Practice Economics

CPT 2011 Update


 

In the past, observation services typically did not exceed 24 hours or two calendar days. However, changes in healthcare policy coupled with the impetus to reduce wasteful spending have spurred an atmosphere of scrutiny over hospital admissions. Sometimes there are discrepancies between a hospital’s utilization review committee and a payor’s utilization review committee in determining the appropriateness of healthcare services and supplies, in accordance with each party’s definition of medical necessity. This situation has caused an increase in both the number and cost of observation stays.

In response, subsequent observation-care codes (99224-99226) were developed and published in the 2011 edition of Current Procedural Terminology (CPT).1

Table 1. Work RVUs for subsequent hospital care and observation codes click for large version

Table 1. Work RVUs for subsequent hospital care and observation codes

Codes and Their Uses

CPT outlines three subsequent observation care codes:

  • 99224: Subsequent observation care, per day, for the evaluation and management (E/M) of a patient, which requires at least two of these three key components: problem-focused interval history; problem-focused examination; and medical decision-making that is straightforward or of low complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs. Usually, the patient is stable, recovering, or improving. Physicians typically spend 15 minutes at the bedside and on the patient’s hospital floor or unit.
  • 99225: Subsequent observation care, per day, for the E/M of a patient, which requires at least two of these three key components: expanded problem focused interval history; expanded problem focused examination; and medical decision-making of moderate complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs. Usually, the patient is responding inadequately to therapy or has developed a minor complication. Physicians typically spend 25 minutes at the bedside and on the patient’s hospital floor or unit.
  • 99226: Subsequent observation care, per day, for the E/M of a patient, which requires at least two of these three key components: detailed interval history; detailed examination; and medical decision-making of high complexity. Counseling and/or coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs. Usually, the patient is unstable or has developed a significant complication or a significant new problem. Physicians typically spend 35 minutes at the bedside and on the patient’s hospital floor or unit.
Table 2. Physician overlap and subsequent care billing click for large version

Table 2. Physician overlap and subsequent care billing

Subsequent observation-care codes replicate the key components and time requirements established for subsequent hospital care services (99231-99233). However, the relative value units (RVUs) of physician work associated with subsequent observation care are not weighted equally (see Table 1, below). Subsequent observation care is a less-intense service, and therefore is valued at a lesser rate.

The attending of record writes the orders to admit the patient to observation (OBS); indicates the reason for the stay; outlines the plan of care; and manages the patient during the stay. Specialists typically are called onto an OBS case for their opinion/advice (i.e. consultants) but do not function as the attending of record.

According to CPT 2011, subsequent OBS care codes can be reported by both the attending physician of record and specialists who provide medically necessary, nonoverlapping care to patients on any day other than the admission or discharge day (see Table 2, above). At press time, CMS and private payors had not provided written clarification on the use of subsequent observation-care codes. Therefore, it is imperative to monitor payments, denials, and policy clarifications providing further billing instruction.

On the Horizon

Prior reporting guidelines required the reporting of subsequent observation-care days with established outpatient codes (99212-99215). Some member plans insisted on referrals for all outpatient visits regardless nature of the service. Without the mandated referral for established patient visits performed in the observation setting, physician services were denied for coverage.

The creation of subsequent observation codes might play a role in decreasing these denials. Be sure to review the private payors’ fee schedules for inclusion of 99224-99226 codes. If missing, contact the payor or include it as an agenda item during your contract negotiations.

For more information on observation care services, check out “Observation Care” in the July 2010 issue of The Hospitalist. TH

Carol Pohlig is a billing and coding expert with the University of Pennsylvania Medical Center, Philadelphia. She also is faculty for SHM’s inpatient coding course.

References

  1. Abraham M, Ahlman J, Boudreau A, Connelly J, Evans D. Current Procedural Terminology: Professional Edition. Chicago: American Medical Association Press; 2011.
  2. Centers for Medicare and Medicaid Services. Medicare Claims Processing Manual: Chapter 12, Section 30.6.8. Available at: www.cms.hhs.gov/manuals/downloads/clm104c12.pdf. Accessed Jan. 16, 2011.

Physician Alert: Home Health Face-to-Face Encounter

Hospitalists have recently heard about—and fear the impact of—CMS-1510-F. This code is a condition of payment that will affect reimbursement to home health agencies, not hospitalists.

The Affordable Care Act of 2010 mandates that the physician who certifies a patient for home health services must document that a personal, face-to-face encounter, or an encounter with a qualified nonphysician provider, occurred. Prior to this regulation, hospitalists would certify home health services and be obligated to sign the plan of care to oversee post-discharge outpatient care, which placed hospitalists in a clinically awkward situation. CMS-1510-F expands and revises the guidelines:

  • A face-to-face encounter must occur within the 90 days prior to the start of home health care, or within the 30 days after the start of home health care.
  • Face-to-face patient encounters can be provided by a qualified physician or nonphysician provider (e.g. nurse practitioner) who is working in collaboration with the physician in accordance with state law, or a physician assistant acting under the supervision of the physician.
  • Physicians who attended to the patient in an acute (hospitalists) or post-acute setting may certify the need for home health care based on their contact with the patient, initiate the orders for home health services, establish and sign the plan of care, and “hand off” the patient to his or her community-based physician to review and sign off on the plan of care.

While some might view CMS-1510-F as detrimental, hospitalists recognize its benefit: The certifying physician (e.g. hospitalist) no longer has to be the same physician who signs the formal plan of care (e.g. PCP).

For more information, visit www.cms.gov/MLNMattersArticles/downloads/SE1038.pdf and download further details of CMS-1510-F.—CP

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