Observation & Medical Necessity
Was on a conference call with my CDM Coordinators within my health system and involved in a lively discussion. If there's no medical necessity for observation, what do you do with charges? Our departments get productivity based on the charges posted. We all agreed that the observation charges shouldn't be billed to the insurance but had different opinions on how it should be handled.
1. A physician orders observation before the start of outpatient surgery and doesn't document any reasons why the patient needs to receive observation services. The patient goes to the unit.
2. A physician likes to have his outpatient surgery patients stay overnight in the hospital.
Do you post charges and write them off?
Do you post charges and list them in the non-covered column on the claim?
Do you not post charges but use tracking charges so the nursing unit gets the productivity?