A health plan (HP) has implemented a policy that outlines how providers should submit Type of Bills 13X and 83X for observation services. The policy requires observation services to be billed hourly. The HP also requires providers to use the "first date" of the observation service to bill all the hourly observation services on a single SV2 line if the observation services spans multiple dates of service.  Only the "first date" is to be represented on the claim with all the hourly units aggregated to a single service line. The HP has explicitly stated "Observation services should not be reported with a date span even when the period of observation spans more than 1 calendar day."

The requirement applies to the payer's Commercial network.  We believe the requirement to aggregate the entire observation service to a single date is not an appropriate use of the SV2 service line information and the associated DTP segment. The DTP02 segment associated with SV2 for "Date Time Period Qualifier" indicates an RD8 (date span format) is required when the "To and From" dates are different. We believe the HP policy is not allowed by X12 standards because the HP is requiring providers to not bill the service in a date span format.

The HP policy causes significant issues with secondary claim submission because other HP's and government payers require providers to express the hourly observation service on actual date of service, which is a separate SV2 line or a single SV2 line with a date span. The HP 835s now do not align with the secondary payer 837i service lines, which causes provider resources to manually split the HP EOB adjudication data to align to secondary claims.