You said this was a Medicare pt. but did not address if you are a CAH or PPS hospital.
CAH you split the bill into two stays. When pt met inpatient criteria he should have been discharged from observation, end of acct. Then readmitted with new acct number for inpatient.
PPS you have to change admit date and time to when the patient met inpatient criteria. all charges would go on the bill as 72 hr rule, and on an inpatient bill there are HCPCS, so do you need the codes?

Amy