When the patient is admitted to observation status, the facility counts from that point forward, regardless of whether the provider saw the patient on the first date or not. Initial observation care is when the provider sees the patient face-to-face for the first time. If the provider sees the patient on the following day (date), that will be billed as the initial obs care visit. If the patient is discharged from obs status on that date, the 2nd day, then the coding will be different.