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


Same-day discharges: HCFA has changed its policy

From the April 2001 ACP-ASIM Observer, copyright 2001 by the American College of Physicians-American Society of Internal Medicine.

By Brett Baker

Q: How has Medicare changed its payment policy for situations in which observation care or a hospital admission takes place on the same date as a discharge?

A: HCFA has implemented a new policy that deviates from CPT. HCFA believes that a discharge service that takes place shortly after a hospital or observation care admission is less complex than a discharge service after a longer hospital stay.

CPT allows physicians to use codes 99234-99236 to report hospital admission or observation care on the same date as the discharge, regardless of the total length of stay. HCFA’s new policy, however, allows physicians to use same-day admission and same-day discharge codes, CPT 99234-99236, only with patients who have been discharged at least eight hours after observation care or hospital admission on the same date.

Based on this concept, HCFA has also enacted the following policies:

  • To appropriately report CPT codes 99234-99236, your patient must be an inpatient or an observation care patient for at least eight hours on the same calendar date.

  • When admitting patients for observation for less than eight hours on the same date, use CPT codes 99218-99220 (initial observation care) and do not report a discharge code.

  • When you admit patients for observation care and discharge them on a different calendar date, use CPT codes 99218-99220 (initial observation care) and the CPT observation discharge code, 99217.

  • When you admit patients for inpatient hospital care and discharge them on a different calendar date, use CPT codes 99221-99223 (initial hospital care) and CPT hospital discharge day management codes, 99238-99239.

  • If you admit someone as an inpatient and discharge them less than eight hours later on the same calendar date, use CPT codes 99221-99223 (initial hospital care) for the admission service. Do not bill for the hospital discharge day management service.

  • To bill CPT codes 99234-99236 (same-day admission and discharge), you must satisfy documentation requirements for admission to and discharge from inpatient or observation care. You must also document the duration of observation care or treatment status.

Q:What is the College’s position on this policy?

A: ACP–ASIM continues to object to HCFA’s new policy. The College has protested the policy because it deviates from CPT by requiring that the discharge take place at least eight hours after the admission when the services are provided on the same calendar date.

We recommend that HCFA use the CPT standard, which allows physicians to report a same-day admission and discharge code, CPT 99234-99236, regardless of the total duration of the patient’s stay. The HCFA policy is unnecessarily confusing.

HCFA’s original proposal was even more onerous. Its original proposal would have reduced payment for all observation and inpatient admissions that take place on the same date as discharge. HCFA did not implement this proposal because of concerns raised by ACP–ASIM and others.

Brett Baker is a third-party payment specialist in the College’s Washington Office.

If you have questions about third-party payment or coding issues, contact him at 202-261-4533 or


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