To compare observation billing patterns among psychiatric vs. non-psychiatric patients presenting to emergency departments (ED) with extended lengths of stay (LOS).

Analysis of commercially insured claims and encounters from the Merative™ Marketscan® Commercial Database (2016 – 2022). The cohort included patients ages 18 to 64 with an ED claim, service dates occurring on two calendar dates, and a non-null billing code. Analytic methods included descriptive/inferential statistics with effect size estimation. The primary outcome was observation code frequency. Claims and encounters were compared within psychiatric and non-psychiatric patient groups.

There were 40,441 psychiatric and 1,133,496 non-psychiatric encounters. Fifteen percent of psychiatric encounters had an observation billing code as compared to 32% of all non-psychiatric encounters (18%). When analyzed by specific LOS category, larger differences were observed between the two groups for LOS 2 (36%), LOS 3 (36%), LOS 4 (35%), and LOS 5 (29%), as compared to LOS 1 (14%).

In this study of commercially insured patients with extended ED LOS, we observed a difference between the frequency of psychiatric and non-psychiatric observation encounters, which increased in magnitude when analyzing encounters with longer LOS. Our findings may suggest underbilling for extended stay psychiatric patients.