The physician should satisfy the E/M documentation guidelines for furnishing
observation care or inpatient hospital care. In addition to meeting the documentation requirements for history, examination and medical decision-making, documentation in the medical record shall include:
* Documentation noting the stay for observation care or inpatient hospital care
involves eight hours, but less than 24 hours.
* Documentation identifying the billing physician was present and personally
performed the services.
* Documentation identifying the order for observation services, progress notes and discharge notes were written by the billing physician.
In the rare circumstance when a patient receives observation services for more than two calendar dates, the physician should bill a visit furnished before the discharge date using the outpatient/office visit codes. The physician may not use the subsequent hospital care codes since the patient is not an inpatient of the hospital.
Admission to Inpatient Status Following Observation Care
* If the same physician who ordered hospital outpatient observation services also
admits the patient to inpatient status before the end of the date on which the
patient began receiving hospital outpatient observation services, Medicare
should pay only an initial hospital visit for the E/M services provided on that date.
* Medicare payment for the initial hospital visit includes all services provided to the patient on the date of admission by that physician, regardless of the site of
* The physician may not bill an initial observation care code for services on the
date he admits the patient to inpatient status.
* If the patient is admitted to inpatient status from hospital outpatient observation
care subsequent to the date of initiation of observation services, the physician
must bill an initial hospital visit for the services provided on that date.
The physician may not bill the hospital observation discharge management code
(99217) or an outpatient/office visit for the care provided while the patient
received hospital outpatient observation services on the date of admission to
Hospital Observation Services During Global Surgical Period
The global surgical fee includes payment for hospital observation (codes 99217, 99218, 99219, 99220, 99234, 99235 and 99236) services unless the criteria for use of modifiers 24, 25 or 57 are met. These services are paid in addition to the global surgical fee only if both of the following requirements are met:
* The hospital observation service meets the criteria needed to justify billing it with modifiers 24, 25 or 57 (decision for major surgery).
* The hospital observation service furnished by the surgeon meets all the criteria
for the hospital observation code billed.