Admissions VS. Observation Black and White Answers to Admissions Criteria and Observation Services

1. Admissions VS. ObservationBlack and White Answers to Admissions Criteria and Observation Services Presented by: HomeTown Health October 8, 2009

2. Medicare Sets the Record Straightwith Hospitals & Physicians

3. Transmittal 1760 - July Update of the OPPS published June 23, 2009 • Item 8. Clarification Related to Observation Services CMS updated Pub.100-04, Medicare Claims Processing Manual, chapter 4, §290, and Pub.100-02, Medicare Benefit Policy Manual, chapter 6, §20.6, to clarify that a hospital begins billing for observation services, reported with HCPCS code G0378, at the clock time documented in the patient’s medical record, which coincides with the time that observation services are initiated in accordance with a physician’s order for observation services. EFFECTIVE OCTOBER 1, 2009

4. NO MORE “Admit to Observation”

5. Term ADMISSION removed from Medicare manual regarding Observation Services • Editorial changes to the manuals remove references to “admission” and “observation status” in relation to outpatient observation services and direct referrals for observation services. These terms may have been confusing to hospitals. The term “admission” is typically used to denote an inpatient admission and inpatient hospital services. • For payment purposes, there is no payment status called “observation”, observation care is an outpatient service, ordered by a physician and reported with a HCPCS code. Transmittal 1760, issued June 23, 2009

6. New Language on Orders required after October 1st

7. New Language on Orders required after October 1st • Transmittal 1760, issued June 23, 2009, didn't change the appropriate use of observation status, but it did change the language by which physicians order these services, says Deborah Hale, CCS, president of Administrative Consultant Services LLC. • Physician documentation on orders for patients to receive observation services should state "referred for observation services”

8. New Language on Orders required after October 1st • It's important to make sure the language is correct so that the Medicare Administrative Contractors (MAC) or Recovery Audit Contractors (RACs) will be able to determine the physician's intended level of care and avoid inappropriate claims that result when a physician's order is worded "admit for observation” • "The transmittal made it clear that the hospital staff cannot change a physician's order for inpatient admission or take sole responsibility for determining the patient's level of care. Only a physician can change a patient from inpatient status to observation services

9. POLL QUESTION • Were you aware of this new Medicare rule regarding Observation going into effect on October 5th?

10. How does Medicare define “Observation”

11. Purpose of Observation Observation is used to evaluate a patient’s condition in order to determine the need for acute inpatient admission.

12. CMS Definition of Observation: CMS defines observation status as a “well defined set of specific, clinically appropriate services, which include ongoing short-term treatment, assessment, and reassessment, before a decision can be made regarding whether patients will require further treatment as hospital inpatients or whether they can be discharged from the hospital “.

13. CMS Definition of Observation: • It is rare that an observation status would span over 48 hours. Usually the determination to discharge or admit the patient to the hospital can be made within 24 hours. • Medicare does not specify what type of bed or unit a patient must be in if they are observation status. • Medicare coverage for observation services requires at least 8 hours of monitoring. Observation time begins at the time the physician writes the order and it ends when the patient is actually discharged from the hospital or admitted as an inpatient. This time DOES NOT include the time a patient may spend waiting on transportation to get home.

14. Observation ServicesKEY Questions to ASK • In what condition will the patient most likely be tomorrow? “Better” =  Observation • Is it risky to send the patient home today? “Yes” =  Observation • Is it likely I will know whether to admit or send the patient home by tomorrow? “Yes” =  Observation

15. Observation ServicesKEY Questions to ASK • Are vital signs stable? “Yes” =  Observation • Will a diagnosis likely be made in 24 hours? “Yes” =  Observation • Will treatment, such as IV fluids, require standard monitoring and be complete within 24 hours? “Yes” =  Observation

16. Observation ServicesKEY Questions to ASK • Is the patient presenting with a symptom(s) (e.g., chest pain, abdominal pain, TIA) “Yes” =  Observation • Is the patient having an unusually long recovery period following outpatient procedure (e.g., pain management issues, cardiopulmonary concerns, urinary retention) “Yes” =  Observation http://www.hpmpresources.org/Portals/1/Tools/OBV_For%20Hospitals.ppt#300,9,Purpose of Observation

17. OBSERVATION: The RULEIt’s Elementary! R/ORule Out = R/ORemember Observation

18. Do NOT use OBS for…. • Social reasons • Physician or patient convenience • Routine prep for diagnostic testing • Routine recovery from outpatient procedures • Procedures designated as “inpatient only”

19. How is a Patient changed from I/P back to Observation?CONDITION CODE 44

20. CONDITION CODE 44 • In cases where a hospital utilization review committee determines that an inpatient admission does not meet the hospital’s inpatient criteria, the hospital may change the beneficiary’s status from inpatient to outpatient and submit a CODE 44 claim for medically necessary Medicare Part-B services that were furnished to the beneficiary, provided all of the following conditions are met: • • The change in patient status from inpatient to outpatient is made prior to discharge or release, while the beneficiary is still a patient of the hospital. • • The hospital has not submitted a claim to Medicare for the inpatient admission. • • A physician concurs with the utilization committee’s decision. • • The physician’s concurrence with the utilization review committee’s decision is documented in the patient’s medical record followed with an order for observation services, timed and dated.

21. CONDITION CODE 44 To be Used Sparingly CMS allows the use of Condition Code 44 to address late-night or weekend admissions when no physician or case manager is on duty to offer guidance but emphasizes that it is to be used sparingly. "Use of Condition Code 44 is not intended to serve as a substitute for adequate staff or utilization management personnel or for continued education of physicians and hospital staff about each hospital's existing policies and admission protocols," the transmittal says. In order for hospitals to file a Condition Code 44 claim, the medical record must have documentation of a physician's concurrence that an inpatient admission is not medically necessary and that the patient should have been registered as an outpatient. The reason for the change and those involved in the review should be documented as well.

22. INPATIENT VS. OBSERVATION EXAMPLE: An 85-year-old Medicare patient with high blood pressure and diabetes arrives in the emergency room complaining of chest pain that resembled the pain he felt when he had an earlier heart attack. The physician’s course of action is clear: admit the patient to observe him. SO, does the hospital admit him or observe him? How will the physician bill Medicare? What CPT Code should be used? Does he meet criteria for I/P? http://www.minnesotamedicine.com/PastIssues/February2007/PulseMedicareFebruary2007/tabid/1701/Default.aspx

23. Welcome to theTwilight Zone of Medicare regulations.

24. Why is it so important to get it right? Getting this call wrong can result in either charges of Medicare fraud or a nearly $5,000 loss per admission to a hospital. It can even result in the entire physician payment being recouped at a later date from the RAC or MAC. “This is terribly confusing to providers,” says Jane Pederson, M.D., director of medical affairs for Stratis Health, Minnesota’s Medicare Quality Improvement Organization (QIO)

25. SO WHAT IS RIGHT?

26. Medicare SAYS: • The Medicare Benefit Policy Manual says that physicians should use a 24-hour period as a benchmark to distinguish between inpatient and outpatient status, meaning if a patient needs to stay more than 24 hours, then he or she likely qualifies as an inpatient. However, it also says the distinction is not solely based on the time the patient actually spends in the hospital. • The Medicare manual also says the decision to admit a patient is a “complex medical judgment” and that physicians need to assess the severity of the patient’s symptoms, the likelihood of a bad outcome, and the availability of diagnostic tests and resources before making their decision.

27. For a physician to bill the initial observation care codes, there must be: a medical observation record for the patient which contains dated and timed physician’s orders regarding the care the patient is to receive while receiving observation care, nursing notes, and progress notes prepared by the physician while the patient was receiving observation care. This record must be in addition to any record prepared as a result of an emergency department or outpatient clinic encounter. http://www.cms.hhs.gov/Transmittals/Downloads/R1466CP.pdf Billing Requirements for Observation Care

28. Payment for an initial observation care code is for all the care rendered by the ordering physician on the date the patient received observation care. All other physicians who see the patient while he or she is in observation must bill the office and other outpatient service codes or outpatient consultation codes as appropriate when they provide services to the patient. For example, if an internist admits a patient to observation and asks an allergist for a consultation on the patient’s condition, only the internist may bill the initial observation care code. The allergist must bill using the outpatient consultation code that best represents the services he or she provided. The allergist cannot bill an inpatient consultation since the patient was not a hospital inpatient. http://www.cms.hhs.gov/Transmittals/Downloads/R1466CP.pdf WHO can bill for Observation Care?

29. Clarifying CPT codes for observation, admission, discharge

30. Q: How should I code services rendered to a patient admitted to observation status on one date, then admitted as an inpatient for two additional days? A:The coding for the scenario you describe should be billed using: • An initial observation care Current Procedural Terminology (CPT) code, 99218-99220, on the first date, when the patient is in observation status. Any evaluation and management services in another setting, such as the office or an emergency department, that are related to the admission to observation status cannot be billed separately, as they are considered part of the initial observation care service. • An initial inpatient hospital care code, 99221-99223, on the second date, on which you admit the patient to the hospital inpatient setting. You cannot report the observation care discharge service code, 99217, in conjunction with a hospital admission. All related evaluation and management services are part of the initial hospital care service, regardless of the setting. • A hospital discharge service code, 99238-99239, for the third date.

31. Q: What if I admit a patient to observation status and then send him or her home the next day? A: FIRST OF ALL, you no longer document “admit to observation” you document, “referred for observation services”. If the patient receives observation care on one calendar date and discharged on the next date, bill an initial observation care code, 99218-99220, for the first date of service and the observation care discharge service code, 99217, for the second.

32. Q: What about admission and discharge from observation to home on the same date? A: Bill a CPT “Observation or Inpatient Care Services (Including Admission and Discharge Services)” code, 99234-99236. These codes are to be used for a same-date admission and discharge in the observation status or inpatient setting. • In addition to meeting the documentation requirements for history, examination, and medical decision making documentation in the medical record shall include: • Documentation stating the stay for observation care or inpatient hospital care involves 8 hours, but less than 24 hours; • Documentation identifying the billing physician was present and personally performed the services; and • Documentation identifying the admission and discharge notes were written by the billing physician. http://www.cms.hhs.gov/Transmittals/Downloads/R1466CP.pdf

33. Q: Does Medicare require a minimum number of hours on observation status before a physician can bill 99234-99236? A: Yes. A patient must be in observation status at least eight hours for a physician to bill a same-date admission and discharge code. Medicare rules differ from the instructions in the CPT code book for this scenario and, thus, are more likely to differ from private-payer billing rules. For Medicare: • If observation care is ordered for the patient and then discharged home on the same date of the observation stay that lasted at least eight hours (but fewer than 24 hours, since it must be on the same date), bill a code from the 99234-99236 range. • If the patient is discharged home after fewer than eight hours in observation status, bill only an initial observation care code, 99218-99220. The Medicare eight-hour minimum rule for observation status pertains to same-date admission and discharge only. If, as happens rarely, a Medicare beneficiary receives observation care and is discharged in fewer than eight hours on a different date, bill an initial observation care code, 99218-99220, for the first date of service and the observation care discharge service code, 99217, on the second date.

34. Q: Can you provide some background on each of these different code families? A: CPT code 99217, observation care discharge day management, is used for billing when a patient is discharged from observation care on a date other than the date he or she was placed in observation status. CPT codes 99218-99220, initial observation care, describe physician visits during a patient’s stay in observation status. CPT codes 99234-99236, observation or inpatient care, are used when the patient is placed in observation status or admitted to inpatient status and then discharged on the same date. All services provided on the day of discharge from inpatient status are coded 99238 or 99239. This applies for a discharge from inpatient status on a day other than the day a patient was admitted. The full Medicare observation care services’ billing rules are listed in the Medicare Claims Processing Manual, Chapter 12. The pertinent information is in Section 30.6.8.

35. SO . . .An Inpatient or Not?

36. More guidance is definitely needed on admissions coding—particularly in regard to chest pain, which causes the most confusion. American Heart Association and the American College of Cardiology have developed base guidelines that should be considered based on patient history, age, duration and severity of signs and symptoms.

37. An Inpatient or Not? • So if the 85-year-old described earlier in the story wasn’t currently having chest pain, most physicians would consider ordering observation services.   • However, if he had another bout of chest pain or his biomarkers turned positive while in the hospital, they would change his status to inpatient. • Physicians should use observation status as the default. Medicare is more lenient on code changes from observation to inpatient, rather than vice versa. • One thing is certain; that is in order to avoid problems, hospitals and physicians need to have a consistent, well-documented policy and process for making

38. Establish Protocol and Decision Tools

39. In Summary • Remember new language for orders: • Referred for Observation Services • or Outpatient Observation Care • Remember that benchmark for Observation is 24 hours – document progress regularly. • Must treat all patients the same for all payers. • Work with your hospital administration to establish UR Committee policy and procedure regarding appropriate use of Observation services.