RetiredUnitedHealthcarePolicy CS356LA.D

Hospital Services: Observation and Inpatient (Louisiana)

State-specific UnitedHealthcare Community Plan policy for Louisiana governing observation status (up to 48 hours) and inpatient hospital service requirements, notification/authorization expectations, billing guidance for outpatient encounter claims, and application of InterQual criteria for level-of-care decisions. Policy was retired April 1, 2026.

Policy Summary

PayerUnitedHealthcare

PolicyHospital Services: Observation and Inpatient (Louisiana)

Policy CodePolicy CS356LA.D

Change TypeRetired

Effective DateJan 1, 2026

Next Review Date

Key ActionObtain MCO authorization for any observation services beyond 48 hours and notify the MCO within one business day if converting observation to an inpatient admission.

POLICY UPDATE CHANGES

Retired policy; Louisiana plan membership disenrolled on Apr. 1, 2026.

Supporting information and References section updated on 01/01/2026; previous version archived as CS356LA.C.

48Max Observation Coverage Duration

1Notification timeframe (business days) for admission

04/01/2026Policy retirement date

Coverage Summary

This is a Louisiana-specific UnitedHealthcare Community Plan coverage policy for Hospital Services: Observation and Inpatient (Policy CS356LA.D). Status: RETIRED (effective Apr 1, 2026). The policy was effective January 1, 2026 with last review April 1, 2026 and membership disenrolled on April 1, 2026. It governs observation status (clinical observation up to ≤ 48 hours), inpatient hospital requirements, billing guidance for outpatient encounter claims, notification and authorization expectations, and use of InterQual to support level-of-care decisions. Notification to the MCO for conversions to inpatient status is required within 1 business day of the order to admit.

Medical-Necessity Criteria

State-Specific Observation Procedure

Covered when ALL of the following are met:

ALL of the following

Observation status reimbursed up to 48 hours for medically necessary care to determine need for further treatment, inpatient admission, or discharge.≤ 48 hours
Observation and ancillary services do not require notification, precertification or authorization and will be covered up to 48 hours.≤ 48 hours
Billing instruction: Hospitals should bill the entire outpatient encounter, including emergency department, observation, and any associated services on the same claim with the appropriate revenue codes; covered services processed and paid separately.
Operational billing instruction
Any observation service over 48 hours requires MCO authorization.> 48 hours
For observation services beyond 48 hours that are not authorized, MCOs shall deny only the non-covered hours.
If anticipated observation beyond 48 hours, hospital must notify MCO as soon as reasonably possible for potential authorization of extension.

Observation-to-Inpatient Procedure

Admission/conversion rules and notification requirements:

ALL of the following

Length of stay alone should not determine denial of inpatient stay or downgrading to observation.
Medicaid enrollees should not be automatically converted to inpatient status at end of 48 hours; admission cannot be denied solely on basis of time spent.
All hospital facility charges on hospital day one are included in the inpatient stay and billed accordingly inclusive of ED/observation facility charges.
Professional charges should continue to be billed separately.
All observation status conversions to an inpatient hospital admission require notification to the MCO within one business day of the order to admit the enrollee.

Inpatient Hospital Services Requirements

Inpatient services covered when ALL applicable requirements are met:

ALL of the following

Definition: Inpatient hospital care defined as care needed for treatment of illness/injury which can only be provided safely and adequately in a hospital setting.
Includes basic services expected of a hospital; services that can be provided at home or are custodial/cosmetic are not reimbursed.
Exclusions: MCO shall not reimburse care that can be provided in the home or for which the primary purpose is custodial or cosmetic.
Ordering: Inpatient hospital services must be ordered by an attending physician or other licensed/qualified health care provider, an emergency room physician, or a dentist when monitoring is required during an authorized dental procedure.

Use of InterQual

Clinical decision support:

ALL of the following

InterQual support: UnitedHealthcare uses InterQual criteria to support medical necessity and level-of-care decisions when applicable; InterQual is intended as support for independent professional medical judgment.

Provider Actions & Requirements

Prior Authorization

Authorization for observation >48 hours

Obtain MCO authorization for any observation services beyond 48 hours. If observation hours beyond 48 are not authorized, the MCO may deny only the non-covered hours.

Prior Authorization

Out-of-state non-emergency inpatient prior authorization

Obtain prior authorization for out‑of‑state non‑emergency inpatient hospitalization unless the enrollee is dual Medicare/Medicaid eligible. Check the MCO contract for any additional authorization requirements or exclusions.

Documentation Required

Observation order and physician documentation

Document an observation order and physician care in the medical record: include an order for observation, timed/written/signed progress notes, and a discharge note to show the enrollee was under physician care during the observation period.

Billing Rule

Single claim for outpatient encounter

Bill the entire outpatient encounter (ED, observation, and associated services) on the same claim using the appropriate revenue codes; professional charges should be billed separately.

Note

Notify MCO on inpatient admission

Notify the MCO within one business day of the order to admit when converting observation to an inpatient admission. Acceptable notification methods include MCO provider portals, admit/discharge/transfer (ADT) notifications, and other mediums accepted by the plan.

Coding & Billing Instructions

Billing instruction (revenue codes reference)mixed

No codes listed

Operational billing and submission instructions: hospitals should bill the entire outpatient encounter — including emergency department, observation, and any associated services — on the same claim using the appropriate revenue codes; covered services (facility and ancillary) will be processed and paid separately. Professional (physician) charges should be billed separately from facility charges. For observation services anticipated beyond 48 hours, obtain MCO authorization; if not authorized, MCOs may deny only the non-covered hours. When converting observation to inpatient, notify the MCO within 1 business day using accepted methods (e.g., provider portals, ADT notifications).

Background & References

Background: This state-specific policy implements Louisiana Department of Health requirements for Medicaid managed care observation and inpatient hospital services. It clarifies observation definitions (observation care: minimum one hour and up to 48 hours; enrollee must be under physician care), billing expectations (single claim for outpatient encounter with professional charges billed separately), authorization thresholds for extended observation (authorization required for observation beyond 48 hours), and notification timelines for conversions to inpatient status (notify MCO within 1 business day of the order to admit). UnitedHealthcare references InterQual criteria to support level-of-care decisions and cites the Louisiana Medicaid MCO Manual (updated April 23, 2025) as a regulatory reference.

Definitions

Observation CareA set of clinically appropriate services furnished while determining whether an enrollee will require formal inpatient admission or be discharged; minimum of one hour and up to 48 hours; enrollee must be in the care of a physician with documentation.

Observation TimeThe period beginning when an order is written to place an enrollee in observation status or when the enrollee presents with such an order, ending with discharge or an order for inpatient admission.

OpenPayer

Hospital Services: Observation and Inpatient (Louisiana)

Coverage Summary

Medical-Necessity Criteria

Provider Actions & Requirements

Coding & Billing Instructions

Background & References

Evidence & References

Revision History

Reference	Details
InterQual Level of Care: Acute Adult and Acute Pediatric
Louisiana Medicaid MCO Manual (updated April 23, 2025)