M1000 answer depends on type of observation

Dear Lisa: We are receiving many referral from hospitals that the patient was listed as “observation only.”  How do we mark M1000?

Lisa says: Your answer depends on whether the observation was inpatient or outpatient observation. If the patient was inpatient observation then the patient was discharged from a facility. If the patient was billed as outpatient, then it does not count as an inpatient facility discharge. 

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