The Regulatory Nuances of ObservationRonald Hirsch, MD, FACP, CHCQM-PHYADV, CHRI In the August, 2022 edition of Compliance Today, a publication of the Health Care Compliance Association (HCCA), I wrote a comprehensive article on the nuances of billing Observation services. You can read the full article here: https://bit.ly/3oMJR2F. As with many issues, the rules seem to change as fast as we can learn them. The professional fee billing of Observation will change dramatically on January 1, 2023 when the Observation visit codes are eliminated and providers will instead use the initial and subsequent hospital visit codes 99221-99233. They will still need to ensure they bill with the correct place of service, either inpatient or outpatient hospital, and affix the -AI modifier to inpatient claims where appropriate but not to outpatient claims. While the number of code choices has lessened, the confusion and opportunity for error has not. It will be interesting to see how the payers and auditors handle these changes. On the facility fee side of Observation billing, the biggest confusion lies in the billing of the many hours of care that are provided to outpatients that are not medically necessary. Is it appropriate to bill the four hours of Observation that a patient sits and waits for their ride to arrive? What about the patient who stays an extra day or two because a test cannot be performed or a specialist is not available to see the patient? Observation and surgery continue to confound many. The “old timers” like myself recall the days of surgeons ordering “23 hour Observation” for the patient who is staying overnight for routine recovery. While surgeons are great at learning new surgical techniques, they are often less adept at forgetting old habits when it comes to placing status orders. That can create confusion and potentially false claim submissions. The misuse of Observation by commercial and Medicare Advantage plans continues to be an issue. If any of you listen to Monitor Monday, a weekly webcast produced by RACmonitor.com, you will know that David Glaser, a health law attorney, and I often debate whether the MA plans must follow the Two Midnight Rule. Whether they must follow it or not, it is clear that they are not following it. And finally the handling of Observation hours on rebilled claims can be vexing. Can you add Observation hours to an inpatient claim that was denied by a payer other than Medicare? I hope you’ll take the time to click the link above and read my article. Access may be time-limited so consider saving as a pdf. And remember, when I wrote it, the change in Observation professional billing had not yet been announced so don’t roll your eyes when you read that section! Dr. Hirsch is Vice President of Regulations and Education at R1 RCM Inc |