American College of Physicians: Internal Medicine — Doctors for Adults ®


More discussion about coding for the second day of observation

From the September ACP Observer, copyright 2007 by the American College of Physicians.

By Brian Whitman

Practice RxQ: Your column in the July/August 2007 ACP Observer advised physicians to use the unlisted evaluation and management (E&M) code (99499) for billing on the second day of observation. I have been told by Medicare to use the outpatient office codes (99212-99215) for this service. Should I continue to do so?

A: Yes. Patients must generally stay less than 48 hours to be considered "under observation" by Medicare. However, a stay of less than 48 hours can take place over a period of three calendar days. For example, a patient is admitted to observation status at 11 p.m. on Monday and discharged to home care 36 hours later at 11 a.m. on Wednesday. In my last column, it was noted that there is no Current Procedural Terminology code for a second-day observation visit that is not a discharge, and physicians were advised to use an unlisted code. However, Medicare has advised physicians instead to use the outpatient established patient visit codes (99212-99215) for this service.

Medicare considers an observation stay that spans more than two calendar days to be a "rare occurrence." Using these outpatient office codes for this service certainly makes it administratively easier to bill for the service. It is important for physicians billing this service to remember to use the place of service (POS) code to reflect that this outpatient visit, which would normally be performed in an office setting (POS 11), is now being performed in an outpatient facility setting (POS 22).

Outpatient E&M codes receive a lower payment when reported in a facility setting, because the physician is not responsible for many of the expenses that he would be responsible for in his own office, such as rent, utilities and other overhead. Physicians will receive lower payments for the 99212-99215 series reported in a facility than in their own offices.

Q: I frequently bill Medicare for care plan oversight service provided to patients under the care of hospice or home health agencies. At times, these claims are denied for reasons that are not at all clear to me.

A: The patient must be receiving Medicare-covered services from a home health or hospice program in order for a physician to bill for care plan oversight for patients enrolled in home health or hospice (G0181 and G0182). Medicare Part B contractors determine if a patient is enrolled in one of these programs by examining the common working file (CWF) to determine if a claim for these services has been filed by a home health or hospice agency for the month in which the physician service was provided. If a hospice or home health agency files its claims in a timely manner and those claims are properly processed by the Medicare Part A fiscal intermediary, claims for home health or hospice care plan oversight should not be denied.

The problem occurs if these agencies do not file claims in a timely manner or if other obstacles are encountered during the processing of these claims. When this occurs, the physician claim for the care plan oversight cannot be matched to a claim submitted by the agency, and therefore is denied. Unfortunately, physicians have no way of knowing if the claims will be submitted in a timely fashion by the agencies.

If you are faced with this situation on a regular basis with the same home health or hospice agency, it may be best to advise that agency of this problem and inform them that it creates significant financial difficulties for you when the agency does not submit claims on time.

Q: I understand that Medicare requires a consultation to be documented in both the requesting physician's and the consultant's records. Does this mean that I have to verify that the requesting physician recorded the request in the patient's chart?

A: Medicare requires that a physician makes a note in the patient's chart whenever he or she requests a consultation. However, Medicare has made it clear that consultant physicians are not responsible for confirming that this requirement has been carried out by the requesting physician. Consulting physicians should urge requesting physicians to record the information in patients' charts, but they are not required to verify that it was done.

Q: I have my National Provider Identifier (NPI) and I have started to use it. Is there a way to get the NPIs of other healthcare providers without calling them?

A: Yes. The Department of Health and Human Services (HHS) has announced plans to make NPIs available through the CMS Web site starting Aug. 1.

At first, the data will be available as a single downloadable file listing all of the providers with NPIs. HHS will eventually create a database searchable by provider name or geographic location. This database will be available free to the public. Data will include demographic information, such as name, address and provider type, but not protected information, such as social security numbers or birth dates.

This new database should function similarly to the existing Unique Provider Identification Number directory.

Brian Whitman is Senior Analyst for Regulatory and Insurer Affairs in ACP's Washington, D.C. office.


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