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Increase in Use of Observation Care Codes Triggers Scrutiny

According to a recent study, use of observation care codes has continued to increase over the past several years, triggering payers to more closely scrutinize the billing of the codes to ensure medical necessity. What can be done to assist your practice with billing the observation care codes accurately?

Let time and condition severity guide code selection when choosing observation care codes. Initial observation care codes are provided to new and established patients specifically admitted to the hospital for observation and not discharged on same date.

  • 99218 - Low severity and approximately 30 minutes bedside or on the floor/unit.
  • 99219 - Moderate severity and approximately 50 minutes bedside or on the floor/unit.
  • 99220 - High complexity and approximately 70 minutes bedside or on the floor/unit.
  • The more complex the condition, the more time the physician typically spends with the patient.

What if the patient is in observation status for 8+ hours but is discharged the same day?

  • 99234 – Low severity and 40 minutes are typically spent bedside or on the floor/unit.
  • 99235 – Moderate severity and typically 50 minutes.
  • 99236 – High complexity and 55 minutes or more are spent with patient bedside or on the floor/unit.

Subsequent days of observation care are reported using 99224-99226. Again, choose codes based on patient condition and the amount of time spent bedside and spent on the floor/unit.

  • 99224 – Low complexity and typically 15 minutes bedside and on the floor/unit.
  • 99225 – Moderate complexity and 25 minutes bedside and on the floor/unit.
  • 99226 – High complexity and typically 35 minutes bedside and on the floor unit.

The observation discharge code of 99217 cannot be used to report services if the patient has been admitted for observation and discharged on the same calendar date. The 99217 code is for discharge only if the patient was discharged from observation status on a different calendar date.
Please don’t hesitate to contact Precision with any questions or inquiries you may have about observation care codes.