The Pennsylvania Department of Public Welfare has published a notice in the Pennsylvania Bulletin continuing its current payment methodology under the state’s Medicaid program but noting that it still has not developed an observation rate for the program.
Last year the state indicated that it wanted to establish such an observation rate, but it has not yet done so.  The new notice states that

The Department also announced its intent to establish an observation rate for hospital cases for which an inpatient admission is not medically necessary, but medical observation of a patient is required. The Department received multiple public comments concerning an intended observation rate. At this time, the Department plans to develop a payment policy and rates for observation services and will provide an opportunity for public comment in a future notice of intent.

At the time the state expressed an interest in developing an observation rate, the Safety-Net Association of Pennsylvania wrote to the Department of Public Welfare expressing support for the concept.  Read SNAP’s letter here.
Find the entire Pennsylvania Bulletin notice here.