Q&A: Observation APC Payment

Q. Is diagnosis no longer a criteria for the observation APC payment?

A. No. Use and payment for observation has absolutely nothing to do with the diagnosis, only the fact that the physician orders observation and it’s payable when the patient receives at least eight hours of observation and we get the qualifying ED visit, direct referral visit, or type B ED coded and billed correctly on the claim. When you're auditing to make sure you're using observation services correctly, be sure that you also include a look at the claim and the way those services were billed because sometimes we just review the clinical aspect of the service and had we reviewed the financial aspect, we would have identified some really significant opportunities for improvement in reimbursement.

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

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