Internal Medicine Coding Alert
READER QUESTION ~ Location Won't Drive Observation Service Coding
Published on Wed Mar 07, 2007 
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Question: Our internist performed an observation service on a patient who was not in the observation area of the hospital. Can we still report an observation code?
Texas Subscriber
Answer: Location is not the most important factor when deciding whether to use an observation E/M code or not. The patient does not have to be in a designated observation unit for you to use the codes.
Remember it this way: Observation is a status, not a location where the service occurs.
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