Observation - Did You Know?

A patient that is intubated in the ICU can be designated as OBSERVATION.
While mechanical ventilation can certainly support an inpatient status, it is not a clinical condition or scenario that requires a patient to be inpatient.


Which Patient Status Do I Order? ​

The patient wants to be kept comfortable. Death is expected in minutes to hours: Order OUTPATIENT status.  

  • Request Hospice Consult for enrollment for family to receive 13-month hospice bereavement support. ​

Patient needs life support in ICU to be kept alive until family arrives to say goodbye. Death is expected in <48 hours: Order OUTPATIENT status with OBSERVATION.  

  • Request Hospice Consult for enrollment for family to receive 13-month hospice bereavement support. ​

Patient/Family unsure about hospice or wants limited trial of Aggressive Care: Order OUTPATIENT status with OBSERVATION.  ​

  • Seek Palliative Care consult to discuss goals of care and hospice consult. ​

  • IF the patient continues to deteriorate and asks to stop aggressive care, request Hospice Consult for enrollment for family to receive 13-month hospice bereavement support. 

Patient/Family wants Aggressive Care 

  • >2MN stay anticipated: Order INPATIENT status. ​

  • Will have an Inpatient Only procedure, taken to the OR, taken to the Cath Lab: Order INPATIENT status. ​

Patient is INPATIENT status and continues to Deteriorate:  LEAVE as INPATIENT Status AND​

  • Seek Palliative Care consult to discuss goals of care and hospice consult, OR ​

  • Contact Hospice directly to request consult for enrollment for family to receive 13-month hospice bereavement support.


A patient must have INPATIENT status if they’ve had an inpatient-only procedure.
Examples include craniotomy, hip fracture repair, TAVR and about 500 others. There is some urgency around this, since the chart requires an attending physician/APP order for inpatient before discharge, otherwise we forfeit the inpatient reimbursement. Unfortunately, payers will not accept an order from a case manager, utilization reviewer, UR physician, or CMO.  

Consider HALO (High Acuity Limited Observation) when a patient’s demise is potentially imminent and you do not know the patient's or family’s wishes.
HALO is rooted in patient and family expectations. It is reasonable to place a critically ill patient who requires mechanical ventilation and pressor support on observation until the family can assess the situation with all available data and decide next steps.

If a patient is critically ill and the patient’s family arrives and requests comfort care, then it is highly unlikely the patient will exceed two midnights of hospitalization.

An observation stay does not typically cost more for the patient/family. 

A typical observation patient with Medicare Part A and B owes the once-yearly Part B deductible ($226 for 2023) and 20% of the approved payment from CMS for the stay (a two-midnight stay ranges from about $2,100 to $3,700). Thus, the patient would owe ~$650 to $970 for an observation stay. An observation stay almost always results in a lower out-of-pocket obligation for the patient than the inpatient deductible of $1,600. The only exceptions: 1) Medicare patients who’ve already paid their Part A deductible for the benefit period because they had an inpatient admission within the prior 60 days and 2) a patient who requires an SNF stay after discharge.

If your eyes are crossing, perhaps take solace in this delightful cartoon parody of the entire concept of observation status. 

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