Facility Observation Coding: Good News And Bad News: Your Facility Observation Payments Will Increase in 2014, But There's A Catch

Why This Topic Matters

Hospitals and outpatient coding teams need to know which observation and emergency department services are paid together versus packaged into a primary outpatient payment. Understanding the 2014 changes helps support accurate facility billing and prepares organizations for payer scrutiny of observation and admission decisions.

Article Sections

1. New observation composite payment approach

   Introduces the updated Medicare facility observation payment structure for 2014 and the broader outpatient payment context. It explains the general shift toward a composite approach for qualifying encounters.

2. Reporting requirements for qualifying encounters

   Summarizes the types of facility services that must be reported together to support the observation-related composite payment. The section discusses the involved encounter categories at a broad level.

3. Packaging changes under OPPS

   Describes the categories of items and services CMS says will be bundled into primary outpatient payment in 2014. It covers the general packaging framework affecting diagnostic and procedural services.

4. Practical impact for emergency department and observation billing

   Highlights the operational effect of the packaging changes on common facility services used in emergency and observation settings. The section focuses on which service types are more likely to be bundled or remain separately payable at a high level.