Observation codes vs E/M codes

When our MD is seeing an established patient in the hospital setting (excluding a patient who came in via the ED), who is not registered as an in-patient, and we are monitoring them for an issue. Is this an Obs or an an E/M charge?

One of my Doctors' thinks these should be E/M codes, I think they should be Observation charges.

I've posed this question to other coding websites and had plenty of people look, but never got an answer. Doesn't anybody know when Obs codes should be used?

re: Observation codes vs E/M codes

You only bill OBS when there is documentation supporting "admit to observation. If they hang out after an E/M for whatever monitoring, it is an E/M code and possibly add-on prolonged service code.

re: Observation codes vs E/M codes

Nancy- Don't say "admit to observation"- the proper phrase is "place on observation."

If the patient was held overnight after an outpatient surgery (commonly called Extended Recovery), the non-surgeon doc would bill a "office visit" code with place of service outpatient hospital.

And BTW, hospital visit codes and Observation codes are all E&M codes too!

re: Observation codes vs E/M codes

MEDICARE OBSERVATION TIP SHEET: PHYSICIAN GUIDELINES
Utilization of the Observation Setting—“What Physicians Need to Know”
• The correct use of the observation setting is the best way to avoid medically unnecessary admissions.
• The decision to admit to the observation or inpatient setting is the responsibility of the treating physician.
• The observation setting should be utilized when:

? The physician is unsure about the patient’s need for inpatient admission and requires time for short-term treatment, assessment, and reassessment in order to make that decision.

? The physician anticipates that the patient’s condition can be evaluated/treated within 24 hours and/or rapid improvement of the patient’s condition can be anticipated within 24 hours.
• The medical necessity of all observation admissions must be documented in the medical record.
• Physicians should not routinely default to the observation setting. The admission setting should be determined for each patient based on the patient’s particular condition and needs.
• A clearly written physician order is required for an admission to the observation setting. The order should state the status that is being ordered (e.g., “Admit to observation”). The order must be written prior to the initiation of the observation services. The order must be signed, dated, and timed. A written order of “admit,” or “admit to the floor,” is interpreted as an order for inpatient care.

re: Observation codes vs E/M codes

I couldn't have said it better myself, nmaguire :)

re: Observation codes vs E/M codes

thank you

re: Observation codes vs E/M codes

But, I can't tell you how many times "Admit" gets misinterpreted. Patients on Observation status are not admitted to the hospital- they are outpatients. The RAC is looking very closely at these orders and taking back lots of money from hospitals.

So while the citation may say that, talk to any Case Management staff person and they will shudder when you say "admit to Observation."


By the way, where did you get that citation?

re: Observation codes vs E/M codes

I can see what you are saying about the word "Admit". and I agree, it probably could be easily misinterpreted. But I would say that if RACs are taking money back based solely on an interpretation of "Admit", then hospitals need to be standing their ground on that issue. As long as the word "observation" is included, the RAC is just trying to earn few extra bucks by bluffing your auditing dept. Call their bluff and keep your money.