The Senate Special Committee on Aging  recently heard testimony about the challenges posed by the “observation status” designation conferred on some Medicare patients in hospitals.
Among the concerns raised at the hearing were the financial vulnerability of some seniors hospitalized only under observation and not as inpatients; the possibility that some hospitals may be using observation status to avoid Medicare penalties for readmitting recently discharged payments; the punitive actions of Medicare recovery audit contractors (RAC auditors); and more.  Intertwined with this is Medicare’s two-midnight rule and the challenges the program has faced attempting to implement this rule.
Testifying before the committee were representatives of the Medicare Payment Advisory Commission (MedPAC), the Centers for Medicare & Medicaid Services (CMS),  the American Hospital Association, and others.
For a closer look at the hearing, a link to a video of the hearing, and copies of some of the testimony, see this Fierce Healthcare article.