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2012 Texas Medicaid Provider Procedures Manual

Inpatient and Outpatient Hospital Services Handbook : 3. Inpatient Hospital (Medical/Surgical Acute Care Inpatient Facility) : 3.7 Claims Filing and Reimbursement : 3.7.3 Inpatient Reimbursement : Observation Status to Inpatient Admission
Observation Status to Inpatient Admission
When a client’s status changes from observation to inpatient admission, the date of the inpatient admission is the date the client was placed on observation status. This rule always applies regardless of the length of time the client was in observation (less than 48 hours) or whether the date of inpatient admission is the following day. All charges including the observation room are submitted on the inpatient claim (TOB 111).

Texas Medicaid & Healthcare Partnership
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