Assessing and reassessing a patient in observation ensures the patient is receiving active care and not simply a lower, custodial level of care. Like other services covered by Medicare, observation must be reasonable and necessary or, in other words, medically necessary. The physician must document that he or she assessed patient risk to determine that the patient would benefit from observation services.
Documentation should describe what risks are present that prevent the patient from being safely discharged either home or to a lower level of care and how the patient would benefit from further observation at the hospital.
Documentation of this assessment provides the basis of the medical necessity of the observation services. This is particularly important if the observation services are to later serve as a basis for meeting the 2-midnight benchmark—discussed below—because only medically necessary observation is counted toward meeting the benchmark. To see the full excerpt that appeared in Medicare Insider , click here.
Most charges for observation stays that result in an inpatient admission within 3 days of the observation period will be billed on the inpatient claim. If the hospital is not subject to IPPS, observation stay charges are only rolled into the inpatient charges if the observation occurred within one day of admission. In these cases, observation stays are not rolled into inpatient charges and will instead appear in the Outpatient file.
To fully understand whether an observation stay in the outpatient file resulted in an inpatient admission, the Inpatient file must also be used. Observation stays that resulted in admission and are included in the inpatient claim are identified using revenue center code in the inpatient revenue center file.
Individual revenue centers are not included in the MedPAR data. The Inpatient file is the only method to identify observation stays that were rolled into an inpatient admission prior to The MedPAR and Inpatient files both allow the identification of these observation stays from onward. Medicare-paid observation stays that do not result in an inpatient admission will be found in the Medicare Outpatient revenue center file using revenue center code Observation time is reported by hospitals in hours.
Using the Inpatient or Outpatient file, hours spent in observation can be found in the Revenue Center Unit Count for the revenue center code Since the patient was discharged and although it seems counterintuitive, it is a good idea to bill the outpatient claim to Medicare.
First, Medicare uses claims data to identify certain procedures that may be considered for removal from the IPO list see 69 Fed. Second, the inadvertent inpatient-only procedure should be reviewed against the CMS separate procedure list. This allows the facility to be reimbursed for most of its services while also providing CMS with relevant claims data for future removal from the IPO list or possible addition to the separate procedures list.
Group brand, in Middleton, Massachusetts.
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