If the patient is converted to an inpatient status on the same day as the OBS admission, only an initial inpatient-care service is reported (e.g., 99222). For billing purposes, it is not necessary to redocument another history and physical exam (H&P), but hospitalists should write the new order for inpatient admission and update the OBS assessment with any relevant, new information to justify the need for conversion.
If the inpatient conversion occurs on the second calendar day of the OBS stay, the physician is allowed to report the initial observation care code (e.g., 99220) on day one, and the initial inpatient care code (e.g., 99223) on day two.4 Keep in mind that the physician must then meet the documentation guidelines for initial hospital care and redocument a complete H&P to support the reported code (e.g., 99223=a comprehensive H&P and high-complexity decision-making). The hospitalist is only permitted to reference the previous review of systems and histories, and must redocument the history of present illness, exam, and decision-making.
If the physician decides not to document to this level of detail in support of the initial hospital-care service, reporting a subsequent hospital-care code (99231-99233) is considered reasonable. The physician should not report the OBS discharge (99217).