A: CPT code 99217, observation care discharge day management, is used for billing when a patient is discharged from observation care on a date other than the date he or she was placed in observation status.

All services provided on the day of discharge from inpatient status are coded 99238 or 99239. This applies for a discharge from inpatient status on a day other than the day a patient was admitted. The full Medicare observation care services' billing rules are listed in the Medicare Claims Processing Manual, Chapter 12. The pertinent information is in Section 30.6.8.

CPT codes 99234-99236, observation or inpatient care, are used when the patient is placed in observation status or admitted to inpatient status and then discharged on the same date.

Q: How should I code services rendered to a patient admitted to observation status on one date, then admitted as an inpatient for two additional days?

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A: If the patient is admitted to observation status on one calendar date and discharged on the next date, bill an initial observation care code, 99218-99220, for the first date of service and the observation care discharge service code, 99217, for the second.

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A: Yes. A patient must be in observation status at least eight hours for a physician to bill a same-date admission and discharge code. Medicare rules differ from the instructions in the CPT code book for this scenario and, thus, are more likely to differ from private-payer billing rules. For Medicare:

CPT codes 99218-99220, initial observation care, describe physician visits during a patient's stay in observation status.

The Medicare eight-hour minimum rule for observation status pertains to same-date admission and discharge only. If, as happens rarely, a Medicare beneficiary is admitted to observation status and is discharged in fewer than eight hours on a different date, bill an initial observation care code, 99218-99220, for the first date of service and the observation care discharge service code, 99217, on the second date.

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An expert from ACP's Regulatory and Insurer Affairs section clarifies what codes to use when admitting and discharging patients across the span of several days, and how to handle observation status depending upon how much time is spent.

Q: Does Medicare require a minimum number of hours on observation status before a physician can bill 99234-99236?

A: Bill a CPT “Observation or Inpatient Care Services (Including Admission and Discharge Services)” code, 99234-99236. These codes are to be used for a same-date admission and discharge in the observation status or inpatient setting.