How to clock observation time
Hospital observation time requirements
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. Observation time ends when all medically necessary services related to observation care are completed. Any care provided before the order for observation, or after the order for admission/discharge, is excluded from the total observation time.
Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure (e.g., colonoscopy, chemotherapy).
In situations where such a procedure interrupts observation services, hospitals would record for each period of observation services the beginning and ending times during the hospital outpatient encounter and add the length of time for the periods of observation services together to reach the total number of units reported on the claim for the hourly observation services HCPCS code G0378 (hospital observation service, per hour)
Hospitals should round to the nearest hour and units of service billed must equal the number of hours the patient is in observation. Number of units reported with observation code G0378 must equal or exceed eight hours to receive a separate payment. Observation less than eight hours must be documented in the medical record and are packaged into the APC for OPPS providers; Maryland waiver hospitals will be paid by cost review methodology.
Billing scenarios
No active monitoring carved out
- Order to place in observation documented 10:20 a.m.
- Order to discharge home at 9:45 p.m.
- 11 hours 25 minutes in observation
- Total units to bill: 11
Active monitoring carved out
- Order to place in observation documented at 12:20 a.m.
- Order to admit as inpatient at 11:45 a.m.
- 11 hours 25 minutes in observation
- 1 hour 40 minutes at diagnostic test (time carved out of observation time)
- 9 hours 45 minutes total time spent in observation
- Total units to bill: 10
References