Payment for Initial Hospital Inpatient or Observation Care

30.6.9.1 - Payment for Initial Hospital Inpatient or Observation Care Services and Hospital Inpatient or Observation Care Services (Including Admission and Discharge Services) (Rev. 11842; Issued; 02-09-23 Effective:01-01-23; Implementation: 05-09-23) A. Initial Hospital Inpatient or Observation Care From Emergency Department A/B MACs (B) pay for an initial hospital inpatient or observation care service if a practitioner sees a patient in the emergency department and decides to admit the person to the hospital or place the patient in observation care. They do not pay for both E/M services. Also, they do not pay for an emergency department visit by the same practitioner on the same date of service. When the patient is admitted to the hospital via another site of service (e.g., hospital emergency department, physician’s office, nursing facility), all services provided by the practitioner in conjunction with that admission are considered part of the initial hospital inpatient or observation care when performed on the same date as the admission. B. Initial Hospital Inpatient or Observation Care on Day Following Visit A/B MACs (B) pay both visits if a patient is seen in the office on one date and admitted to the hospital as an inpatient or receives observation care on the next date, even if fewer than 24 hours has elapsed between the visit and the admission for hospital inpatient or placement in observation care. C. Initial Hospital Inpatient or Observation Care and Discharge on Same Day Both hospital inpatient and observation care coding should be billed as follows: When the patient is admitted to inpatient hospital care or is in observation care for less than 8 hours on the same date, then Initial Hospital Inpatient or Observation Care, from CPT code range 99221 - 99223, shall be reported by the physician. The Hospital Inpatient or Observation Discharge Day Management service, CPT codes 99238 or 99239, shall not be reported for this scenario. When a patient is admitted to inpatient hospital care or is in observation care and then discharged on a different calendar date, the physician shall report an Initial Hospital Inpatient or Observation Care from CPT code range 99221 - 99223 and a Hospital Inpatient or Observation Discharge Day Management service, CPT code 99238 or 99239. When a patient has been admitted to inpatient hospital care or is in observation care for a minimum of 8 hours but less than 24 hours and discharged on the same calendar date, Hospital Inpatient or Observation Care Services (Including Admission and Discharge Services), from CPT code range 99234 - 99236, shall be reported. The following table summarizes the above, based on hospital length of stay and discharge date: Hospital Length of Stay Discharged On Code(s) to Bill < 8 hours Same calendar date as admission or start of observation Initial hospital services only* 8 or more hours Same calendar date as admission or start of observation Same-day admission/discharge* < 8 hours Different calendar date than admission or start of observation Initial hospital services only* 8 or more hours Different calendar date than admission or start of observation Initial hospital services* + discharge day management *Plus prolonged inpatient/observation services, if applicable. D. Documentation Requirements for Billing Hospital Inpatient or Observation Care Services (Including Admission and Discharge Services) The physician shall satisfy the E/M documentation guidelines for admission to and discharge from inpatient observation or hospital care. In addition to meeting the documentation requirements for medically appropriate history and/or examination, and medical decision making documentation in the medical record shall include: • Documentation stating the stay for hospital treatment or observation care status involves 8 hours but less than 24 hours; • Documentation identifying the billing physician was present and personally performed the services; and • Documentation identifying the admission and discharge notes were written by the billing physician. E. Physician Services Involving Transfer From One Hospital to Another; Transfer Within Facility to Prospective Payment System (PPS) Exempt Unit of Hospital; Transfer From One Facility to Another Separate Entity Under Same Ownership and/or Part of Same Complex; or Transfer From One Department to Another Within Single Facility Physicians may bill both the hospital discharge management code and an initial hospital care code when the discharge and admission do not occur on the same day if the transfer is between: • Different hospitals; • Different facilities under common ownership which do not have merged records; or • Between the acute care hospital and a PPS exempt unit within the same hospital when there are no merged records. In all other transfer circumstances, the physician should bill only the appropriate level of subsequent hospital care for the date of transfer. F. Initial Hospital Care Service Requirements Per the CPT code descriptors for Initial Hospital Inpatient or Observation Care Services, a medically appropriate history and/or examination will be required, but will no longer be used to select visit level. Practitioners working in hospitals should continue to be aware of the documentation needed to meet requirements for other payment systems or Conditions of Participation, in addition to the documentation required to bill Hospital Inpatient or Observation Care codes under the PFS. Physicians who provide an initial visit to a patient during inpatient hospital care that meets the code descriptor requirements shall report an initial hospital care code (99221-99223). The principal physician of record shall append modifier “-AI” (Principal Physician of Record) to the claim for the initial hospital care code. This modifier will identify the physician who oversees the patient’s care from all other physicians who may be furnishing specialty care. Physicians may bill initial hospital care service codes (99221-99223), for services that were reported with CPT consultation codes (99241 - 99255) prior to January 1, 2010, when the furnished service and documentation meet the Initial Hospital Inpatient or Observation Care code descriptor requirements. Physicians must meet all the requirements of the initial hospital care codes, to report CPT code 99221, which are greater than the requirements for consultation codes 99251 and 99252. Reporting CPT code 99499 (Unlisted evaluation and management service) should be limited to cases where there is no other specific E/M code payable by Medicare that describes that service. Reporting CPT code 99499 requires submission of medical records and A/B MAC (B) manual medical review of the service prior to payment. A/B MACs (B) shall expect reporting under these circumstances to be unusual. G. Initial Hospital Care Visits by Two Different M.D.s or D.O.s When They Are Involved in Same Admission In the inpatient hospital setting all physicians (and qualified nonphysician practitioners where permitted) who perform an initial evaluation may bill the initial hospital care codes (99221 - 99223) or nursing facility care codes (99304 - 99306). A/B MACs (B) consider only one M.D. or D.O. to be the principal physician of record (sometimes referred to as the admitting physician.) The principal physician of record is identified in Medicare as the physician who oversees the patient’s care from other physicians who may be furnishing specialty care. Only the principal physician of record shall append modifier “-AI” (Principal Physician of Record) in addition to the E/M code. Follow-up visits in the facility setting shall be billed as subsequent hospital care visits and subsequent nursing facility care visits.