CPT Code Description
99217 Observation care discharge day management (This code is to be utilized to report all services provided to a patient on discharge from outpatient hospital “observation status” if the discharge is on other than the initial date of “observation status.” To report services to a patient designated as “observation status” or “inpatient status” and discharged on the same date, use the codes for Observation or Inpatient Care Services [including Admission and Discharge Services, 99234-99236 as appropriate.])
99218 Initial observation care, per day, for the evaluation and management of a patient which requires these 3 key components: A detailed or comprehensive history; A detailed or comprehensive examination; and Medical decision making that is straightforward or of low complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs. Usually, the problem(s) requiring admission to outpatient hospital “observation status” are of low severity. Typically, 30 minutes are spent at the bedside and on the patient’s hospital floor or unit.
99219 Initial observation care, per day, for the evaluation and management of a patient, which requires these 3 key components: A comprehensive history; A comprehensive examination; and Medical decision making of moderate complexity. Counseling and/or coordination of care with other physicians, other qualified health care professionals, or agencies are provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs. Usually, the problem(s) requiring admission to outpatient hospital “observation status” are of moderate severity. Typically, 50 minutes are spent at the bedside and on the patient’s hospital floor or unit.
99220 Initial observation care, per day, for the evaluation and management of a patient, which requires these 3 key components: A comprehensive history; A comprehensive examination; and Medical decision making of high complexity. Counseling and/or coordination of care with other physicians, other qualified healthcare professionals, or agencies are provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs. Usually, the problem(s) requiring admission to “observation status” are of high severity. Typically 70 minutes are spent at the bedside and on the patient’s hospital floor or unit.
Initial Observation Care (CPT code range 99218-99220)
• Included in Initial Observation Care:
– Initiation of observation status
– Supervision of the care plan for observation
– Performance of periodic reassessments
• When a patient receives observation care for less than 8 hours on the same calendar date, the Initial Observation Care, from CPT code range 99218 – 99220, shall be reported by the physician.
• When a patient is admitted for observation care and then is discharged on a different calendar date, the physician shall report Initial Observation Care, from CPT code range 99218 – 99220, and CPT observation care discharge CPT code 99217.
• To report services provided to patient who is admitted to the hospital after receiving hospital observation care services on the same date, see initial hospital carenotes in the American Medical Association (AMA) Current Procedural Terminology (CPT) Publication.
• To report hospital admission on a date subsequent to the date of observation status, use appropriate initial hospital care codes (CPT 99221 – 99223)
• Observation status that is initiated in the course of an encounter in another site of service (eg. hospital emergency department, office, nursing facility) all E/M services provided by the supervising physician or other qualified health care professional in conjunction with initiating “observation status” are considered part of the initial observation care when performed on the same date.
– The level of service reported should include the services related to initiating “observation status” provided in the other sites of service as well as in the observation setting
• On the rare occasion when a patient remains in observation care for 3 days, the physician shall report an initial observation care code (99218-99220) for the first day of observation care, a subsequent observation care code (99224-99226) for the second day of observation care, and an observation care discharge CPT code 99217 for the observation care on the discharge date.
• Admitted and discharges from observation or inpatient status on the same date report CPT codes 99234-99236 as appropriate; do NOT report observation discharge in conjunction with a hospital admission.
• These codes may NOT be utilized for post-operative recovery if the procedure is considered part of the surgical “package.”
REIMBURSEMENT GUIDELINES from Oxford insurance
Initial Observation Care
The physician supervising the care of the patient designated as “observation status” is the only physician who can report an initial Observation Care CPT code (99218-99220). It is not necessary that the patient be located in an observation area designated by the hospital, although in order to report the Observation Care codes the physician must:
** Indicate in the patient’s medical record that the patient is designated or admitted as observation status;
** Clearly document the reason for the patient to be admitted to observation status; and
** Initiate the observations status, assess, establish and supervise the care plan for observation and perform periodic reassessments.
The CPT codebook states that “When “observation status” is initiated in the course of an encounter in another site of service (e.g., hospital emergency department, office, nursing facility) all evaluation and management services provided by the supervising physician or other qualified health care professional in conjunction with initiating “observation status” are considered part of the initial Observation Care when performed on the same date. The Observation Care level of service reported by the supervising physician should include the services related to initiating “observation status” provided in the other sites of services as well as in the observation setting.”
Oxford follows the Centers for Medicare and Medicaid Services’ (CMS) Claims Processing Manual which provides the instructions, “for a physician to bill the initial Observation Care codes [99218-99220], there must be a medical observation record for the patient which contains dated and timed physician’s admitting orders regarding the care the patient is to receive while in observation, nursing notes, and progress notes prepared by the physician while the patient was in observation status. This record must be in addition to any record prepared as a result of an emergency department or outpatient clinic encounter.”
Consistent with CMS guidelines, Oxford requires that an Initial Observation Care CPT code (99218-99220) should be reported for a patient admitted to Observation Care for less than 8 hours on the same calendar date.
Q: Can Observation Care codes 99217 and codes 99218-99220 be reported on the same date of service?
A: No. CPT codes 99234-99236 should be reported for patients who are admitted to and discharged from observation status on the same calendar date for a minimum of 8 hours but less than 24. An initial Observation Care code (99218-99220) should be reported for patients admitted and discharged from observation status for less than 8 hours on the same calendar date. CPT code 99217 can only be reported for a patient discharged on a different calendar date.
Q: Does the patient need to be in an observation unit in order to report the Observation Care codes?
A: It is not necessary that the patient be located in an observation area designated by the hospital as long as the medical record indicates that the patient was admitted as observation status and the reason for Observation Care is documented.
Observation Services limitation
Hospital observation (procedure codes 99217, 99218, 99219, and 99220) are professional services provided for a period of more than 6 hours but fewer than 24 hours regardless of the hour of the initialcontact, even if the client remains under physician care past midnight. Subsequent observation care, per day (procedure codes 99224, 99225, and 99226) is also a benefit of Texas Medicaid. Inpatient hospital observation services must be submitted using the procedure code 99234, 99235, or 99236.
Observation care discharge day management procedure code 99217 must be billed to report services provided to a client upon discharge from observation status if the discharge is on a date other than the initial date of admission. The following procedure codes are denied if submitted with the same date of service as procedure code 99217:
Procedure Codes
99211 99212 99213 99214 99215 99218 99219 99220
If an E/M service is billed by the same provider with the same date of service as a physician observation visit, the E/M service is denied if provided in any place of service other than inpatient hospital. If a physician observation visit (procedure code 99217, 99218, 99219, 99220, 99234, 99235, or 99236) is billed by the same provider with the same date of service as prolonged services (procedure code 99354, 99355, 99356, or 99357), the prolonged services will be denied as part of another procedure on the same day.
If dialysis treatment and a physician observation visit are billed by the same provider (and same specialty other than an internist or nephrologist) with the same date of service, the dialysis treatment may be reimbursed and the physician observation visit will be denied.
