Outpatient Observation Bed/Room Services

Outpatient observation services are covered when a bed and periodic monitoring are used to evaluate an outpatient to determine the need for inpatient admission and must be ordered by a physician or authorized designee. Coverage requires patient-specific clinical justification (e.g., unstable medical condition or significant adverse reaction to a diagnostic/therapeutic service), precise documentation of clock times for start and end of observation, and risk stratification; routine recovery, blood-only administration, convenience, or facility SOPs do not qualify. Observation stays generally do not exceed 24 hours and claims over 48 hours may be subject to medical review.

"Observation services are covered when a bed and periodic monitoring are used to evaluate an outpatient's condition to determine the need for possible inpatient admission."

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