Appeal type: Practitioner Services
Decision: Partially Favorable

 
We decided that the Plan has to pay for the CPT 99217. We decided that the Plan does not have to pay for CPT 
99220 and 99225. 
 
You asked the Plan to pay for the services. The Plan says that the billed services cannot be verified. 
 
We decided that the Plan has to pay for CPT code 99217. 
 
The Plan must follow Medicare rules. Medicare rules say that providers must report services correctly. 
Providers must report services with the appropriate CPT code. 
 
In this case, the CPT Code Manual definition of code 99217 is "Observation care discharge day management 
(This code is to be utilized to report all services provided to a patient on discharge from outpatient hospital 
"observation status" if the discharge is on other than the initial date of "observation status." To report services 
to a patient designated as "observation status" or "inpatient status" and discharged on the same date, use the 
codes for Observation or Inpatient Care Services [including Admission and Discharge Services, 99234-99236 
as appropriate.])". 
  
We asked our coding reviewer to carefully review the case file and apply the relevant Medicare rules to 
determine if the Plan was correct in denying the request to pay for the services. Our reviewer says that the use 
of CPT code 99217 is supported by the records provided. Our coding reviewer found that documentation 
submitted does meet criteria for observation care discharge on a different date than admit date. 
 
We looked at this coder?s review, the file, and Medicare rules. Based on this information, we decided that 
Medicare rules for coverage of the services have not been met Therefore, we decided that the Plan has to pay 
for CPT 99217.  
 
We also decided that the Plan does not have to pay for CPT codes 99220 and 99225. 
 
The Plan must follow Medicare rules. Medicare rules say that providers must report services correctly. 
Providers must report services with the appropriate CPT code. 
 
In this case, the CPT Code Manual definition of code 99220 is "Initial observation care, per day, for the 
evaluation and management of a patient, which requires these 3 key components: A comprehensive history; A 
comprehensive examination; and Medical decision making of high complexity. Counseling and/or coordination 
of care with other physicians, other qualified health care professionals, or agencies are provided consistent with 
the nature of the problem(s) and the patient's and/or family's needs. Usually, the problem(s) requiring 
admission to outpatient hospital "observation status" are of high severity. Typically, 70 minutes are spent at the 
bedside and on the patient's hospital floor or unit." The CPT Code Manual Definition of code 99225 is 
"Subsequent observation care, per day, for the evaluation and management of a patient, which requires at least 
2 of these 3 key components: An expanded problem focused interval history; An expanded problem focused 
examination; Medical decision making of moderate complexity. Counseling and/or coordination of care with 
other physicians, other qualified health care professionals, or agencies are provided consistent with the nature 
of the problem(s) and the patient's and/or family's needs. Usually, the patient is responding inadequately to 
therapy or has developed a minor complication. Typically, 25 minutes are spent at the bedside and on the 
patient's hospital floor or unit."  
 
We asked our coding reviewer to carefully review the case file and apply the relevant Medicare rules to 
determine if the Plan was correct in denying the request to pay for the services. Our reviewer says that the use 
of CPT codes 99220 and 99225 is not supported by the records provided. Our coding reviewer found that initial 
observation care supports a detailed or comprehensive history. The documentation supports Medical Decision 
Making that is straightforward or of low complexity. There is a more appropriate code to report for these 
services. 
 
We looked at this coder?s review, the file, and Medicare rules. Based on this information, we decided that 
Medicare rules for coverage of CPT codes 99220 and 99225 have not been met. 
 
Therefore, we decided that the Plan does not have to pay for CPT 99220 and CPT 99225. 
 
If the Plan does not agree with our decision, they can ask us to open a case again. We only open a case again 
if we believe there was a mistake or if there is new information to review. The Plan has to show us the mistake 
and/or send us the new information. This does not happen often. If we decide to open the case again, we will 
send you a letter.