MedicaidCoverageMedium impact
MMP 23-18: Update to Coverage of Professional Hospital Outpatient Observation Care Services
Michigan Medicaid - MDHHS·MI · Emergency Medicine, Internal Medicine, Family Medicine +1 more·Medical Policy
Effective date
Jun 1, 2023
We identified it
Jun 20, 2026
Summary
Michigan Medicaid expanded coverage for professional hospital outpatient observation care services beyond 24 hours when medically necessary. The policy clarifies specific CPT code reporting requirements based on observation duration: use initial observation codes for <8 hours, same-day discharge codes for 8-24 hours, and separate admission/discharge codes for >24 hours.
Action Required
Before June 1, 2023: Billing team must update coding protocols for Michigan Medicaid observation services. Program billing system to select appropriate CPT codes based on observation duration: 99221-99223 for <8 hours, 99234-99236 for 8-24 hours, and 99221-99223 plus 99238-99239 for >24 hours. Train providers on required documentation including observation orders, progress notes, discharge notes, provider presence verification, and total observation time. Update encounter forms to capture observation duration.