Question ED Admission which was later cancelled.

I'm needing some assistance on what the appropriate CPT code and POS would be for a patient whom presented to the ED, an order for admission from the ED provider was made, the hospitalist saw the patient for an initial hospital visit and billed 99222 w/pos 21. Then, the patient was seen by surgery and was discharged later that day, but never actually left the ED and the patient's status is ER. The insurance is obviously denying the 99222 since the patient was never actually admitted. What CPT code and POS would be appropriate for this type of service? Thank you in advance for your expertise and advice!

If an order was placed to admit, then there's a snafu with your system. They were still physically in the ED but the order means that they were admitted. You can be admitted (by order) and be lying on a bed in the hallway....still in an IP status. Happens all the time. Why the status wasn't changed when the order was signed, is a mystery to me. (generally it happens automatically)
However, you can try to appeal with a copy of the order, but if that doesn't work, you'd bill an ED visit with the emergency room POS.