Q&A: Observation after surgery
APCs Weekly Monitor, August 20, 2010
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Q: A Medicare patient is admitted for same-day surgery. After surgery, the physician orders observation services for the patient and discharges the patient home the following day. Does this remain a same-day surgery case with overnight observation charges absorbed by the account, or should we process this as an observation account?
A: The physician must document the reason that the patient needs medical observation above and beyond routine post-surgical recovery. Without the justification for medical observation, the hospital should bill the time as recovery time with revenue code 0710 (recovery room) and not as observation time.
The Medicare Claims Processing Manual Chapter 4, Section 290.2.2 states:
General standing orders for observation services following all outpatient surgery are not recognized. 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
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