Changing Obsv to Inpt or vice versus

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We are getting notified by the Hospital to change the place of service on some patient accounts. This can be Inpatient to Obsv or Obsv to Inpatient. In some cases we have already been paid on the Physican side as an Inpatient using Inpatient codes and Inpatient POS so to change these is not a simple task and we are concerned due to the amount of these we are getting. Some of the DOS on these requests from the Hospital go back anywhere from 1 month to a year or more. The Insurance Carriers vary so we do not see a trend there. We are not getting denials from the Carriers, just the notification from the Hospital. We are a large Group Practice and the Physicians are Employees of the Hospital and the Hospitalists are Locums. We are concerned about the fact that these accounts have been paid and the patient billed, most of these changes involve more than just changing the POS and codes.

Also, if a patient comes in under Obsv and is admittted to Inpatient 1-2 days later, does this change the entire stay to Inpatient starting the beginning date of the Obsv service and the entire stay is coded as an Inpatient?

Please direct or send me any supporting documentation regarding these 2 issues.
This is the cheat sheet we have created for our Hospitalists. It kind of simplifies the guidelines. If it is observation it should be billed that way, once the patient had been admitted then you change it over to inpatient. HOPE THIS HELPS!!!


Observation Admission (99218-99220) can be reported only once on the first day of service by the Supervising Physician. For observation encounters by other physicians on this date, use the Office/Outpt Established or Office/Outpt Consult CPT codes.

Patient in observation status admitted & discharge on same date of service:
99234-99236 (Observation or Inpt care services same date)

Patient in hospital overnight for observation but less than 48 hours:
1st Day: 99218-99220 (Initial Observation Care)
2nd Day: 99217 (Observation Care Discharge)

If observation stay is longer than 48 hours:
1st Day: 99218-99220 (Initial Observation Care)
2nd Day: 99212-99215 (Est. Pt, Office/Outpatient)
3rd Day: 99217 (Observation Care Discharge)

Services immediately prior to admission are bundled into observation service. Ex: Office visit prior to observation admission would be bundled into the Initial Observation Care Service.

If the patient were admitted to the hospital from observation status on the same date, the physician would report only the Initial Inpt Hospital Care Code (99221-99223) POS: INPT.

For a patient admitted to the hospital on a date subsequent to the date of observation status, the hospital admission would be reported with the appropriate Initial Hospital Care Code (99221-99223). For Example:
1st Day: 99218-99220 (Initial Observation Care, POS: OUTPT)
2nd Day: 99221-99223 (Initial Inpt Hospital Care Code, POS: INPT
We have been told that once the patient is admitted all codes and services become Inpatient from the beginning of the stay. Please tell me where you are getting the information so I can show them documentation to support this.
In the CPT pg. 11 under Intial Obeservation Care... New or Established Patient 2nd paragraph. "For a patient admitted to the hospital on a date subsequent to the date of observation status. The hospital admission would be reported with the appropriate Initial Hospital Care code (99221-99223)."

It is a seperate calendar day. What was done and billed yesterday (before 23:59) doesn't change because the patient was admitted to the hospital today. Observation is outpatient, Initial Hospital is inpatient, BIG difference. Now if this all took place on the same DOS that would be inpt from the get go.

I don't blame you for wanting to verify.
The proof is in the CPT... kind of like the proof is in the pudding. ;)
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I believe where the hospital is "coming from" is that from a DRG window perspective, the official start of the stay is whenever the patient was first seen in the facility. For instance, when I'm coding the facility fee of an IP stay, I may begin at the ER. If I'm coding the pro fees for that stay, they begin only on the date of conversion or admission. Anything prior to that is outpatient, coded that way and irrelevant to the actual pro fee IP stay.

For years now, I've preached that the facility bill and professional bill may look nothing alike. However, I occassionally hear rumblings that payers will be comparing the two charges. Unless the payers have coders fully apprised in all aspects of coding, it's unlikely there'll be much success in that practice. The two claims really have very little to do with one another.