# Observation to Inpatient



## ARCPC9491

Okay ... here's my cookie cutter scenario ... 

Day 1 - Admitted to Observation
Day 2 - Still in Observation
Day 3 - Status Changed to Inpatient 
(Do you bill for Inpatient Admission here?)
Day 4 - Subsequent Care
Day 5 - Inpatient Discharge

I'm thinking if the status changed to inpatient, you only bill the inpatient stay ... I can't seem to find documentation on this ... it's been a rough day!

Thoughts??


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## FTessaBartels

*You can do it either way*

AR,
If your hospital actually "changes" the status of the entire visit to inpatient, then you might be able to just bill the inpatient admission code for day 1 and subsequent visits up till discharge day. (That's what we generally do.)

However, I have been to many seminars where this scenario has been described and the answer was to code:
Day 1  99218-20 Initial Observation
Day 2  99211-15 Outpatient established visit
Day 3  99221-23 Initial Hospital visit
Day 4  99231-33 Subsequent hospital visit
Day 5  99238-39 Hospital discharge management

Obviously this second approach requires TWO H&P/admission documents - one for observation and one for the initial hospital visit. (That may be why we opt to use option 1.)

F Tessa Bartels, CPC, CPC-E/M


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## ARCPC9491

Thank you!

Now my question is ...... is we code for both the observation days and then the inpatient admission ...... will Medicare reimburse for both? What is their standpoint on this?


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## ARCPC9491

Okay, I did my homework

Here's my findings...I wanted to share with everyone.

Observation Coding

If admission to observation is 8 hours or less on same calendar day, report 99218 – 99220 
No observation discharge is reported.

If admitted and discharged from observation on different calendar days, report 99218 – 99220 and observation discharge, 99217

If admitted to observation for a minimum of 8 hours, and discharged less than 24 hours, report same day admit/discharge, 99234 – 99236

If admitted to observation and patient stays in observation for more than 2 calendar days, report 99218 – 99220 and 99211 – 99215 for days subsequent to observation admission, also report observation discharge, 99217 

If admitted to observation and then inpatient on same day, report only inpatient admission, 99221 – 99223.  Do not report initial observation or observation discharge.

If admitted as inpatient from observation subsequent to the date of admission to observation, report 99221 – 99223 for the date of inpatient admission.

	Example:		Day 1		Admitted to Observation	(99218 – 99220)
				Day 2		Subsequent Observation	(99211 – 99215)
				Day 3		Inpatient Admission		(99221 – 99223)	
				Day 4		Subsequent Hospital Care	(99231 – 99233)
				Day 5		Discharge Planning		(99238 – 99239)


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## cdcpc

AR,
Thank you for posting this question.  I run into this situation all the time and it's great to get come expert advice.  
FTessa--thanks for your input and help


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## ARCPC9491

*New Question(s)*

Here's a question the docs are asking now :

If they are to only bill the inpatient stay subsequent to the admit to observation ....... so in other words, they just aren't going to bill for the observation ....... is this okay? Is deliberating not billing for something ok? I know it sounds like an awkward question but normally on an "outpatient basis" the patient is responsible for more money and on an "inpatient basis" the insurance has to pay more out, as well all know - so would this fall under the False Claims Act somehow?  

Anyone ... ??

Question #2:

If they do choose to bill for both the observation and inpatient stay .... the doctors want to know why they would have to re-dictate an inpatient H&P .... I know they have the code requirements to uphold .... but the way they are relaying it to me is "Well, we admit them to observation...they stay for 2 days... we do labs and find out something is elevated, so we have to admit them ... why would we have to redictate the whole H&P when nothing else has changed except for the elevation in labs?"

I see their point, and I know my point ....  Anyone??

THANKS!


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## FTessaBartels

*Redictating the H&P*

If they want to bill for the Initial Hospital Visit, then they need to have documentation of *that service done on that date* of service. The only way to do this is to dictate another H&P. 

As to your first question ... well some might argue that you are overcharging by charging for TWO admissions for ONE hospital stay. Bear in mind that we *bill each date of service*, it's just that we charge the Initial Hospital Visit on day 1, and subsequent hospital visits on each day following until Discharge date.  So with your original example we would bill:
Day 1 - Initial Hospital Visit  (99221-23)
Day 2 thru 4 - Subsequent hospital visit (99231-33
Day 5 - Discharge (99238-39)

F Tessa Bartels, CPC, CPC-E/M


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## Herbie Lorona

"I know it sounds like an awkward question but normally on an "outpatient basis" the patient is responsible for more money and on an "inpatient basis" the insurance has to pay more out, as well all know - so would this fall under the False Claims Act somehow?"


*I guess it would depend on the insurance thought as to it costing the patient more for outpatient then inpatient. For example with Medicare when it comes to the dr billing the observation days and inpatient days the patient is is responsible for the 20% for both the inpatient and observation days.*


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## Anna Weaver

*obs to inpt*

My question is:
If you charge the patient as an inpatient from day 1 when they were actually admitted as observation, shouldn't your charges match the hospitals? When they have them in as outpatient for 2 days, that's what will be charged for room charges etc. (correct?) then you charge inpatient charges, if this visit is audited would this be a concern?


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## ARCPC9491

Anna Weaver said:


> My question is:
> If you charge the patient as an inpatient from day 1 when they were actually admitted as observation, shouldn't your charges match the hospitals? When they have them in as outpatient for 2 days, that's what will be charged for room charges etc. (correct?) then you charge inpatient charges, if this visit is audited would this be a concern?



Anna,
We would charge inpatient the day their status changed from observation to inpatient, not from day 1 when they were observation. So our charges would match the hospitals.

The question is... when their status does change to inpatient, do we ONLY bill the inpatient stay OR bill for the days they were in observation as well.

and ... if we only bill the inpatient stay, would we get in trouble for not reporting the observation?


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## magnolia1

Why not do a split-billing?

Karen Maloney, CPC
Data Quality Specialist


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## FTessaBartels

*Re-read my earlier post*



Anna Weaver said:


> My question is:
> If you charge the patient as an inpatient from day 1 when they were actually admitted as observation, shouldn't your charges match the hospitals? When they have them in as outpatient for 2 days, that's what will be charged for room charges etc. (correct?) then you charge inpatient charges, if this visit is audited would this be a concern?



Anna,
You have a very valid point. But if you re-read my earlier post ... our hospital *changes the status of the ENTIRE visit to inpatient* once the patient has been admitted.
So in the case of Mary Jane who was admitted to observation status on Sept 1, stayed in that status on Sept 2, was transferred to inpatient status on Sept 3, Stayed inpatient on Sept 4, and discharged Sept 5 ... The hospital we are affiliated with will change the status of Mary Jane's entire stay to inpatient, effective with Sept 1 (the first date she presented for service).
I believe the hospital does not code their services until discharge; but don't hold me to that since I work for the doctors, not the hospital. 

So, our physician charges DO match the hospital's. That's why we wait to code until discharge, or at least 7 days of inpatient stay. 

F Tessa Bartels, CPC, CPC-E/M


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## Anna Weaver

*obs to inpt*

Thanks for clarifying, but I'm still confused. I would think that since the admitting orders are dated on the first date and state admit to observation, then 2 days later the orders are there for admit inpatient, if this is audited, the orders will not match the charges. Do you know if the hospital has been audited? I'm just curious and trying to understand. I've been told that you must, under no circumstances retro an admit. 
Thanks for helping me understand!!!


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## ARCPC9491

I'm confused too  

If you are changing the entire stay to inpatient even from the day 1 when they were admitted to observation, how is that correct? it seems that they should only charge inpatient for the day they were inpatient to discharge. if they hospital changes the entire stay to inpatient, what does the physician bill for the services they rendered for obs and inpt?

I guess from a hospital stand point, does it matter whether they are inpatient or outpatient? I don't know anything about hospital billing but do they indicate to the payer whether it's obs or inpt? because essentially regardless of status, they're billing the same thing right?

please clarify...


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## gsmith

*one possible solution*

We just tackled this question for our hospital group.  It does make a difference if the hospital bills for outpatient and the doctor bills as inpatient.  Many payers compare the place of service on both bills when processing a hospital stay.  
You should not retro an admit.  Bill the observation code for day 1; if on day 2 the patient is admitted, bill the admit code.  Documentation should show the order for admission and reference the original h&p but they don't have to redo the whole h&p. If the conversion happens on day 1 then bill only for the inpatient admission.
For an observation that extends past 2 days, use an OP office visit code for those days.


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## astrid

I guess Im just really confused on this.  Some of the patients our docs are seeing as in-patient consultations have been put on abservation floors. Can the insurance companies deny these in-patient billings if theya re on observation?  

Please help.


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## afhernandez

*Hi AR*

I'm look into billing for a hospital Nocturnits, do you have any information that can help me?
Thank you


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## AmandaBriggs

The physical location of the patient does not matter.  A patient may be on an "observation" floor but be inpatient.  Likewise, a patient may be in the ICU and be observation status.  The determining factor is the order for admission.  I just did an audit on these for our clinic and the orders specifically state admit to observation or admit to inpatient.  If your physician is not the admitting physician for the observation codes, then they will bill outpatient visit codes.  If it is an inpatient then bill the inpatient codes appropriate to the service.


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## elenafrankie

I am billing a hospital claim, Do we bill for Observation charges as well as inpatient charges for the visit?

Patient is placed into observation on 07/01, admitted on 07/02 and discharged on 07/03.

Would we bill observation hours and 1 day of inpatient room and board?


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## Mperkes72

FTessaBartels said:


> *You can do it either way*
> 
> AR,
> If your hospital actually "changes" the status of the entire visit to inpatient, then you might be able to just bill the inpatient admission code for day 1 and subsequent visits up till discharge day. (That's what we generally do.)
> 
> However, I have been to many seminars where this scenario has been described and the answer was to code:
> Day 1  99218-20 Initial Observation
> Day 2  99211-15 Outpatient established visit
> Day 3  99221-23 Initial Hospital visit
> Day 4  99231-33 Subsequent hospital visit
> Day 5  99238-39 Hospital discharge management
> 
> Obviously this second approach requires TWO H&P/admission documents - one for observation and one for the initial hospital visit. (That may be why we opt to use option 1.)
> 
> F Tessa Bartels, CPC, CPC-E/M


Hi, 
So is this each profee like 5 different ones or can you on one encounter form use OB, Outpatient and Inpt codes? I sure hope that made sense.


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