Physician’s Coding Strategist

New observation rules change coding practice

Same-day coding affected

The Health Care Financing Administration (HCFA) has changed its payment policy for situations in which observation care or a hospital admission takes place on the same date as a discharge, notes Brett Baker, a payment expert with the American College of Physicians-American Society of Internal Medicine in Philadelphia. Previously, the CPT coding permitted physicians to use codes 99234-99236 to report hospital admission or observation care on the same date as the discharge, regardless of the total length of stay, notes Baker.

HCFA’s new policy, however, allows physicians to use same-day admission and same-day discharge codes, CPT 99234-99236, only with patients who have been discharged at least eight hours after observation care or hospital admission on the same date. Based on this concept, HCFA has also enacted the following policies:

— To appropriately report CPT codes 99234-99236, your patient must be an inpatient or an observation care patient for at least eight hours on the same calendar date.

— When admitting patients for observation for less than eight hours on the same date, use CPT codes 99218-99220 (initial observation care) and do not report a discharge code.

— When you admit patients for observation care and discharge them on a different calendar date, use CPT codes 99218-99220 (initial observation care) and CPT observation discharge code 99217.

— When you admit patients for inpatient hospital care and discharge them on a different calendar date, use CPT codes 99221-99223 (initial hospital care) and CPT hospital discharge day management codes 99238-99239.

— If you admit someone as an inpatient and discharge him or her less than eight hours later on the same calendar date, use CPT codes 99221-99223 (initial hospital care) for the admission service. Do not bill for the hospital discharge day management service.

— To bill CPT codes 99234-99236 (same-day admission and discharge), you must satisfy documentation requirements for admission to and discharge from inpatient or observation care. You also must document the duration of observation care or treatment status.