Blue Review
A newsletter for physician, professional, facility, ancillary and Medicaid providers

December 2016

Reminder: Medical Necessity Review of Observation Services

As a reminder, it is the policy of Blue Cross and Blue Shield of Texas (BCBSTX) to provide coverage for observation services when it is determined to be medically necessary based on the medical criteria and guidelines as outlined in the Milliman Care Guidelines. Claims for observation services are subject to post-service review, and BCBSTX may request medical records for the determination of medical necessity. 

When medical records are requested, documentation should include the following information:

  • The attending physician’s order for observation care with clock time (or clock time can be noted in the nurse’s observation admission note)
  • The physician’s admission and progress notes confirming the need for observation care
  • The supporting diagnostic and/or ancillary testing reports
  • The admission progress notes (with the clock time) outlining the patient’s condition and treatment
  • The discharge notes (with clock time) with discharge order and nurse’s notes
  • Itemized bill