Medicare observation status Archives - Safety-Net Association of Pennsylvania

Medicare Notification of Observation Care Requirement Set

Beginning on August 6, hospitals will be required to notify patients if they are under observation care and have not formally been admitted to the hospital.
The new policy, required by last year’s Notice of Observation Treatment and Implication for Care Eligibility Act, requires hospitals to provide a written notice to patients “in plain language” explaining that they have not been admitted to the hospital and how that might affect what they owe the hospital for the care they receive and their eligibility for follow-up services. Hospitals will be required to provide this information no more than 36 hours after the observation care has begun.
Hospital building More than two million Medicare patients were hospitalized under observation status in 2014.
Learn more about the new policy, what it means, and some of the challenges it may pose in this Kaiser Health News article.

PA Safety Net Admin2016-06-23T06:00:08+00:00June 23rd, 2016|Medicare|Comments Off

Hospitals Not Using Observation Status to Avoid Readmissions Penalties

Hospitals are not moving returning patients to observation status to avoid incurring financial penalties under Medicare’s hospital readmissions reduction program, according to new study published in the New England Journal of Medicine.
Since that program’s inception, more than 3300 hospitals have reduced the rate at which they readmit Medicare patients within 30 days of their discharge from the hospital. A moderate increase in the classification of Medicare patients in observation status led some critics to suggest that observation status was being used to avoid penalties for readmissions.
The study disagrees, concluding that

…we found a change in the rate of readmissions coincident with the enactment of the ACA, which suggested that the Hospital Readmissions Reduction Program may have had a broad effect on care, especially for targeted conditions. In the long-term follow-up period, readmission rates continued to fall for targeted and nontargeted conditions, but at a slower rate. We did not see large changes in the trends of observation-service use associated with the passage of the ACA, and hospitals with greater reductions in readmission rates were no more likely to increase their observation-service use than other hospitals.

For a closer look at the study, the methodology employed, and its conclusions, go here to see the New England Journal of Medicine article “Readmissions, Observation, and the Hospital Readmissions Reduction Program.” In addition, the U.S. Department of Health and Human Services features a commentary about the study on its blog. Go here to see that commentary, titled “Reducing Avoidable Hospital Readmissions to Create a Better, Safer Health Care System.”

PA Safety Net Admin2016-02-26T06:00:17+00:00February 26th, 2016|Health care reform, Medicare, Uncategorized|Comments Off

Readmissions Down But Observation Status Up

New research suggests that the general decline in hospital readmissions may be leading to increased use of observation status.
According to new research in the journal Health Affairs,

Our independent analysis of Medicare data published by CMS revealed that the top 10 percent of hospitals with the largest drop (16 percent on average) in readmission rates between 2011 and 2012 also increased their use of observation status for Medicare patients returning within 30 days by an average 25 percent over the same time period.

The practice appears to be affecting privately insured patients, too, with the report noting that

…hospitals that reduced readmissions within 30 days also increased their share of returning observation patients in private plans. The top third of hospitals with the largest six-year (2009-2014) reduction in 30 day readmissions (26 percent on average) increased their share of returning observation patients in private plans by an average of 45 percent (Figure 2). Much of that increase started in 2012, the same year that Medicare hospital readmission penalties began.

The report concludes that

Our findings suggest that at least some hospitals are substituting observation status for inpatient readmissions, both for Medicare and privately insured patients. These trends raise a number of questions. For instance, do observation patients get the same quality of care as inpatients? Further, do drops in readmission rates truly mean that hospitals are providing better quality care? Or… is it merely that some hospitals are avoiding penalties by relabeling patients they previously would have readmitted as observation patients?

Learn more about the study, its findings, and its potential implications in the article “Is Observation Status Substituting For Hospital Readmission?” here, on the Health Affairs web site.

PA Safety Net Admin2015-11-11T06:00:09+00:00November 11th, 2015|Medicare|Comments Off

Senate Takes Testimony on Medicare Observation Status

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.

PA Safety Net Admin2015-06-01T06:00:59+00:00June 1st, 2015|Medicare|Comments Off

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