Prior to the 2023 Current Procedural Terminology (CPT) code set, there were several codes specifically used for hospital observation services:
- CPT 99217 (Observation discharge)
- 99218-99220 (initial observation care)
- 99224-99226 (subsequent observation care)
All of the above-mentioned codes were removed and the services are now included in other existing codes.
What codes can you use for observation in 2023?
Observation care will now be included in the following existing initial, subsequent, discharge day codes:
- Report observation discharge services with CPT 99238, 99239
- Report initial observation care services with 99221, 99222, or 99223
- Report subsequent observation care services with 99231, 99232 or 99233
As a reminder, if a patient is being observed, they don’t have to physically be in a designated observation area. If a patient is admitted and discharged as an inpatient or in observation on the same day, use 99234, 99235, or 99236.
What to look for?
As with all services, ensure the documentation supports the codes billed. With these particular codes it is also important to look for:
- CPT 99238, 99239 – these are time-based codes as the time needs to be documented
- Look for providers billing the highest level of services within the initial care services codes. CPT 99223 reflects a higher service than 99221 and 99222
- Look for providers billing the highest level of services within the subsequent care services codes. CPT 99233 reflects a higher service than 99231 and 99232
- For services that include admission and discharge on the same date, look for billing of the highest level of service. CPT 99236 reflects a higher service than 99234 or 99235
Healthcare Fraud Shield was already monitoring potential upcoding of these codes with the following alerts:
[2004-20] – UPCODING HOSPITAL DISCHARGE E/Ms: Providers billing 99239 compared to 99238/99239 excessively compared to peers.
[2107-20f] – UPCODING-E/M, HOSPITAL CARE: This rule reviews providers billing high frequencies of 99223 out of the CPT range of codes 99221-99223. (peer comparison)
[2107-20g] – UPCODING-E/M, HOSPITAL CARE: This rule reviews providers billing high frequencies of 99233 out of the CPT range of codes 99231-99233. (peer comparison)
[2107-20h] – UPCODING-E/M, OBSERVATION/HOSPITAL CARE: This rule reviews providers billing high frequencies of 99236 out of the CPT range of codes 99234-99236. (peer comparison)
If you have questions or comments you may email us at [email protected].