Inpatient Status to Observation

Sep. 15, 2015

Effective October 9, 2015 Blue Cross Blue Shield of Montana’s (BCBSMT) Medicare Advantage Product will be implementing an internal process change for benefit determinations related to inpatient status vs. observation status. Observation status refers to the classification of hospital patients as outpatients, even though, like inpatients, observation patients may stay for many days and nights in a hospital bed, and still receive the classification of outpatient. A patient can remain in observation status for 24-48 hours based on a doctor’s judgment and need for medically necessary hospital care.

Diagnoses that were formerly approved as inpatient status may now instead be approved as observation status when clinically appropriate. When a facility calls to notify BCBSMT of an admission, if the diagnosis code is on BCBSMT's observation status list, then the facility will be granted observation status rather than inpatient status. If the facility disagrees with this determination and believes the patient requires inpatient status then the facility will be transferred to a Medical Review nurse to discuss the clinical criteria further and the facility may need to submit clinical information to support an inpatient stay.


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