Case Management

Mentor moment: Provider-friendly change to tracking observation hours

Case Management Weekly, June 22, 2011

Editor’s note: The following article is adapted from a blog by Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance at HCPro, Inc., that appeared on Medicare Mentor.

In the July OPPS update, CMS made a very provider-friendly manual change to the section on counting observation hours. CMS amended Medicare Claims Processing Manual, Chapter 4 – Part B Hospital (Including Inpatient Hospital Part B and OPPS), §290.2.2 Reporting Hours of Observation, to allow providers to use average times when determining the amount of time to subtract from observation time for other procedures.

Providers have struggled with this issue since CMS added a clarification to the manual in 2008 that requires providers to subtract time for procedures that require active monitoring and interrupt observation care. Providers struggled with determining which procedures required active monitoring and how much time to subtract for these procedures.

In early 2010, CMS published FAQ 9974, addressing the issue regarding which procedures require sufficient active monitoring to necessitate subtraction from overall observation time. The specific question related to drug administration services. CMS said hospitals must determine service-by-service whether a particular drug administration service required active monitoring because services with the same HCPCS code may or may not need active monitoring. It provided examples of an antibiotic infusion as something that doesn’t require active monitoring and a complex drug infusion titration as something that does.

But this left the issue of how much time to subtract once a hospital determined that a service did indeed require active monitoring. The manual indicated that the beginning and end times of observation, or more likely the procedures, would require documentation to calculate total observation time. However, this was problematic for many of these bedside procedures...For instance for a procedure such as a PICC line placement, providers normally document all pertinent details about the procedure, but don’t necessarily document when they entered or left the room.

The most recent change to the manual will be a welcome change for providers who have struggled with this. CMS now allows providers to use an average time for these procedures that interrupt observation. The new manual section give providers the option of documenting start and stop times or using an average time when subtracting these procedures.

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