Physician Orders to Admit to Inpatient Hospital or for Observation Services

Lack of a formal order for inpatient admission or observation services results in an increase of the CERT error rate for National Government Services.

• CERT auditors are required to deny inpatient hospital or observation services as not medically necessary when the record does not include a formal physician’s order admit to inpatient or order for observation services.

What is an order to admit to inpatient hospital?

An inpatient admission order is a written order by the treating physician requesting to admit beneficiary to inpatient hospital level of care, (i.e., written in the MD orders).

What is an order for observation services?

Observation services are covered only when provided by the order of a physician or another individual authorized by state licensure law and hospital staff bylaws to admit patients to the hospital or to order outpatient tests. In the majority of cases, the decision whether to discharge a patient from the hospital following resolution of the reason for the observation care or to admit the patient as an inpatient can be made in less than 48 hours, usually in less than 24 hours. In only rare and exceptional cases do reasonable and necessary outpatient observation services span more than 48 hours.

The signature requirements must meet the guidelines in the Centers for Medicare & Medicaid Services (CMS) Internet-Only Manual (IOM) Publication 100-08, Medicare Program Integrity Manual, Chapter 3 Section 3.3.2.4 D Signature Requirements. (1 MB)

Hardcopy order sheets:

• If signature is not legible – verification of signature showing MD name in print with signature in the form of an attestation statement by the MD or a document prepared by the MD or compliance officer.

Electronic orders include:

• Screen print of order with notation such as “Electronically signed by”
• Physician’s name
• Copy of security protocol describing the physician’s unique sign on ID and password requirements

Related Content

• CMS IOM Publication 100-02, Medicare Benefit Policy Manual:
  • Chapter 1, Section 10: (214 KB)
    • The physician or other practitioner responsible for a patient's care at the hospital is also responsible for deciding whether the patient should be admitted as an inpatient.
  • Chapter 6, Section 20.6
    • In accordance with the Social Security Act (SSA) Sections 1862(a)(1)(A) and 1814(a)(3)
      “…payment for services furnished an individual may be made only to providers of services …  if, … a physician certifies that such services are required to be given on an inpatient basis for such individual’s medical treatment.”

Reviewed 11/14/2024