Purpose 

This medical policy outlines Highmark Health Options Duals services for Observation Care.

Definitions

Highmark Health Options Duals (HHO Duals) – Highmark Health Options Duals is designed for people with both Medicare and Medicaid. Our D-SNP Medicare Advantage HMO coverage offers the same benefits as Original Medicare, plus extra benefits, like prescription drug coverage and vision and dental care.

Medicare Outpatient Observation Notice (MOON, Form CMSD-10611) - A standardized notice to inform Medicare patients (including health plan enrollees) that they are outpatients receiving observation services and are not inpatients of a hospital or Critical Access Hospital.

Observation - Observation care is a well-defined set of specific, clinically appropriate services, which include ongoing short-term treatment, assessment, and reassessment that are furnished while a decision is being made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital. Observation services are commonly ordered for patients who present to the emergency department and who then require a significant period of treatment or monitoring in order to make a decision concerning their admission or discharge.

Prior Authorization

Prior authorization is not required.

Procedures

Outpatient observation is an alternative to inpatient admission. A physician order documented as admit to observation will follow this policy. Conversely, a physician order documented as admit will be treated as an inpatient admission, and this policy will not apply.

1. Medical Necessity Guidelines Observation Care

·       Observation care is a well-defined set of specific and clinically appropriate services. These include ongoing short term treatment, assessment, and reassessment, which occur while a decision is being made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital.

·       Observation services are commonly ordered for patients who present to the emergency department and require a significant period of treatment or monitoring in order to make a decision concerning their admission or discharge.

·       Medical care provided under observation services are covered only when provided by the order of a physician or another individual authorized by State licensure law and hospital staff bylaws to admit patients to the hospital or to order outpatient services.

·       Observation services must also be reasonable and necessary to be covered by Medicare.

·       Providers must follow Medicare Guidelines for Observation services and reporting hours of observation including that:

o   Hospitals and Critical Access Hospitals are required to provide a Medicare Outpatient Observation Notice (MOON) to patients informing them that they are outpatients receiving observation services and are not inpatients of a hospital or Critical Access Hospital. The MOON is to be delivered to patients who received observation services as an outpatient for more than 24 hours and must be delivered no later than 36 hours after observation services begin. The MOON may be delivered before a patient receives 24 hours of observation services as an outpatient.

·       Providers must report all services rendered in observation with the appropriate revenue codes, HCPCS codes, CPT codes, and ICD-10 diagnosis codes.

2.       Observation Services do not require prior authorization.

3.       The Medical Record must document the need for clinically appropriate services, treatments, assessments, and testing. The documentation should include the following information but is not limited to:

·       Physician admission and progress notes:

·       Diagnostic and/or ancillary testing reports;

·       The discharge notes (with clock time) with discharge order and nurses notes

4. Observation services should not be billed in some situations:

·       Observation services should not be billed along with diagnostic or therapeutic services for which active monitoring is a part of the procedure. Note that when active monitoring is part of the procedure the hospital may determine the most appropriate way to account for this time. Examples include:

o   Standing orders following an outpatient surgery

o   Extended observation following a procedure

o   Services provided concurrently with chemotherapy

o   Routine recovery and post-operative care after same-day surgery

o   Awaiting transfer to another facility

o   Outpatient blood administration

·       Observation services provided for the convenience of the patient, the patient’s family, or a physician.

5.         Post-payment Audit Statement

The medical record must include documentation that reflects the medical necessity criteria and is subject to audit by HHO at any time pursuant to the terms of your provider agreement.

6.         Place of Service

The proper place of service for observation is hospital outpatient.

Operational Guidelines *Do not include on external version*

·       This medical policy will be applied on a postservice, postpayment basis for both professional and facility claims.

Coverage Determination and Links

HHO Duals follows the coverage determinations made by CMS as outlined in the NCD, and the state specific LCD/LCA.

CMS Link

·       CMS Website

NCD/LCD Link

·       There are no current NCD/LCDs related to this topic.