4.2 For observation stays before May
1, 2009 (implementation of OPPS) and thereafter for observation
stays in non-OPPS facilities, the following provisions apply:
4.2.1 Cost-sharing
of observation services, subsequent to ambulatory surgery reimbursement under
the prospective ambulatory group payment, is covered if determined
that placement on observation is medically necessary.
4.2.2 Cost-sharing
of outpatient observation services is covered following care provided
in an emergency setting.
4.2.3 Cost-sharing at the observation level or
outpatient level should be considered for inpatient denials when
the services rendered are medically necessary, but provided at an
inappropriate level of care.
4.2.4 Cost-sharing of outpatient mental health
observation is covered.
4.2.5 Up to 48 hours of outpatient observation
services may be cost-shared. Observation hours exceeding 48 shall
be denied.
4.2.6 Time
spent in a recovery room following surgery should not be included
in the 23 hour limit.
4.2.7 The time of admission to an observation
bed is counted as the first hour of observation and is rounded to
the nearest hour. The total number of hours of observation should
be indicated on one line in the units field on the Centers for Medicare
and Medicaid Services (CMS) 1450 UB-04 claim form. If the patient
has more than 23 hours of observation show all hours of services
provided in the units field.
4.2.8 Outpatient observation services are billed
using the revenue code 0762 with the description listed as Observation
Services. This code includes room and board services.
4.2.9 Up to 48
hours is considered one stay and will cost-share/co-pay one time
per claim.
4.3 For observation stays on or after
May 1, 2009 (implementation of OPPS), the following provisions apply:
4.3.1 Outpatient observation
stays are separately payable when certain conditions are met for maternity
patients. Reference the TRICARE Reimbursement Manual (TRM),
Chapter 13, Section 2, paragraph 3.9.3 for
those specific conditions that must be met in order to receive separate
payment under the hospital Outpatient Prospective Payment System
(OPPS) for maternity observation stays.
4.3.2 All other observation stays will be
packaged under the primary procedure for payment. Hospitals are
to report these observation charges under revenue code 0762 - “Observation
Room”, and HCPCS code G0378. The above packaging requirement is
specific for observation stays reimbursed under the OPPS.