Observation (99218. 19 or 20) is only one calendar day - the code descriptor states it is to be used on a daily basis. If your patient is in observation 3 days then you'd choose your level and charge it out each day. Discharge codes and hospital admit codes should not be used on the same day.
As long as the patient is in prolonged observation, you'd use the above codes - if it's a one day admit/discharge for observation you'd use 99234-36.

barbara