Observation Rate – Shooting for a StandardDr. Russell Firman, MD, FACEP, CHCQM, FABQAURP–PHYSADV After reading RAC Monitor’s “The Right Observation Rate - I have the numbers sort of…” by Ronald Hirsch MD, it dawned on me that the observation rate discussion is never going to stop. How can a metric that is so flawed continue to be a benchmark Physician Advisors are held accountable for? If it won’t go away, then how can we make it work for us instead of against us? I looked for other articles with a standard definition to apply across all platforms but none of them were truly apples to apples. Even ACPA has no recommendation on how to define the observation rate. The only consistent theme was how inconsistent the reporting was due to different numerator and denominator definitions not accounting for certain exclusions and endless variable exceptions not considered. For sports enthusiasts, a shot off the post in hockey is not considered a shot on goal while in lacrosse it is considered a shot on goal. If you had to come up with a save rate for sports goalies in general, you would have different definitions for numerators and denominators. What do you do with shootouts, or penalty shots, or empty net goals when the goalie is pulled for an extra attacker? These seem hardly fair to apply to overall sports save rate since each sport has their own unique set of rules. The observation rate changes depending on whether you measure it during a hospitalization at the front end. (ER, direct admit), the middle of a hospitalization (snapshot), or at the back end (discharge final status). So, how many observation rates are there, and which is best to use? Let's consider the possibilities. 1) ED Observation rate: this considers all “observation” eligible patients hospitalized through the ER and measures how your ED case management is doing. This has been defined previously by Steven Meyerson MD and his definition includes any patient with ED charges with HCPS code G0378/G0379 (can include direct admits) in the numerator, with the denominator including the numerator plus all current inpatients with ED charges. This is probably the only measure that can be standardized and easily measured across all hospital systems with a clear numerator and denominator. If you are with me so far, what did you do with your surgical cases here in the numerator and denominator? Do you include or exclude appendectomies and cholecystectomies going directly to the OR? Do you include Inpatient only list procedures? Is this your correct observation rate you tell your CFO when many of these patients are converted to inpatient later? Is this the correct observation rate? 2) Spot daily observation rate - a daily report of number of patients in observation status divided by total observation plus inpatient at a moment in time as measured by your hospital. This is usually a daily report manufactured within your institution where all the observation cases are in the numerator, and anything is fair game in the denominator. This is usually “very high” at 6 am and much better at 4pm so make sure it is reported out to daily huddles with the 4pm number. Overnight observation cases pileup overnight. If a hockey goalie has a great second period with 15 saves and no goals allowed but allows 9 goals on 10 shots in the 1st and 3rd periods, and loses the hockey game, I am not sure how this data tracking helps the overall goal of the organization. Is this the right observation rate? 3) Discharge observation rate - measures how many people are discharged in observation status (numerator) over total observation plus inpatients (denominator), upon discharge. This measure accounts for the conversions made during the stay. If your hospital continues observation cases after procedures your observation rate will be high. Once a patient has a procedure, changing the status to outpatient with extended recovery gets the discharge final status of observation off your numerator and lowers your observation rate. This work yields you no financial benefit, but you get a warm and fuzzy about reducing your overall observation number. If a soccer player kicks the ball back to his own goalie, is it a boost to his/her save percentage? Is this the right observation rate? 4) Specialty line observation rate - different rules unique to each specialty would make this plausible but nearly impossible. Did you know a hockey goalie making a save on a shot going wide of the net does not receive credit for that shot on goal? 5) Hospital random reported observation rate - Are you stuck with a daily observation percentage report at your hospital but you have no idea what the numerator or denominator is? I have determined that someone in IT at your hospital has a formula for the observation rate they obtained from someone in finance. It is time you took this over! Let's look at the problems that need to be addressed so we can try to begin to make the observation rate number standardized and meaningful for all of us and our hospital partners. 1) How do you compare a hospital with a very high inpatient denial rate (possibly lower observation rate) with another hospital with a lower inpatient denial rate (possibly higher observation rate)? One hospital will look great to the CFO, or will it? Should we always look at the observation rate next to the denial rate / overturn rate? This reminds me of a sports team that plays terrible defense but allows a lot of shots on goal or vice versa. 2) Do you exclude OB/GYN, psych, pediatrics? What is this supposed to include exactly with varying definitions? For example, an overdose that is cleared in the ER for psychiatry, but because there are no psych beds, is placed in a medical bed overnight with observation, would this count? Is this applied nationally at all hospitals? What about 22-week pregnant vaginal bleed directly sent to observation on L&D? Ectopic ruled out in obs. Does this count? Is peds age standardized across all hospitals? Do emancipated minors count? Why exclude pediatrics? Are they considered the hockey goal post? 3) Are your nursing homes sending cases to the ER with minor falls and weakness when they are struggling with staffing? Are your observation cases really outpatient in a bed that have no medical necessity? 4) Are your ED and admitting physicians in a highly litigious county of your state that requires more hospitalizations in observation for risk management purposes? 5) Does a patient’s primary care physician send patients to the ER to be admitted that may not need to be admitted? 6) Are surgeons sending elective cases to the ER as an end around due to difficult scheduling or the need for medical clearance and they start out errantly as observation? 7) Are you an accepting tertiary care center making it easy and accessible for referring hospitals to send a patient population that are placed in observation, even when these procedures are routinely done in the outpatient setting? Do you do 20 cardiac caths every day on transfers all in observation that should be in a surgical outpatient status? 8) Has your CFO signed a contract that all patients must stay three days before the payer will consider inpatient status (you are stuck with payer short stay policies)? 9) Is your EMR easier for your medical staff to place observation orders instead of inpatient or hospital outpatient? 10) Are there errors in preauthorized outpatient procedure orders, being mistakenly placed in observation, such as infusion center encounters? Does the same thing happen for pre-authorized outpatient surgeries that the surgeon placed an observation order out of habit? 11) Are denials for observation services by payers considered in your final data collection? Do you consider counting patients who spend less than eight hours in observation since you won’t get paid for observation? 12) What do you do with a patient that was discharged as an inpatient, but after P2P there is mutual agreement that observation was more appropriate? We know that with some payers they allow you to go ahead and collect a similar amount of money, but the patient order is not officially changed to observation. 13) How would you consider counting an inpatient denial that is lost on written appeal and 12 months later is finally overturned? Your high observation rate from a year ago now is better. 14) How do you account for a third-party denial for an appropriate inpatient stay three years later that cannot be overturned on written appeal and they recoup the money? Now your data will look worse. Do Medicare self-denials fit here as well? Who adjusts your observation rate? 15) How do you account for certain J1 and T procedures that do not allow you to receive reimbursement for observation services for that visit? Was this patient counted in your observation percentage when in some cases observation services pay more than the procedure? 16) How do you define a patient who is placed in observation on day one, attending switched to inpatient day 2, but UM recommends switching back to observation but patient elopes prior to order being placed? I would argue this patient could be both an inpatient or an observation statistic depending on how your IT department defines the data. 17) How do you account for a patient that is in an appropriate observation status from the ER with abdominal pain and after a day is determined to need a laparoscopic cholecystectomy. The patient is changed to an outpatient status commonly referred to as extended care to recover. The patient has an APC for observation and for the procedure. Since the observation APC is not paid, should it be counted? It had to be reported, so why not? Off the hockey post for sure here, no save counted! 18) How do we count the patient in observation for 7 hours, changes to inpatient for 12 hours before undergoing a non-emergent lap cholecystectomy (code 44) and discharged as an outpatient with extended care before 2nd midnight? Let’s define the term once and for all and not let it continue to be inaccurately used. Let’s standardize the data collection and reporting in a way that is reliable and trusted and clear up the variable exceptions. At professional sporting events there are officials whose sole job is to count shots on goal. I propose these referees are Physician Advisors at hospitals. Unfortunately, we have allowed others to do this for us. Last month, I presented my frustration to the observation committee who pledged to define and standardize the rate with guidance in the coming months. I appreciate the observation committee “skating to where the puck is going, not where it has been” in the words of Wayne Gretzky. How do you think Observation rate should be defined? Go to this link to give us your thoughts and suggestions. (Add a survey monkey link for comments) Also, keep an eye out for the formal announcement and date for ACPA Observation Committee Townhall in Feb 2023 “Observation Metrics 101.” Reference - What is Your Real Observation Rate? What Should It Be? at https://www.acpadvisors.org/content.aspx?page_id=5&club_id=90610&item_id=61692&search=1 Dr. Firman is board certified Emergency Medicine and practices clinically for US Acute Care Solutions, and is currently full time as a Physician Advisor with Saint Joseph’s Health/Trinity in Syracuse, New York. |