CurrentUnitedHealthcarePolicy 2025F7016D

Hospital Outpatient Observation Services (UB-04)

This reimbursement policy governs billing and payment for hospital outpatient observation services (HCPCS G0378/G0379) for UnitedHealthcare Community Plan Medicaid products and applies to facility claims submitted on the UB-04 form or electronic equivalent.

Policy Summary

PayerUnitedHealthcare

PolicyHospital Outpatient Observation Services (UB-04)

Policy CodePolicy 2025F7016D

Change TypeNo material changes

Effective Date

Next Review Date

Key ActionReport G0378 under revenue code 0762 with units representing hours (rounded to the nearest hour).

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

8Minimum hours for reimbursement

30NC maximum hours

48Common state cap

0762Revenue code

G0378/G0379HCPCS codes

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Observation coverage and billing criteria

Facility reimbursement for observation services is subject to the following criteria and state-specific exceptions.

Report observation services with type of bill 13X, 78X, or 85X and revenue code 0762

Report HCPCS code G0378 (hospital observation service, per hour) with units representing hours (rounded to the nearest hour); bill on a single line using the date observation begins

G0378 will only be considered for reimbursement when the observation period meets or exceeds 8 hours unless state regulations allow otherwise

G0378 should not be reported when monitoring is inclusive of, or included in payment for, a surgical, diagnostic, or therapeutic procedure; G0378 will not be reimbursed when reported in addition to procedure codes assigned CMS IOCE status indicators J1 or T

ALL of the following

ANY of the following
- Emergency Department visit (CPT 99281-99285 or G0380-G0384)
- Clinic visit (HCPCS G0463)
- Critical care (CPT 99291)
- Direct referral/admission for observation (HCPCS G0379) reported on the same date as G0378

Report HCPCS code G0379 for direct referral/admission to observation when no ED, clinic, or critical care service is on the same date; G0379 is not separately payable if such services or services assigned status indicators T or V are reported on the same date, and G0379 must be submitted on the same date as G0378 to be reimbursable

When observation spans midnight, report on a single line using the start date and total hours; do not report observation with a date span or on separate claim lines

State-specific maximum hourly limits apply; limits beyond the state maximum will be denied

State exceptions / special rules (examples)

North Carolina: observation is covered for the first 30 hours; revenue code 0762 is not required to be billed with any HCPCS code
Maryland: per state rules, billing more than 24 hours under revenue code 0762 will deny the entire claim; G0378 only allowed when billed with revenue code 0762
Texas: revenue code 0762 should be reported alone with units representing hours spent in observation (rounded to nearest hour)
Several states (e.g., ID, KS, MN, NM, NJ, TX, DC) list maximum hourly limits commonly at 48 hours (see policy for full list); some states allow exceptions to the 8-hour minimum or other provisions

Certain documentation exceptions (death, transfer, left AMA, delivery) and state rules may change classification between inpatient and observation per state requirements

Providers must follow state Medicaid regulations where states are exempt from or have modified policy provisions (examples include FL, HI, ID, IN, KS, MD, MS, MO, NJ, NM, NC, OH, PA, TN, TX, VA, WA, WI, DC)

G0378 may be denied if billed with procedure codes that have CMS IOCE status indicators J1 or T; status indicator lists are available in CMS OCE releases

Physician professional observation services (evaluation/management CPT codes) are addressed under a separate UnitedHealthcare professional policy

HCPCS Codes, Revenue Codes, and Duration Limits

Observation facility HCPCSHCPCSCovered

G0378	Hospital observation service, per hour
G0379	Direct admission for observation care
G0739

Minimum reimbursable observation duration (general)

Minimum reimbursable observation durationObservation service code G0378 will only be considered for reimbursement when the observation period meets or exceeds 8 hours (state exceptions apply)

Rounding and unitsReport G0378 with units representing hours in observation care, rounded to the nearest hour

Billing line and dateObservation services must be reported on a single line and the date of service for that line is the date that observation care begins

State-specific maximum/limits examples

North CarolinaMaximum hourly limit 30 hours; policy notes NC is exempt from policy except state rule: observation covered for first 30 hours; revenue code 0762 not required to be billed with any HCPCS code

MarylandMaximum hourly limit 24 hours

Multiple states (examples)Several states list a 48-hour maximum (Idaho, Kansas, Minnesota, New Mexico, New Jersey, Texas, Washington DC) — see policy for full state list and exceptions

Billing, Reporting, and Prior Authorization Actions

Prior Authorization

Report G0378 on revenue code 0762 with hourly units; G0379 same-date reporting requirement

Report HCPCS code G0378 under revenue code 0762 with units that represent the hours in observation care (rounded to the nearest hour). G0378 will only be considered for reimbursement when the observation period meets or exceeds 8 hours (state exceptions apply). Report HCPCS code G0379 for direct referrals/admissions to observation; G0379 must be submitted on the same date as G0378 to be reimbursable and is not separately payable when an ED, clinic, critical care service, or a service with IOCE status indicator T or V is reported on the same date.

Submit observation services with type of bill 13X, 78X, or 85X and report on a single line using the date observation begins.
Do not report G0378 when monitoring is inclusive of a surgical, diagnostic, or therapeutic procedure or when billed with procedure codes assigned CMS IOCE status indicator J1 or T.
State-specific maximum hourly limits apply (examples: NC = 30 hours; MD = 24 hours; several states = 48 hours); amounts beyond state maximums will be denied.

Key Terms and Code Definitions

Observation care

DefinitionObservation care is a set of short-term services including ongoing treatment, assessment, and reassessment to determine whether a patient requires inpatient admission or can be discharged

Common settingObservation status is commonly assigned to patients who present to the emergency department and require monitoring before a disposition decision

Coding noteHospital outpatient observation services are reported with HCPCS codes G0378 and G0379 per CMS guidance

G0378

CodeG0378

DescriptionHospital outpatient observation service, reported per hour under the appropriate revenue code (0762)

UnitsUnits represent hours spent in observation care and are rounded to the nearest hour; report on a single line with the date observation begins

G0379

CodeG0379

Intended useReport when observation services result from a direct referral/admission to observation care without an associated ED visit, clinic visit, or critical care service on the day observation begins

Usage constraintsG0379 must be submitted on the same date of service as G0378 to be reimbursable and is not separately payable when an ED, clinic, critical care service, or services with IOCE status T or V are reported on the same date

OpenPayer

Hospital Outpatient Observation Services (UB-04)

Observation Service Coverage and Billing Criteria

HCPCS Codes, Revenue Codes, and Duration Limits

Billing, Reporting, and Prior Authorization Actions

Key Terms and Code Definitions