Inpatient Facility Coding & Compliance Alert

Coding for hospital observation services comes with some unique challenges, especially when the patient receives therapeutic infusions, hydration services, or other types of drug administration. Keep the following points in mind when deciding whether you can charge for these services during observation care.
Starting point: You should not bill "observation" services concurrently with diagnostic or therapeutic services when active monitoring is part of the procedure, according to the Medicare Claims Processing Manual (Chapter 4 Section 290.2.2).One common example would be chemotherapy.
Remember Interruptions Can Change Reporting

If, for some reason, the infusion/drug administration service interrupts the observation service and leads to two or more distinct observation periods, you can report all services. Record the beginning and ending times of each observation period, then add the lengths of time for all the observation periods. That total time will help you determine the total number of units reported on the claim for hourly observation services (G0378, Hospital observation service, per hour).
Verify Active Monitoring

Your next step is to determine whether the drug administration service included active monitoring of the patient (either the entire administration time or a portion of it). Whether the patient is monitored can depend on several factors including the:

• type of drug administration service provided
• specific drug administered
• needs of the patient.

Example: A complex drug titration infusion to elicit a certain therapeutic response could require constant, active monitoring by hospital staff. A routine antibiotic infusion, however, might not require active monitoring.

Bottom line: If you determine that active monitoring is part of the drug administration service, don't report G0378 for that portion of the drug administration time. Instead, report the appropriate drug administration code (such as 96365, Intravenous infusion, for therapy, prophylaxis, or diagnosis [specify substance or drug]; initial, up to 1 hour) for the infusion and G0378 for any time focusing solely on observation.