Medicare keeping vigilant on observation services

If you or your practice provides observation care at a local hospital to Medicare patients, the Centers for Medicare & Medicaid Services (CMS) is issuing a gentle reminder to pay attention to your documentation for those services – if you don’t want to face a refund request.

In the latest issue of CMS’s Medicare Quarterly Provider Compliance Newsletter, the agency indicates it is keeping a close eye on physician billing for hospital observation services. In the article, “Comprehensive Error Rate Testing (CERT): Observation Services,” CMS notes that evaluation and management (E/M) services, such as observation services, remain a leading cause of improper Medicare payments. CMS also notes that most improper payments were due to insufficient documentation, such as:

•    No order for observation services
•    No progress notes
•    No physician’s signature on a progress note

As an example, CMS describes the case of a physician who billed Medicare for CPT 99217 (“Observation care discharge”) for a date of service in April 2013. However, the submitted documentation was missing signed and dated physician’s orders for observation services and was also missing a signed and dated progress note to support a face-to-face encounter on the date of service. The physician was unable to produce any documentation to support that he or another member of his group had seen the patient on the date of discharge from observation. Subsequently, the Medicare administrative contractor recovered the payment.

The article also reminds physicians that even when documentation is present, it must support the level of E/M observation service claimed. Failure to document the level of service claimed also constitutes a potential overpayment as far as Medicare is concerned.

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians