Determining the Time of Observation Care
Question: Proper coding for observation services (e.g., initial observation care 99218-99220 and observation care, including discharge, 99234-99236) depends upon the time the patient spends under observation, but when does the service officially start? Is it when the patient begins to receive services at the hospital? Is it from the time the order is written? Is it from the time the physician sees the patient?
Answer: Per the Medicare Claims Processing Manual, chapter 4, section 290.2.2, Reporting Hours of Observation, observation time begins, “at the clock time documented in the patient’s medical record, which coincides with the time that observation care is initiated in accordance with a physician’s order.”
By this definition, the physician must first see the patient and give the formal order for observation care. Only when the ordered observation begins does the observation care clock start to run. For example, time in the emergency department prior to the initiation of observation care doesn’t count toward observation time. Observation care ends when the patient is discharged to home, per the Centers for Medicare & Medicaid Services guidelines.
Your timekeeping needn’t be absolutely precise. Per the Medicare Claims Processing Manual, when determining the total time in observation:
Hospitals should round to the nearest hour. For example, a patient who began receiving observation services at 3:03 p.m. according to the nurses’ notes and was discharged to home at 9:45 p.m. when observation care and other outpatient services were completed, should have a “7” placed in the units field of the reported observation HCPCS code.
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