Observation Care | Service Sheet | FTI Consulting

Observation Care

Healthcare & Life Sciences | Health Solutions

April 4, 2017

FTI Consulting Health Solutions assists in improving quality care outcomes, utilizing integrated solutions which address infrastructure requirements and operational dependencies between evidence based quality medical care and clinical team operational processes. Our value‐driven solutions address real challenges while developing the processes and infrastructure necessary to meet tomorrow’s needs. Medicare’s Two‐Midnight rule has implemented regulatory guidelines resulting in increased outpatient/observation stays and decreased revenues. Hospitals and health care systems attempt to adjust, providing appropriate patient care while modifying processes to ensure compliance. FTI Consulting Health Solutions specialists work with physicians, case management professionals, quality leaders and other healthcare team professionals to ensure patients receive safe, efficient, cost‐effective healthcare that delivers optimal financial outcomes.

Observation Care Processes

Medicare’s Two‐Midnight Rule was expected to simplify the process of determining whether a patient should be inpatient or outpatient and remain revenue‐neutral for hospitals. However, attempts to implement standardized processes have been challenging for hospitals. Case Management/Utilization Management staffs have struggled with physician education associated with annual changes to the rule, as well as coordinating processes for level of care assignments with medical staff, clinical and revenue cycle leaders and staff. Seamless clinical integration and flawless operational execution are essential to coordinating regulatory compliance, ensuring quality patient care and minimizing financial impacts. Observation Care delivery involves ensuring accurate level of care assignment and provision of efficient clinical care, as well as facilitation to alternate levels of care when appropriate. FTI Consulting minimizes net revenue impact associated with the care of the observation patient by ensuring compliance with regulations and facilitating strong Observation Care clinical and utilization review processes.


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