Why would observation services deny when rendered in a hospital?
Denials may be due to the place of service reported. Observation services should be reported as place of service 22, outpatient hospital, and not place of service 21, inpatient hospital. This is supported by CMS Publication 100-4, The Medicare Claims Processing Manual, Chapter 12, Section 30.6.8 that you can access through the following link: http://www.cms.hhs.gov/manuals/104_claims/clm104c12.pdf Visits by other physicians while the patient is in observation status should be billed using the office and other outpatient service codes or outpatient consultation codes as appropriate. In the rare circumstance when a patient is held in observation status for more than two calendar dates, the physician must bill subsequent services furnished before the date of discharge using the outpatient/office visit codes. The physician may not use the subsequent hospital care codes since the patient is not an inpatient of the hospital. Please see the December 2007 article for additional information.
Related Questions
- If an admission notice of noncoverage is issued, what happens to the observation/outpatient services? Is the hospital reimbursed for the services rendered before the admission?
- What are the fees and what are the time estimates for services rendered?
- Why would observation services deny when rendered in a hospital?
