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Comprehensive Observation Services and the 2-Midnight Rule – Part 3 June 26, 2014 Mary Guyot Principal [email protected] 207-650-5830 (cell)
Comprehensive Observation Services and the 2-Midnight Rule – Part 3
June 26, 2014
Mary Guyot
Principal
207-650-5830 (cell)
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• This presentation was prepared using CMS (such as Medicare Claims Processing Manual
and the Medicare Benefit Policy Manual) for regulations available at the time of this
presentation and other resources such as AHA and MLN. It is not intended to grant rights or
impose obligations. It may contain references or links to statutes, regulations, or other policy
materials.
• The information provided is only intended to be a general summary. Caution should be
exercised in relying on these materials alone. There are frequent changes to various
regulations applicable to the Medicare program as well as further interpretation or
explanation.
• There is no representation, warranty or guarantee that this information is error-free or that the
use of this material will prevent differences of opinion or disputes with payers. The presenter
bears no responsibility or liability for the results or consequences of the use of this material.
The publication is provided “as is” without warranty of any kind, either expressed or implied.
• We encourage participants to review the specific statutes, regulations and other interpretive
materials for a full and accurate statement of their contents.
• This information applies to Medicare unless otherwise specified
Presentation Sources & Disclaimer
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• The participant will be able to:
• Explain how to calculate Observation hours and billing
for such
• Discuss billing for change of status (IP to OP or OP to IP)
• Verbalize when to use an ABN for Observation
• Reiterate key components of documentation and develop
a P&P for Observation Services
• Have a resource for Physician part B billing
• Will be able to work with their hospital team to determine
if an action plan is needed to change processes
Objectives
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Calculating & Billing for Observation Hours
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Assigning Account Number(s)
CAHs– 3-day rule does not apply– Patient in ED and OBS has 1 account # and 1 UB-04
(patient’s co-pay applies)– If patient ends up being admitted, they will have 2
account # and 2 UB-04 [1 for OP (ED and Observation where patient’s co-pay applies) and 1 for IP]
PPS hospitals– 3-day rule applies– Patient in ED and OBS has 1 account # and 1 UB-04
(patient’s co-pay applies)– The ED and/or ED & OBS gets rolled into the IP stay
therefore they only require 1 account # (Observation co-pay does not apply)
CMS only pays for Observation when needed for 8 hrs or more if criteria is met (Effective Jan 1, 2011) in PPS hospitals – this does not apply to CAHs
Start time is not the computer registration time
• Start time is not necessarily the time of the physician order but a physician order is a must or we cannot bill for Observation
• Most often is when the care for Observation is initiated
• Recommend the floor admitting nurse to clearly state the time the patient was placed in Observation
• If Observation was initiated in ED because there is no bed or staff available to admit on the floor at the time the patient is discharged from ED – the ED nurse should document something like Observation initiated in ED while awaiting a bed in _____. She/he would then follow the physician’s orders as if the patient went to the floor
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Calculating Hours
Stop time is not necessarily the computer discharge time• Stop time is when the care has been completed
• If the patient is stable and the physician writes and order for discharge, the stop time would be after the nurse has completed the remaining treatments if applicable and given the discharge instructions
• Note: If patient is stable and all treatments are completed but it takes 2 hours before the nurse has the time to complete the discharge – that 2 hrs is not counted in Observation – time it took to discharge the patient can be counted in
• Time waiting for a ride is not counted
Q: What do you do if a patient is stable and all treatments have been completed by 11:00 am – you notify the physician and he/she says they will be over to discharge the patient at lunch time or when the clinic closes?
A: Time waiting for the physician is a non-billable timeDo discuss with administration if this is a frequent occurrence
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Calculating Hours
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Calculating & Billing Hours of Observation
Calculating hours of Observation
– Start with total hours in bed under nursing care (post provider order)
• Minus time for Active Monitoring (see earlier section)
• Minus hours where patient remains in bed but no longer in need of assessments and reassessments as in previous slide
Q: Who should calculate the Observation time
A: Ideally it is the coder when reviewing the chart – if the discharge floor nurse is responsible to calculate the hours, the coder is accountable to ensure that the time is correct
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Calculating & Billing Hours of Observation
Calculating hours of Observation
– 0 – 30 minutes = 0
– 31 – 60 minutes = 1 unit
– For example, a patient who began receiving observation services at 2:03 p.m. according to the nurses‘ notes and was discharged to home at 9:45 p.m. when observation care and other outpatient services were completed, and there were no Active Monitoring time to subtract, the UB-04 should have an 8 placed in the units field of the reported observation HCPCS code
• 7 hrs and 42 min rounded up to 8 hrs
• If it was from 2:03 to 8:15 pm = 7 hrs & 13 min rounded down to 7 hours
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Calculating & Billing Hours of Observation
Revenue code 0762 with HCPCS code G0378 is used for Observation hours, rounded to nearest hour
For Medicare, bill all billable hours for a single encounter on one line even if the Observation service spans more than a calendar day− (e.g.: Observation – 26 units) – that means 26 hrs
The line-item date of service is the date the patient is placed in observation care
No need to report non-billable Observation hours
If patient is stable and all treatments are completed but he/she refuses to be discharged or there is no place to discharge to at this point, the hospital may give an ABN since the care will only be custodial and the patient would be responsible for those hours of care which does not meet criteria for Observation
If ABN is given, it transfers the liability of care while you offer a safe discharge and patient can apply for charity care if finances is an issue
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Calculating & Billing Hours of Observation
Medicare ABN Specific Modifiers
• Modifiers to use when submitting charges to Medicare to indicate that an ABN was given or not given to the patient.
GA Modifier: Waiver of Liability Statement Issued as Required by Payer Policy
• This modifier indicates that an ABN is on file and allows the provider to bill the patient if not covered by Medicare
• Use of this modifier ensures that upon denial, Medicare will automatically assign the beneficiary liability.
GZ Modifier:
• Item or Service Expected to Be Denied as Not Reasonable and Necessary. When an ABN may be required but was not obtained this modifier should be applied.
• Additional information can be found at: http://www.cms.gov/manuals/downloads/clm104c12.pdf
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Calculating & Billing Hours of Observation
In addition, hospitals should report G0379 when observation services are the result of a direct referral for observation care without an associated emergency room visit, hospital outpatient clinic visit, critical care service, or hospital outpatient surgical procedure (status indicator T procedure) on the day of initiation of observation services.
Hospitals should only report HCPCS code G0379 when a patient is referred directly for observation care after being seen by a physician in the community (see §290.4.2)
The number of units reported with HCPCS code G0379 must equal 1
In the situation above, the hospital still needs to report RC 0762 and G0378 for the # of Observation hours
Ensure that G0379 and the hourly observation code G0378 both have the same date of service.
• Note: Reportedly G0379 is not required for CAHs
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G0379 (cont’)
Patient may not be placed in Observation directly from home or nursing home without being seen by the physician on the day they were placed in Observation
For instance, if a family member calls the physician to discuss mom’s status and the provider sent her to the hospital after calling to notifying of Mrs. X on her way in to be placed in Observation, the hospital may not bill for observation until the physician comes in to examine the patient and write the reason for placing the patient in Observation unless he/she referred the patient to the hospitalist’s care
In the above case where the patient was not seen by the physician on the day they were referred to Observation, the Observation “start time” is only when the physician comes in to see the patient regardless of when the patient came in.
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CPT and HCPCS Codes
Q: Some say that CAHs have the choice of using HCPCS codes or not such as in Observation – may bill with revenue code only and no HCPCS but if the HCPCS code is used then they are to follow the definition of the code as written. Is this correct?
A: This is MAC/FI dependent – some MACs allow this for all services. Stroudwater recommends that CAHs bill all services at the CPT or HCPCS level when applicable. More and more MACs are demanding CPT/HCPCS assignment
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Changing Services from IP to OP and OP to IP
See Medlearn Matter re: CMS SE0622
http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/downloads/SE0622.pdf
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Change of Status and Billing for such
Observation to IP
Example: Patient was placed in Observation last night
at 8:00 PM and after UR review, it is determined that
the patient meets IP criteria and the provider concurs
• For CAHs,
• Bill Observation from when they were placed in
Observation with the ED bill
• Bill IP per diem rate from the time the new order for
IP is written and patient is given a new account #
• For PPS,
• ED and Observation are incorporated in with the IP
bill
• Both PPS and CAHs
• Must remember to charge all Observation hours on
the same line with date the service was initiated
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Change of Status and Billing for such
Observation to IP
Q: What if a patient has been in the hospital under observation for a few hours and then order is written for an inpatient stay, should the billing and the medical records face sheet reflect the date and time of the inpatient order? Our UR people are saying not to change this information from the observation date and time on the face sheet, that it should only be changed only on insurance claim. Medical records wants face sheet for the observation date and time and then another face sheet for the admission. I don’t see how billing can bill correctly without changes being made.
A: The date and time of the original order should not be changed.
No new face sheet is needed. The coder needs to see the new order time and note
Do ensure that you have a mechanism for UR to notify HIM and Billing
If this is CAH, bill the Obs separately under 85X TOB, then the IP on a 11X TOB.
If this is a PPS, and the Obs is less than 8 hours, don’t report the Obs at all. Over 8 hours report the Obs according to the 3 day payment window guidelines.
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Change of Status and Billing for such
IP to Observation – Meeting Condition Code 44
Example - Patient is an IP since 8:00 PM last night – PCP this am evaluates the patient and believes that the patient will be able to be discharged prior to 2 MN and does meet Observation level of care
• Signed Medical UR review (either outsourced report or
internal Medical Review)
• Primary provider notes he/she concurs and writes, dates
and times a new order for Observation
• Patient is notified of the change
• HIM and Business Office is notified of the change
• Observation hours are calculated to start when the
physician writes the new order
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Change of Status and Billing for such
IP to Observation – Meeting Condition Code 44 (cont’)
Condition code 44 allows hospitals to treat the entire episode of care as an outpatient encounter and to receive payment for the full episode
• Biller uses bill type 13X for PPS or 85X for CAHs
• Report Condition Code 44 in one of Form Locators 24-30 to
denote that CC 44 criteria was met
• Hours once the Observation order is written and timed (if the
patient continues to meet criteria for Observation), use revenue
code 0762 with HCPCS code G0378 for the total # of
Observation hours meeting criteria
• Hours prior to the new order cannot be billed as observation but
do bill for all services provided from the time the patient left the
ED
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Change of Status and Billing for such
IP to Observation – NOT meeting Condition Code 44
– Example # 1 - Patient is an IP since 8:00 PM last night. Identified by clinical UR this am that the patient does not meet IP criteria - did meet Observation criteria but now is ready to be discharged
– CMS removed some of the previous financial disincentive for inpatient admission (such as a potential short-stay payment denial) by allowing hospitals to rebill a retrospectively determined inappropriate admission as an outpatient visit under Part B. Hospitals can do so for up to one year from the point of service
• Bill using Type of Bill 12x (for PPS) and 85x (for CAHs) for covered Part B only services that were furnished to the inpatient
• Coinsurance may apply, and the beneficiary may be billed for applicable coinsurance of part B services
• No Observation hours to be billed since the patient is being discharged
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Change of Status and Billing for such
IP to Observation – NOT meeting Condition Code 44
– Example # 2 - Patient was an IP since Friday at 8:00 PM and discharged Sunday at 2:00 pm. UR reviews the chart on Monday and notices that the patient did not meet IP criteria. Physician advisors concurs. Do we still bill for IP?
– As per the previous slide, CMS now allows the hospital to bill as an IP Part B. This holds true for post discharge reviews done much later post discharge as long as the hospital rebills a retrospectively determined inappropriate admission as an outpatient visit under Part B. Hospitals can do so for up to one year from the point of service
– Example # 3 – Patient was placed in Observation Sunday at 8:00 PM. On Monday PCP believes this patient will need another MN therefore admits the patient and discharge him Tuesday am which leads to a 1 day acute stay
• If the Medicare Reviewer denies the stay due to lack of an order or lack of medical necessity documentation, the hospital may rebill as an OP as long as this is done within 1 year post date of service
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Change of Status and Billing for such
UR determines that the patient did not meet neither IP nor
Observation criteria and the patient is still at the hospital –
what now?
• Give letter of non-coverage - follow CMS instruction
• If they appeal, do notify them that they will be responsible for
the cost if they insist on staying at the hospital
• Submit the claim as non-covered
• Wait for a denial of payment
• Resubmit a part B claim, and include all OP that would
normally have been covered had the IP never existed
UR determines that the patient did not meet neither IP nor
Observation criteria after the patient has been discharged
• Submit the claim as non-covered
• Bill for Part B services such as Lab, x-ray …if applicable
Q: How should the change in patient status from inpatient to outpatient be reported in the patient’s medical record? Can the hospital just discard the inpatient record?
A: Entries in the medical record cannot be expunged or deleted and must be retained in their original form. Therefore, all orders and all entries related to the inpatient admission must be retained in the record in their original form. If a patient’s status changes in accordance with the requirements for use of Condition Code 44, the change must be fully documented in the medical record, complete with orders and notes that indicate why the change was made, the care that was furnished to the beneficiary, and the participants in making the decision to change the patient’s status.
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Condition Code 44 and Medical Record
MedLearn - SE0622
Q: Physician admits patient to Observation from the ER per documentation, however it is placed in the Electronic Record by clerical and nursing accidently as an Inpatient. Documentation and charges are for an inpatient. This does not get caught until after discharge but before being billed. Would this be ok to change the Inpatient to an Observation? Would we have to use the condition 44???
A: Condition Code 44 would not be applicable since the patient was discharged. This is considered a clerical error vs an error in the medical order.
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Other Participant’s Q&A
Q: What if physician write an admission order to IP but there is a clerical error from the registration staff and nursing cares for the pt. as an Observation patient. This is identified later pre or post discharge. Since the physician had an order for IP can they correct the clerical error and bill as IP?
A: If you can show that the nurses have provided the care the physician has ordered, regardless of inpatient status or outpatient status and if the order to admit as an inpatient is clearly stated in the record and all of the other requirements are met such as: the 2-midnight benchmark, and documented, the order signed prior to discharge, certification completed and signed prior to discharge, then the clerical error could be addressed and the claim could be billed to Part A. CMS has stated on open door forum calls that as long as this is not a common practice and a rare occurrence, it would be acceptable to correct the error when all requirements are met and the record clearly demonstrates the intent of an inpatient.
Given scrutiny from reviewers, a facility should approach this issue cautiously and thoroughly track and review each incident before making a decision to bill as a covered Part A stay.
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Other Participant’s Q&A
Q: Let’s say same story as on the previous slide but UR never noticed that there was no 2MN certification – would you still let them bill as IP?
A: Under the physician certification requirements, the 4 elements must be documented and signed prior to discharge for Part A payment so you would not be able to bill as a covered Part A stay.
The following excerpt is from the CMS 1/30/14 Physician Certification document. “As a condition of payment for hospital inpatient services under Medicare Part A, section 1814(a) of the Social Security Act requires physician certification of the medical necessity that such services be provided on an inpatient basis. The certification must be completed, signed, dated and documented in the medical record prior to discharge, except for outlier cases which must be certified and recertified…”
http://cms.gov/Medicare/Medicare-Fee-for-ServicePayment/AcuteInpatientPPS/Downloads/IP-Certification-and-Order-01-30-14.pdf
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Other Participant’s Q&A
Q: If a hospital self-denies an Inpatient stay after the patient is discharged and bills Part B services, do you have to notify the patient in writing?
A:Yes you must notify the patient – in this situation, in writing since the patient has been discharged. This requirement did not change under the regulations.
The only scenario when you don’t have to notify the patient is when the contractor denies and/or you stop the appeals process and you plan to bill under Part B. If you use the CC44 or self-denial process, then you must notify the patient within 2 days of the decision by the UR Committee.
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Other Participant’s Q&A
Q: Can we clarify admission orders if no admission status is
included in the original order?
A: CMS clearly says that a clear order must be written from
the start in order to bill for that service
Q: The issue we have is when the ER physician discussed the case with the PCP and then wrote to place the patient in inpatient, the PCP rounds the next morning and examines the patient and states "this patient should have been observation".
A: Same answer as aboveHospitals MUST initiate clear pre-typed orders as stated in part one of this series and track orders incorrectly written by physician – this must be addressed!
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Other Participant’s Q&A
Q: What if a patient is just not quite ready to go home and will have been in the hospital for 2 MN – do we have to admit them?
A: Yes if the patient met criteria to stay past the 2 MN at which point you will need an order to be admitted, the reason for the need of 2 MN or greater and signed 2MN certification by the physician.
If the reason the patient is not quite ready is for custodial care waiting for transportation or social issue only, then you would not admit the patient
Q: If the MD writes Admit this is a assumption that the patient is Inpatient can you clarify this, do we need to do anything else regarding that status?
A: Yes “admit” is an assumption to IP but highly recommend pre-typed order choice as describe in part 1 going forward
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Other Participant’s Q&A
Q: If the ER physician writes an admission order for Inpatient after he has discussed the admission with the Hospitalist or attending and the accepting physician decides this patient should be Observation on the same day what should take place?
A: Follow Condition Code 44 (IP to Observation) and track frequency of this happening by provider
Q: The ER physician sends a patient to the floor without a level of care you said we cannot clarify that order, Obs or Inpatient starts when the order is written, nothing can be billed unless we have an order. Is that correct?
A: Yes that is correct – Nobody should register a patient if they do not know what the service is for and no nurse should initiate care without an order – that includes orders to admit or place in Observation
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Other Participant’s Q&A
Q: If the physician sends a patient from the MD office with orders that had Admit to Inpatient Status and the next day he comes in and writes an order to change to Observation then discharge home can you clarify how this needs to be handled.
A: See Condition Code 44 slides if CC44 criteria is met –otherwise, if CC44 not met then you can only bill IP Part B
Q: The ED admits a patient to the floor he has placed a check mark in the blank for observation and for inpatient what is the rule for this?
A: I will check with CMS but the next am PCP must certify need for greater than 2 MN if he/she agrees with IP but I repeat, registration and nurses MUST have a clear order. One would assume that it will be based on the PCP – if he certifies need for 2 MN you are ok. Question to CMS is if PCP agrees with the Observation level only does he clarify the Observation order and Observation hrs start from there or from the beginning since there was an order (though confusing)
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Other Participant’s Q&A
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Sample Chart Review for Coding & Billing Appropriateness
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Sample Chart Review for Coding & Billing
• Billing for observation is dependent first upon the presence of a provider order to place in Observation
• Then on documentation of medical necessity for the level of care including reasons for ordering observation services (ancillary, treatments…), then
• On documentation that services took place, then
• On when the ordered services were completed
• Examples of services provided that may be billable or not:
– Provider orders NS for Hydration, slow drip, 500ml over 3 hours
• Nurse documents start time only
• Bill NS J7040 as a supply. Bill nothing for hydration because we can only document that the service was ordered, not performed
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Sample Chart Review for Coding & Billing
Provider documents that NS 1L was administered. Does not document medical necessity for hydration, or specifically orders hydration.
• Nurse documents 1L NS bolus wide open, completed in 50 minutes (start to stop documented)
• Bill J7030 1L NS. Bill nothing for hydration because the service was documented as performed but provider documentation does not support hydration
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Sample Chart Review for Coding & Billing
Provider documentation with time stamp 12:40 has an order to discharge the patient
• Nurse documents discharge orders reviewed with patient at 3:00pm and patient discharged. No nurse notes between 12:40 and 3:00pm, and no indication in either notes that the patient was having additional testing or treatment.
• End Observation time at 12:40 and bill accordingly. There are no notes to support that observation care and outpatient services were not completed by 12:40
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Billable Services and Supplies
Report all services billable as OP services
– Infusion (based on start and end time)
– IV medication and Injections
– Hydration
– ECG
– Catheter insertion, nursing procedures
– Ancillary services – Lab, radiology, rehab
– Respiratory therapy treatment
– All procedures
– Physical Therapy eval and units of treatment
Ensure physician orders are evident for tests, procedures and treatments with support for why if not obvious and that there is nursing documentation of such taking place
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Facility Billing for Observation services
Hospitals should have an encounter form not unlike an ED encounter form which includes # of
billable Observation hours
with date of admission to
Observation and # of non-billable
Observation hours followed by
infusion codes and descriptions as
well as all charges and procedures
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Inpatient vs Outpatient (Same Day) Surgery
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IP vs OP Surgery
Any operation or procedure not on the inpatient only list must be done as an outpatient with the following exceptions:
– The surgery is done on an emergency basis or on an unstable patient at risk for adverse events
– The patient is appropriately admitted for an unrelated reason and continues to meet criteria for IP
– The presence of serious comorbidities justifies admission for the surgery based on documented risk of adverse outcome
– Post-op issues occur and the patient will require a total of 2 MN or more counting the day of surgery
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Observation Chart Content
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Observation Chart Content
ED assessment forms (provider and nursing), orders thus far and documentation of completed orders and available test results when placed in Observation through ED
Physician order sheet with a clear dated and timed order to place in Observation
Physician progress form (admitting note must support reason for Observation as discussed earlier) and medical necessity for orders must be documented
List of medications (include dosages and frequency) patient is taking on a regular basis) – medication reconciliation
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Nursing Admission form / note to include:– Admission time, admitting vital signs, chief
complaint and condition on admission– Modified problem focus assessment based on
the reason they are placed in Observation if patient came from the ED where a nurse did the full assessment (which needs to be part of this chart)
• Complete full assessment if patient was placed in Observation directly from the community
– Full skin assessment and Fall Precaution Needs Assessment
– Discharge planning assessment and document needs
Observation Chart Content
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Nursing progress notes – free hand notes when monitoring, assessments and treatments occur as well as discharge status– Recommended reassessment based on reason for
Observation every 1 to max 2 hrs– Note in and out times patient is off the floor for tests,
procedures, therapy etc… to reflect active monitoring – this will facilitate the counting of billable Observation time
MAR and V/S form, IV and I&O form when applicable Results of ancillary tests from ED and/or Observation as
well as procedure and therapy reports Physician discharge progress note with discharge
instruction and follow-up Copy of medication reconciliation and discharge
instructions
See sample nursing documentation form
Observation Chart Content
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Observation Policies & Procedures
The Observation patient's medical record must include
– The beneficiary must be in the care of a physician during the period of observation, as documented in the medical record by outpatient registration, discharge, and other appropriate progress notes that are timed, written, and signed by the physician.
– The physician must have seen or see the patient on the day of Observation before Observation hours can be billed
– The physician order to “place in outpatient Observation……”
– A history and physical giving pertinent medical findings and rationale for Observation status
– The medical record must include documentation that the physician explicitly assessed patient risk to determine that the beneficiary would benefit from observation care
– Physician and nursing progress notes written with sufficient frequency and content to specify how the patient responds to care.
contd. 45
Policy and Procedure Observation items
– Documented appropriate and timely interventions which include the delivery of appropriate diagnostic and therapeutic services based on the patient's condition.
– When appropriate, the progress notes must state "continue outpatient observation" and what aspects of the patient's condition warrant extended Observation.
– Address abnormal test results.
– Document reassessment of the patient's medical, physical, psychological and social needs with appropriate referrals.
– The medical record will reflect patient teaching to include medication instructions, dietary advisements and wound care instructions.
contd.
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Policy and Procedure Observation items
– Documented plan for appropriate follow-up care.
– Case Manager/UR to direct questions concerning the appropriate utilization of the observation patient with physician as soon as possible and refer to Medical Director and to Administration as needed
– Case Management to call the patient's physician, if after 24 hours of being placed in Observation (usually done before leaving for the evening), the medical record does not reflect orders to continue outpatient observation, admit or discharge the patient.
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Policy and procedure Observation items
CMS Medical reviewers look for the following to determine medical necessity and intensity of the service
– Does the physician's order accurately and clearly reflect the care setting required?
– Does the documentation support the medical necessity of the services provided?
– Does the documentation include sufficient rational to support the level of care ordered as well as the test, procedures and treatments ordered?
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Documentation considerations
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How Can Physicians Help?
Documented order for OP observation status
− Remind ED physician when discussing plan
Repeat visit / discharge visit – decision by the “24th hour” as to what the next step will be if patient is still in Observation
Discharge progress note, plan of care and discharge instructions
The decision to place into an Observation status is the responsibility of the physician, not the hospital. We do ask that physicians work closely with the hospital – at this time the physician still gets paid for visits to patient who’s admission has been denied, the hospital does not – this may change
– Imperative to educate both ED physicians and nurses and/or supervisors when available regarding Observation criteria
– Care managers will round on Observation patients early a.m. for utilization review purpose to discuss with the patient’s needs with the physician when he arrives 50
How can physicians help?
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How can physicians help?
Medical necessity documentation is imperative
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How can physicians help?
Document medical necessity for level of care based on:
– Assessment of risk
– Failed OP
– Chronic conditions activated
– Comorbidities
– Social conditions or disability worsening BUT need to be able to document the above first – it is not a reason for admission, it is simply a potential documented support to the above for IP care vs OP
– What “in their judgment” warrants an IP stay
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Physician Billing for Observation Status
For reporting purposes, intra-service time for these services is defined as unit / floor time, which includes:
– Time physician spent on the unit and at the bedside rendering services – this includes:
• Chart review• Patient exam• Writes notes and communicates with other
professionals• Communication with family
– Pre and post time is not included in the time reported (e.g.: reviewing pathology and/or radiology reports in another part of the hospital) but it was included in calculating the total work of typical services reported in physician surveys
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Hospital Observation Physician Billing Description
Contractors pay for initial observation care billed by only the physician who placed the patient in Observation and was responsible for the patient during his/her stay in Observation.
A physician who does not have inpatient admitting privileges but who is authorized to place a patient to Observation status may bill these codes - such as an ED physician because Observation is an OP service
Payment for an initial Observation care code is for all the care rendered by the admitting physician on the date the patient was placed in observation
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Who can bill initial Observation care?
For a physician to bill the initial Observation care codes, there must be a medical Observation record for the patient which contains:
– Dated and timed physician’s admitting orders regarding the care the patient is to receive while in Observation,
– Nursing notes, and
– Initial and other progress notes as applicable prepared by the physician while the patient was in Observation status.
Documentation identifying the admission and discharge notes were written by the billing physician.
This record must be in addition to any record prepared as a result of an emergency department or outpatient clinic encounter.
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Who can bill initial Observation care?
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 for the payor in question, when they provide services to the patient.
Medicare does not accept consultation codes
For example, if an internist places a patient to Observation and asks an allergist for a consultation on the patient’s condition, only the internist may bill the initial Observation care code. The allergist must bill using the outpatient code that best represents the services he or she provided. The allergist cannot bill an inpatient consultation since the patient was not a hospital inpatient.
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Who can bill initial Observation care?
If patient was seen in ED, placed and followed in Observation status by the same physician, bill ED professional fee only as the initial assessment
If patient seen in physician’s office then placed in Observation status, the physician may choose to bill for office visit or initial Observation care code
If patient is referred to primary physician from ED and both agree to the need for Observation, the ED physician may bill for the ED visit and the primary physician or hospitalist who will be following the care while in Observation may bill for Observation as per the extent of the service
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Physician billing
Observation D/C and Acute Care Admission cannot be both billed on the same day
Physicians may bill for an initial Observation care and an Observation D/C code if D/C is on other than initial date of “observation status”
Following instructions (on next slides) affects physicians and qualified non-physician practitioners (NPPs) who can submit claims to Part A/B Medicare Administrative Contractors (A/B MACs) and carriers for hospital Observation services provided to Medicare beneficiaries during a hospital visit
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Physician billing
Physicians and qualified NPPs should report Initial Observation Care using a code from CPT code range 99218 – 99220 when the observation care is less than 8 hours on the same calendar date.
Physicians and qualified NPPs should not report an Observation Care Discharge Service (CPT code 99217) when the observation care is less than 8 hours on the same calendar date.
Physicians and qualified NPPs should report Initial Observation Care using a code from CPT code range 99218 – 99220 and an Observation Care Discharge Service (CPT code 99217) when the patient is placed in a bed for observation care and discharged on a different calendar date.
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Physician billing
Physicians and qualified NPPs should report
Observation Care Service (Including Admission and
Discharge Service) using a code from CPT code
range 99234 – 99236 when the patient is placed in
Observation care for a minimum of 8 hours but less
than 24 hours and discharged on the same calendar
date.
Physicians and qualified NPPs should report Office or Other Outpatient Visit using a code from CPT code range 99211 – 99215 for a visit before the discharge date in those rare instances when a patient is held in Observation care status for more than two calendar dates.
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Physician billing
If the same physician who placed a patient in Observation status also admits the patient to inpatient status from Observation before the end of the date on which the patient was placed in Observation, Medicare will pay only an initial hospital visit for the evaluation and management services provided on that date. Medicare payment for the initial hospital visit includes all services provided to the patient on the date of admission by that physician, regardless of the site of service.
In other words, the physician may not bill an initial Observation care code for services on the date that he or she admits the patient to inpatient status.
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Admission to IP status from Observation
If the patient is admitted to inpatient status from Observation subsequent to the date of patient being placed in Observation, the physician must bill an initial hospital visit for the services provided on that date.
The physician may not bill the hospital Observation discharge management code (code 99217) or an outpatient/office visit for the care provided in Observation on the date of admission to inpatient status.
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Admission to IP status from Observation
The global surgical fee includes payment for hospital observation (codes 99217, 99218, 99219, and 99220, 99234, 99235, 99236) services unless the criteria for use of CPT modifiers “-24,” “-25,” or “-57” are met. Contractors must pay for these services in addition to the global surgical fee only if both of the following requirements are met:
– The hospital observation service meets the criteria needed to justify billing it with CPT modifiers “-24,” “-25,” or “-57” (decision for major surgery); and
– The hospital observation service furnished by the surgeon meets all of the criteria for the hospital observation code billed.
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Observation during Global Surgical Period
Example 1 of the decision for surgery during a hospital observation period is:
– An emergency department physician orders hospital outpatient observation services for a patient with a head injury.
– A neurosurgeon is called in to evaluate the need for surgery while the patient is receiving observation services and decides that the patient requires surgery.
– The surgeon would bill a new or established office or other outpatient visit code as appropriate with the “-57” modifier to indicate that the decision for surgery was made during the evaluation.
– The surgeon must bill the office or other outpatient visit code because the patient receiving hospital outpatient observation services is not an inpatient of the hospital.
– Only the physician who ordered hospital outpatient observation services may bill for initial observation care.
Example 2 of the decision for surgery during a hospital observation period is:
– A neurosurgeon orders hospital outpatient observation services for a patient with a head injury. During the observation period, the surgeon makes the decision for surgery. The surgeon would bill the appropriate level of hospital observation service.
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Observation During Global Surgical Period
Contractors pay a physician for only one hospital visit per day for the same patient, whether the problems seen during the encounters are related or not. The inpatient hospital visit descriptors contain the phrase “per day” which means that the code and the payment established for the code represent all services provided on that date. The physician should select a code that reflects all services provided during the date of the service.
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Two Hospital Visits Same Day
In a hospital inpatient situation involving one physician covering for another, if physician A sees the patient in the morning and physician B, who is covering for A, sees the same patient in the evening, carriers do not pay physician B for the second visit. The hospital visit descriptors include the phrase “per day” meaning care for the day.
If the physicians are each responsible for a different aspect of the patient’s care, pay both visits if the physicians are in different specialties and the visits are billed with different diagnoses. There are circumstances where concurrent care may be billed by physicians of the same specialty.
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Hospital Visits Same Day but Different Physicians
Physicians and qualified NPPs should:
– Document the medical record to satisfy the evaluation and management guidelines for admission to and discharge from Observation care or inpatient hospital care
– Note that the documentation requirements for history, examination and medical decision making should be met
– Document his/her physical presence
– Document his/her personal provision of Observation care
– Document the number of hours the patient remained in the Observation care status
– Personally document the admission and discharge notes
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Physician documentation
Physician Observation Billing Codes Synopsis
Code Description
Initial Observation Care - Admission:less than 8 hours and D/C on same calendar date
99218 Low severity
99219 Moderate severity
99220 High severity
992349923599236
Use when the patient is placed in Observation care for a minimum of 8 hours but less than 24 hours and discharged on the same calendar date. The length of time for Obs care or treatment status must also be documented
Observation care discharge code
99217Use 99217 for discharge care when Observation admission is > than 8 hrs and discharge date is on a different day than the date the patient was placed in Observation
Do not use when Observation is < than 8 hrs and discharged on the same calendar date as the admission
Observation Care AND Observation D/C Codes
99218992199922099217
Use 99218-99220 for Admission and 99217 for Discharge for observation care > than 8 hours and D/C on a different date than when the patient was placed in Observation
Physician Observation Billing Codes Synopsis
Code Description
Observation care > than 48 hrs
992189921999220
992249922599226
Use 99218-99220 for the placement of the patient in Observation care for those rare occasions when the patient remains in Observation longer than 48 hrs Cannot use initial observation Care codes on the same day as an IP admission
Use 99224-99226 for subsequent observation care on day two and use 99217 as the observation discharge code on the third day
Initial Observation Care and Admission
99218-99220
and99221-99223
Use 99218 to 99220 for initial Observation Care and 99221 to 99223 for Initial Hospital visit if patient is admitted the calendar date following the date the patient was placed in Observation
992219922299223
Also used for an IP admission and discharge less than 8 hrs on the same calendar date. These are used for IP admission and the hospital discharge day management service should not be billed
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UR/UM Plan
Case Management/UR, regardless of the hospital size.Having a plan for UR after hours if even better!
“The UR plan must provide for review for Medicare and Medicaid patients with respect to the medical necessity of admissions to the institution.”Being a small rural hospital is not an excuse to not have a UR process!
Medicare CoP require a UR plan – do you know what your plan is saying? This should be a “living document”
“The hospital must have in effect a utilization review (UR) plan that provides for review of services furnished by the institution and by members of the medical staff to patients entitled to benefits under the Medicare and Medicaid programs.”
Code of Federal Regulations [Title 42, Volume 3] Sec. 482.30 Condition of Participation: Utilization review
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UR/UM Plan
Standard: Scope and frequency of review.
The UR plan must provide for review for Medicare and Medicaid patients with respect to the medical necessity of:
a) Admissions to the institution; b) The duration of stays; and c) Professional services furnished, including
drugs and biological(s).
Code of Federal Regulations] [Title 42, Volume 3] Sec. 482.30 Conditions of Participation: Utilization review
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Time For An Action Plan….
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• Do you know the CoP to maintain compliance?
• Does the hospital have a written UR plan
• Does the CMgr/UR have available resources to serve as guidelines for the right level of care (InterQual, Milliman Roberts) to based continued need for zip stay
• Do you have Medical UR Director/Physician Advisor?
• Do you wrongfully allow auto-conversion,
– Placed in Observation and automatically admitted after 24 hours? (should not allow)
– Recovery room to Observation? (should not allow)• Are staff oriented to Observation UR when Case
Manager/UR not in-house? – Do we have a cheat sheet for
– Delayed assessment of patients
– Weekend admissions
Are you at risk?
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• Are you applying code 44 (from IP to Observation) appropriately
• Do you ensure NO start of Observation without physician orders?
• Do you ensure no start of billing for direct placement in Observation from home/NH until physician comes in to evaluate the patient?
• Do you have an early process to evaluate and initiate changes to patient status
• Do you have the following P&Ps or 1 containing the following components
o Observationo Active Monitoringo Self Administrated Drugs
• Do you have an updated Charge Master (CDM)• Does the coder know the appropriate codes• Does the biller know what to ask when codes are
missing
Are you at risk?
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• Do you have somebody appointed to calculate the hrs to be billed and do they know the dos & don’ts?
• Do you discuss areas where you are at risk
• Do you educate physicians, ED nursing, case manager, coders and billers
• Do you audit charts for
– Dated and timed orders for specific level of care
– Meeting medical necessity
– Automatic conversions
– Ensure differentiation between IP and OP only procedures
– Are correct CPT codes used for hospital and physician if you bill for them
– Do we have correct D/C codes
– Infusion and procedure documentation
– Active observation procedures subtracted
What is your risk plan?
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• Do you have a mechanism for the nursing staff to know each patient’s level of care
• Does nursing understand that Observation is an OP service therefore infusion documentation should be no different than OP Infusion department or ED
• Is there an encounter form/charge form specific to Observation –not unlike an ED encounter form
• Does nursing have the tools needed to document? Do they document observations in relations to the reason the patient was put in Observation and/or the effects of the treatment(s)
• Do we inform staff of audit findings – do we graph and celebrate improvement?
• Does registration know not to continue if the order is not clear?
• Do we inform the patient when placing them in Observation and/or changing their status from IP to Obs.
• Do we teach nursing as to why they have to document the way we need to
• Do we develop action plans to maintain compliance
What is your risk plan?
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• Does case management or other department track data to identify issues and celebrate when meeting goals (by month, compared to same month last year, FYTD and compared to FYTD last year – do we analyze the data and work with PI/QI
• # of patients placed in Observation
• # of total hours /24 to = days/month and YTD for CAHs
• # of 1 day IP admissions – to ensure documentation of the reason for such as patient changed from OP or Obs level to IP due to ___________ necessitating at least 2 MN
• # of IP changed to Observation status (those meeting condition code 44 vs not)
• # of Observation who end up being admitted – should we have foreseen this?
• # of ED re-visits within 72 hrs – should they have been placed in Observation?
• # of Observation return within 7 days
• # of post-discharge review necessitating a rebill because the patient did not meet criteria
• Tracking by provider is highly recommended
What is your risk plan?
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• Create a team to review this presentation and get together to discuss by _____________
• Make a list of the known issues and potential issues
• Have everyone write down their questions/comments
• Meet on set date to discuss questions/concerns including the slides regarding the risk of doing nothing etc…
• Develop an action plan based on the needs identified using sample provided here
• Set date and time for next meeting and expect all responsible party to have completed their tasks
PI Action Plan
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• Agree on new processes
• EDUCATE staff
• Remember, it’s not what you Expect, it’s what you Inspect so do on-going “inspection”
• Create audit tools to correct data before it gets to billing – time to fix is very aggravating, inefficient, and costly – not to mention what we don’t fix
• Other
PI Action Plan
A STITCH IN TIME SAVES NINE !!!
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Performance Improvement Action Plan
Some say we do not have time to meet and fix all the concerns .
Performance improvement says – “we do not have the time NOT TO FIX
or prevent the issue from occurring.”
As always, the name of the game is team work!
Mary Guyot, Principal [email protected]
207-650-5830 (mobile)
Remember
Teamwork continues to be the only way through this!
