Q&A: How are Observation Services Paid?

Q: How are covered observation services paid?

A: Covered observation services can be paid in three ways:

1. They are packaged into the C-APC for observation services (8011)
2. They are packaged into a visit APC for direct referral for observation
3. They are packaged to the other services on the claim

The C-APC for observation services makes a single payment for encounters that include a clinic or critical care visit along with observation if no surgical service is provided.

For more information, see the Patient Status Training Toolkit for Utilization Review.

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