that will help you code confidently every time.

Starting point: Remember you can only consider reporting modifier 25 when coding an E/M service. If the procedures you’re reporting don’t fall under E/M services, check whether the encounter qualifies for modifier 59 (Distinct procedural service) instead.

1. Verify That Service Is Significant

As CPT’s Appendix A explains, a significant and separately identifiable service “is defined or substantiated by documentation that satisfies the relevant criteria for the respective E/M service to be reported.” Ask yourself two questions when deciding if your case meets the criteria:

• Could the complaint or problem stand alone as a billable service? A single trigger point injection (20552, Injection[s]; single or multiple trigger point[s], 1 or 2 muscle[s]), for example, qualifies as a stand-alone service you might see in conjunction with an E/M visit.
• Do you have a different diagnosis for the portion of the visit unrelated to the initial service? For example, the patient might be in the office for a planned knee injection, but also complains of shoulder pain during the visit.

Reporting an E/M code with modifier 25 would be appropriate for the services performed and documented concerning the shoulder.

If you can answer “yes” to either question, you’re one step closer to reporting modifier 25.

Example: “My physicians complete a lot of lumbar and cervical injections that have a 0-day global period,” says Mary Baierl, RHIT, CPC, CCA, CMT, a coder with BayCare Clinic, Pain Management and Rehabilitation Medicine in Green Bay, Wis. “When they evaluate the patient in the office, offer an injection, and have time to do the injection that day, we code the injection and include office visit E/M code with modifier 25 as a separately identifiable service.”

2. Check for Additional Work

If the diagnosis remains the same, Quita Edwards, CCS-P, CPC, COSC, CPC-I, owner of CASE Contracting Services in Fort Valley, Ga., says you have a third question to ask: Did your orthopedist perform extra work that went above and beyond the typical pre- or postoperative work associated with the procedure code? Another affirmative answer points you to modifier 25.

Example: A patient comes to your office for a scheduled joint injection. She has received injections to treat knee pain due to osteoarthritis but they don’t provide long-term relief. During the appointment your physician says she needs to begin thinking about surgical intervention. He spends between 30 and 40 minutes discussing the risks and benefits of surgery so the patient can make an informed decision.

Even though the diagnosis you report for the injection and the E/M service will be the same, you can separately report the two services in this case. “The physician spent enough time discussing the surgery to count as significant and separately identifiable from the injection,” Edwards explains. “You can bill an E/M code with modifier 25 based on the amount of time he spent, even though he didn’t evaluate the patient.”

3. Look for Pre-Planning

Modifier 25 is meant for those “oh, by the way” type situations, not procedures that are tied to previous services. Consider these scenarios and whether you think they merit modifier 25, then watch the Medical Coding News for our experts’ recommendations.

Scenario 1: Your orthopedist sees Mrs. Jones in the office and gives her a prescription for pain medication to help her wrist pain. He says that if this doesn’t help, he’ll give her a wrist injection when she returns. Mrs. Jones returns to the office two weeks later for the injection. Your physician completes another evaluation prior to administering the injection.

Scenario 2: Your physician treats Mrs. Adams for a minor shoulder injury. She returns a few days later because her arm was snatched during activity and she’s experiencing significant pain. The physician completes a full evaluation before prescribing treatment.

Scenario 3: Your surgeon completes total hip arthroplasty on Mr. Brown. Six weeks after the surgery, Mr. Brown returns to your office and sees a different physician because of an ankle sprain.

@ Orthopedic Coding Alert

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