§ 2805-v. Observation services. 1. If a general hospital provides
observation services, such services shall be provided in accordance with
this section, and regulations adopted by the council and approved by the
commissioner.

2. Observation services may be provided for such period of time as is
permitted by the commissioner by regulation. Such regulations shall be
consistent with federal policies for providing observation services to
beneficiaries, as set forth in title XVIII of the federal social
security act (medicare), except where necessary, in the discretion of
the commissioner, to protect and promote patient care and safety.

3. Based on the clinical needs of the patient, which shall be
determined in prompt fashion by appropriate staff, and the availability
of services to meet those needs and patient safety, a general hospital
shall determine (a) the proper clinical location for the care of a
specific patient requiring observation services, including whether or
not to provide such services in a distinct physical space, and (b) the
appropriate oversight of observation services.

4. Every general hospital providing observation services shall develop
and adopt policies and procedures for observation services, including:
(a) assignment of a provider who will be responsible for the care of the
patient and timely discharge from observation services; (b) clinical
criteria for observation assignment and discharge; and (c) integration
with quality assurance activities of the hospital.

5. The commissioner shall develop outpatient rates for observation
services provided in accordance with this section to patients eligible
for payments made by state governmental entities.