Q&A: Auditing for observation and infusion services

Q: Our facility is interested in conducting audits for observation and drug administration services, but understand they should be considered differently from other services. What details should we take into account before we begin?

A: Both of these audit topics have a fiscal value and are typically identified as educational opportunities. Correctly counting the hours of observation requires an understanding of those services that may be included in the hour count. This is in contrast to the time documented for other services that must be deducted from the hour count, otherwise known as “carveout” time. Carveouts may include other procedures that are composed of active monitoring as part of the procedure, such as colonoscopies or chemotherapy. Infusion issues surface when the clinician states “infusion” but the infusion services documented lack the start and stop times; therefore, the services must be coded as a push rather than an infusion. When this occurs, there is a loss of revenue. Both situations lend themselves to teaching opportunities, the former with either the coding or billing team and the latter with the nursing staff.

According to Debbie Rubio, BS, MT (ASCP), manager of regulatory affairs and compliance at Medical Management Plus, Inc., “observation time begins at the clock time documented in the patient’s medical record, which coincides with the time that observation care is initiated in accordance with a physician’s order.”

What does this mean exactly? First, there must be a physician’s order for observation before observation services can begin. Observation orders cannot be back-dated. For example, when condition code 44 is used to change a patient’s status from inpatient to outpatient, observation services do not begin until there is an order for observation (which would be after the change to outpatient status). Observation services would begin at the time that order was written.

If the patient is already actively receiving care, such as in the example above, then observation begins at the time the observation order is written. For patients being transferred to a room after an observation order is written, observation care may not begin until the patient begins to receive evaluation and/or care in the hospital room.

Editor’s Note: This answer is excerpted from JustCoding's Essential Guide to Coding Audits by Rose T. Dunn, MBA, RHIA, CPA/CGMA, FACHE, FHFMA, CHPS.

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