# Observation vs Inpatient-Can anyone explain



## jdibble (Mar 29, 2010)

Can anyone explain which this would be - According to the status on my report, the patient is listed as Inpatient. However patient was admitted say at 4:00pm on the first day, and then discharged at 3:30pm the next day. The patient was in the hospital less than 24 hours. The billing department has stated that insurance has been denying the intial visit and discharge visits billed, however if they rebill with the initial observation and discharge, 99218-99220 & 99217, they are paying. So now the person who enters the charges has been changing the Initial visit and discharge codes billed for any inpatients whose stays are less than 24 hours to the observation codes.

My question is if a patient is admitted as an inpatient, not observation, but stays less than 24 hours is that now automatically considered observation and the coding needs to be changed? Or was the coding correct and the claim needs to be appealed?

Thanks for any input.

Jodi Dibble, CPC


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## mitchellde (Mar 29, 2010)

The hospital is allowed on post review to determine that the patient met the criteria for observation and the must then REQUEST from the physician an order in the chart to convert the admission to an observation.  The both the faciltiy and the physcian may bill as an observation.  If you go to the CMS websit and search the transmittals you should be able to find this one, it was issued several years ago, I am thinking around 05 or 04.


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## jdibble (Mar 31, 2010)

*Need more clarification*

Thank you Debra for your response. 

The issue I am having is that I can't find any documentation anywhere showing that the hospital or the doctor switched the patient from Inpatient to observation. It appears that billing is making the code switches based on the time the patient was in the hospital because the insurances were denying the Initial Inpatient and Disharge charges (99221-23 & 99238-39) as not valid codes for patient stay.  So now anytime a patient is admitted as Inpatient, but their stay is less than 24 hours, but on separate dates, they are converting the codes to 99218-20 & 99217.  My confusion is that if a patient is Inpatient less than 24 hours - but admitted as Inpatient, should the Hospitalist still be using the Observation codes? Is a stay of less than 24 hours always considered Observation?


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## mitchellde (Mar 31, 2010)

No it is not always an observation just based on length of stay, the billing staff should NOT be billing this way automatically.  Perhaps you should contact someone in UR.  Again the type of stay is up to the admitting physician.  Then only upon recommendation from UR with an agreement from the physician can the stay be changed after discharge.


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## mitchellde (Mar 31, 2010)

I pulled this statement off of a Medicare filefrom 2005
• Hospitals can convert and bill an inpatient case as an outpatient if the hospital utilization review committee determines before the patient is discharged and prior to billing that this setting would have been more appropriate. A physician must concur with the decision of the committee, and the physician’s concurrence and status
change must be documented in the medical record.


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## jdibble (Mar 31, 2010)

Thanks again Debra. I will look into this with the hospital.


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