Case Management

Carve out active monitoring time to bill observation appropriately

Case Management Monthly, March 1, 2011

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The official length of a professional football game is 60 minutes, but anyone who watches the game on Sunday knows a game beginning at 1 p.m. typically ends around 4 p.m. The various stoppages in play and television commercials add to the overall duration of the game, but the action on the field only occurs for 60 minutes. 

The same idea can be applied to observation services. Patients may be in the hospital for several hours, but when you subtract the time patients spend waiting for transportation or undergoing procedures that require “active monitoring,” the billable observation time is reduced. 

Observation services are a specific set of services provided to a patient while the physician decides whether to admit or discharge the patient. That means if a patient undergoes a procedure that requires “active monitoring,” he or she is not receiving observation services during the procedure. 

Hospitals must subtract the procedure time from observation time to bill correctly. Chapter 4, section 290.2.2, of the Medicare Claims Processing Manual states the following: 

Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure (e.g., colonoscopy, chemotherapy). In situations where such a procedure interrupts observation services, hospitals would record for each period of observation services the beginning and ending times during the hospital outpatient encounter and add the length of time for the periods of observation services together to reach the total number of units reported on the claim for the hourly observation services HCPCS code G0378 (Hospital observation service, per hour).

However, successfully carving out active monitoring time isn’t easy, according to Deborah K. Hale, CCS, president of Administrative Consultant Service, LLC, in Shawnee, OK. CMS does not officially endorse any method for counting observation hours and carving out active monitoring time, Hale says. “In fact, CMS leaves lots of gray areas. Hospitals are taking their best guess and moving ahead,” she says. 

This is an excerpt from a member only article. To read the article in its entirety, please login or subscribe to Case Management Monthly.

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