Bingo. 8 hours medicare. Other insurances are different. If you cross midnight, that counts as 8 hours...
You think someone is drunk / high and needs to sleep it off until they act sober / have a ride in the AM ? Thats observation my friend. You are ensuring they don't have a worsening toxidrome or a subtle medical / traumatic /psychiatric cause of their altered sensory. We all have those "drunks" who we tuck in at 2300 and then at 0100 realize they are getting worse. Thats why we don't just wheel them to the sidewalk and dump them...
Severe gastroenteritis or canibinoid hyperemesis or cyclical vomiting that fails your first round of therapy, but you really think you can keep them out of the hospital given a few more hours? Boom observation. Severe anaphylaxis you want to keep 4+ hours? Obs. Young woman with pyelonephritis who looks ok but is vomiting and can't keep pills down and its 10pm? Consider observation until AM for IVF, zofran, IV abx and reassessment.
Psych cases? All go in observation if they are staying in the ED. They aren't just waiting for placement. They are having multiple security measures for their safety, serial exams, serial interviews with their placement team, they get seen by the MD at least daily, they are being restarted on their home meds, they often get new/PRN meds from me, they might be under observation to ensure no withdrawal for their alcohol/heroin abuse, etc. Thats very much billable observation. That, and the fact many of them stabilize after 1-2 days in the ED, and actually go home / outpatient....
One that likely doesn't net a ton of money, but saves hospital beds and avoids admissions and gets people into the right level of service--
We do a lot of elderly falls obs-- fall go boom no reason, seem unsafe to go home at 11pm alone and don't quite pass the bedside get-up-and-go test? Obs, consider serial labs in AM, formal PT eval at 0800, case management at 0900, see if they need rehab or higher level of care placement or if they qualify for home services, etc etc.
Now if your ED has 40 in the WR all night, you can't spare a bed for this type of obs.
Anyway, do NOT start putting people into observation to make money. However, if you are already holding people in your ED for >4hr, and NOT at least CONSIDERING observation billing/status, you are likely doing yourself and your facility a disservice.