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  • Outpatient
  • Clinically appropriate services provided to patients before decision can be made regarding inpatient admission or discharge
    • Short term treatment
    • Assessment
    • Reassessment
  • Covered only when provided under physician order or someone authorized by state law and hospital staff bylaws to admit to inpatient status or order outpatient tests
  • Decision to admit or discharge should be made within 48 hours, usually less than 24 hours
  • Observation status generally assigned to patients who present to emergency department (ED) and then require treatment/monitoring before a decision to admit or discharge can be made
  • "Direct Admit" occurs when patient in community admits to observation bypassing ED or clinic

Not Observation

  • Not medically necessary or reasonable for diagnosis or treatment
    • Services provided for convenience of patient, patient's family, or physician
  • Services covered under Part A (medically appropriate inpatient admission)
  • Services that are part of another Part B service
  • Standing orders for observation following outpatient surgery



Last Updated Nov 04, 2015