Observation services are being increasingly provided by emergency physicians, whether within the ED proper or at a different site within the hospital. Observation services may be provided in any bed in any part of the hospital, including the ED.  Observation is not a location, but a status. 

If an ED bed is to be utilized for provision of observation services, the physician providing observation services must:

• write initial “Admission to Observation” orders,
• must periodically enter Progress Notes on the patient
• must document
  (a) a physical exam of the patient just prior to discharge from observation status,
  (b) a discussion of the patient’s observation stay and
  (c) must write (or otherwise document) all discharge instructions, including prescriptions, referrals, follow-up with the patient’s primary care physician, activity and return to work or school instructions (if applicable), etc.

If the observed patient is a Medicare beneficiary, if the physician bills the initial observation care codes, there must be a medical observation record which contains dated and timed physician admitting orders.  The observation record should reflect all the care the patient receives while in observation status, the nursing notes, and the physician’s dated and timed progress notes.  The observation services medical record must be in addition to the ED medical record or outpatient clinic record.  

Medicare requires, for “same day” observation services, i.e. the patient is both admitted and discharged from observation status on the same calendar day—that the patient spend at least 8 hours in observation status.  If the patient is admitted to observation on one calendar day and discharged on a different calendar day, then Medicare does not require a minimum length of stay in observation status.     

Patients may receive a procedure in the ED and then receive observation services from the same physician.  Both services will be paid.  Of course, the ED Visit codes may not be coded in this instance.  The observation services code would be assigned (with a –25 modifier for “significant, separately identifiable evaluation and management services provided on the same day of the procedure or other service”) and the correct CPT code for the procedure would also be coded.     

Likewise, if a patient receives observation services as well as procedural services (while in observation status) from the same physician (or another physician), then both the observation services and procedural services are coded and reimbursed.  For example, an intoxicated patient with a head injury is placed into observation by Dr. A.  While in observation , the patient has another seizure and sustains a laceration of his leg, which is repaired by Dr. A.  The coder assigns the appropriate observation services code as well as the laceration repair code to Dr. A’s claim and both services will be paid—unless you are contractually prohibited from doing so. 

The following are the appropriate CPT codes and descriptions for observation services:

For same day observation admit and discharge: 

99234  Observation care for problems of low severity with documentation requiring a detailed or comprehensive History, a detailed or comprehensive PE, and straightforward or low complexity MDM (Medical Decision Making). 

99235  Observation care for problems of moderate severity.  Documentation requires a comprehensive History, a Comprehensive PE, and moderate complexity MDM. 

99236 Observation care for problems of high severity.  Documentation requires a comprehensive History, a comprehensive PE, and high complexity MDM.  

For observation services which span more than one calendar day: 

99218  Initial observation care for problems of low severity.  Documentation requires a detailed or comprehensive History, a detailed or comprehensive PE and straightforward or low complexity MDM. 

99219  Initial observation care for problems of moderate severity.  Documentation requires a comprehensive History, and comprehensive PE, and moderate complexity MDM. 

99220  Initial observation care for problems of high severity.  Documentation requires a comprehensive History, a comprehensive PE, and a high complexity MDM. 

99217  Observation care discharge includes services on the date of observation discharge (only to be used on a calendar day other than the initial day of observation).  These services include a “final exam”, discussion of the observation stay, all follow-up instructions, and documentation of the patient’s discharge. 

RVUs (relative value units) comparing ED E&M Codes Vs. Observation Codes 

Of note is that the same physician cannot charge for both the ED care and the observation care if he or she provided both services.   In this instance, the physician would charge for observation services and forego charging for the ED visit services, since the RVUs are higher for the observation services.  If two different physicians in the same specialty or in the same group and one physician provides the ED service and the other provides the observation service, the two physicians are considered to be the same physician for coding and billing purposes—thus either the ED visit services or the observation services may be billed, but not both.  If a mid-level practitioner provides the ED care and the ED physician provides the observation care—if both individuals are part of the same group, then either the ED service or the observation service may be coded and billed—but not both.  If the ED physician provides ED visit services and the patient subsequently receives observation services from a physician in a different specialty and a different group, then both physicians may bill and receive reimbursement for their services. 

There are No Procedures that are “Bundled” into Observation Services.  Any procedure you provide to a patient in observation status may be separately (and additionally) billed. 

All payers except Medicare do not place any restrictions on the kinds of problems for which observation patients may receive care and subsequent reimbursement.  Medicare continues to reimburse physicians for observation services provided to Medicare beneficiaries regardless of the patient’s diagnosis or medical problem, as long as the services are reasonable and medically necessary.  Medicare will only reimburse the hospital for observation services provided to patients with congestive heart failure, asthma or acute chest pain, however.  Before providing observation services to a Medicare beneficiary who suffers from a problem “not approved for payment to the hospital by Medicare”, the physician would be well advised to contact the hospital administrative staff for “guidance”—as provision of care in this instance may create a source of friction between the hospital and the physician. 

The three key elements in selecting the appropriate level of E&M code are history, physical examination, and medical decision-making. Medical decision-making (MDM) drives the history and physical exam.  These elements must meet or exceed the minimum requirements specified by CPT.  When determining the level of history for an E&M code, the documented elements in the History of Present Illness (HPI), Review of Systems (ROS), and/or the Past, Family, Social History (PFSH) determine the level of history performed.

Documentation Requirements:The type of patient history depends on the nature of the presenting problems and includes some or all of the following elements: the chief complaint; the history of the present illness; the review of systems; and the past, family and/or social history. 

History of Present Illness (HPI):Is it brief or extended? Depends on how many checkmarks you can check–not on how long it takes. If you have 4 or more of 7 components described (location, quality, severity, duration, timing, context, modifying factors), it’s extended; come up one short, you’re sunk.: brief only.  

Review of Systems (ROS): The following systems will be recognized as part of the ROS: constitutional symptoms (e.g., fever, weight loss, vital signs); eyes, ears, nose, mouth and throat; cardiovascular; respiratory; gastrointestinal; genitourinary; musculoskeletal; integumentary (skin and/or breast); neurological; psychiatric; endocrine; hematologic/lymphatic; and allergic/immunologic.

There are three types of ROS:

* For the problem-pertinent ROS, your documentation must show the patient's positive responses and pertinent negatives for the system related to the problem identified in the HPI.

* For the extended ROS, your documentation must show the patient's positive responses and pertinent negatives for two to nine systems related to the problem or problems identified in HPI.

* For the complete ROS, your documentation must show that at least 10 organ systems have been reviewed. Those systems with positive or pertinent negative responses must be individually documented. For the remaining systems, a notation indicating all other systems are negative is permissible. In the absence of such a notation, at least 10 systems must be individually documented.  

Past, Family, and Social History:

* For a pertinent PFSH, your documentation must include at least one specific item from any of these three history areas.

* For a complete PFSH, your documentation must include at least 2 of the 3 (past, family, social).

Note: A patient’s past history cannot be utilized in the ROS or HPI elements. 

Putting it all together: 

Problem Focused History: If you have a brief or extended HPI, but no ROS and PFSH, you have a problem focused history. 99281 (history) 

Expanded Problem Focused History: If you have a brief or extended HPI, problem pertinent ROS, and no PFSH, you have an expanded problem focused history. 99282 or 99283 (history) 

Detailed History: If you have an extended HPI, extended ROS, and pertinent PFSH, you have a detailed history. 99284 (history) 

Comprehensive History: If you have an extended HPI, complete ROS, and complete PFSH, you have a comprehensive history. 99285 (history)

The types of HPI, ROS and PFSH you document will help determine the level of E/M service we can report. For instance, when considering a comprehensive encounter, we cannot have a brief history of present illness documented, unless the “caveat” exists.

Evidence Based Clinical Orders

Emergency Departments are increasingly being forced by their administration to focus on improving “Through-Put” times. One of the areas that can positively impact this goal is the streamlining of the ordering process. Dr. Irma Nin, M.D., an emergency physician from Venice, Florida has developed, both from experience and published literature, an Evidence Based cost effective system for the ordering process.

Her expertise has shown that training triage nurses to use physician-determined criteria allows appropriate testing to be performed and the results to be ready in many cases in time for the physician’s first interaction with the patient.

The Triage Nurse is trained to take the History, perform a basic “hands on” exam, and then, based on the findings, implement a set of standardized standing orders. Some of the areas that lend themselves to this concept include: Congestive Heart Failure and G.I. Bleeding. Risks involved with establishing and using these standards are reduced because they are all based on published evidence.

At each facility where she consults, Dr. Nin works with the group and the nurses to develop individualized protocols for that facility. She then trains the nurses to implement the process, which in most cases includes developing a comfortable level with the performance of the “hands on” exam.

You are welcome to visit with Dr. Nin to discuss her ideas at Booth # 1512 at the ACEP Scientific Assembly in New Orleans, October 15-17, 2006.

You can also contact Dr. Nin by leaving her a message at www.medaphase.net.