Payment Trends
Ask the Expert: Hourly Documentation for Observation Status
October 25, 2012
11:34 am
Q: “At one point, I heard rumors that CMS was going to require hourly documentation by nursing to support Observation status. I feel as if this did not go forward, but have no hard documentation that it remains at every 4 hours. Will you comment, please?”
A: Below is a link to the Medicare Claims Processing Manual. Section 290.5.1 covers billing observation services which states that you bill for observation in hourly increments, which means that medical necessity for that code needs to be documented in the medical record.
http://www.cms.hhs.gov/manuals/downloads/clm104c04.pdf
HFMA Technical Director Chad Mulvany answered this question.
