Hospital Observation Services

Procedure Codes and Places of Service

99217                Discharge Service
99218 - 99220   Initial Observation Care

Valid places of service:       22, 23, 

NOTE: For a patient admitted and discharged from observation or inpatient status on the same date, the services should be reported with codes 99234 - 99236 as appropriate.

The above procedure codes are used to report evaluation and management services provided to patients designated/admitted as "observation status" in a hospital. It is not necessary that the patient be located in an observation are designated by the hospital.

If such an area does exist in a hospital (as a separate unit in the hospital, in the emergency department, etc.), these codes are to be utilized if the patient is placed in such an area.

The Observation Services procedure codes are used by the supervising or admitting physician with the patient when designated as "observation status".

When "observation status" is initiated in the course of an encounter in another site of service (e.g., hospital emergency department, physician's office, nursing facility) all evaluation an management services provided by the supervising physician in conjunction with initiating "observation status" are considered part of the initial observation care when performed in the same date. The observation care level of service reported by the admitting physician should include the services related to initiating "observation status" provided in the other sites of service as well as in the observation setting.

• Only the physician who admitted the patient to hospital observation and was responsible for the patient during his or her stay in observation may bill the hospital observation codes

• All other physicians who see the patient while he or she is in    observation must bill the office and other outpatient service codes or outpatient consultation codes as appropriate when they provide  services to the patient.

• The initial observation care codes are for each day of care. This is   determined by calendar date, not 24hour period. Therefore, anytime spent in observation until midnight of the first day is day one.

• The global surgical fee includes payment for hospital observation    services unless the criteria for the use criteria of CPT Modifiers 24, 25, or 57 are met. If the criteria for use of these modifiers are not met, observation services billed during the global period of surgery should not be billed.

FRAUD ALERT: Evaluation and Management services on the same of service provided in sites that are related to initiating "observation status" should NOT be reported separately.