Medicare AdvantageBilling CodesHigh impact
[California] Observation service billing: review CMS requirements before
Anthem BCBS·CA·Claims & Billing
Effective date
Sep 1, 2026
We identified it
Aug 2, 2026
Summary
Effective September 1, 2026, Anthem Blue Cross (Medicare Advantage) is updating observation service billing requirements to align with CMS guidance for claims billed under POS codes 19, 22, or 23. Key changes: only one initial observation service code per patient visit, only one observation code per calendar date per billing practitioner, and only the ordering/overseeing physician may bill observation codes—other practitioners must use appropriate outpatient service codes instead.
Action Required
Before September 1, 2026: Billing team must implement the following changes: (1) Update billing system validation rules to prevent submission of multiple initial observation service codes per patient visit or multiple observation codes per calendar date per practitioner; (2) Audit current observation service billing practices to identify which practitioners are billing these codes and ensure only ordering/overseeing physicians bill observation services; (3) Train clinical and billing staff that consultants and other practitioners during observation stays must bill appropriate outpatient service codes instead of observation codes; (4) Review and update encounter forms/templates to clarify billing practitioner requirements; (5) Configure system edits to enforce one observation code per date per billing practitioner. Failure to comply will result in claim denials and potential compliance issues with Anthem. Verify all claims submitted on or after September 1, 2026 conform to these requirements.