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Observation and Inpatient (E/M) Common Denials and Resolutions

Below provides a processing overview for observation and inpatient evaluation and management (E/M) claims billed after an already processed observation or inpatient E/M claim. To view options for the provider, find your denied CPT code in bold below, and review the options based on the other previously processed code.

Key Points

  • Deciding factor is provider's specialty and not provider's group affiliation
  • First claim received, first to pay
  • Sub-specialties are non-factor for all scenarios
  • Providers should review with the other provider(s) caring for the patient to ensure proper billing. Most denials occur when an inpatient E/M is billed after an outpatient E/M and vice versa. The first E/M sets the precedence for the claims that follow.
    • Example:
      • 1st provider billed and approved for CPT 99218 (Outpatient)
      • 2nd provider bills CPT 99232 (Inpatient) the following day and will deny
X
 

Inpatient Admittance (99221-99223)

E/M in History Denial and/or Provider Resolution
99221-99223; 99231-99239
  • May reimburse if different specialty or same specialty/different diagnosis is billed
  • Deny if same specialty/same diagnosis is billed. Provider may submit an appeal
99217, 99218-99220, 99224-99226
  • Deny if billed on same day
99234 - 99236
  • Will deny; Provider must prove an admit/discharge/admit on same day situation

 

Inpatient Subsequent Visit (99231-99233)

E/M in History Denial and/or Provider Resolution
99221-99223; 99231-99239
  • Reimburse if different specialty or same specialty/different diagnosis is billed
  • Deny if same specialty/same diagnosis is billed. Provider may submit an appeal
99218-99220
  • Deny if billed on same day
99217, 99224-99226, 99234-99236
  • Deny if billed on same day

 

Inpatient Discharge (99238-99239)

Note: Only one 99238-99239 is allowed per stay

E/M in History Denial and/or Provider Resolution
99221-99223; 99231-99239
  • Reimburse if different specialty or same specialty/different diagnosis is billed
  • Deny if same specialty/same diagnosis is billed. Provider may submit an appeal.
99217, 99224-99226
  • Deny if billed on same day
99218-99220  
  • Deny if billed on same day. Provider must prove an observation admit occurred after patient was discharged. Provider may submit an appeal request
99234-99236
  • Will deny; Provider must prove a discharge/admit/discharge on same day situation. Provider may submit an appeal request
99238-99239  
  • Deny if billed on same/consecutive days or no admit in-between two discharges

 

Outpatient/Observation Discharge (99217)

E/M in History Denial and/or Provider Resolution
99221-99223
  • Reimburse if billed day before
  • Will deny if billed on same or next day
99224-99226
  • Reimburse if different specialty or same specialty/different diagnosis is billed
  • Deny if same specialty/same diagnosis is billed
99231-99233, 99238-99239, 99218-99220
  • Deny if billed on same day
99234-99236
  • Will deny; Provider must prove an admit/discharge/admit on same day situation. Provider may submit an appeal request to prove an admit/discharge/admit on same day situation

 

Outpatient/Observation (99218-99220)

Note: 99218-99220 can only be approved the day before an admit 99221-99223 without the presence of a 99217

E/M in History Denial and/or Provider Resolution
99218-99220
  • Reimburse if different specialty or same specialty/different diagnosis is billed
  • Deny if same specialty/same diagnosis is billed. Provider may submit an appeal request
99221-99223
  • Deny if billed on same or next day
99224-99226
  • Reimburse if different specialty or same specialty/different diagnosis is billed
  • Deny if same specialty/same diagnosis is billed
99217
  • Deny if billed on same day
99231-99233
  • Deny if date of service (DOS) billed is prior to/on same/or after 99231-99233 DOS
99234-99236
  • Will deny; Provider must prove an admit/discharge/admit on same day situation. Provider may submit an appeal request
99238-99239
  • Will deny; Provider must prove patient was admitted to outpatient/observation after inpatient discharge. Provider may submit an appeal request

 

Outpatient/Observation Subsequent Visit (99224-99226)

E/M in History Denial and/or Provider Resolution
99221-99223
  • Reimburse if billed day before
  • Deny if billed same or next day
99217-99220, 99224-99226
  • Reimburse if different specialty or same specialty/different diagnosis is billed
99231-99233
  • Deny if DOS is billed is prior to/on same/or after to 99231-99233 DOS
99234-99236
  • Will deny; Provider must prove a discharge/admit/discharge on same day situation. Provider may submit an appeal request
99238-99239
  • Will deny; Provider must prove patient was admitted to outpatient/observation after inpatient discharge. Provider may submit an appeal request

 

Admittance/Discharge on Same Day (99234-99236)

E/M in History Denial and/or Provider Resolution
99217-99239
  • Will deny; Provider must prove an admit/discharge/admit on same day situation. Provider may submit an appeal request

 

Last Updated Aug 17, 2017