99234-99236 are used only when the patient is admitted and discharged from observation on the same day.

If the pt is in the hospital overnight but remains there less than 48 hours, the first day's service is coded from 99218-99220 (Initial Observation Care).

If the pt is on observation status longer than 48 hours, code first day as 99218-99220 (Initial Observation); second day as 99212-99215 (Established office or other outpatient); third day is coded 99217 (Observation Care Discharge Services). If a patient is admitted to observation, then becomes ill enough to be admitted as inpatient, an Initial Hospital Care code (99221-99223) is used.