Observation: Coding, Billing and Financial Impacts

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Start Time:12:00 AM
End Time:12:00 AM
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Provided by MHA Health Institute
Health Institute

Date & Time

Tuesday, Feb. 6, 2018
12:30 - 2 p.m.

Register on or before Wednesday, Jan. 31, to ensure delivery of instructional materials.

MHA members — $225
Nonmembers — $275

The webinar registration fee is for one phone line connection. Each additional phone line connection will be charged a registration fee. Multiple participants on the same connection is encouraged. Get more value by inviting colleagues to join you!

This webinar is being offered at a reduced registration fee to MHA-member hospitals because of a contribution from MHA Management Services Corporation.


This session is recommended for physicians and non-physician practitioners; outpatient nursing staff; medical/surgical nursing personnel and managers; ED nursing staff; health care compliance personnel; utilization review and quality assurance teams; billing, coding and claims transaction personnel; chargemaster coordinators; compliance personnel; and other interested staff.

The following program content was provided by the speaker.


Observation continues to be a problem area relative to proper coding, billing and documentation, particularly in relationship with the propriety of inpatient admissions. This workshop is devoted to observation services with an emphasis on coding, billing and financial impacts. The Centers for Medicare & Medicaid Services, through the OPPS, developed a packaged payment process using a C-APC that makes a blanket payment for observation services. Whether hospitals even recover their costs under this packaged approach is problematic given the extreme variability of services and the host of challenges with determining proper inpatient admissions. The reimbursement differences between a short inpatient stay versus observation also will be discussed.


  • discuss the concept of observation and associated services
  • explain how documentation must support the coding and billing process
  • differentiate between observation and inpatient admissions
  • describe the medical decision-making relative to the over two-midnights rule
  • define the use of standard observation protocols or care paths
  • identify use of C-APC 8011 in payment for observation under the OPPS
  • discuss how Medicare reimbursement is affected by a procedure performed after observation
  • compare reimbursement between a short stay inpatient encounter and an observation encounter
  • explain how private payers view and use observation services
  • identify the requirements in the NOTICE Act


Duane C. Abbey, Ph.D.
Abbey & Abbey Consultants, Inc.
Ames, Iowa

Dr. Duane Abbey is a management consultant and president of Abbey & Abbey Consultants. For more than 20 years, Dr. Abbey has provided health care consulting services to hospitals, physicians and medical clinics. The focus of his consulting has been in the areas of compliance, payment and delivery systems. In addition to his consulting, Dr. Abbey is an invited presenter for hospital associations, medical societies and other groups. He also has published articles and books on health care topics. The speaker has no real or perceived conflicts of interest that relate to this presentation.