Health Information Management

Calculating observation hours

APCs Insider, December 18, 2003

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December 19, 2003
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Today's topic

This week, our experts explain how to properly and consistently calculate observation hours.

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TODAY'S TOPIC: Calculating observation hours

QUESTION: For Medicare separate observation requirements, the observation time begins at the clock time appearing on the nurse's observation admission note. How literal is this requirement? Does the nurse have to document per diem that "the patient arrived to the unit at such and such time" or can you take the time from an admission assessment form, which is performed when the patient arrives on the unit and/or the time that the nurse signs off on the order for observation?

ANSWER: For many years, providers struggled with assigning patients appropriately to observation status. Remember there must be a clear physician order for observation service, including the reason observation is necessary. Once that requirement is met, one of the most difficult issues surrounding observation is the calculation of the correct observation hours. Many providers attempted to automate the process using access, charging, or bed assignment procedures to start the observation "clock." These methods often produced inaccurate time calculations. In an attempt to establish a uniform standard and to improve the accuracy of the time calculation, CMS provided instructions that the time would begin based upon professional observation and delivery of services. Although CMS has been somewhat flexible in its application of this instruction, you must ensure that your processes meet CMS's intent.

If a patient is placed in an observation status and moved to a new area of the hospital, the nurse's observation admission note may suffice. The problem most often encountered with this process is with those patients who move from outpatient to observation status but do not move to another area in the facility. In these instances, the nursing professionals don't always complete a new assessment or the assessment may be delayed because staff are familiar with the patient's needs. The same problem would occur with a note that says "patient arrived."

Signing off on the order is a little more accurate but can also cause problems. To meet CMS's intent, we recommend that you develop a uniform process, which is documented in a constant manner and location in the medical record. This documentation should be unique to observation patients and should be recorded by a care provider associated with the delivery of observation services. The same processes should be used to record when a patient is discharged from observation status--regardless of when they actually leave the unit or facility.

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