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Reporting Observation Medical Billing Claims

Reporting Observation Medical Billing Claims

You know the basics for reporting observation services in the ED. However, there are some common coding mistakes that can be costing you in the form or partial or rejected services. Don’t worry about the location of the services for observation. Observation is a service and not necessarily a physical place within the ED where the patient can stay.

Another way to insure full reimbursement is to make sure that you have a specific written order from the physician for observation. Medical documentation should include time notes from both the doctor and nurses. Avoid using codes 99228-99220 when reporting observation. It is used to determine whether or not a patient needs to be admitted so you wouldn’t want to use an Initial Observation Care coding as that is general coding.

You can’t bundle these services either. Take care that they are reported as separate services. Use an upper level coding such as 99284 (Emergency department visit for the evaluation and management of a patient, which requires these three key components: a detailed history, a detailed examination, and medical decision-making of moderate complexity) or 99285 (…within the constraints imposed by the urgency of the patient’s clinical condition and/or mental status: a comprehensive history, a comprehensive examination, and medical decision-making of high complexity). Remember, you can bill for additional procedures such as diagnostic testing beside your observation codings.

For example, a “comprehensive” observation history requires you to list three out of three elements for the patient’s past/family/social history, whereas the ED E/M codes (99281-99285) only ask you for two of three. For all of the observation codes, you’re looking at either detailed or comprehensive physical examinations. Make sure you have your documentation in order you might be looking at a rejection. Observation claims require the physicians order, timed doctor and nurse notes of observation, length of time for treatment, and you need to see evidence in the medical record of every time the physician talked to the patient, observes and checked on his status, or went over diagnostic tests results.

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