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Better documentation of observation Status

Patient Safety Quality Monthly, February 18, 2004

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Dear Colleague,

A reader recently sent in a question asking how to best encourage physicians to document observation services and status in compliance with JCAHO standards-a current topic of confusion for hospitals, and more so for 2004 and beyond.

Here is what she wrote:

[W]e still struggle with physicians to obtain the necessary documentation to support observation services. Physicians comment that case managers should know that certain procedures will require more monitoring . . . and do not feel they need to document plan of care or what prompted [the physician] to order observation status post recovery. [According to our] clinical documentation specialists, CMS says that "periodic" intervention/oversight and documentation is required for appropriate observation billing. We will be suggesting that the bedside nurses contact the attending physician/resident every 4 hours of the observation period to provide test results. [We also want] to update them on the patients' clinical presentation and limit the observation period to 24 hours.

What do you think would be the best way to educate physicians [on the constantly changing rules around observation status?]

This is a great question. My advice to the reader is to first understand your physicians' point of view: It is difficult to keep in mind the rules related to the administrative nuances of reimbursement, especially as these rules are frequently changing.

Keeping that in mind, many physicians (myself included) believe that observation status is good mechanism-you don't have to admit patients formally, and you don't have to commit them to a full hospital stay when we have the opportunity to assess and approve patient conditions in a more rapid time frame.

Observation status, if done properly, can be viewed as a patient safety mechanism, making the occurrence of "health care-associated infections" (formerly called nosocomial infections) and injuries in the hospital less frequent if you can avoid a longer admission. The potential down side of observation status is that patients may get discharged too quickly to avoid hospital admissions.

With these factors in mind, I suggest the following:

1) If you want physicians to use observation status appropriately, educate them to develop a clear consensus on the philosophy behind the observation. Most physicians think that if they use observations status, it may be a barrier to admission. Help the physicians understand that the best practice is to start with observation status for all patients with certain common diagnoses where observation is useful (e.g. asthma, chest pain) even if they feel "certain" an admission will occur. This will prevent locking patients into unnecessary longer stays and will also avoid the one- and two-day admissions that are under Medicare scrutiny.

Often this type of consensus building starts with medical staff leadership and the medical executive committee (MEC). If you have a utilization review (UR) or utilization management (UM) committee, have that committee draft a brief (one page) document outlining the approach to using observation status. Then present it to the MEC for approval. If you don't have such a committee, work with the key physician leaders involved with the UM committee on the draft.

2) The main reason why physicians tend not to like observation status is because of the administrative burden it places on the physician. Observations status requires a second order to admit the patient, often at a time that is not convenient for the physician to do so. The key strategy is to make it easy for physicians to make the conversion. I suggest not contacting the physician every four hours. Instead, contact them only with critical information that may be useful a few hours before the observation period is to end. By following these approaches and getting physician buy-in from the beginning, you will do much to improve observation status documentation procedures and, in turn, patient safety.

Thanks for your question. I hope this answer helps.

Bob Marder, MD
Practice Director, Quality and Patient Safety
The Greeley Company

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