Case Management

Mentor moment: Providers ask CMS to abolish observation services

Case Management Weekly, September 8, 2010

Several providers suggested CMS abolish observation services during an August 24 CMS listening session entitled, “Medicare beneficiaries receiving extended observation care as a hospital outpatient.”

The session began with statements from Jonathan Blum, Deputy Administrator and Director, Center for Medicare Management. He said the purpose of the listening session was to understand the increase in extended observation stays and whether CMS needs to change its guidance or regulations or to provide better education for beneficiaries, or both.

Chapter 4 of the Medicare Claims Processing Manual, states:

Observation care is a well-defined set of specific, clinically appropriate services, which include ongoing short term treatment, assessment, and reassessment, that are furnished while a decision is being made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital.

Access the manual at www.cms.gov/manuals/downloads/clm104c12.pdf.  Scroll to p. 48/211.

However, many comments during the August 24 call indicated that facilities don’t use observation services in this manner.

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