First obs or inp is a status assigned by the attending physician not case management. If the physician did not write an order to convert the stay to inpatient then the stay is still obs. If the physician did write the order then did he convert the stay to inpt or did he order admit to inpt on a certain day. If the order is to convert to inpt then the entire stay is inpt and if you have already billed the first day as obs you will need to submit a corrected claim for the stay as inpt. If the order is to admit as of say day 2 of obs then you must discharge from obs and admit to inpt. and you will bill the admit level. To convert the stay is less work work for the physician as his obs admit note is now the inpt admit note. Most hospital would prefer that the physician convert the stay.
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