Last week was a very light week for any issuances from the Federal Government – most likely due to the weather related closures in Washington, D.C. and Baltimore. In light of that, let’s take a look at a Frequently Asked Question (FAQ) that we reported in our February 2 issue of the Medicare Weekly Update.
Facilities continue to work on developing efficient processes for carving out procedure time from billable observation hours. Some procedures are obvious and the documentation can clearly support this process. This includes services such as endoscopy, surgery, chemotherapy, and transfusions. In Chapter 4 of the Medicare Claims Processing Manual (Section 290.2.2), it states that “observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure.” In these situations, hospitals should add the times together for each period of observation that is supported by the documented beginning and ending times to determine the total number of units reported under HCPCS code G0378 (observation per hour). All of the time related to the procedure, including pre- and post-operative preparation, monitoring and recovery, is inclusive in the procedure itself and should not be billed separately.
Other procedures such as MRIs and CTs with contrast and therapeutic drug infusions are not quite as clear. On January 27, CMS responded with FAQ 9974 regarding a question about drug administration services and observation. CMS replied that the hospital must determine if active monitoring is a part of the time for the drug administration services for that patient. This determination may depend on the type of drug administration, the drug itself or the needs of the patient. The FAQ goes on to compare a complex and a routine drug infusion using the same drug HCPCS code – one situation requiring active monitoring and not in the other. It also advises hospitals to check with their Medicare contractors with questions about specific clinical situations. The FAQ response seems to correlate with a similar question that was asked on the October 2009 Hospital Open Door Forum call.
Hospitals need to increase their own “active monitoring” of billable observation hours, making sure that procedure times and actively monitored drug administration times are deducted from the total units of observation hours. Hospitals that rely on their information systems to automatically calculate observation hours based on changing the patient’s service type to and discharging from observation are at particular risk for including procedures requiring active monitoring in their total time. Unfortunately, all observation services will most likely need to be reviewed using clinical staff and a manual process based on documentation times, clinical criteria and individual patient needs – once again, adding to the “costs” of providing observation care and delaying billing of the services.
Note: In the FAQ #9974 response, CMS incorrectly stated Chapter 6, section 290.2.2 of the Medicare Claims Processing Manual. The chapter that should be cited is Chapter 4 and the section remains the same.