I don't know for sure... I had some medical issues come up while I was IP and had to be sent to a medical hospital. They kept a sitter on me while I was there 24 hours a day, and had the psychologist come see me once a day.

I would think it is possible to have mobservation in a medical hospital if the medical issues are prominent. But also if the psychiatric issues are the most important issue, doctors would probably prefer a psychiatric hospital situation, even though a medical hospital would be more comfortable for you...