What is Observation vs Inpatient status vs Out Patient In Bed [OPIB] status?

I have been a physician advisor for a few years and I will try to explain these concepts in a simple language.

As a physician advisor, the most important thing that we will be doing is to determine the status of the patient. Most of the times we are stuck trying to determine between inpatient status versus observation. The factors which determine the status are severity of illness and intensity of care. Another factor which is very important is length of stay. Medicare and Medicare advantage plans should strictly follow 2 midnight rule to determine the status.
The recommendation is not black-and-white. The 2 guidelines we can use are InterQual and MCG guidelines. The commercial payers, however, are not allowed to deny inpatient status based on the guidelines only. This is where the 2 midnight expectation comes into play. You could have seen webinars conducted repeatedly on 2 midnight rule just trying to understand it better. It is important to understand the definitions of different statuses as these have direct impact on the billing.

Observation he is when a patient is admitted to the hospital during which the physician is trying to determine whether the patient needs continued treatment or can be discharged after 1 midnight stay. If the patient continues to need hospital stay for treatment after 1 midnight, he would most probably be meeting criteria for inpatient status based on the severity of illness or intensity of care.

Inpatient status is when the patient requires severe intensity of care due to high severity of illness, usually more than 1 midnight. There are exceptions to inpatient status especially when the patient gets transferred to higher center of care or dies or signs out AGAINST MEDICAL ADVICE or admitted to inpatient hospice care or recovers unexpectedly/quickly. Length of stay does not have to be strictly more than 2 midnights.

Outpatient in bed [OPIB] is when a person gets surgery and goes home the same day or may stay in the hospital overnight and get discharged on the next day. In this situation, neither observation or inpatient status order is required.

The phrase “the patient is admitted to the hospital” does not automatically mean that the patient is in inpatient status. It is very important to tell the patient that status under which the patient is getting admitted during the time of admission as it can have financial impact for the patient.

If the Medicare patient is admitted under inpatient status and later the physician advisor and the patient’s attending determined that the patient should be observation, then the patient should be given MOON to inform the patient about the change as per CMS.

The patient gets admitted after surgery under outpatient in bed status, but ends up having complications requiring further medical care beyond 2 midnights, the status may have to be changed to observation versus inpatient status based on the patient’s condition and the treatment rendered.

On a daily basis, the UM nurses play a vital role in helping the physician advisors both by helping change the status appropriately by reaching out to the attendings and also by reaching out to the physician advisors when in doubt.

As a physician advisor, we have to take decisions to change the patient’s status between outpatient and inpatient multiple times a day on different patients. That is why it is very important to understand these concepts.