Observation Service Code Observations

Observation care reporting can be a challenging area of medical coding. Patients are commonly ordered for observation services when they present to the emergency department and then require an extensive period of treatment/monitoring in order to determine their admission or discharge. Here are some helpful tips on how to successfully report observation service codes:

1. Initial observation services are per calendar date, not per 24-hour period. Do not rely on length of stay in making determination of the correct CPT code.
2. Confirm patient status. It is important to know whether the patient is in the hospital under “observation” status or “inpatient” status.
3. The second day of observation begins at 12 A.M. even if the initial observation services were provided just an hour earlier. Second day of observation care should be reported with office or other outpatient visit codes 99211-99215.
4. Physician documentation is key! Be sure that the provider’s documentation is concise and supports the observation service codes that are being reported.