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24.3.12.9 Observation Room Services
Physician outpatient hospital observation room services (procedure codes 1-99217, 1-99218, 1-99219, and 1-99220) are for professional services for a period of more than 6 hours, but less than 24 hours, regardless of the hour of the initial contact, whether or not the patient remains under physician care past midnight. Observation may take place in any patient care area of the hospital or outpatient setting. Physician outpatient observation services may be reimbursed if no other services are billed during the same 24-hour period. Outpatient observation is not a service payable to any other provider type.
When a patient's status changes from observation to inpatient, the date of inpatient admission is the date the patient was first placed on observation status. This rule always applies; regardless of the length of time the patient was in observation (fewer than 24 hours) or whether the physician's order to formally admit the patient was the following day. Charges are to be billed as specified in Section 18.3.3, "Outpatient Services," on page 18-10.
Observation care discharge day management procedure code 1-99217 may be used to report services provided to a patient upon discharge from "observation status" if the discharge occurs on a day other than the initial date of admission.
The following limitations apply to these procedure codes:
• Procedure codes 1-99211, 1-99212, 1-99213, 1-99214, 1-99215, 1-99218, 1-99219, and 1-99220 are denied if billed on the same day as procedure codes 1-99217, 1-99234, 1-99235, and 1-99236 by the same provider.
•If a physician observation visit (procedure codes 1-99217, 1-99218, 1-99219, 1-99220, 1-99234, 1-99235, and 1-99236) is billed on the same day as prolonged services (1-99354 and 1-99355) by the same provider, the prolonged services are denied as part of another procedure on the same day.
•Emergency department visits (procedure codes 1-99281, 1-99282, 1-99283, 1-99284, and 1-99285) and after-hours and out-of-office services (procedure code 1-99056) are denied if they are billed the same day as physician outpatient hospital observation room services (procedure codes 1-99218, 1-99219, and 1-99220) by the same provider.
•If procedure codes 1-99234, 1-99235, and 1-99236 are billed on the same day as the initial observation care (procedure codes 1-99218, 1-99219, or 1-99220) by the same provider, they are denied.
•If a hospital admission (procedure codes 1-99221, 1-99222, and 1-99223) is billed on the same day as outpatient hospital observation (procedure codes 1-99234, 1-99235, and 1-99236) by the same provider, the observation is denied.
•If procedure codes 1-99234, 1-99235, and 1-99236 are billed on the same day as prolonged services (procedure codes 1-99354 and 1-99355) by the same provider, the prolonged service is denied.
•If procedure codes 1-99234, 1-99235, and 1-99236 are billed on the same day as a subsequent hospital visit (procedure codes 1-99231, 1-99232, and 1-99233) by the same provider, the subsequent visit is denied.
•If procedure codes 1-99234, 1-99235, and 1-99236 are billed on the same day as a consultation by the same provider, the consultation is paid and the physician outpatient hospital observation is denied.
•Procedure codes 1-99234, 1-99235, and 1-99236 are not payable on the same day as procedure codes 1-99238 and 1-99239.
•Procedure codes 1-99234, 1-99235, and 1-99236 are subject to the global surgical fee pre-/post-care days assigned to certain surgical procedures.
•If critical care and physician outpatient hospital observation are billed the same day by the same provider, the critical care is paid and the physician outpatient hospital observation is denied.
•E/M services provided at any POS other than an inpatient hospital and billed on the same day as a physician observation visit by the same provider are denied.
•If dialysis treatment and physician observation visits are billed the same day by the same provider, same specialty (other than nephrology and internal medicine specialists), the dialysis treatment may be paid and the physician observation visit is denied.
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