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Outpatient FAQ March 2016

Published on 

Tuesday, March 1, 2016

 | FAQ 

Q:

Since payment for observation services has changed from a composite payment to a comprehensive APC payment (see MMP article Observation Payment for 2016), have the requirements for reporting observation hours changed?

 

A:

No. The reporting of observation services remains the same as described in the Medicare Claims Processing Manual, Chapter 4, section 290.2.2. Some of the key information from this manual is:

  • Observation services are only covered when provided by the order of a physician or other individual authorized to admit patients or to order outpatient services.
  • Observation services are generally reported with revenue code 762.
  • Other ancillary services performed while the patient is receiving observation care are separately reported.
  • Observation time is reported per hour, rounded up to the nearest hour.
  • Observation time begins at the clock time documented when observation care is initiated in accordance with a physician’s order.
  • Observation time ends when all medically necessary services related to observation care are completed.
  • Although 8 or more hours of observation care are required for an observation payment, all hours of observation should be reported.
  • Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure. This means providers may have to “carve out” procedure time from the total stay to calculate observation hours.
  • Standing orders for observation services following outpatient surgery are not appropriate.
  • When observation services span more than one day, all observation hours are reported as a single line item for the date observation care began.
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This material was compiled to share information.  MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.