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2012 Texas Medicaid Provider Procedures Manual

Inpatient and Outpatient Hospital Services Handbook : 4. Outpatient Hospital (Medical/Surgical Acute Care Outpatient Facility) : 4.2 Services, Benefits, Limitations, and Prior Authorization : 4.2.4 Outpatient Observation Room Services : Direct Outpatient Observation Admission
A client may be directly admitted to outpatient observation from the evaluating practitioner's office without being seen in the emergency room by a hospital-based practitioner. The practitioner's order should clearly specify that the practitioner wants the client to be admitted to outpatient observation status. An order for “direct admission” will be considered an inpatient admission unless otherwise specified by the practitioner's orders.
Brief observation periods following an office visit or at the direction of an off-site practitioner that involve a simple procedure (e.g., a breathing treatment) would be more appropriately coded as a treatment room visit.

Texas Medicaid & Healthcare Partnership
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