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Observation services must be billed with Revenue Code 762 or 769. These services should be billed with one unit/day for every 24 hours. These codes do not multiply.
The observation period begins when the attending physician formally admits the patient to observation status. When the observation stay must span two calendar days to equal 24 hours, observation should only be billed for one day. If more than one day is involved, make sure to include the date ranges. Observation services related to and within 72 hours of an admission are considered inpatient services and are included in the inpatient DRG payment. Do not substitute outpatient observation services for medically appropriate inpatient admissions.
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