The hospital is allowed on post review to determine that the patient met the criteria for observation and the must then REQUEST from the physician an order in the chart to convert the admission to an observation. The both the faciltiy and the physcian may bill as an observation. If you go to the CMS websit and search the transmittals you should be able to find this one, it was issued several years ago, I am thinking around 05 or 04.
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