We had a patient who was initially under 23 observation stay but the case management in the hospital couldn’t get it approved for inpatient stay. She is a patient with severe comorbidities and complications. She had to stay in the hospital for 5 nights before discharge. Since hospital classified it as outpatient we have no choice but to bill 99211-99214 codes. However, our biller said that Blue Cross Medicare Advantage will deny the claims since we cannot bill outpatient codes consecutively for more than 3 days. I had called the hospital and they maintain that it is an outpatient stay.

What is the ruling for this situation and how do we go about billing it?
We have the medical records to prove service is rendered however, the technicality of outpatient stay of more than the 2 midnight rule is confusing.

Thanks.