Observation Compared to Inpatient Status: Just the Facts

1
Observation Compared to Inpatient Status Just
the Facts

• Mary Helderman, RN, CPUM
• HPMP Project Coordinator
• Medicare Quality Improvement Organization (QIO)
  for Kentucky

2
Objectives

• Importance of meeting admission criteria
• Determining patient status
• Physician and hospital roles
• Impact on Medicare beneficiary

3
Importance of Meeting Admission Criteria-Why does
it matter?

• For the Hospital
• For the Physician
• For the Patient
• For the Centers for Medicare Medicaid Services
  (CMS)

4
Medically Necessary Admissions

• CMS defines medically necessary services or items
  as those which
• Are proper and needed for diagnosis or treatment
  of a medical condition
• Are provided for the diagnosis, direct care, and
  treatment of a medical condition
• Meet the standard of good medical practice in the
  medical community
• Are not primarily for the convenience of the
  beneficiary or their physician

5
What is the Appropriate Setting?

• Inpatient admission
• Observation

6
Factors for Consideration

• Current needs of the patient
• Severity of the signs and symptoms
• Existence of comorbid conditions likely to impact
  the clinical course
• Intensity of services
• Medical predictability of the clinical course
• The potential for adverse complications

7
What is Observation?

• The Medicare Hospital Manual defines outpatient
  observation as
• Service furnished by a hospital
• Periodic monitoring
• Reasonable and necessary
• Determination for possible admission
• Ordered by a physician

8
Observation Is For

• Evaluating a patient for possible admission
• Treating patients expected to be stabilized and
  released in 24 to 48 hours (must be well
  documented over 24 hours)
• Treating complications following outpatient
  surgery or procedures
• Evaluating an unconfirmed acute diagnosis

9
Observation is NOT

• A substitute for inpatient admission or
  continuous monitoring
• For medically stable patients who need testing or
  outpatient procedures
• For patients who need therapeutic procedures that
  are routinely provided in an outpatient setting
• For patient awaiting nursing home placement (NHP)

10
Observation is NOT (Cont)

• For routine prep or recovery prior to or
  following diagnostic or surgical procedures
• To be used as a convenience to the patient,
  family, hospital, or physician
• A routine stop between the emergency room and
  an inpatient admission

11
Payment for Observation

• Billed through Outpatient Prospective Payment
  System (OPPS)
• Packages observation payment as part of the
  Ambulatory Payment Classification (APC)
• Can be reimbursed for up to 48 hours only
• Additional reimbursement for diagnosis of chest
  pain, congestive heart failure (CHF), and asthma

12
Diagnoses That Generally Do Not Support an
Inpatient Admission

• Chest pain
• Asthma
• CHF (mild)
• Syncope
• Atrial arrhythmias
• Cardiac catheterization or electrophysiological
  (EP) studies
• Renal colic
• Dialysis, transfusions, drug administrations, and
  chemotherapy

13
Observation Claims

• Contain a valid order
• Dated, timed,and signed
• Contain execution of the orders
• Medical necessity for services provided
• Contain correct coding

14
Why Use Observation?

• Allows physician to observe patient
• Avoids potentially unnecessary inpatient
  admissions and costs
• Decreases burden on the emergency department (ED)
• Does not preclude an eventual admission

15
Condition Code 44

• For outpatient claims only
• Used prior to discharge
• When hospital has not submitted a claim for
  inpatient admission
• Attending physician concurs with utilization
  review (UR) committees opinion
• Physician concurrence is documented
• Effective April 1, 2004

16
Inpatient Services

• Patients expected to need hospital care for 24
  hours or longer
• Not covered when care can be provided in less
  intensive setting
• May be denied for lack of appropriate physician
  order, lack of medical necessity, or if services
  were not rendered

17
Observation to Inpatient

• Patient requires continuing services and
  monitoring beyond 48 hours
• Patients condition is severe enough to require
  inpatient treatment
• Cannot be backdated to the beginning of the
  outpatient observation stay

18
Documentation of Inpatient Services

• Valid order to admit inpatient
• Support a formal admission has occurred
• Demonstrate services were actually rendered
• Meets severity of illness (SI) and intensity of
  service (IS)
• Coding is consistent with documentation

19
Physicians Role

• Knowledge of the definition and appropriate use
  of observation and inpatient status
• Determination and documentation of admission
  status
• Documentation of clinical rationale for status
  decision

20
Hospital Role

• Education of staff and physicians
• Monitoring of observation appropriateness
• Monitoring appropriateness of inpatient
  admissions
• Utilization review committee
• Appropriate application of admission criteria
• Conduct monitoring, auditing, and development of
  process improvement for utilization management

21
Beneficiary Impact

• Quality of care
• Cost difference
• Liability
• Preadmission Notice of Noncoverage
• Hospital Issued Notice of Noncoverage (HINN)
• No-pay bill
• Three-day qualifying stay
• Risks
• Falls
• Infections
• Medical errors

22
Medicare Patients Observation or Inpatient
Admission Status Decision Tree
23
Inpatient or Observation?

• Case Study A
• A 66 year-old male presented to the emergency
  room with complaints of abdominal pain, nausea,
  and diarrhea. Vital signs included blood
  pressure of 124/72, a pulse of 83 without
  orthostatic changes, and temperature of 99.2F.
  Physical exam was normal except for periumbilical
  tenderness. Lab revealed normal electrolytes,
  CBC, and WBC.
• Admit as inpatient or place in outpatient
  observation?

24
Inpatient or Observation? (Cont)

• Place in outpatient observation.
• There were no significant vital sign
  abnormality or orthostasis, no evidence of
  bleeding, and no significant evidence of
  dehydration.

25
Inpatient or Observation?

• Case Study B
• A 62 year old female presented to the
  emergency room with complaint of chest pain
  radiating to the shoulder and associated with
  nausea and shortness of breath. Chest pain not
  relieved by 2 Nitroglycerin tablets. Vital signs
  of 200/104 blood pressure, heart rate 52, and
  respirations of 28. EKG revealed ST depression
  in leads II, III, and AVF. First set of cardiac
  enzymes revealed an elevated Troponin level.

26
Inpatient or Observation? (Cont)

• Place in inpatient status.
• Elevated cardiac enzymes
• EKG changes

27
Capturing the Vision

• Provide health services that are reasonable and
  necessary, and that are provided in the
  appropriate setting
• Promote quality of care of the patient
• Protect the Medicare Trust Fund
• Maintain financial viability

28
Questions and Answers

• Contact Information
• Kyhpmp_at_hce.org
• Medicare QIO Provider Help Desk
• 1-800-300-8190
• This material was presented by Health Care Excel,
  the Quality Improvement Organization for
  Kentucky, under contract with the Centers for
• Medicare Medicaid Services (CMS), an agency of
  the U.S. Department of Health and Human Services.
  The contents presented do not necessarily
  reflect CMS policy. 8SOW-KY-HPMP-06-27
  10-05-2006