If your physician is the admitting for observation services, you would use initial observation care code (99218-99220) and then 99217 on the date of discharge. I thought I read that the AMA stated that if the patient was receiving observation services for 48 hours and since there is not a subsequent observation care code for the second day if they are not discharged---that for this situation you would bill 99499.
I would reveiw the above link for guidance for billing Medicare
If a consultation was requested of your doctor from the admiting. You would bill 99241-99245 for a Non-Medicare payer. If Medicare is the carrier or a replacement plan that follows their guidelines then like you said you would use the three year rule on determine whether the patient was new or established and bill outpatient follow up codes if the patient had been seen by the physician or a physician of the same speciality of the same group within the last three years.
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