1. To Admit…or not to Admit…that is the question!
Observation
To Admit…or not to Admit…that is the question!

2. Outpatient Observation Services
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3. Outpatient Observation Services Description of course
This module was created to familiarize physicians and nursing staff with the observation status verbiage required for coding and reimbursement concerning the observation patient.

4. Outpatient Observation Services objectives
Meet requirements for proper verbiage in regards to the observation status.
Recognize an improper observation order and take steps to correct.

5. Outpatient Observation Services Defined
Observation care is a well defined set of specific, clinically appropriate services, which include:
Ongoing short term treatment.
Assessment and reassessment before a decision can be made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital.

6. Outpatient Observation Services Defined
Observation services are covered ONLY when provided by the order of a physician or another individual authorized by State licensure law and hospital staff bylaws to admit patients to the hospital or to order outpatient tests.

7. Observation Services Must be patient specific Intended for short term
Generally does not exceed 24 hours
Greater than 48 hours would be seen rare and exceptional cases
Outpatient services

8. OR Observation Services
Observation is only medically necessary when: Patient’s current condition requires outpatient hospital services OR
There’s a significant risk of deterioration in immediate future

9. Observation Services Medical Necessity and Proper Setting:
Considerations to determine appropriate setting for care based on patient needs:
Can treatment be provided on an outpatient basis or home health basis or at home?
Are these alternatives more economical and effective than inpatient care?
Does the patient’s physical condition and family/social support system allow them access to care options?

10. Observation Services
Physician’s order required and order must be part of medical record. Order should clearly define what service is being requested.
Clearly differentiate observation from an order for an inpatient admission “Admit as inpatient” or “Place in observation”

11. Outpatient Versus Inpatient Orders
An order simply documented as “admit” will be treated as an inpatient admission.
An order that states “admit for observation” will be viewed as an inpatient order because of the word ‘admit’.
A clearly worded order such as “inpatient admission” or “place patient in outpatient observation” will ensure appropriate patient care and prevent hospital billing errors.

12. Hospital Observation Codes Defined
G0378 –Hospital Observation Services, Per Hour
G0379 –Direct (Referral) Admission of Patient for Hospital Observation Services Only report when applicable
When patient is referred directly to observation care after being seen by a physician in community without an associated ER visit, hospital outpatient clinic visit or critical care service on day of initiation of observation.
Clock time begins when patient placed in observation bed. This time must be documented in the medical record.

13. Reporting Hours of Observation
Observation time begins at the clock time documented in the patient’s medical record.
Hospitals should not report as observation care, services that are part of another Part B service, such as postoperative monitoring during a standard recovery period (e.g., 4-6 hours) which should be billed as recovery room services.

14. Reporting Hours of Observation
Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure.

15. Hospital Observation Time Requirements
Observation time must be documented in medical record.
Begins at clock time documented; coincides with time observation services are initiated in accordance to a proper physician’s order.
Nurse’s patient assessment, prior to physician order is not counted towards observation time.
Hospitals should round to nearest hour.
Units of service billed must equal number of hours patient is in observation status.

16. Observation Services Flow Chart
Can the patient’s condition be evaluated/treated w/in 24 hours and/or is rapid improvement of patient’s condition anticipated w/in 24 hours.
Observation is appropriate.
YES
Inpatient admission is appropriate. NO
YES
Does the patient’s condition require treatment/further evaluation that can ONLY be provided in a hospital setting (i.e., inpatient or observation)?
Alternate level of care is appropriate (outpatient, home health care, extended care facility). NO
Additional time is needed to determine if inpatient admission is medically necessary; observation is appropriate.
UNSURE
The decision to admit a patient as an inpatient requires complex medical judgment including consideration of the patient’s medical history and current medical needs, the medical predictability of something adverse happening to the patient, and the availability of diagnostic services/procedures when and where the patient presents.

17. Outpatient Observation Services Conclusion
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