Adding Charges - Urban Myth?

When an encounter has been determined NOT to meet inpatient requirements and changed to outpatient, can we go back and add charges, that would have been posted had the encounter been outpatient from the beginning, before we submit the claim?  Does it matter if the claim has already been billed and denied?  There seems to be an urban myth that once you bill the claim as inpatient, you can't change the total dollars.


  • Woud love to hear form others but for Medicare, don't do it. For all others, what does the payer or contract and payer representative say? If they tell you "bill it as observation and we will pay you" then to me they are authorizing adding observation charges even though it was not ordered. 
  • We wouldn't add observation charges since there was no order.  Should we go back and look for charges like injections, infusion services, etc. that would normally not be posted to an inpatient encounter.  Does this make more sense?
  • My philosophy is that If a person at a payer says something such as “you can bill observation” that they should honor that. They are not saying the whole hospital stay was unnecessary, but only that the patient was hospitalized in the wrong status and should have been observation. Therefore, since they said you can bill Observation, and they know there is no observation order, it goes without saying that you can add the observation hours to the claim so the claim can be paid as an observation stay. I will add here since it will come up that the patient received inpatient services but they are billing as observation services so a MOON or other observation notice is not necessary.

     Paying only ancillary services means they felt the whole stay was not medically necessary but you can get paid for the blood tests and xrays.

    Placing the patient in the wrong status and the payer denying that after the fact is not, in my mind, a reason to not get paid one cent for room and board or nursing for what the payer admits was an appropriate hospital stay.  

  • One thing to consider regarding a payer instructing to bill a claim as an observation service, for that payer, the observation hours replace the IP room and board that was reported for the IP claim.  If the payer instructs you to bill a claim in this manner, it is for claims processing and reimbursement purposes.  There would be an IP order and then the individual payer instruction that would support the change in the look of the charges.  I don't recommend adding charges. You can bill under the payer's contract based on what was already charged.  It would be a good exercise for discussion internally to see what can be negotiated in the next contract update with non-federal payers.   
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