Billing for Observation - Update

Observation services should not be billed concurrently with diagnostic or therapeutic services for which active monitoring is a part of the procedure (e.g., colonoscopy, chemotherapy). In situations where such a procedure interrupts observation services, hospitals would record for each
period of observation services the beginning and ending times during the hospital outpatient encounter and add the length of time for the periods of observation services together to reach the total number of units reported on the claim for the hourly observation services HCPCS code G0378 (Hospital observation service, per hour).

This language was published February, 2008 for implementation in March, 2008. To read the full transmittal click here. Page 48 (of 68) begins the portion dedicated to billing and clock time for Observation services.