Q&A: Counting Observation Time

Q. When does the time start for observation hours? Is time in the ER included or is it when the physician writes the order?

A. It depends on what you're counting it for. If you're counting observation time to determine when to deliver the MOON, you start with the time the physician wrote the order for observation services. If you are counting to determine how many observation hours you should bill, then you look to see when observation care began after the physician gave you the observation order. And it’s not a geographic location. It could have begun in the ED, but we would need to see clear documentation that separates the ED care from the initiation of the observation care.

So if we’re counting to know how many hours to bill, we’re going to obviously see that we had a physician’s order for observation, but we’re going to start counting at that start of delivery of observation services. We are going to continue to count observation hours, potentially after the discharge order has been written. For example, if the discharge order says, “May be discharged after physical therapy evaluation,” then we’re going to bill right up to that physical therapy evaluation. We’re going to carve out the physical therapy evaluation because the patient was receiving care that required active monitoring of that patient. So we’re not going to count the physical therapy time towards our observation hours. Of course, that’s when we’re also going to carve out any of the services that receive active monitoring like, for example, an EGD or a colonoscopy, etc. Any of those things would be a carve out.

Deborah Hale, CCS, CCDS, president and CEO of Administrative Consultant Service, LLC, in Shawnee, Oklahoma, answered this question.

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