Reimbursement Policy Update: Observation Integral to Procedures – Observation, Facility

Effective April 1, 2025, Blue Cross and Blue Shield of North Carolina (Blue Cross NC) is implementing a revision to the Observation, Facility reimbursement policy.

Observation services performed for routine decision-making monitoring, preparation, intra-operative monitoring, or recovery/post-operative care related to a diagnostic, surgical, or therapeutic procedure are considered integral to the base procedure and are not separately reimbursable.

Blue Cross NC references CMS’s Ambulatory Payment Classification (APC) code list of services assigned a status indicator J1 or T to define surgical and diagnostic procedures. Please see the related policy notification for more information.

Blue Cross NC is implementing this change to ensure consistent reimbursement practices. Reimbursement for integral observation services are considered to be included in the payment for the primary service.

This change will apply to Commercial, Inter-Plan Program (IPP) Host, and Federal Employee Program (FEP). Observation integral to routine services is already applicable to Medicare Advantage.