Health Information Management

Tip of the Week: Understand what constitutes observation services

APCs Insider, November 2, 2007

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Always keep in mind that observation services do not include those services that providers render for the convenience of the patient, family, or physician. They also do not include a social event or time that the patient spends waiting for a ride home after discharge. Your facility should never bill those hours as observation time.

Do not include preprocedure orders as observation time. For example, oftentimes surgeons order outpatient surgery and anticipate a medically-monitored overnight stay for the patient. The surgeon orders the patient to receive observation, when in reality, CMS considers this time as extended recovery for billing purposes.

Do not classify other diagnostic procedures (e.g., catheterization laboratory procedures) as observation. There is no definition of what constitutes typical prep time prior to a procedure or what constitutes typical post-time for recovery after a procedure. It really depends on the procedure.

(The above tip appeared in the November 2007 issue of Briefings on APCs).

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