Medicare, Medicaid and private payors are pushing hospitals to put more patients into observation status and the length of time sometimes exceeds Medicare limits, according to a report by the Columbus Dispatch.
Observation status is a Medicare billing category for patients not sick enough to be admitted but not ready to be sent home. Payors are "increasingly scrutinizing whether patients really need to be admitted," the newspaper observes. "If an insurer says a patient shouldn't have been admitted, it might not reimburse a hospital."
While Medicare suggests a patient should not be held in observation for more than 48 hours, Vicki Gottlich, an attorney for the Center for Medicare Advocacy, said she has talked with patients who have been in observation status for as much as 21 days.
The AHA acknowledged the trend toward longer stays in observation status in a letter to CMS last October. The letter said hospitals' fear of recovery audit contractors and other "post-payment reviews of inpatient claims" has been partly responsible. The letter added that it "is our hope that CMS will help us educate and provide clarity to the hospital field and to seniors about the use of observation services" and how it may affect Medicare coverage.
In its Oct. 2010 work plan, the HHS Office of the Inspector General said it would review payments for observation status to determine how its use affects patient care and out-of-pocket costs.
Read the Columbus Dispatch report on Medicare payment.
Read the AHA letter to CMS on observation status.
Read more coverage of hospital trends:
- 10 Key Concepts on Building an ACO: From Linde Wilson of Aria Health
- Getting Ahead of the Curve – 12 Weeks to Evidence-Based Best Practices
- OIG 2011 Work Plan: 17 Key Areas of Focus for Hospitals