Case Management

Observation status: Tips for accurate care determination

Case Management Monthly, June 1, 2009

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Although the care provided to patients in observation and inpatient status may be the same, the payments are different. The determination of inpatient (Medicare Part A) or outpatient (Medicare Part B) status for any given patient is specifically reserved for the attending physician, although the physician has Medicare or other payer guidelines that he or she is expected to follow.
To be in compliance, hospitals must educate physicians and gain their cooperation, even though the care provided and professional fees received by physicians may be essentially the same for either status. But what have physicians been told about observation status? Has their education been based on the facts as published in the federal regulations, or is it based on confusion between different payer requirements, rumor, or overreaction?

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