Under what circumstances is use of outpatient observation appropriate?

What types of services would/would not qualify for outpatient observation?

Would it be permissible for a hospital to routinely care for all patients in outpatient observation prior to making a decision about their need for inpatient admission?

How should the physician word the order for outpatient observation versus inpatient admission?

When should observation orders be written?

If a hospital determines within a short period of time after admitting a patient that although the patient was acute on admission he or she has responded rapidly to treatment and is no longer acute, should the hospital bill the stay as an outpatient observation in order to prevent denial of a short stay/medically unnecessary admission?

If a hospital determines after admitting a patient that he or she was not acute at the time of admission, should the hospital bill the stay as an outpatient observation?

If an intern admits a patient as an inpatient and then the attending physician determines that the patient should be cared for in outpatient observation, can the attending physician change the order from inpatient admission to outpatient observation, and can the case then be billed as an observation case?

When is a patient of an acute care hospital considered an inpatient?

If a physician writes a clear admission or outpatient observation order and the patient is receiving the level of care ordered, but an error by business office or other staff results in an incorrect level of care designation being noted in the billing system, can this type of clerical transcription or designation error be corrected?

If a physician orders (verbally or by telephone) a patient to be treated in observation, but the hospital staff transcribes the order incorrectly, indicating that the patient is an inpatient, can the hospital correct this?

If a physician determines that a patient is acute and is not responding to treatment after a stay in outpatient observation, can the patient then be admitted as an inpatient?

Is a physician actually required to write an inpatient admission order when a patient is progressed from outpatient observation to inpatient admission?

When does a Medicare Observation end?

If hospitals place too many patients in observation status, are they penalized by TMF and/or CMS?

The patient meets screening criteria at the time of presentation to the hospital and the patient was placed in observation. Twenty-four hours later, the patient was converted to an inpatient admission and did not meet screening criteria at that time. Can screening criteria that was met during the observation part of the hospital stay be used to approve the admission?

How does TMF interpret a physician’s order of “Admit for observation”? (inpatient admission versus observation status).

Initially the patient was placed in observation. Can the attending physician at a later date write an order to make this an inpatient admission from the date the patient was placed in observation?

Is there a time limit/frame for getting clarification from the physician regarding the admission status if he only writes “admit” or “admit to the floor”? Can this type of order be clarified after it is written?

If, during a retrospective review using the screening criteria, we identify a Medicare case that does not meet screening criteria and our UR chairman feels that the patient could have been managed in an observation setting, how should these cases be handled? Can they be re-billed? What is the process?

When a patient is first placed in observation status, then admitted the next day as an inpatient, and the claim is eventually filed as inpatient, are there any documented instructions concerning how (or if) the hospital is to note on the UB-92 that there was an observation period during this stay?  For FL 42, there is a revenue code 0762, which indicates observation room, but is the hospital supposed to note this on the claim or is there someother way to note in a field on the UB-92 that there was a period of observation?

Reporting Hours of Observation
(CMS Manual System Pb 100-04 Medicare Claims Processing Transmittal 787, Issued 12-16-05, Effective:  01-01-06, Implementation:  01-03-06)