Observation services are a specific set of services provided to a patient while the physician decides whether to admit or discharge the patient. That means if a patient undergoes a procedure that requires “active monitoring,” he or she is not receiving observation services during the procedure.
In 2010, HCPro’s Revenue Cycle Institute conducted its second annual in-depth study on RAC preparedness among healthcare providers. The results are now in: RAC audits have picked up, but preparation and education are still under way for many, and HIM plays an important role.
In a recent HCPro audio conference titled “ Observation Services v. Inpatient Admission: Assign Proper Level of Care and Prevent Denials,” experts answered listeners’ questions about proper use of observation services.
Condition code 44 has been problematic for hospitals since its inception in 2004 due to CMS’ unclear language, multiple changes to the observation billing rules, and inconsistent guidance.
CMS has seen an increase in the number of extended observation stays and wants to know why. That was the reason it gave for holding an August 24 listening session regarding the matter. The reason providers misuse observation services may not have been as interesting as the solution proposed by some callers—namely, that CMS should abolish observation services.
