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Liu, 61, was granted medical parole and released from jail earlier this month after he was diagnosed with late-stage liver cancer.
A Chinese vice minister of justice met with diplomats from the US, Germany and the EU on Thursday to brief them about Liu's case, and told the diplomats that Liu can't go abroad for treatment because he is too sick to travel, according to a source familiar with the meeting.
Liu had been serving an 11-year prison sentence for "inciting subversion of state power" in Jinzhou, near the city of Shenyang in northeastern China.
His case has come under an international spotlight amid allegations from his supporters that he had become gravely ill because his cancer wasn't treated in prison.
A medical team comprised of eight renowned oncologists have seen Liu seven times and formed a treatment plan, it said, adding that the hospital has invited traditional Chinese medicine (TCM) practitioners to join the team at the request of Liu's family.
US ambassador's appeal
Terry Branstad, the new US ambassador to China, on Wednesday urged Beijing to let Liu seek cancer treatment overseas.
In his first public remarks since arriving in China, the former Iowa governor told reporters that he hoped the two sides could work together to address Liu's condition.
"It's very serious," he said. "Obviously, our hearts go out to him and his wife and we're interested in doing what can be done to see if it's possible. We Americans would like to see him have the opportunity for treatment elsewhere, if that could be of help."
A Chinese foreign ministry spokesman dismissed the ambassador's appeal.
"Liu Xiaobo is a Chinese citizen," said Lu Kang at a regular press briefing Wednesday. "Why should we discuss his case with other countries?"
Liu's plight has become a rallying point for activists in Hong Kong, which is hosting Chinese President Xi Jinping as part of festivities to mark 20 years of Chinese rule in the former British colony.
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It also shows him receiving medical check-ups and treatment in prison and at hospitals.
Liu could be heard describing how prison officials had been taking good care of him, especially his health, and expressing his gratitude to them.
The statement from Shenyang's judicial authorities said that Liu's wife, Liu Xia, was staying with him at the hospital.
"Liu Xiaobo and his family members are satisfied with the work and treatment by the prison and the hospital," it said.
The statement also said Liu had a history of hepatitis B before imprisonment and prison authorities had provided him with an annual physical examination as well as monthly checkup -- and no abnormal conditions had been found before the recent diagnosis.
A prolific writer and longtime activist, Liu had been in and out of jail since the bloody crackdown on pro-democracy protesters in Beijing's Tiananmen Square in 1989.
His most recent conviction, on Christmas Day 2009, stemmed from his co-authorship of Charter 08, a manifesto calling for political reform and human rights in China.
In 2010, while in prison, Liu was awarded the Nobel Peace Prize for "his long and nonviolent struggle for fundamental human rights in China."
CNN's Katie Hunt in Hong Kong contributed to this report.