Appeal type: Practitioner Services
Decision: Favorable

 
We decided that the Plan has to pay for procedure codes 99219, 99225, and 99217 provided from September 
15, 2022, to September 17, 2022. 
 
You asked the Plan to pay for procedure codes 99219, 99225, and 99217. You say that the medical records 
support the billing of codes 99219, 99225, and 99217. The Plan denied your request. The Plan says that the 
records do not include documentation of observation status. 
 
The Plan must follow Medicare rules. Medicare rules say that providers must report services correctly. 
Providers must report services with the appropriate CPT code. The rules also say that Medicare health plans 
must make reasonable and diligent efforts to gather and forward to the IRE information regarding its decision 
to deny coverage or payment.  
 
In this case, the CPT Code Manual definition of code 99219 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 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 problem(s) 
requiring admission to outpatient hospital "observation status" are of moderate severity. Typically, 50 minutes 
are spent at the bedside and on the patient's hospital floor or unit. The 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. The 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 find that CPT codes 99219, 99225, and 99217 are supported in the medical record. Specifically, the records 
show that the enrollee was admitted, evaluated, and discharged under an outpatient status. The Plan has 
provided no documentation showing that the enrollee was admitted as anything other than outpatient. Based on 
this information, we decided that Medicare rules for coverage of procedure codes 99219, 99225, and 99217 have been met. Therefore, we decided that the Plan has to pay for procedure codes 99219, 99225, and 99217 
provided from September 15, 2022, to September 17, 2022.  
 
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.