Health Information Management

Tip: Know when to carve out services from observation time

APCs Insider, September 2, 2011

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Coders may report outpatient therapeutic services and observation services on the same claim. However, if a patient receives a therapeutic service that requires active monitoring, coders must carve that time from the total observation time. The facility receives payment for active monitoring as part of the HCPCS codes for these procedures. Therefore, this time may not be included in observation hours.

A wide range of services require active monitoring (e.g., colonoscopies, administration of certain drugs). Carving time for drug administration services can be particularly confusing because coders mustreview each separate service to determine whether it requires active monitoring.

Drug infusion titrations require that a nurse stand by and monitor the infusion. However, other services that fall under the same HCPCS code for drug administration do not require active monitoring. For example, during a routine antibiotic infusion, a nurse can simply start the infusion and walk away when it runs. In this case, carving infusion time from the observation hours is unnecessary.

CMS previously said that providers must document the start and stop times of each procedure to facilitate carving rime from them. CMS stated in Transmittal R2234CP (during late May as part of the July OPPS update) that it would allow facilities to calculate an average time. This will allow facilities to calculate an average amount for these services, eliminating the need to record exact start and stop times, says Hoy.

The tip is adapted from “Correctly count observation time for outpatients” in the August issue of Briefings on APCs.

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