Home > Claims, Coding, Payment
Web Content Viewer
Web Content Viewer
Reminder: Remember to bill correctly for observation services
February 3, 2021

This article is for acute care hospitals where our members receive observation care

Blue Cross Blue Shield of Massachusetts reimburses for observation services as outlined in our observation payment policy.

As a reminder, our existing observation payment policy states that Blue Cross does not reimburse observation services when rendered as part of normal recovery.

  • Enforcement of this policy has previously been done through post payment audits.
  • Blue Cross now has the ability to configure our system to process claims in accordance with the payment policy referenced above.
  • You will begin to notice pre-payment enforcement soon. This will reduce the number of observation post payment audits.

Remember these important billing requirements

  • When billing for observation services, please make sure you are evaluating for medical necessity criteria.
  • Report the observation stay using hours, rounded to the nearest hour.
  • Report observation services using only revenue code 0762 and the appropriate observation CPT or HCPCS code noted within the policy.
  • Report all outpatient facility services related to the observation stay on the same claim form.


Call Network Management and Credentialing Services at 1-800-316-BLUE (2583). As always, thank you for the care you provide to your patients—our members.


Observation payment policy (log in required)