Observation or inpatient? get it right up front.

Auditors from all types of payers are focusing their attention on patients'level of care making it imperative for hospitals to ensure that the level of care is appropriate and the documentation supports it. There are a lot of grey areas in the rules and admission criteria sets and the Recovery Audit Contractors (RACs) are looking at them as tools, and not as definitive answers as to whether patients meet inpatient criteria. Insufficient physician documentation is the reason for a large number of hospital payment errors. Level of care determination doesn't necessarily affect physician billing but it can have a huge impact on hospital reimbursement and patients' out-of-pocket expenses. Patients appropriate for observation services are those who need additional care or who need to be reassessed before a decision on admission is made. At some hospitals, case managers on the surgical unit conduct reviews to ensure that patients are placed in the proper status after surgery.