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After careful consideration, we are proposing:
• to continue to package observation services into surgical procedures;
• to create a single APC — APC 0339, Observation — to make separate payment for observation services for three medical conditions: chest pain, asthma, and congestive heart failure — when certain criteria (as described below) are met.
We are further proposing to instruct hospitals that payment under APC 0339 for observation services would be subject to the following billing requirements and conditions:
• An emergency department visit (APC 0610, 0611, or 0612) or a clinic visit (APC 0600, 0601, or 0602) is billed in conjunction with each bill for observation services.
• Observation care is billed hourly for a minimum of 8 hours up to a maximum of 48 hours.
• We would not pay separately for any hours a beneficiary spends in observation more than 24 hours, but all costs beyond 24 hours would be packaged into the APC payment for observation services.
• Observation time begins at the clock time appearing on the nurse’s observation admission note. (We note that this coincides with the initiation of observation care or with the time of the patient’s arrival in the observation unit.)
• Observation time ends at the clock time documented in the physician’s discharge orders, or, in the absence of such a documented time, the clock time when the nurse or other appropriate person signs off on the physician’s discharge order. (This time coincides with the end of the patient’s period of monitoring or treatment in observation.)
• The beneficiary is under the care of a physician during the period of observation, as documented in the medical record by admission, discharge, and other appropriate progress notes, timed, written, and signed by the physician.
• The medical record includes documentation that the physician used risk stratification criteria to determine that the beneficiary would benefit from observation care. (These criteria may be either published generally accepted medical standards or established hospital-specific standards.).
• The hospital furnishes certain other diagnostic services along with observation services to ensure that separate payment is made only for those beneficiaries truly requiring observation care.
• We believe that these tests are typically performed on beneficiaries requiring observation care for the three specified conditions and they are medically necessary to determine whether a beneficiary will benefit from being admitted to observation care and the appropriate disposition of a patient in observation care.
• The diagnostic tests are as follows:
— for chest pain, at least two sets of cardiac enzymes and two sequential electrocardiograms;
— for asthma, a peak expiratory flow rate (PEFR) (CPT code 94010) and nebulizer treatments;
— for congestive heart failure, a chest X-ray, an electrocardiogram, and pulse oximetry.
• We are proposing to make payment for APC 0339 only if the tests described above are billed on the same claim as the observation service.
• We are not proposing to require telemetry and other ongoing monitoring services as criteria to make separate payment for observation services. Although these services are often medically necessary to ensure prompt diagnosis of cardiac arrhythmias and other disorders, we do not believe they are necessary to support separate payment for observation services.
• We propose to require that, in order to receive payment for APC 0339, the hospital must include one of the ICD-9-CM diagnosis codes listed below in the diagnosis field of the bill. We propose the following diagnosis codes to indicate a symptom or condition that would require observation.
— For chest pain:
411.1 Intermediate coronary syndrome;
411.81 Coronary occlusion without myocardial infarction;
411.0 Postmyocardial infarction syndrome;
411.89 Other acute ischemic heart disease;
413.0 Angina decubitus;
413.1 Prinzmetal angina;
413.9 Other and unspecified angina pectoris;
786.05 Shortness of breath;
786.50 Chest pain, unspecified;
786.51 Precordial pain;
786.52 Painful respiration;
786.59 Other chest pain.
— For asthma:
493.01 Extrinsic asthma with status asthmaticus;
493.02 Extrinsic asthma with acute exacerbation;
493.11 Intrinsic asthma with status asthmaticus;
493.12 Intrinsic asthma with acute exacerbation;
493.21 Chronic obstructive asthma with status asthmaticus;
493.22 Chronic obstructive asthma with acute exacerbation;
493.91 Asthma, unspecified with status asthmaticus;
493.92 Asthma, unspecified with acute exacerbation.
— For congestive heart failure:
428.0 Congestive heart failure;
428.1 Left heart failure;
428.9 Heart failure, unspecified.
Source: Centers for Medicare and Medicaid Services, Baltimore, MD.