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New billing codes for ‘subsequent observation care’ services

From the January ACP Internist, copyright 2011 by the American College of Physicians

By Debra Lansey

The new year brought numerous changes that have a significant impact on internists’ practices. Internists can use new procedure codes to be paid for the increasingly common service of evaluating and managing a patient after the date of their admission to “observation status” in a hospital but prior to the date of observation status discharge.

There are three new codes in the evaluation and management (E/M) section of the Current Procedural Terminology (CPT) 2011 code book that describe a physician’s “subsequent observation care” service to a patient. These codes were developed, with significant input from ACP, to enable physicians to more accurately report the work that is specific to these increasingly common services.

New billing codes for ‘subsequent observation care’ services

Before Jan. 1, the CPT book contained coding options for reporting observation services provided to a patient admitted on one date and discharged on a different date, and for a patient admitted and discharged on the same date. Without a specific mechanism to report a subsequent observation care service, coding guidelines dictated that a physician report the service using CPT 99499, the code for an unlisted E/M service, which requires the physician to submit documentation and gives Medicare discretion as to how much to pay.

The Centers for Medicare and Medicaid Services (CMS) has assigned a value to each subsequent observation care service that determines a national Medicare payment amount in 2011.

The accompanying table provides the “relative value” for each service, instead of listing the payment amount, because the conversion factor that Medicare uses to convert the relative value assigned to each service to a dollar payment amount for 2011 was unknown at the time this article went to press.

While ACP continues to press Congress and fully expects it to avert a devastating cut, perhaps replacing it with a continuation of the 2010 conversion factor, we are unable to predict the exact payment amount of the subsequent observation care and other services with confidence.

The CMS Physician Fee Schedule Search will let readers find the specific payment amount for these services that result from the 2011 conversion factor.

ACP has undertaken significant effort to realize a CMS relative value assignment that adequately captures the physician work and other resource inputs for these services relative to others. The College was a driving force behind the Relative Value Update Committee (RUC) recommending that CMS establish relative values higher than those listed here for each service. The RUC is the entity convened primarily by the American Medical Association that is composed of physicians appointed by major specialty organizations, including ACP.

ACP disputes the relative value CMS assigned to these codes, believing that the assignments do not fully account for the physician work involved in providing the services. The College will continue to urge CMS to use the RUC-recommended relative values.

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CPT codes, descriptors and total RVUs

CPT Code: 99224

Code Descriptor: Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least two of these three key components: problem-focused interval history; problem-focused examination; medical decision making that is straightforward or of low complexity. Counseling and/or coordination of care with other clinicians or agencies is 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.

2011 Total RVUs: 0.82

CPT Code: 99225

Code Descriptor: Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least two of these three key components: an expanded problem-focused interval history; an expanded problem-focused examination; medical decision making of moderate complexity. Counseling and/or coordination of care with other clinicians or agencies is 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.

2011 Total RVUs: 1.45

CPT Code: 99226

Code Descriptor: Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least two of these three key components: a detailed interval history; a detailed examination; medical decision making of high complexity. Counseling and/or coordination of care with other clinicians or agencies is 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.

2011 Total RVUs: 2.17

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