Prior authorization is required for elective and direct placement into observation (ie from home, physician office etc). For participating hospitals only, authorization is not required for observation status less than 48 hours. For observation placements that become an inpatient stay, authorization is required for the inpatient stay. Authorization for services in these scenarios must be obtained and medical necessity must be met in order to be considered for payment of professional and facility services.
If an observation service occurs on the same date of service as an emergency room service, the observation service should be billed on the same claim as the emergency room service.