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Thread: Inpatient Vs Observation Service

  1. #1

    Default Inpatient Vs Observation Service

    AAPC: Back to School
    We have Physicians who see Inpatients at the hospital. They do not always know if the patient is in inpatient or observation status.

    When we get the encounter the Physician gives us the appropriate inpatient level of service, when we check the hospital system prior to billing out the claim, they may have changed the status to Observation.

    How do you handle these circumstances? In order to be paid we have to bill with the correct place of service and code appropriately?

    Can we change the code accordingly? or does the encounter go back to the Physician for a new code based on observation versus inpatient status?

    Currently we are changing the code to the appropriate level according the inpatient/observation status.

    Just need some guidance...

  2. #2
    Join Date
    Apr 2007
    Milwaukee WI

    Default Are these consultations?

    Why doesn't the physician know whether the patient is inpatient vs observation? Is it a consultation?

    If you are the admitting service, you SHOULD know how you admitted the patient. Nevertheless, I have seen cases where the hospital admitted them as inpatient vs observation (and vice versa). I go to the original admission orders of the physician to clarify and, if necessary, get the hospital to change the status.

    It sounds has if you have access to the hospital records, so I'd start with the admitting physician (if it's not MY physician) to determine if I should be using inpatient or outpatient codes.

    If you have an understanding with your physicians that you will change the code to appropriate inpatient vs outpatient codes, then, yes, go ahead and do so. But in the absence of such an understanding (and clearly written protocol), you'll need to send the info back to the physician to be re-coded for the appropriate status.

    Hope that helps.

    F Tessa Bartels, CPC, CEMC

  3. #3

    Default Status change after pt discharged

    What do you do if the physician admits the pt to inpatient status and after the pt has been discharged, the hospital changes it after medical review to observation? At the time of the service, the physician chooses the correct inpt code. If the hospital then changes the status, do we have to send a corrected claim to change the inpt code to the observation code? My thinking is it would be appropriate to bill the service provided at the time of service but then the status of the pt won't match when the insurance company gets the bills. Are there any guidelines in this situation? Help!

  4. #4

    Question Observations

    I need all the help I can get; I've just been coding for 1 yr. and recently obtained my certification and at my current job I'm doing outpatient surgeries and just started doing observations which are very confusing to me.

    So if there is anyone out there that could give me references or know of any resources that could help explain this to me I would be very appreciative.

    One of my questions would have to be: How do I know when an Observ. goes to inpatient and what is the criteria for this?

    I don't know if I can leave my email on this forum and would like to know that also.

    Thank you,

    Susan L. Minor

  5. #5
    Join Date
    Apr 2007
    Hartford, CT


    My docs are having the same problem. They are often asked to see a patient who is in the hospital and give me an inpatient code. I verify with the hospital what the staus is and then the status gets changed. We have had money recouped by the insurance companies because the hospital is changing the status after we have billed. I found out that the hospital is billing claims and if they get denied (example inpatient charges denied) they are then changing the status to observation and rebilling. We're trying to work with the hospital, but they are making it extremely difficult for us to bill correctly. At leaast I know others are having the same problem even if we don't know how to change it.

  6. #6


    In reading this thread, it seems to me that the hospital should not be changing the codes. We have to code based on documentation, not based on what will be paid. It also seems odd to me that there would be that many doctors called in to see a patient during observation other than the admitting doctor. Just my immediate thoughts on the previous posts.

    CPT indicates that the patient must be admitted to observation status. It also says this does not necessarily mean a specific area for observation, but that if an observation area exists, and a patient is admitted to the observation area, then observation codes should be used.

    I interpret this as follows: In the absence of a designated observation area, the provider must state "admitted TO observation for ______" vs "admitted FOR observation of ______." It is all about symantics in this case.


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