I've only done a very quick read of your document, but I did want to respond back with just a few comments.
First thing I noticed is the use of the word "status". (I guess I should also state that I work in a hospital, but do have experience on the physician side). CMS advises hospitals that Observation is a service not a status. I know that is a minor word difference, but it has sort of been drilled into me, so I thought it might bear repeating.
Also, hospitals have very specific criteria for Observation Services, and we are charged with making sure all physicians understand these criteria. Per CMS, the purpose of Observation is to be when the physician needs mroe time in determining the patient's needs. That is, they may get better pretty quickly (less than 48 hours) on a certain treatment plan, or they may not respond. So Observation is used to allow the time to make that decision. (This probably has nothing to do with your document, but I just wanted to explain "service" a little!)
The other thing that sort of jumped out at me was using one of the admit/discharge on same day codes if the patient expires. According to the CPT description for discharge codes, "expired" is not included anywhere in the description. I don't think I have ever used a discharge CPT code on a patient that expires.
One last comment regarding subsequent observation visits, as a facility we hope patients are either admitted as an inpatient or discharge (all depending on medical necessity as per the physician, of course!), within that 48 hour period. Most managed care contracts are written in such a way that a facility may not be reimbursed for those additional days. Of course if a patient does not meet medical necessity but the physician doesn't feel they are ready for discharge, an inpatient admission is not appropriate. Cases like that are a completely separate discussion!
You wrote a great document, and I do plan to read it more carefully!
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