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Physician Advisor Update: Observation Units and Strategies for Peer-to-Peer Discussions with Payers

Bernard Ravitz, MD, CHCQM-PHYADV, FABQAURP, ABAM, PAC-CDI
Associate Medical Director - MedStar Good Samaritan and Union Memorial Hospitals
Chair - American College of Physicians Advisors Observation Committee
Founding Member - American College of Physicians Advisors, Board of Directors


Observation Units and Strategies for Peer-to-Peer Discussions with Payers
In August 1945, Jean-Paul Sartre founded what was the most important European philosophical journal of his century: Les Temps Modernes. In this journal, Sartre continued to remind us that we are not what we think we are because we are always in a state of becoming.

In the foreword of “Observation Units Implementation and Management Strategies,” Gregory L. Henry MD, FACEP, writes, “Man is the only animal that seriously directs the future by looking at the past.” (American College of Emergency Physicians, 1998).

Believe it or not this was 24 years ago. Yes, a lot has changed on how we view Observation Medicine in 2022 but has the original concept of the Centers for Medicare & Medicaid Services (CMS) changed? Since the introduction of the two-midnight rule for determining observation services in 2013, observation patients have represented a growing percentage of hospitals’ daily census. Although the CMS rule technically applies only to traditional Medicare beneficiaries, similar methods for determining observation status have been adopted by commercial health plans. (Kaufman Hall Newsletter, March 2022).

The first question: what are observation outpatient services?
Observation care is a well-defined set of specific, clinically appropriate services, which include ongoing short-term treatment, assessment and reassessment before a decision can be made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital. (Medicare benefit policy manual: Chapter 6; Section 20.6).

Now that we have defined observation services, the question that we will discuss at the upcoming ABQAURP conference in October will be, should the observation unit be a closed one or an open one? There are many variables that will go in to determining whether your hospital will benefit from an open or closed observation unit. One of the key determinants is looking at your medical staff. Is the makeup all private physicians, hospitalists, residents, or a combination of all of these? Your physical space may play a role in the determination of an open or a closed unit.

As a physician advisor, it is especially important, whether your unit is closed or open, that you realize the value and cost savings that you bring to your institution every time you decrease the number of hours in observation.

The bottom line with an observation unit whether it is an open or closed unit is how you will provide safe, high quality, efficient, effective, low-cost care.

Peer-to-Peer Discussions with Payers
As physician advisors, you may be asking yourself the question are peer-to-peers worth the time and effort? From my perspective, the peer-to-peer encounter is worth the effort depending on how you approach each opportunity to overturn a potential denial for the hospital.

Many of you may be asking yourself, has Dr. Ravitz lost his mind? Well, if any of you out there are a type A personality and you love a good challenge, then doing a peer-to-peer discussion can be a lot of fun and extremely rewarding. There are some key aspects to consider when approaching the peer-to-peer discussion.

Attitude is key. Be friendly and kind. Get to know your medical directors, they are not evil, they have a job to do like we do as physician advisors. Approach each medical director as a human being with respect and calmness. Build a relationship of trust and integrity. This will serve you well now and in the future.

Always be prepared and armed with the facts about the case that you will be discussing. Review the actual medical record and what has been submitted to the payer by your utilization nurse specialist. Have your payer specialist provide you with what is being denied and what guidelines the payer utilizes. Be prepared to discuss evidence-based medicine in relationship to every specific case. The type of denial will help you to focus on your approach for your discussion with the medical director.

Yes, some days it feels like horse trading, however for every overturned day, you are providing dollars for your health care system.

Remember:
        “In thinking, keep to the simple.
        In conflict, be fair and generous. …
        In work, do what you enjoy.”
           -Tao Te Ching

Learn more about observation units and having meaningful peer discussions during Dr. Bernard Ravitz’s session at ABQAURP's Annual HCQ&PS Conference, “Physician Advisor Update: Closed Observation Units and Strategies for Peer-to-Peer Discussions with Payors,” on Friday, October 7, 2022, at 8:00 a.m. For more information and to register, visit www.abqaurp.org/AnnualConference.