CMS changes wording of orders for observation
CMS changes wording of orders for observation
Make sure documentation reflects new language
In an effort to clarify what had been confusing in the past, the Centers for Medicare & Medicaid Services (CMS) changed the wording of the observation orders and admission status, effective July 1.
Now instead of using the term "place observation status" or admit to observation," the physician order should read "outpatient — refer for observation services."
Transmittal 1760, issued June 23, 2009, didn't change the appropriate use of observation status, but it did change the language by which physicians order these services, says Deborah Hale, CCS, president of Administrative Consultant Services LLC, a health care consulting firm based in Shawnee, OK.
"There is no payment status called 'observation.' Observation care is an outpatient service, ordered by a physician and reported with a HCPCS [Healthcare Common Procedure Coding System] code," CMS wrote in the transmittal, which updates the Claims Processing Manual.
Case managers should educate physicians about the revised wording of their order and work with the medical staff to achieve standardization.
"When this wording is included as an option on standardized order sets or computerized physician order entry, the facility is more likely to get it right all the time," Hale says.
Case managers should make sure that documentation for patients receiving observation services states "referred for observation services," she says.
This may mean that hospitals need to change their standing orders to reflect the language now required by CMS, Hale adds.
It's important to make sure the language is correct so that the Medicare Administrative Contractors (MAC) or Recovery Audit Contractors (RACs) will be able to determine the physician's intended level of care and avoid inappropriate claims that result when a physician's order is worded "admit for observation," she says.
In the transmittal, CMS emphasizes that in no case may a nonphysician make a final determination that a patient's stay is not medically necessary or appropriate, Hale says.
"The transmittal made it clear that case managers cannot change a physician's order for inpatient admission or take sole responsibility for determining the patient's level of care. Only a physician can change a patient from inpatient status to observation services," she adds.
"This instruction, first published in 2004, references a change from inpatient status to outpatient. Observation may not be billed for the time a patient was thought to be an inpatient, as this service is billable only when a physician has ordered observation services," she says.
Even though Transmittal 1760 makes reference to "admission protocols: These reminders about physicians' responsibility for the level-of-care order is evidence that CMS is not referring to a case management protocol in which the case manager is solely responsible for assigning a level of care," Hale adds.
On April 22, 2009, National Government Services1 posted an opinion regarding the use of a case management protocol to determine level of care, Hale says. The following statement was included:
"Many facilities are attempting to implement a 'standing order' practice that removes the physician from the decision-making process, and to date, CMS has given no indication that this practice is acceptable. If these protocols are used, then the inpatient admission is not recognized until the physician (nonphysician practitioner) responsible for the patient's care concurs."
However, CMS states that it expects hospitals to employ case management staff to facilitate the application of hospital admission protocols and criteria, and to facilitate communication between practitioners and the utilization review committee or Quality Improvement Organization.
CMS allows the use of Condition Code 44 to address late-night or weekend admissions when no case manager is on duty to offer guidance but emphasizes that it is to be used sparingly.
"Use of Condition Code 44 is not intended to serve as a substitute for adequate staff or utilization management personnel or for continued education of physicians and hospital staff about each hospital's existing policies and admission protocols," the transmittal says.
Hospital Conditions of Participation require all hospitals to have a utilization review committee with at least two physician members who review admissions for appropriateness of the level of care. Review of admissions may take place before, at, or after a hospital admission.
In order for hospitals to file a Condition Code 44 claim, the medical record must have documentation of a physician's concurrence that an inpatient admission is not medically necessary and that the patient should have been registered as an outpatient. The reason for the change and those involved in the review should be documented as well.
The practitioner responsible for the care of the patient must be consulted and allowed to present his or her views before the utilization review committee.
"To achieve success with level-of-care determinations, hospitals are going to need to change the practice of having case managers review a patient's chart for medical necessity 24 hours or more after admission. The patients are going to have to be screened before or at the time of admission in order to facilitate appropriate level of care, even if that includes a referral to a physician advisor at the time the decision is made," Hale says.
(Editor's note: This article includes the most recent information from the Centers for Medicare & Medicaid Services as of July 31 and may be subject to change.)
Reference
- National Government Services is one of the largest Medicare contractors in the country and has served as a Medicare contractor since 1966.
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